AIG 2013 Annual Report Download - page 224

insurance coverage for risks which are generally not available in the standard insurance market. Surplus lines policy
forms and rates are not regulated by the insurance departments.
Prior year development Increase or decrease in estimates of losses and loss expenses for prior years that is
included in earnings.
RBC Risk-Based Capital A formula designed to measure the adequacy of an insurer’s statutory surplus compared to
the risks inherent in its business.
Reinstatement premium Additional premiums payable to reinsurers to restore coverage limits that have been
exhausted as a result of reinsured losses under certain excess of loss reinsurance treaties.
Reinsurance The practice whereby one insurer, the reinsurer, in consideration of a premium paid to that insurer,
agrees to indemnify another insurer, the ceding company, for part or all of the liability of the ceding company under
one or more policies or contracts of insurance which it has issued.
Rescission Denial of claims and termination of coverage on loans related to fraudulent or undocumented claims,
underwriting guideline violations and other deviations from contractual terms.
Retained Interest Category within AIG’s Other Operations that includes the fair value gains or losses, prior to their
sale, of the AIA ordinary shares retained following the AIA Group Limited initial public offering and the MetLife, Inc.
securities that were received as consideration from the sale of American Life Insurance Company and the fair value
gains or losses, prior to the FRBNY liquidation of Maiden Lane III LLC assets in 2012, on the retained interest in
Maiden Lane III LLC.
Retroactive Reinsurance See Deferred Gain on Retroactive Reinsurance.
Salvage The amount that can be recovered by us for the sale of damaged goods for which our policyholder has
been indemnified (and to which title was transferred to us).
Second-lien Subordinate in ranking to the first-lien holder claims on a property in the event of default on a
mortgage.
Severe losses Individual non-catastrophe first party losses and surety losses greater than $10 million, net of related
reinsurance. Severe losses include claims related to satellite explosions, plane crashes, and shipwrecks.
SIA Sales Inducement Asset Represents amounts that are credited to policyholder account balances related to the
enhanced crediting rates that a seller offers on certain of its annuity products.
SIFI Systemically Important Financial Institutions Financial institutions are deemed systemically important (that is, the
failure of the financial institution could pose a threat to the financial stability of the United States) by the Financial
Stability Oversight Council (FSOC) based on a three-stage analytical process.
SLHC Savings and Loan Holding Company A company (other than a bank holding company) that controls a savings
association or that controls another company that is a savings and loan holding company. Savings and loan holding
companies are subject to regulation and supervision by the Board of Governors of the Federal Reserve System.
Solvency II Legislation in the European Union which reforms the insurance industry’s solvency framework, including
minimum capital and solvency requirements, governance requirements, risk management and public reporting
standards. The Solvency II Directive (2009/138/EEC), was adopted on November 25, 2009 and is expected to
become effective in January 2016.
SSDMF Social Security Death Master File A database of deceased individuals, most of whom were issued a social
security number during their lifetimes, maintained by the U.S. Social Security Administration.
Subrogation The amount of recovery for claims we have paid our policyholders, generally from a negligent third
party or such party’s insurer.
Surrender charge A charge levied against an investor for the early withdrawal of funds from a life insurance or
annuity contract, or for the cancellation of the agreement.
Unearned premium reserve Liabilities established by insurers and reinsurers to reflect unearned premiums which
are usually refundable to policyholders if an insurance or reinsurance contract is canceled prior to expiration of the
contract term.
VOBA Value of Business Acquired Present value of projected future gross profits from in-force policies from acquired
businesses.
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AIG 2013 Form 10-K206
GLOSSARY
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