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Lloyd's Name Once an individual is able to show proof of a rather significant financial net worth and is willing to participate as a member by putting that net worth on the line as collateral, he/she must then be elected by the Lloyd's membership in order to become a member of Lloyd's of London. They are also known as "Lloyd's members." Individuals are insurers; the group is Lloyd's.
Lloyd's of London A collection of individuals who assume policy obligations as the individual obligations of each. The formal name is Underwriters at Lloyd's, London. Also, Lloyd's of London is a service organization which provides a central market place and ancillary services (such as policywriting, accounting, inspections, and adjusting) for its underwriting members and its brokers.
Lloyd's Underwriter Once an individual is able to show proof of a rather significant financial net worth and is willing to participate as a member by putting that net worth on the line as collateral, that individual must then be elected by the Lloyd's membership in order to become a member of Lloyd's of London. Those persons are also known as "Lloyds names" or "Lloyd's members." Individuals are insurers or underwriters; the group is Lloyd's. Lloyd's underwriters are responsible only for their own assumptions of risk. They are not obligated for any risk assumed by others even if in the same syndicate, on the same account, or otherwise a part of the Lloyd's organization.
Long Term Care (LTC) Care which is provided for persons with chronic diseases or disabilities. The term includes a wide range of health and social services provided under the supervision of medical professionals.
Long Term Care Facility Usually a state licensed facility which provides skilled nursing services, intermediate care and custodial care.
Long-Tail A colloquialism referring to the lengthy period of time between the occurence of an event giving rise to a third-party claim and the claim itself. While this lengthy period is common to all kinds of third-party claims, as opposed to direct damage claims, it is most pronounced in professional liability insurance written on an "occurrence" basis, as opposed to a "claims-made" basis.
Long-Tail Liability Covered liability occurrences may take many years to fully develop into claims, be investigated, and settled. This development process is called long-tail. As a result, liability rates are not as responsive to losses, nor are they as credible as other lines of insurance.
Loss Constant Used primarily in workers compensation insurance, a flat charge added to the premium of small risks to offset the higher loss ratios produced by such risks. Also used in some states in fire insurance premiums for low valued dwelling risks to offset the higher loss ratios they produce.
Loss Control The steps and processes made by a risk to reduce, eliminate or control the frequency of loss from occurring and the severity of the loss once it has occurred.
Loss Cost 1)The ratio of actual (or "as if") reinsured losses to a ceding company's subject matter premium (either written or earned premium)for the same period. Used to analyze past experience and to predict future experience of a per-risk excess cover. 2)In order to reduce the allegations of rate-fixing and prevent anti-trust suits and litigation, many rating bureaus and rate organizations have now eliminated the development of rates. Instead, they are providing only base statistics called a loss cost, which is the precent of each exposure base for each classification that is directly attributed to the amount of loss experienced by that class. To the loss cost, each insurer must then add its own loading for expense, contingencies, profit, etc.
Loss Experience The loss history for an account, a line of business, a book of business, or some other defining category. Loss experience may include the date of loss, type of loss, amount of loss, whether the loss is open or closed, and summary of the details of the loss.
Loss Report A written statement made by an agent, an insured, a claimant, or a beneficiary containing details of the claim being made under an insurance policy.
Loss Reserve An estimate of the amount an insurer expects to pay for reported and estimated claims. May include amounts for loss adjustment expenses.
Lump Sum One method of payment of benefits, most often occurring in life insurance, where the beneficiary receives the entire face value or payout of the policy at once, rather than in installments, monthly income, or various other options.
Major Hospitalization Policy The same as Major Medical Insurance, except that it applies to expenses incurred only when the insured is hospitalized. See also Major Medical Insurance.
Major Medical Insurance A type of Health Insurance that provides benefits up to a high limit for most types of medical expenses incurred, subject to a large deductible. Such contracts may contain limits on specific types of charges, like room and board, and a percentage participation clause sometimes called a coinsurance clause. These policies usually pay covered expenses whether an individual is in or out of the hospital.
Malicious Mischief Intentional and willful vandalism and destruction of property. In most property policies, it is linked with the vandalism cause of loss.
Malpractice Improper actions or failure to exercise proper skill by a professional or others involved with the care of the human body, such as a physician, dentist, blood bank, etc. Malpractice insurance is a form of liability coverage against such mistakes.
Managed Care The coordination of health care services in the attempt to produce high quality health care for the lowest possible cost. Examples are the use of primary care physicians as gatekeepers in HMO plans and pre-certification of care.
Managed Health Care Plan A plan which involves financing, managing, and delivery of health care services. Typically, it involves a group of providers who share the financial risk of the plan or who have an incentive to deliver cost effective, but quality, service.
Mandated Benefits Benefits required by state or federal law.
Mandated Providers Types of providers of medical care whose services must be included by state or federal law.
Manual Rate A charge for a unit of insurance set forth in a manual of instructions.
Manual Rates Rates based on average claims data for a large number of groups. These rates are then adjusted for specific groups based on that group's characteristics, such as the type of industry, changes in benefits from the standard, etc.
Marine Insurance One of major divisions of insurance (life, health, property, marine, casualty, surety), primarily written for property in transit. If by sea, "ocean" marine or "wet" marine; otherwise, "inland" marine.
Marine Law Section of the federal or national court system which deals with matters pertaining to vessels, crew, and their cargoes navigating on interstate or international waters. Maritime procedures, precedents and rules are different in admiralty courts than in other courts. Also called admiralty court.
Marine Perils The perils which are insured against in a policy of ocean marine insurance. The wording of the marine policy is the result of several hundred years of careful study, judicial interpretation and precedent, and thus such perils have maintained an exact definite meaning in marine insurance.
Marine Syndicates Groups of insurance underwriters which act through a manager to insure certain ocean marine classes of business.
Market Assistance Plan (MAP) A plan promulgated by the Department of Insurance to assist buyers to obtain certain types of insurance when they are limited in availability.
Market Value Clause A clause in which the insurer agrees that the amount it will pay in the event of loss shall be the value of the destroyed merchandise "on the market", which is the amount which could have been realized by selling the merchandise. Obviously, this includes the seller's profit; therefore, the clause is used with caution to avoid the creation of a moral hazard.
Master The commander of a commercial vessel. Popularly the "captain," but the term in admiralty law and marine insurance is "master."
Maximum Allowable Costs (MAC) List A list of prescriptions where the reimbursement will be based on the cost of the generic product.
Maximum Disability Policy A form of noncancellable Disability Income Insurance that limits an insurer's liability for any one claim but not the aggregate amount of all claims. In other words, for any one claim there is a maximum amount payable, but there could be any number of separate claims for different disabilities.
Maximum Out-of-Pocket Costs The most a member will pay considering copayments, coinsurance, deductibles, etc.
McCarran-Ferguson Act Enacted on March 9, 1945, a law by which Congress granted authority to the states to continue to tax and regulate the business of insurance (after the insurance business had been held by the Supreme Court to be commerce in a landmark case in 1944, and therefore, subject to federal regulation whenever subject to interstate regulation). The act provided further that the antitrust laws should not apply to the extent the business of insurance is regulated by the states, except for coercion, intimidation and boycott. Also known as Public Law 15 (79th Congress, 1945. McCarran-Ferguson Regulation Act: 15 U.S.C. 1011-15)
Mean The average of the accumulation of data, statistics and their results for a given topic.
Mechanics Permit A clause in a policy granting permission to employ workers, such as mechanics, in and around the risk, since their work may increase the exposure. Permission is usually automatically included for such repairs and alterations which are necessary for the maintenance of the premises.
Medicaid A medical benefits program administered by states and subsidized by the federal government. Under this plan, various medical expenses will be paid to those who qualify. It is technically referred to as Title XIX Benefits.
Medical Care Insurance See Medical Expense Insurance
Medical Examination The physician who examines an applicant or claimant on behalf of the insurer and as an agent of the insurer.
Medical Examiner The physician who examines an applicant or claimant on behalf of the insurer and as an agent of the insurer.
Medical Expense Insurance A form of Health Insurance that provides benefits for medical, surgical, and hospital expenses. This term is used to include coverage under the names Hospital-Surgical Expense Insurance and Medical Care Insurance.
Medical Information Bureau (MIB) A data pool service that stores coded information on the health histories of persons who have applied for insurance from subscribing companies in the past. Most Life and Health insurers subscribe to this bureau to get more complete underwriting information.
Medical Loss Ratio Total health benefits divided by total premium.
Medical Supplies Any items which are essential in carrying out the treatment of a patient's illness or injury.
Medically Necessary A service or treatment which is absolutely necessary in treating a patient and which could adversely affect the patient's condition if it were omitted.
Medicare The United States federal government plan for paying certain hospital and medical expenses for persons qualifying under the plan, usually those over 65. The hospital benefits are Part A, and the medical expense portion is Part B. Part A is compulsory social insurance; Part B is voluntary government-subsidized, government-operated insurance.
Medicare Beneficiary Anyone entitled to Medicare benefits based on the designation by the Social Security Administration.
Medicare Supplement Insurance Insurance coverage sold on an individual or group basis which helps to fill the gaps in the protection provided by the Medicare program. Medicare supplements cannot duplicate any benefits provided by Medicare, but may pay part or all of Medicare's deductibles and copayments, and may cover some services and expenses not covered by Medicare.
Member Anyone covered under a health plan (enrollee or eligible dependent).


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