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Exclusion 1) That which is not covered by the insurance as stated in the policy. 2) A clause in an insurance policy which specifies that which is excluded from the policy's coverage.
Exclusive Provider Organization (EPO) A type of preferred provider organization where individual members use particular preferred providers rather than having a choice of a variety of preferred providers. EPOs are characterized by a primary physician who monitors care and makes referrals to a network of providers.
Expected Claims The estimated claims for a person or group for a contract year based usually on actuarial statistics.
Expected Morbidity The expected incidence of sickness or injury within a given group during a given period of time as shown on a morbidity table.
Expense A policy's share of the company's operating costs, fees for medical examinations and inspection reports, underwriting, printing costs, commissions, advertising, agency expenses, premium taxes, salaries, rent, etc. Such costs are important in determining dividends and premium rates.
Expense Constant A flat premium charge made on small workers compensation policies based upon the fact that the expense factor on such risks is inadequate to cover the cost of issuing and handling the policy.
Expense Ratio Expenses incurred, expressed as a percentage or net written premiums.
Experience Rating A form of individual risk rating which takes into consideration the loss experience of the particular risk as a credit or a debit to the manual rate for the insured's classification. As the size and number of exposure units increase (e.g., a multiple location risk), more credibility is given to the insured's own experience.
Experimental or Unproven Procedures Any health care services, supplies, procedures, therapies, or devices that the health plan determines regarding coverage for a particular case to be either (1) not proven by scientific evidence to be effective, or (2) not accepted by health care professionals as being effective.
Expiration 1)The cessation of insurance when the time period for which it was written has ended. 2)The date on which insurance expires. 3)The detailed policy records of customers served which are owned by independent insurance agents.
Expiration Notice A notice sent (by an insurer to an agent or broker, by an agent to a client, or by an insurer to a policyholder) to the effect that a policy is about to expire on a given date.
Explanation of Benefits (EOB) The statement sent to a participant in a health plan listing services, amounts paid by the plan, and total amount billed to the patient.
Explanation of Medicare Benefits A notice which is sent to the Medicare patient which provides information designed to explain how the claim is to be paid.
Explosion 1)A bursting of forces, usually from pressure from within. 2)In general, a rupture of a pressure vessel of some kind due to too much internal pressure, accompanied by a loud noise. Courts, however, have interpreted it in many ways.
Exposure 1)Synonymous with risk:chance of loss-by fire, radiation, accident, etc. 2)The danger of loss (particularly by fire) arising from what happens to another risk close by. 3)The sum total of values which, if damaged or destroyed, would cause loss under a policy, i.e., the value of everything a policy insures. 4)A measure of the rating units or premium basis of a risk, e.g., payroll or number of automobiles. 5)A unit of loss potential (e.g., a life, a house, an automobile, a ship, a package in shipment, an acre of growing crops, a plate glass window, a fur coat), in which case the term "exposure unit" is used.
Extended Care Facility A facility such as a nursing home which is licensed to provide 24-hour nursing care service in accordance with state and local laws. Three levels of care may be provided--skilled, intermediate, custodial, or any combination.
Extended Reporting Period (ERP) In "claims-made" liability policies, only those claims that occur after the retroactive date and are reported or filed against the insured during the policy period are covered by the policy. The ERP, or tail, is an endorsement available to extend the reporting period for the filing of a claim to give additional time in order to be considered covered.
Extension of Benefits A condition in the insurance policy which allows coverage to continue beyond the expiration date of the policy in the case of employees who are not actively at work or dependents who are hospitalized on that date. The extended coverage applies only where the employee or dependent is disabled as of that date and continues only until the employee returns to work or the dependent leaves the hospital.
Face Amount As used in life insurance, the amount stated on the first page of the policy that will be paid at maturity, upon death of the insured expiration of the endowment period. Additional benefits may be provided by riders or dividends. Also known as face value.
Face Value As used in life insurance, the amount stated on the first page of the policy that will be paid at maturity, upon death of the insured or expiration of the endowment period. Additional benefits may be provided by riders or dividends. Also known as face amount.
Factory Mutuals A group of direct-writing mutual insurance companies, independently owned and operated, which underwrite highly protected risks of substantial value on a reciprocal reinsurance basis. The central organization in New England maintains extensive fire laboratory facilities and provides its members with engineering services.
Facultative Reinsurance Reinsurance effected item by item and accepted or declined by the reinsuring company after scrutiny, as opposed to reinsurance effected by treaty. The work facultative connotes that both the primary insurer and the reinsurer have the faculty or option of accepting or rejecting the individual submission, as distinguished from the pre-set obligation to cede and accept already agreed upon by the parties in treaty reinsurance.
Fair Plan A program to provide "fair" access to insurance requirements" for property owners who experience difficulty in buying insurance on property located in blighted or deteriorating urban areas. Basically the plan assures a property owner of physical inspection of property, and a promise to provide fire and allied lines Insurance if the property is adequately maintained and if recommended improvements necessary to make the property insurable have been made. Many of these plans have been extended to cover statewide in those states adopting them.
Family Deductible A health insurance policy deductible that was designed to address the expenses for services for the entire family unit rather than aplication to each person.
Family Dependent A person entitled to coverage because he or she is: 1. The enrollee's spouse, or 2. A single dependent child of either the enrollee or the enrollee's spouse (including stepchildren or legally adopted children), and 3. A resident of the enrollee's home.
Family Expense Policy A policy which insures the medical expenses of all members of a family.
FASB The Financial Accounting Standards Board.
Federal Qualification Approval of any HMO made by the HCFA after conducting their evaluation of methods of doing business, documents, contracts, facilities, and systems.
Fee Maximum The maximum amount available to a provider for specific health care services under a contract.
Fee Schedule A list of maximum fees for providers who are on a fee-for-service basis.
Fee-for-Service Equivalency The difference between the amount a provider receives from a reimbursement system such as capitation (a flat charge per month, for instance) compared to fee-for-service reimbursement.
Fee-for-Service Reimbursement A health care system where physicians and other providers receive payment based on their billed charge for each service provided.
Field Underwriting The initial screening of prospective buyers of health insurance, performed by sales personnel "in the field." May also include quoting of premium rates. (
Financial Accounting Standards Board (FASB) A non-governmental group that sets standards for generally accepted accounting principles.
Financial Guaranty A guaranty that a sum of money will be paid. A form of bond.
Fire Combustion manifested in light, flame and heat for useful purposes (known as friendly fire), or for destructive purposes (called hostile fire). Insurance covers a loss only from the latter.
Fire Clause A condition in a lease which provides that in case fire should damage the property to some agreed extent, certain agreed modifications in the lease automatically take place.
Fire Department Service Clause Sometimes when property is located outside the boundaries of a city or town, the fire department will agree to come to a fire, but a charge is made for it. This clause extends the policy to pay such charges in the event of loss.
Fire Insurance 1)Covers losses caused by fire, lightning and removal of insured property from the premises to avoid further loss. All resultant damage such as that done by water and smoke is also covered. Usually supplemented by extended coverage. Currently, this insurance is referred to a property insurance. 2)A type or line of insurance, as opposed to marine, casualty or fidelity bonding. The term fire insurance is now referred to as property insurance when denoting a line of insurance.
Fiscal Intermediary A commercial insurer contracted by the Department of Health and Human Services for the purpose of processing and administering Part A Medicare claims.
Flat Maternity Benefit A stipulated benefit in a Hospital Reimbursement policy that is paid for maternity confinement, regardless of the actual cost of the confinement.
Flexible Benefit Plan A type of program where employees can tailor their benefits to meet their own specific needs.
Floater A policy which covers property at many locations, even worldwide and in the course of transit, i.e., the protection "floats around" with the objects insured.
Flood Overflow of water from its natural boundaries. More specifically defined by the National Flood Act of 1968 as "a general and temporary condition of partial or complete inundation of normally dry land areas from the overflow of inland or tidal waters, or the unusual and rapid accumulation or runoff of surface waters from any source".
FOB-Free On Board When goods are shipped FOB, the shipper is responsible only until the goods have been placed on board the vessel, freight car, truck, or other means of transport. After that the risk belongs to the consignee.
Forgery False or fraudulent making or altering of a written instrument. Also, the illegal signing of another's name to a document such as a check.
Form A document providing the specifics of the insurance issued, either separate unto itself or attached to other descriptive language.
Formulary See Drug Formulary.
Fortuitous Cause An accidental and unexpected cause of loss. A happening by chance.
Foundation Exclusion Clause A clause in a fire policy which states that it does not insure foundations; hence, their value may not be used to determine the proper amount of insurance under a coinsurance clause.

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