Install
Regulation and Policy terms
The rules of Homeowners Insurance.
Admitted insurerA company licensed by a state to sell insurance there, with its rates and forms under regulator review and its claims backed by the state guaranty fund.Amendatory endorsementAn add-on that rewrites parts of the base policy, usually to match a state's insurance laws, and that takes priority wherever it conflicts with the form.Department of insuranceThe state agency that licenses and supervises insurers and agents, reviews policy forms and rates, and takes consumer insurance complaints.Excess and surplus linesThe specialty market where non-admitted insurers cover unusual, high-hazard or hard-to-place risks that standard carriers will not write at filed rates.File and useA rate-regulation system in which an insurer files new rates with the regulator and may start charging them right away or after a short waiting period.Guaranty fundA state safety net, financed by charges on licensed insurers, that pays covered claims up to a cap when an insurer is declared insolvent.InsolvencyThe condition of an insurer that cannot pay its claims and debts as they come due, or whose liabilities exceed its assets or required capital.Insurance commissionerThe state official who heads the insurance regulator, oversees insurers and agents, reviews rates and forms, and handles consumer complaints.ISO (Insurance Services Office)The industry organization, now part of Verisk, that drafts standard homeowners policy forms, rating data and fire protection grades that insurers use or adapt.Liquidation (insurer)The final stage of an insurer failure, when a court orders the company wound up, its policies ended and its assets sold to pay claims and creditors by priority.NAICThe standard-setting group governed by the chief insurance regulators of the 50 states, D.C. and five U.S. territories, founded in 1871.Prior approvalA rate-regulation system in which an insurer must have the state regulator approve its proposed rates before it may charge them to policyholders.Prompt payment lawState rules that set deadlines for an insurer to acknowledge a property claim, decide it and pay it, often with interest owed on late payments.Rate filingThe package of proposed prices, rating factors and supporting data that an insurer submits to a state regulator before or when it changes its homeowners rates.ReceivershipA court-supervised takeover of a troubled insurer, run by the state's insurance regulator or a designee, to either repair the company or wind it down.Rehabilitation (insurer)A court-ordered effort, run by a state-appointed rehabilitator, to restore a financially troubled insurer, which can end in recovery, a sale or a wind-down.Surplus lines insurerAn insurer not licensed in a state that may write risks the standard market declines, with freer rates and forms and usually no guaranty fund backing.Unfair claims settlement practices actState laws, modeled on an NAIC template, that list claim-handling conduct insurers may not engage in and let the insurance commissioner discipline violators.Use and fileA rate-regulation system in which an insurer may put new rates into effect first and then submit them to the regulator within a set period afterward.Bad faithAn insurer's unreasonable claim handling, such as denying or delaying payment with no reasonable basis, that can bring damages beyond the policy benefits.Market conduct examA state regulator's review of how an insurer treats policyholders, covering underwriting, rating, sales, complaints and claim handling rather than its finances.RedliningThe unlawful practice of refusing to insure, or charging more to insure, homes in certain neighborhoods because of residents' race or other protected traits.Suit limitation clauseThe policy condition that sets a deadline, often one or two years from the date of loss, for filing a lawsuit against the insurer over a claim.