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Word
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Definition
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Package Policy
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Package Policy: An insurance policy combining several different coverages within a single policy.
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Paid-up Insurance
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Paid-up Insurance: An insurance policy for which all required premiums have been paid.
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Part A
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Part A: The Medicare coverage that helps pay for medically necessary inpatient hospital care and, after a hospital stay, for inpatient care in a skilled nursing facility, for home care by a home health agency or for hospice care by a licensed and certified hospice agency. It is financed almost entirely by a nearly universal tax on employee pay, with no beneficiary premiums charged.
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Part B
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Part B: The Medicare coverage that helps pay for medically necessary physician services, outpatient hospital services, outpatient physical therapy and speech pathology services, and a number of other medical services and supplies that are not covered by the hospital insurance. It is a voluntary program, financed through a combination of payments from general federal revenues and premiums paid by beneficiaries who elect to participate.
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Partial Disability
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Partial Disability: A disability that prevents an insured from performing one or more duties related to the insured's employment. See Disability.
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Partial-Risk Capitation
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Partial-Risk Capitation: A form of state-managed Medicaid, under which partial-risk prepaid health plans (PHPs) receive a fixed payment per enrollee per month to provide for a specified subset of Medicaid services, usually primary care and/or certain ancillary services. States usually remain at risk under their traditional program for hospital and specialty care.
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Participant
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Participant: The term "participant" means any employee or former employee of an employer, or any member or former member of an employee organization, who is or may become eligible to receive a benefit of any type from an employee benefit plan which covers employees of such employer or members of such organization, or whose beneficiaries may be eligible to receive any such benefit. See, U.S.C. 1002 (7). Also, see standing issue discussed here.
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Participating GIC
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Participating GIC: A GIC in which the assets are owned by the customer.
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Participating Policy
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Participating Policy: A policy entitling a policyholder to receive dividends from the surplus of an insurer to the extent that dividends are declared by its board of directors.
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Participating Provider
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Participating Provider: A health care provider who participates through a contractual arrangement with a health care service contractor, HMO, PPO, IPA or other managed care organization.
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Past Relevant Work:
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Past Relevant Work: the work you have performed 15 years prior to your onset of disability, lasting more than three months at any given time.
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Past Service Credits
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Past Service Credits: Pension benefits awarded to a beneficiary for service prior to inception of the plan.
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PCCM
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PCCM: See Primary Care Case Management.
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PCP
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PCP: See Primary Care Provider.
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Peer Review
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Peer Review: The evaluation of the clinical practice activities as well as the clinical
outcomes of one health care professional by others of the same specialty and geographic
region.
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Peer Review Organization (PRO)
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Peer Review Organization (PRO): An independent, state-based organization that uses local doctors and nurses to assess the quality of care provided to beneficiaries.
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Penal Sum
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Penal Sum: The maximum amount of a surety's liability under a surety bond.
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Pension
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Pension: A retirement annuity. The monthly income that is paid to a plan participant (and, often, to a spouse) for the rest of his or her life, after reaching a certain retirement age.
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Pension Benefit Guaranty Corporation (PBGC)
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Pension Benefit Guaranty Corporation (PBGC): A federal agency established as part of ERISA tomonitor pension plans and ensure that the vested benefits are fully funded. It acts also as a guarantor for pension participants in plans that become insolvent.
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Pension Equity Plan
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Pension Equity Plan: A type of defined benefit plan, sometimes referred to as a hybrid plan because it mimics some of the characteristics of defined contribution plans. Employees receive credits in their own account, based on a percentage of their salary and a credited interest rate, with proportionately greater benefits provided to employees as they get older. Although the account is more hypothetical than real, the funds are subject to the same rules as defined benefit plan assets and form part of the company's asset pool.
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Pension Plan
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Pension Plan: A defined benefit or defined contribution plan in which employees are granted certain retirement benefits. A retirement program to provide employees (and, often, spouses) with a monthly income payment for the rest of their lives.
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Per Member Per Month (PMPM)
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Per Member Per Month (PMPM): The unit of measure related to each member for each month the member was enrolled in a managed care plan.
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Per Member Per Month (PMPM)
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Per Member Per Month (PMPM): The method by which most managed care organizations account for revenue and expenses.
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Performance Bond:
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Performance Bond: See Contract Performance Bond.
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Performance Standards
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Performance Standards: Standards an individual provider is expected to meet, especially with respect to quality of care. The standards may define volume of care delivered per time period.
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Peril
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Peril: The cause of a loss.
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Periodic Payment
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Periodic Payment: Payments made on a regular basis (per week, per month, etc.) over the life of a benefit plan.
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Permanent Disability Payment
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Permanent Disability Payment: A benefit payment for an insured who is permanently unable to perform duties related to the insured's employment or to engage in any other type of employment appropriate for the insured.
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Permanent Life Insurance
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Permanent Life Insurance: All forms of life insurance other than term insurance.
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Perpetual Mutual
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Perpetual Mutual: A mutual insurer that, for a one-time premium deposit, provides property insurance coverage with no expiration date.
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Persistency
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Persistency: The renewal rate of insurance policies. A high persistency rate means that a high percentage of policies stay in force until the end of the policy term; a low persistency rate means that a high percentage of policies lapse. The term is applied particularly with reference to life insurance policies and annuities.
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Personal Injury
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Personal Injury: (1) Any physical or mental harm to a person's tangible or intangible property covered under general liability insurance. (2) In legal terms, injury solely to a person's body.
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Personal Lines Insurance
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Personal Lines Insurance: Insurance that covers individuals or families, in contrast to commercial lines insurance, which covers commercial and governmental activities.
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Personal Retirement Savings Accounts (PSAs)
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Personal Retirement Savings Accounts (PSAs): A self-directed retirement saving plan that has been proposed as a replacement for part of Social Security. Similar in some respects to IRAs, PSAs would allow workers to divert part of their Social Security taxes into their own personal accounts, which they could invest with various financial services companies and in a variety of financial assets.
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Personal Surety
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Personal Surety: An individual, usually operating without supervision by state insurance regulators, who supplies surety bonds.
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Personal Umbrella Policy
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Personal Umbrella Policy: See Umbrella Liability Policy.
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PHP
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PHP: Pre-Paid Health Plan. See Partial-Risk Capitation.
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Physiatrist
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Physiatrist: A physician who is board-certified in physical medicine and rehabilitation.
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Physical Capacity
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Physical Capacity: The capability of an employee to perform work activities and job tasks.
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Physical Damage
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Physical Damage: Actual damage to tangible property.
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Physical Medicine and Rehabilitation
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Physical Medicine and Rehabilitation: The medical practice of diagnosing, treating,
preventing, and rehabilitating conditions that result in physical impairments and disabilities.
Also known as physiatry.
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Physician Payment Review Commission (PPRC)
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Physician Payment Review Commission (PPRC): The body that advises Congress on Medicare physician payment issues.
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Physician-Hospital Organization (PHO)
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Physician-Hospital Organization (PHO): An alliance formed by physicians and hospitals to share administrative services and costs, and to improve their bargaining position with payers and when contracting with managed care providers.
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Piper Alpha
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Piper Alpha: An oil rig disaster that occurred in 1988 in the North Sea off the coast of Scotland. The total loss was approximately $1.5 billion.
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Plaintiff
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Plaintiff: The party bringing a legal action.
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Plan Administrator
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Plan Administrator: The term can mean (i) the person specifically so designated by the terms of the instrument under which the plan is operated; (ii) if an administrator is not so designated, the plan sponsor; or (iii) in the case of a plan for which an administrator is not designated and a plan sponsor cannot be identified, such other person as the Secretary may by regulation prescribe.
Rule # 1: The administrator is the person or entity identified in the plan documents. [29 U.S.C. 1002 Section 16(A)_(i)]
Many documents will identify the plan administrator and the query may end there. On the other hand, if none is so identified, two default rules are supplied in cascading fashion, as follows:
Rule #2: If Rule #1 does not apply, the "plan sponsor" is the "administrator" for purposes of the statute. [29 U.S.C. 1002 Section 1(A)(ii)]
Once again, ERISA defines the term. The statute defines "plan sponsor" as:
(i) the employer in the case of an employee benefit plan established or maintained by a single employer,
(ii) the employee organization in the case of a plan established or maintained by an employee organization, or (iii) in the case of a plan established or maintained by two or more employers or jointly by one or more employers and one or more employee organizations, the association, committee, joint board of trustees, or other similar group of representatives of the parties who establish or maintain the plan.29 U.S.C. 1002 Section 16(B)
Rule #3: If neither Rule #1 nor Rule #2 apply, the administrator is "such other person as the Secretary may by regulation prescribe." [U.S.C. 1002 Section 16(A)(ii)].
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Plan Participants
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Plan Participants: Employees participating in and covered under a qualified employee benefit plan, such as a pension or profit-sharing plan.
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Plan Sponsor
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Plan Sponsor: An employer (business, nonprofit organization, government, etc.), association, labor union or other group offering a qualified employee benefit plan, such as a pension or profit-sharing plan.
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PML
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PML: See Probable Maximum Loss.
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PMPM
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PMPM: See Per Member Per Month.
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Point-of-Service Plan (POS)
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Point-of-Service Plan (POS): A health care delivery system in which insureds are encouraged, but not required, to choose health care providers within the designated provider network. Also known as an open-ended HMO. As in traditional HMOs, the chosen primary care physician acts as a "gatekeeper" when making referrals; plan members may, however, opt to visit non-network providers at their discretion. Subscribers choosing not to use the primary care physician must pay higher deductibles and copays than those using network physicians.
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Policy
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Policy: An insurance policy or annuity contract issued by an insurer.
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Policy Acquisition Costs
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Policy Acquisition Costs: Direct expenses relating to an insurer's acquisition and retention of business, including agents' and brokers' commissions, premium taxes, and marketing and underwriting expenses.
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Policy Exclusion
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Policy Exclusion: See Exclusion.
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Policy Jacket
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Policy Jacket: The outside cover of an insurance policy where common provisions of the policy are listed.
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Policy Loan
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Policy Loan: A provision in a life insurance policy granting the owner the right to borrow the policy's cash value.
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Policy Reserves
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Policy Reserves: See Reserves.
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Policy Year Experience
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Policy Year Experience: A recording of financial results based upon policies issued in a given year. Thus, an insurer's policy year experience for 1992 would be based upon the loss experience of all policies issued in 1992.
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Policyholder
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Policyholder: A person or entity in whose name an insurance policy has been issued.
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Policyholder
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Policyholder: The Employer to whom the policy is issued.
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Policyholder Dividend
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Policyholder Dividend: The surplus payable to a holder of a participating policy as declared by an insurer's board of directors.
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Policyholders' Surplus
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Policyholders' Surplus: The amount remaining after an insurer's liabilities are subtracted from its admitted assets, applying statutory accounting practices.
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Political Risk Insurance
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Political Risk Insurance: A form of insurance that indemnifies exporters and funding sources against losses arising from political events, such as expropriation, war or currency restrictions.
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Pool
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Pool: An underwriting mechanism in which the participants share premiums, expenses, losses and profits for business written.
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Pooling
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Pooling: The act of becoming a member of a pool.
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Portability
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Portability: The employee's right to transfer pension benefit credits from a former employer to a current employer, or to a tax-deferred vehicle such as an IRA.
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Portfolio
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Portfolio: All of an insurer's premiums and reserves in a particular category of insurance. Also refers to an insurer's investments.
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Portfolio Transfer
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Portfolio Transfer: The act of reinsuring or otherwise assigning a portfolio by one insurer to another.
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POS
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POS: See Point-of-Service Plan.
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PPO
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PPO: See Preferred Provider Organizations.
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PPS
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PPS: See Prospective Payment System.
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Precertification
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Precertification: The process of notification and approval of elective inpatient admission and identified outpatient services before the service is rendered. Often involves appropriateness review against criteria and assignment of length of stay. Failure to obtain precertification often results in a financial penalty to either the provider or the subscriber. Also known as preadmission certification, preadmission review and precert, this is a component of utilization management.
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Pre-Disability Earnings
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Pre-Disability Earnings: The amount of an employee's wage or salary covered by a plan
on the date disability began; usually excludes overtime pay, bonuses, commissions, and any
other extra pay. In STD plans, also called basic weekly earnings. In LTD plans, also called
basic monthly earnings or covered earnings. After the first year of disability, the covered
earnings may be increased by an annual percentage (indexed) to keep pace with inflation.
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Preemption
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Preemption: Section 514(a) of ERISA preempts all state laws insofar as they relate to employee benefit plans covered by Title I of ERISA subject only to certain exceptions expressly provided in section 514(b) of ERISA, was enacted to ensure that ERISA's substantive standards would uniformly apply to all plans to protect plan participants and beneficiaries, to promote the development of employee benefit plans, and to assure uniform regulation of such plans. Congress intended through section 514(a):
to ensure that plans and plan sponsors would be subject to a uniform body of benefits law; the goal was to minimize the administrative and financial burden of complying with conflicting directives among States or between States and the Federal Government . . [and to prevent] the potential for conflict in substantive law . . . requiring the tailoring of plans and employer conduct to the peculiarities of the law of each jurisdiction.
See also, "Complete Preemption" and "Conflict Preemption", supra.
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Preexisting Condition
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Preexisting Condition: Illness or injury for which an employee has received medical
treatment or consultation before the effective date of coverage under a disability plan.
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Pre-Existing Condition
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Pre-Existing Condition: The physical or mental condition of an insured that exists prior to issuance of an insurance policy. In certain instances, an undisclosed pre-existing condition can result in cancellation of a policy. A physical condition of an insured person that existed prior to the issuance of the policy or enrollment in a health plan, and which may result in the limitation in the contract on coverage or benefits. Federally qualified HMOs cannot limit coverage for pre-existing conditions.
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Preexisting Condition Limitation
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Preexisting Condition Limitation: Plan Provision that excludes or reduces Disability
benefits for any illness or injury for which an employee received medical treatment or
consultation within a specified time period before being covered under a disability plan.
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Preferred Provider Organizations (PPOs)
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Preferred Provider Organizations (PPOs): Health care delivery systems in which hospitals, physicians and other health care providers agree to provide health care services at a discount. A health care arrangement between purchasers of care (e.g., employers, insurance companies) and providers that provides benefits at a reasonable cost by providing members incentives (such as lower deductibles and copays) to use providers within the network. Members who prefer to use nonpreferred physicians may do so, but only at a higher cost. Preferred providers must agree to specified fee schedules in exchange for a preferred status and are required to comply with certain utilization review guidelines.
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Preferred Risk
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Preferred Risk: An insurable interest anticipated to have a better or lower-than-average loss experience. Based on this prediction, preferred risks generally pay lower premiums than do standard risks.
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Premises
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Premises: The location of property, as specified in an insurance policy.
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Premium
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Premium: The payment to an insurer in consideration of the insurance coverage being provided.
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Premium
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Premium: The periodic payment (e.g., monthly, quarterly) required to keep an insurance
policy in force.
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Premium Taxes
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Premium Taxes: Taxes levied by states on premiums received by insurers. Premium taxes usually are assessed at rates approximating 2% to 3% of premiums.
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Premium, Annualized
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Premium, Annualized: The price of coverage for one year; the premium for one
period multiplied by the number of periods in the policy year.
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Premium, Earned
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Premium, Earned: That part of a premium applicable to the elapsed portion of the
policy term (the period of time for which the insurer has already provided coverage).
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Premium, Initial
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Premium, Initial: Premium deposit paid when applying for a policy; applied against
the first period's premium when it is determined.
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Premiums Earned
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Premiums Earned: See Earned Premiums.
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Premium-to-Surplus Ratio
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Premium-to-Surplus Ratio: The ratio of net premiums written to policyholders' surplus; one of the major leverage ratios used to analyze company performance.
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Price-Anderson Act
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Price-Anderson Act: Federal legislation that establishes a no-fault liability scheme for nuclear accidents and limits liability for each nuclear reactor facility. See also Nuclear Insurance Pools.
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Primary Beneficiary
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Primary Beneficiary: A person entitled to receive the proceeds of a life insurance policy on a priority basis.
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Primary Care
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Primary Care: Basic or general health care usually rendered by general practitioners, family practitioners, internists, obstetricians and pediatricians, often referred to as the primary care provider (PCP). Referral is made to secondary care specialists, as necessary.
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Primary Care Case Management (PCCM)
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Primary Care Case Management (PCCM): A form of state-managed Medicaid in which beneficiaries select a primary care physician, who is paid a flat monthly fee and must approve and monitor the use of Medicaid services. Other providers are paid as under a traditional Medicaid program.
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Primary Care Physician
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Primary Care Physician: A physician trained in one or more of the following areas: family
medicine, general practice, general internal medicine, and pediatric medicine. Some health
plans include obstetrics-gynecology as one of the types of primary care physicians.
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Primary Care Provider or Primary Care Physician (PCP)
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Primary Care Provider or Primary Care Physician (PCP): The physician responsible for overseeing and coordinating all aspects of a patient's medical care. In order for a patient to receive a specialty care referral or hospital admission, this physician must preauthorize the visit, unless there is an emergency. Also known as a "gatekeeper."
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Primary Company
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Primary Company: An insurer that deals directly with the consumer to provide insurance coverage.
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Primary Integration
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Primary Integration: The LTD benefit is reduced, dollar for dollar, by social security
benefits paid or payable to the insured because of the worker's disability. This does not
include benefits payable to the eligible spouse and/or children.
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Principal
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Principal: The party primarily liable under a surety bond.
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Prior Acts Coverage
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Prior Acts Coverage: A provision in certain claims-made insurance policies that specifies that acts as of a certain retroactive date will be covered.
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Prior Approval Laws
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Prior Approval Laws: Legislation that requires insurers to file proposed rates with insurance regulators and obtain approval by the regulators before the rates can be used.
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PRO
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PRO: See Peer Review Organization.
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Probable Maximum Loss (PML)
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Probable Maximum Loss (PML): The largest loss estimated by an underwriter as applicable to a particular risk, given the worst combination of circumstances perceived as possible.
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Probate Bond
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Probate Bond: See Fiduciary Bond.
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Probationary Period
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Probationary Period: The waiting period required before one can participate in a group plan or have coverage under a policy.
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Proceeds
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Proceeds: The amount payable from an insurance policy.
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Producer
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Producer: A person who originates insurance business, e.g., an agent.
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Products Liability Insurance
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Products Liability Insurance: A form of insurance that covers legal liability for losses resulting fromproducts designed, manufactured or distributed by the insured.
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Professional Liability Insurance
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Professional Liability Insurance: A form of insurance that covers an insured's liability for any actual or alleged breach or neglect of duty committed in the conduct of the insured's profession.
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Professional Reinsurer
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Professional Reinsurer: An insurer whose business is limited primarily to reinsurance coverages. Most reinsurers do not underwrite primary coverages, although they are not prohibited from doing so.
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Professional Review Organization
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Professional Review Organization: A group of physicians with responsibility to review the quality of health care service provided under the Medicaid and Medicare programs.
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Professional Standards Review Organization (PSRO)
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Professional Standards Review Organization (PSRO): A physician-sponsored organization charged with reviewing the services provided patients who are covered by Medicare, Medicaid and maternal and child health programs. The purpose of the review is to determine if the services rendered are medically necessary, provided in accordance with professional criteria, norms and standards, and provided in the appropriate setting.
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Proof of Loss
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Proof of Loss: A written statement submitted by a policyholder to the insurer setting forth information regarding a claim, thereby enabling the insurer to evaluate its liability for payment.
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Property Insurance
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Property Insurance: A form of insurance policy that indemnifies an insured for losses, damage and loss of use of tangible property.
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Proportional Reinsurance
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Proportional Reinsurance: See Quota Share Reinsurance.
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Proposition 103 (Prop. 103)
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Proposition 103 (Prop. 103): An initiative passed by the voters of the State of California in 1988 that, among other provisions, called for the roll-back of insurance rates by 20% and imposed restrictions upon the ability of insurers to raise rates for California insureds.
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Prospective Payment
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Prospective Payment: An advance payment for health care expenses to be incurred in the future.
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Prospective Payment System (PPS)
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Prospective Payment System (PPS): A payment method that establishes rates, prices or budgets before services are rendered and costs are incurred. Providers retain or absorb at least a portion of the difference between established revenues and actual costs.
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Protection and Indemnity (P&I) Insurance
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Protection and Indemnity (P&I) Insurance: Liability insurance associated with sea vessels and cargoes, covering losses other than those covered by workers' compensation and those arising from collisions.
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Provider
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Provider: Any individual, group of individuals or organization that provides a health care service, such as a physician, hospital, group practice, nursing home, pharmacy, etc.
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Providers
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Providers: A broad term referring to the licensed or certified health care professionals and
organizations that provide care to HMO members. Providers can be independent
professionals in private practice or they can be members of an organized group, such as
multi-specialty medical group. Common providers in managed care include hospitals,
medical groups, home care companies, skilled nursing facilities, medical equipment
companies, primary care physicians, and specialty physicians.
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Provider-Sponsored Organization (PSO)
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Provider-Sponsored Organization (PSO): Essentially, provider-owned and -run HMOs.
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Provisional Premium
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Provisional Premium: The premium charged by an insurer upon inception of the policy, which is subject to adjustment upon audit or other measurement of actual exposure.
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Proximate Cause
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Proximate Cause: The direct and immediate cause of loss. If an event is the proximate cause of a loss, an insurer providing liability coverage for such event will be required to provide indemnification.
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PSA
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PSA: See Personal Retirement Savings Accounts.
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PSO
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PSO: See Provider-Sponsored Organization.
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PSRO
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PSRO: See Professional Standards Review Organization.
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Public Adjuster
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Public Adjuster: A person hired by the insured to assist in the claim settlement process.
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Puerto Rico Disability Benefits (PRDB) Law
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Puerto Rico Disability Benefits (PRDB) Law: Mandates a non-occupational, short-term disability plan funded through a tax-supported
state fund; in effect since 1969. Employers may substitute a private, insured or self-insured
plan equaling or exceeding state benefits; additional cost is funded by employer, employees,
or both.
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Punitive Damages
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Punitive Damages: Damages awarded not as compensation but to punish a wrongdoer and to deter future misconduct by others; also known as exemplary damages.
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Pure Loss Ratio
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Pure Loss Ratio: The ratio of losses incurred to premiums earned, without taking into account an insurer's marketing and administrative expenses or loss adjustment expenses.
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Pure Premium
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Pure Premium: The portion of an insurance premium sufficient to pay an insurer's losses and loss adjustment expenses but not its marketing and administrative expenses.
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Pure Risk
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Pure Risk: A risk that a loss may or may not occur but will not result in a gain; as opposed to a speculative risk, which may result in a loss or a gain. Pure risks are generally insurable, whereas speculative risks, such as gambling, are not.
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