The final part of a policy signed by certain officers of the insurance company according to the Deed of Settlement or Memorandum and Articles of Association by which the company is constituted and business transacted. Also known as the Signature Clause.
Insurance Encyclopedia
Attorney-in-fact
An individual who is given authority to execute legal documents, including bonds or the manager of a reciprocal exchange, which is an insurance arrangement whereby risk is transferred to other members. The attorney-in-fact need not be a lawyer.
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A person who is authorized by letter or power of attorney to act on behalf of another, the principal, for a particular act or purpose as differentiated from the general practice of law; and attorney-in-fact acts as an Agent for the principal, but within a specifically limited areas of authority. An Agent or broker issuing an Insurance Policy acts as attorney-in-fact to bind the Insurer or accept premium payments. In bonding and surety ship contracts, a person binding the surety Company is an attorney-in-fact for the surety.
Attractive Nuisance
A dangerous place, condition or object which is particularly attractive to children. In such cases the courts have frequently held that where attractiveness exists, the owner is under a duty to take steps to prevent injury to those that may be attracted and the owner may be held liable for failure to do so. Certain types of machinery such as a rail road turntable have been held to be ‘attractive nuisance.’
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Property that is inherently dangerous and, at the same time, enticing to children is considered to be an attractive nuisance. The property owner is liable for injury to children and must take extra precautions to avoid injury.For example, a swimming pool is considered an attractive nuisance. Swimming pools attract children and swimming pool owners need to take extra precautions to prevent accidents such as building an adequate fence around the pool that keeps children away from the pool. Swimming pool owners have been held liable for accidents involving children hurt by diving into empty pools. Despite the fact that the children were trespassing and that the children should have realized the pool was empty, the property owner maintained an “attractive nuisance” and failed to adequately safeguard against curious children.
Attractive nuisance (Legal Terminology)
Property that is deemed hazardous and appealing to children; for example, a swimming pool. Special precautions must be taken by the property owner to avoid liability.
Attrition rate
Disenrollment from a health insurance plan expressed as a percentage of total membership. For example, a managed care plan with 40,000 members with a 2% attrition rate would need to gain 800 new members each month to retain the initial 40,000 covered lives.
Attritional loss ratio
The measure of residual insurance claims as a percentage of earned premiums (net of reinsurance). Attritional insurance claims are calculated as total claims with major losses and movements in prior year claims reserves subtracted.
AU
HCPCS Level II modifier that may be used with CPT or HCPCS Level II codes indicating item(s) used with urological, ostomy, or tracheostomy supplies. Use of this modifier affects Medicare payment.
Audit
1. Formal, methodical examination or review done to inspect, analyze, and scrutinize the way something is being done (e.g., bookkeeping practices, medical record documentation, insurance claim filing) to determine operational efficiency. 2. In the Medicare program, a process to ensure that the fiscal intermediary reimburses providers based only on costs associated with patient care.
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Some policies (such as workers compensation) are written subject to an audit. Since workers compensation premium is based on the insured’s payroll, the insurer is entitled to audit the insured’s records at the end of the policy to verify that it has collected an adequate premium for the amount of payroll to which it was exposed.
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US: A survey of the financial records of a person or organization conducted annually (in most cases) to determine exposures, limits, premiums, etc.
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Survey of an insured’s records to determine the premium which should be paid to the Insurer for protection furnished and perhaps for other purposes, such as compliance with loss control recommendations.
Audit by request
Type of audit of hospital patient records that occurs when a patient asks for an audit to verify hospital charges. Also see defense audit and random internal audit.
Audit Classification
A coding system for identifying the class of risk for entry in a return that has to be made to some designated office.