accounting for general insurance business whereby a result is determined at the end of the accounting period reflecting the profit or loss from providing insurance cover in that period (compare with fund basis).
Insurance Encyclopedia
Annual bid bond service
An arrangement whereby a contractor pays a premium once a year and in return gets all or a certain number of bid bonds and consents of surety free of charge.
Annual completion factor
Computation adjustment of 12 months of incurred and paid insurance claims to 12 months of expected incurred insurance claims. See incurred claims and expected incurred claims.
Annual compliance review
1. All listed companies should conduct an annual review to confirm that the company, through its directors and officers, has followed sound practices in terms of corporate governance. The directors must report on key risks facing the company and state how the risks are controlled or avoided. See TURNBULL REPORT. 2. An annual review is also required of managing and members’ agents at Lloyd’s to demonstrate their commitment to, and achievement of, recognised compliance standards.
Annual contractor evaluation report (ACER)
Under the Medicare program, this is a yearly assessment report of a provider who contracts to render medical services to Medicare beneficiaries.
Annual cost of living increase
Social Security benefits and supplemental security income payments increased each year to keep pace with increases in the cost of living (inflation).
Annual deductible
See: deductible.
Annual election period (AEP)
For Medicare beneficiaries, this is a time of year, during the month of November, in which all Medicare+Choice health plans are open and accepting new members. Enrollment begins the following January. See election period.
Annual Expected Loss
See: “Loss, probable yearly aggregate.”
Annual maximum
Highest dollar amount that an insurance company will pay on all claims experienced in 1 year for an insured as stated in the insurance contract.