Guaranteeing payment of bonds to depositors in accordance with the terms of a deposit in a bank.
Insurance Encyclopedia
Deposit company
Also called a community deposit company it means an insurance company (other than a pure reinsurer) whose head office is not in an EC State and which has made a deposit in a member State other than the United Kingdom in accordance with regulatory requirements. If the deposit is lodged in the UK the company is called a UK deposit company.
Deposit or provisional premium
A premium amount derived from an approximate value of the final premium. This premium is paid at the start of the policy.
Deposit premium
US: (1) In property and casualty insurance, the premium deposit required by the insurer on forms of insurance subject to periodic premium adjustment. Also called “provisional premium.” (2) In reinsurance, the amount of premium (usually for an excess of loss reinsurance contract) that the ceding company pays to the reinsurer on a periodic basis during the term of the contract. This amount is generally determined as a percentage of the estimated amount of premium that the contract will produce based on the rate and estimated subject premium. It is often the same as the minimum premium but may be higher or lower. The deposit premium will be adjusted to the higher of the actual developed premium or the minimum premium after the actual subject premium has been determined by audit or reporting of the actual exposures insured during the coverage period.
***
MEDICAL,USA: 1. Amount that is paid by a prospective insurance policyholder when an application is made for an insurance policy. It is usually the first month’s estimated premium and is applied toward the actual premium when a statement is sent to the insured. 2. Funds left on deposit with the insurance company for plans subject to premium adjustment. Also called premium deposits .
***
UK: 1. Payment under an adjustable policy to an insurer at the inception based on an estimate of fluctuating values, activities or costs that may be adjusted up or down at the end of the term. 2. In non-proportional reinsurance it is the amount paid by a cedant to a reinsurer representing all or part of premiums expected to be earned under the contract. The premium is adjusted at the end of the contract term or periodically within a multi-year contract to reflect actual premiums earned. If the parties work on an adjustable rate basis the deposit premium may be tiated quarterly. nego
***
A premium that is payable at the inception (start) of an insurance or reinsurance contract and in respect of which an adjustment premium (usually an additional premium) is due depending on the performance of the contract including, possibly, the amount of the business that is ceded thereunder. Compare minimum premium.
***
REFERENCE: See: “Premium, Deposit premium.”
***
REINSURANCE: The amount of premium (usually for an excess of loss reinsurance contract), that the ceding company pays to the reinsurer on a periodic basis (usually quarterly) during the term of the contract. This amount is generally determined as a percentage of the estimated amount of premium that the contract will produce based on the rate and estimated subject premium. It is often the same as the minimum premium but may be higher or lower. The deposit premium will be adjusted to the higher of the actual developed premium or the minimum premium after the actual subject premium has been determined.
***
REINSURANCE: This arises when the actual premium awaits the outcome of the completion of the treaty or contract period. AT inception the reinsurer therefore receives premium as a deposit subject to its adjustment on completion of treaty or contract period.
***
When the price of insurance is tied to fluctuating values or costs that cannot be known until the end of the policy period, inventory or payroll being two common examples, a deposit or provisional premium or estimated premium may be charged at the outset of a policy with final adjustment to come at the end of the term.
Deposit term life insurance
Type of level term insurance that needs a larger premium payment in the first year than the amount of annual premiums in subsequent years. This higher first-year premium is called a deposit . If the insured dies, double the deposit is added to the death benefit. If the insured lives, double the deposit is returned. If the policy lapses, the insured forfeits the deposit and receives no refund.
Deposit-only bank account
Type of bank account that provides protection against cyber thieves because it has a block or filter that enables it to only accept electronic deposits. Sometimes called zero-balance account (ZBA) . See also electronic funds transfer (EFT) system .
Deposition
Process of taking a witness’s sworn testimony out of court; usually done by an attorney. It is a chance for the opposing attorney to ask the witness whatever he or she wants to know, to fill in some blanks, finish preparing the case, evaluate the witness’ testifying style, and determine how to approach the witness at trial.
Deposition (Legal Terminology)
A sworn statement taken from a party or witness in a court case. This statement is usually done as an interview, which the person testifying is compelled to attend.
Depositor’s forgery coverage
Coverage against loss due to forged instruments. Limited coverage is automatically included in homeowners contracts. Commercial establishments can purchase crime coverage with this feature.
Depositor’s Forgery Insurance
A type of protection against the forgery or alteration of instruments such as checks, drafts and promissory notes purported to have been written by the insured. It is issued to individuals, firms and corporations, but not to banks or buildings and loan associations. It can be written to cover incoming items, but this is seldom done. Contrast with “Commercial Forgery Policy.”