Minimum reserves required by an insurance company. An insurer’s required minimum margin of solvency must not fall below the MGF. MGF for general business is €2 million (or €3 million for motor, aviation, general liability, credit and suretyship). This is reduced by 25 per cent for mutual associations. The MGF for life insurance undertakings is €3 million but is reduced by 25 per cent for mutual associations. The new levels of MGF under Directive 2002/12/EC do not apply to mutuals with less than €5 million of annual contribution income. The FSA calls for a short-term plan if the MGF rule (rule 2.9) is breached. The new MGF levels are index linked in line with inflation. See MARGIN OF SOLVENCY.
Insurance Encyclopedia
Minimum income guarantee
Tops up the income of pensioners receiving less than the minimum income by pension credits.
Minimum payments
Minimum amount an employer is allowed to contribute to a contracted out money purchase pension scheme. The amount contributed secures protected rights for the members. It consists of a flat rate rebate of national insurance contributions and corresponds to the reduction in NI contributions that applies in respect of employees who are contracted out.
Minimum Premium
REINSURANCE: An amount of premium which will be charged (usually for an excess of loss reinsurance contract), notwithstanding that the actual premium developed by applying the rate to the subject premium could produce a lower figure. See Deposit Premium.
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An insurer’s lowest charge for an insurance policy. See Also: “Premium, minimum premium.”
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The minimum amount that is payable to an insurer or reinsurer as a premium in respect of a insurance or, more commonly, reinsurance contract which provides for a deposit premium. The minimum premium may be the same as the deposit premium or a different figure.
Minimum premium (Health Insurance/General Insurance Terms)
In health insurance, this term refers to an arrangement wherein the fraction of the premium that the employer pays is used to cover administration costs. The rest is saved by the insurer and eventually used to pay claims. This can also refer to a general insurance term used to mean the lowest premium an insured can be covered for under a certain policy.
minimum premium plan (MPP)
Group health insurance plan that is partially self-insured by the group policyholder but fully administered by an insurer. Premiums are low because the group policyholder pays most of the claims.
Minimum premium rate
Lowest premium amount that an insurance company will charge a policyholder for the first year or a specified period of a group insurance policy. Also referred to as minimum premium .
Minimum Rate
A rate for low hazard risk.
Minimum rate (Property Insurance)
A rate assigned to low-peril risks.
Minimum reserve
Nominal reserved against a claim that has been reported to an insurer but without sufficient information to enable the insurer to make a reasonable assessment of the potential liability. See IBNER. amount