In Marine insurance indemnity as provided by the Marine Insurance Act for unvalued policies e.g., in the case of total loss of hull, the actual market value of the vessel. (In practice a valued policy is always issued).
Insurance Encyclopedia
Pure Loss Cost
See: Burning Cost.
Pure Loss Cost Ratio
(i) The ratio of reinsurance losses incurred to the ceding company’s subject premium. (ii) The ratio of the reinsurance losses incurred and allocated, less expense to the ceding company’s gross earned premium.
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See: “Reinsurance, Pure Loss Cost Ratio.”
Pure loss cost ratio (Reinsurance)
The ratio comprising the reinsurer’s losses in relation to the premiums received by the ceding company from the subject.
Pure Premium
Portion of the total premium needs to pay expected losses and loss adjustment expenses, with no allowance for the Insurer’s expenses or profit. Pure Premium = Actual Loss + Loss Adjustment Expenses
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MEDICAL,USA,REFERENCE: See: pure premium rating method.
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The fraction of the premium payment that is used pay the probable losses.
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The pure risk premium is the product of claim frequency and claim severity per unit of exposure. Hence, pure premium can be calculated as follows… Pure Premium = Actual Loss + Loss Adjustment Expense
Pure Premium Present Level
The pure premium component of experience adjusted to reflect pure premium underlying current premium rates.
Pure Premium Rate
The portion of the premium rate representing projected losses with or without LAE or ALAE.
Pure premium rating method
1. Calculation of the cost of liability insurance protection without loadings for the insurance company’s expenses, premium taxes, contingencies, and profit margins. 2. Average expected cost for insurance benefits.
Pure protection contracts
Contracts that are a sub-category of long-term insurance contracts, e.g. critical illness and income protection, in respect of which: (a) the benefits are payable only on death or in respect of incapacity due to injury, sickness or infirmity; (b) the benefits are payable on death (other than accidental death) only where death occurs within 10 years of the date on which the person in question was first insured, or where death occurs before that person attains a specified age not exceeding 70 years; (c) the contract has no surrender value, or the consideration consists of a single premium and the surrender value does not exceed the premium; (d) the contract makes no provision for conversion or extension causing it not to comply with (a), (b) or (c); and (e) the contract is not one of reinsurance. These contracts are governed by the Insurance: Conduct of Business rules. Long-term care is regulated as an investment product and therefore excluded from the definition.
Pure reinsurer
an insurer who carries on only reinsurance.