Method in proportional treaty reinsurance whereby all premiums and losses relating to an underwriting year are accounted to that year regardless of when such losses arise or when such premiums and losses are paid.
Insurance Encyclopedia
Undiscovered loss clause
Cargo clause providing cover for losses that are not discovered until the boxes are opened after the termination of the risk. Externally the box or package appears in good condition, but contains concealed damage.
Undocumented service
A service that has been billed on an insurance claim for which there is either insufficient or no supporting documentation to validate the service or procedure in the patient’s medical record.
Unearned premium
See: unearned premium reserve .
Unearned premium (UEP)
Portion of a property or liability Insurance premium equal to the unexpired portion of the period for which the total premium has been paid. The unearned premium equals the gross premium minus the earned premium. Thus, for an annual Policy, at the end of the first month of coverage, eleventh-twelfths of the premium is unearned.*****That part of the original premium not yet earned by the Insurance Company and therefore due to the Policy-holder if the Policy should be cancelled.*****
That portion of an insurance premium that would have to be returned to the insured if the policy were canceled.
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That portion of the original premium that applies to the unexpired portion of risk A fire or casualty insurer or reinsurer must carry a reserve against all unearned premiums as a liability in its financial statement, for if the policy should be cancelled, the company would have to pay back the unearned part of the original premium.
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The proportion of premium that relates to the unused period of cover.
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The fraction of the premium which has remained unused during the time frame in which the premium was paid.
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That portion of the policy premium that has not yet been “earned” by the company because the policy still has some time to run before expiration. A property or casualty insurer must carry all unearned premiums as a liability in its financial statement since, if the policy should be canceled, the insurer would have to pay back a certain part of the original premium.
Unearned Premium Insurance
See: Aviation Unearned Premium INSURANCE.
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Insurance against loss by the insured of unearned premium due to payment of a claim made prior to the end of the term for which the premium was paid. A loss on the second day of a Policy written for a year would have the effect of being expenses over an eleven month period, during which time the Insurance Company would not be insuring the risks since the risk did not exist any longer and thus it would be unearned.
Unearned Premium Portfolio
The sum of all unearned premium for in force policies of insurance under the reinsurance agreement, often with respect to a particular block, book or class of business during a particular period.
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UK: an amount payable by a cedant to a reinsurer in consideration of the reinsurer accepting liability for all or part of the liability arising under a contract of reinsurance for claims occurring after a specified date under all or certain underlying contract incepting prior to that date.
Unearned Premium Portfolio Rollover
A term describing an accounting transaction in which an unearned premium portfolio is carried forward from one accounting period to the following accounting period under an existing contract or a renewal.
Unearned premium reserve
Fund that holds a part of the insurance premium that has been paid in advance for which the protection of the policy has not yet been provided. Also called unearned premium .
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A reserve equal to an amount of net premium written but not yet earned.
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The amount of all premiums which have not been earned as of a particular point in time, which is shown on the insurer’s balance sheet.
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The fund set aside by an Insurance Company to provide for the payment of unearned premiums on cancelled policies.
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REINSURANCE: The reserve amount included in the company’s financial statements for unearned premiums with respect to the insurance policies or reinsurance agreements as of a particular point in time. Unearned premiums are the sum of all the premiums representing the unexpired portions of the policies or reinsurance agreements which the insurer or reinsurer has on its books as of a certain date.
Unearned premium/unearned premium reserve
That part of the premium or reinsurance premium applicable to the unexpired portion of the policy. The unearned premium reserve is the accounting provision at a specific time that reflects the total amount of unearned premiums. The effect is to write down current profits by the reserve and carry it forward as income in the next financial year.