Glossary Index



NAMED INSURED: Industry, individual, organization, or firm in whose favor and name the policy is issued

NAMED PERILS POLICY : Policy where the perils against which cover is granted is listed; insurer is liable for making good losses incurred due to these named perils

NATIONAL WEALTH : Sum total of the value of the entire capital and goods available in a country

NATIONALIZATION : Takeover of the assets of private company or its operations by the government; compensation may or may not be offered

NATIONALITY OF VESSEL : Nationality of vessel is critical to the insurance company especially when the ship sails under "flag of convenience" as the owner would not prefer to extend the coverage on the shipped cargo through these vessels and insert the warranty to the open cover or policy

NATURAL GAS : Mostly methane at times can be ethane with minor quantities of entrained heavier fractions like butane, propane, etc., these and others are easily condensed from natural gas flow and are referred to as natural gas liquids and are different from liquid natural gas that is ethane or methane refrigerated under pressure to its liquid state

NATURAL LOSSES : Damages or loss caused due to natural vagaries like hurricane, storm, earthquake, lightning, etc.

NATURAL RESOURCES : Potential and actual forms of wealth provided by nature like oil, coal, arable land, and water power

NAVIGATIONAL LIMITS : Limits prescribed by the Port Authorities and Director General of Shipping with respect to area of operating the vessels that depends on factors like size, type, and nature of the ships; insurance policies also fix area limits for operation of the ships based on their uses

NCDRC : National Consumer Disputes Redressal Commission; complaints can be filed with NCDRC by any aggrieved insured against the insurance company when the claim amount is over INR 20 lacs; territorial jurisdiction of the commission is entire the country, appeals against the orders of any state consumer disputes redressal commission can also be filed with this authority

NEGLIGENCE : Failure of using reasonable care adopted by prudent individuals under similar conditions or situations

NEGOTIABLE INSTRUMENT : Title document for the property that is transferable from one individual to another during the normal course of business

NEGOTIATED SETTLEMENT : Claim settlement reached after compromising in cases where dispute with relation to liability or quantum of the payable loss exists but compromised disposal is more desirable for mutual interest

NEON SIGN INSURANCE : Insurance cover for damages or loss to neon sign installations by any external accidental reasons or theft, fire, explosion, or lightning; insured's liability to 3rd parties due to accidental damage to insured neon sign is also covered with this plan

NET LOSS : Residual loss to the insured after considering realization from salvage and/or recoveries from 3rd parties but this salvage and recoveries are not considered net of expenditures incurred for their realization

NET PREMIUM : Portion of the premium that is designed to provide coverage for benefits or losses payable under the insurance policy; but not various expenses; part of this premium is retained by the office after deducting the expenses for management and includes commission paid to agents

NET PREMIUM WRITTEN : Total premium written by any ceding firm after reducing premium ceded to the reinsurance company

NET PROFIT  : Net trading profit after excluding capital receipts and accretions and outlays that are chargeable towards capital; is determined after providing for standing charges but before deductions of taxes; loss of profit plan provides coverage for loss of net profit and insured standing fees during the time of interruption to the production resulting from damage in insured premises due to insured peril/s

NET RETAINED LINE CLAUSE : Clause that is applicable to excess of loss reinsurance coverage that refers to protection offered by the cover only for retained net line account of the reinsured; net account may be inclusive of normal any single risk retention according to reinsurance program or unplaced share of proportional treaty post retention; according to this clause excess of loss coverage excludes second term

NET RETAINED LINES : Related to excess of loss reinsurance treaties is provision that the contract is only protecting some portion of the insurance that is retained by the reinsured to the net account; treaty does not offer protection if one of the proportional reinsurance provider/s under the treaty is not willing to settle its related share of loss under the contract and because of this reflects back as liability that is to be borne by the reinsured

NET RETENTION : Capacity that insurance companies put forth for retaining risks to its own account without any need for reinsurance

NET TONNAGE : Cargo and/or passenger accommodation expressed in terms of cubic measurements depending on 100 cubic feet equaling one net registered ton

NET WORTH OF THE COMPANY. : Indicating excess of assets over liabilities of the organization that in turn implies sum of preference and equity capital and free reserves such as general reserves of the firm

NEW ATTACHMENTS : Acquisition of new vessels to existing fleet; rate of premium of these new assets depend on the experience of the fleet and factors like registered tonnage, sum insured, type, trading limits of individual ship, age, etc.; premiums for ships are based on trading limits chosen by owners like port limits, worldwide, or limited trading

NEW BUSINESS CLAUSE : Special clause included to specification in loss of profit insurance plan; when insurance is arranged for new business where no historical performance numbers are available the clause amends definitions of gross profit rate, standard turnover, or annual turnover for expanding turnover from start of business until date of damage for giving proportionate figures for 12 months.

NO CESSION WITHOUT RETENTION : Condition in reinsurance contract that states ceding company should retain some portion of the risk and reinsurance the remaining; contract will not permit reinsurance for one hundred percent of the risk/s; primarily acts as a safeguard to the interest of the reinsurer for ensuring bad risks are not completely assumed by the reinsurance company

NO CLAIM BONUS : Reduction as a percent in the manual or prospectus premium while renewing the policy depending on favorable claim experience during the previous year or policies for same insured property against same risks

NO CLAIM REFUND : Part of agreed premium in the policy that must be refunded to the insured in case of no claim being paid or reported in the entire policy duration; customary for insurance companies to link it with the policy renewal for ensuring renewal without gaps

NO CURE, NO PAY : Terminology used with relation to salvage operations of cargo or vessel in distress; salvage award payable to the saver in on No cure No pay basis meaning s/he is entitled to receive the reward only when and if property is salvaged; recovery agents pursuing recoveries from carriers to handle given assignments offered by insurance providers on this basis where claim fee when some amount is recovered from carriers

NO FAULT LIABILITY : Claimant does not require proving that injury, death, or damage has occurred due to negligence, wrongful act, or default of an individual; relief provided under these acts are under "no fault liability"; motor vehicle act with regards to road accidents, public liability insurance act, and workers compensation act

NO KNOWN OR REPORTED LOSS : Condition sometimes stipulated by insurance and/or reinsurance providers that base the acceptance of proposals subject to no reported or known loss for subject matter proposed for insurance or reinsurance on the acceptance date

NOMINEE : Institution, firm, or individual mentioned in accident insurance plans to be the beneficiary of the benefits in case of demise of the insured due to an accident

NON - PERFORMING ASSETS : Refers to investments classified as non-performing assets (NPA) according to company accounting policies; RBI provides detailed guidelines on how to and when an investment is considered as NPA in relation to non-payment of debenture or loan when due or interest non-payment on these on due date; amount provided for such cases as per RBI guidelines are applicable to financial institutions and banks; insurance companies may opt to follow these guidelines and provide these in their accounting books

NON DESTRUCTIVE TESTING : Testing of any component without destroying or damaging it in actuality

NON FARE PAYING PASSENGERS : Provision within motor insurance commercial vehicles plans for covering in respect to commercial automobiles that are unauthorized to carry fare paying passengers or individuals related to specific journey to travel on paying an additional premium amount

NON HAZARDOUS : Physical or chemical properties of matter in whichever state that presents no undue exposure to the peril in question; normally premium rates are lowest for such goods

NONASSIGNABLE POLICY : Insurance plan that cannot be assigned by an insured to any other person; normally liability and property policies are not assignable

NON-CONCURRENT POLICIES : Two or more insurance plans that cover portion of the property covered by other policies or those that include uncovered properties of others; some property may be common to all

NAMED PERILS : Coverage within property insurance providing protection against loss from perils specifically listed in the contract that are not physical in nature, such as fire, storm, smoke, theft, etc.

NATIONAL ASSOCIATION OF INSURANCE COMMISSIONERS (NAIC) : Association of insurance commissioners in different states for promoting national standardization in insurance regulation

NO-FAULT AUTOMOBILE INSURANCE : Kind of insurance in which an individual's financial loss due to an automobile accident are paid by his or her insurance company irrespective of whose fault caused the accident

NON-ADMITTED INSURANCE COMPANY : Insurer that is not licensed for conducting business in specific state/s like an organization; however, it may sell surplus or excess insurance in these state/s if licensed insurance providers due not have the capacity or expertise

NONCANCELLABLE : Contract that insured has to continue through timely premium payments as set forth in the contract; until at lease s/he reaches the age of 50 years, or if insurance is issued after age of 44 years for a period of 5 years from issue date during which time the insurer has no right to make unilateral any modifications to any provision of contract while in force

NONCANCELLABLE GUARANTEED RENEWABLE POLICY : Individual plan that insured individual has to continue until specific age (65 years) through timely premium payments; insurance company cannot make changes in any policy provision while it is in force

NONCONFINING SICKNESS : Illness that disables the covered individual but does not confine her or him to the home or hospital

NONCONTRIBUTORY : Term applicable to employee benefit plans whereby the employers bears full cost of benefits on behalf of the employees; 100% of eligible employees need to be insured

NONDISABLING INJURY : Injury that may need medical care but does not result in loss of income due to lost working time

NONDISABLING INJURY BENEFIT : Benefit within certain disability income plans offering payment of medical expenditures incurred for treating injuries that require such care but do not leave the injured completely disabled

NONFORFEITURE OPTION : One of the options available in case the holder discontinues paying the premium on insurance plan with cash value; this if any may be taken in cash in the form of extended insurance or decreased paid-up insurance

NONMEDICAL LIMIT : Maximum face value of insurance plan that a firm will issue without having the applicant undergo medical examination

NONOCCUPATIONAL POLICY : Contract that insures an individual against off-the-job illness or accident; does not provide cover for disability due to such incident covered under workers compensation plan, group insurance, and sickness policies that are often non-occupational

NONPARTICIPATING INSURANCE : Insurance plan whereby the insured is not entitled to any share in the dividend distribution of the company

NONPARTICIPATING POLICY : Life insurance plan where the organization does not distribute any portion of its surpluses to the holders; premiums are lower than those compared to participating insurance plans; some nonparticipating policies have maximum premium and current reduced premium; current premium reflects anticipated experience more favorable than what is being guaranteed by the firm; and may be charged from time to time for entire business to which the plan belongs to

NONPROFIT INSURERS : Individuals under special state regulations for providing hospital, dental, and other medical insurance on non-profit basis; laws offer tax exemption for some taxes

NOTICE OF LOSS : Written notice of losses incurred by insurance companies as stipulated in the conditions of the insurance plan