Insurance and risk management terminology · MLC-0106

Insurance and risk management terms: R (240)

• Racketeer Influenced and Corrupt Organizations (RICO) Act of 1970A United States federal law providing for extended criminal penalties and a civil cause of action for acts...
• Radiological weaponA device, also known as a dirty bomb, that uses a conventional explosive to disperse radioactive material...
• Radius classA classification system used in commercial auto insurance to categorize vehicles based on the typical...
• Radius of operationsThe farthest distance from its garaging location that a vehicle regularly operates, used to place it in a...
• Railroad protective liability RRPA liability policy that a contractor buys for a railroad, which is the named insured, covering the railroad's...
• Railroad sidetrack agreementA contractual agreement between a railroad company and a business that uses a sidetrack (a short track...
• RainmakerAn individual, such as a top-tier agent, broker, or partner in a firm, who generates a substantial amount of...
• Ratable lossesThe portion of an employer's incurred workers' compensation losses that are used in the calculation of...
• RateThe cost per unit of insurance, used to calculate the premium charged for a policy. It reflects the insurer's...
• Rate discriminationThe practice of charging different premiums to policyholders for the same insurance coverage without a...
• Rate makingThe process by which insurers calculate the appropriate price for an insurance policy, known as the premium...
• Rate manualA document or electronic file that sets out an insurer's base rates, rating rules and classification codes...
• Rate of natural changeThe difference between the crude birth rate and the crude death rate within a population over a specific...
• Rate on line (ROL)The ratio of the premium paid for a layer of reinsurance to the limit of that layer, expressed as a...
• Rated insurerAn insurance company that has been evaluated by an independent rating agency, such as A.M. Best, Standard &...
• Rated policyAn insurance policy issued to an individual or entity that presents a higher-than-average risk, resulting in...
• RatingThe process of determining the premium an insured will pay for an insurance policy, based on an assessment of...
• Rating bureauAn organization that collects statistical data on losses and expenses from multiple insurers to develop...
• Rating classA grouping of insureds who share similar characteristics that influence their risk profile and, consequently...
• Rating experienceThe historical record of an employer's workers' compensation losses and payroll, used to calculate an...
• Rating methodologyThe systematic approach and set of procedures used by an insurer to determine the appropriate premium for an...
• Rating organizationAn independent entity that collects statistical data on losses and expenses from multiple insurers and then...
• Readjustment incomeThe portion of a life insurance settlement designated to support a surviving family during the period...
• Real estate brokers errors and omissionsProfessional liability insurance that protects real estate brokers and agents against claims of negligence...
• Real propertyLand and anything permanently attached to it, including buildings, fixtures, and improvements. In insurance...
• Reasonable accommodationAny modification or adjustment to a job, an employment practice, or the work environment that allows a...
• Reasonable expectations doctrineA legal principle in insurance contract interpretation stating that policyholders are entitled to the...
• Reasonable repairsTemporary repairs made by the insured to protect covered property from further damage after a loss. These...
• Reasonably available control technology (RACT)An emission control standard required by the U.S. Clean Air Act for existing major sources of air pollutants...
• Reasonably safe from floodingThe community must review all permit applications to determine whether the proposed building sites will be...
• RebateA portion of the premium or commission returned to the policyholder by an insurer or agent as an inducement...
• RebatingThe illegal practice of offering a prospective insurance policyholder a portion of the agent's commission or...
• RecaptureThe act of a ceding insurer taking back business it had previously ceded to a reinsurer, either in part or...
• ReciprocalAn unincorporated association of individuals or organizations, known as subscribers, who agree to insure each...
• Reciprocal insuranceA form of insurance where a group of individuals or businesses, called subscribers, agree to exchange...
• ReciprocityAn arrangement in which one state recognizes the license or authority granted by another, so an insurance...
• Recreational vehicleA vehicle which is:
• Rectification coverageA type of insurance coverage, often found in professional liability or construction policies, that pays for...
• Rectification/mitigation insurance (R/M)A type of insurance that covers the costs incurred to correct or mitigate a defect or error before it leads...
• Recurrent disabilityA provision in disability income insurance policies that treats a return of the same or a related disability...
• Recurring clauseA provision in a disability insurance policy that treats separate periods of disability from the same or...
• RedactTo remove or obscure confidential, privileged, or personally identifiable information from a document before...
• Redhibitory defectsHidden flaws or imperfections in a purchased item that render it unfit for its intended use or diminish its...
• RedliningThe discriminatory practice by insurers or lenders of denying or limiting coverage or services to residents...
• RedomicilingThe process by which an insurer changes its legal state or country of incorporation, known as its domicile. A...
• Reduced paid-up insuranceA nonforfeiture option available in whole life insurance policies that allows the policyholder to use the...
• ReformationA legal remedy allowing a court to amend a written insurance policy to reflect the true agreement and intent...
• Refund annuityAn annuity contract that guarantees the return of the annuitant's principal investment, or a portion thereof...
• Registered agentA person or entity officially designated to receive legal documents, such as service of process, subpoenas...
• Registered Health Underwriter (RHU®)A professional designation for individuals specializing in health insurance and employee benefits. It...
• Registered mail coverageA form of inland marine insurance that protects against the loss of valuable property such as securities...
• Regular program1. The final phase of a community's participation in the NFIP. In this phase, a Flood Insurance Rate Map...
• Regular program communityA community wherein a Flood Insurance Rate Map (FIRM) is in effect and full limits of coverage are available...
• Regulated asbestos-containing material (RACM)Any friable asbestos-containing material or non-friable asbestos-containing material that has been or will be...
• Regulated medical wasteWaste materials generated in healthcare settings that pose a potential risk of infection or other health...
• Regulation 114 trustA trust account established by a non-admitted reinsurer to hold assets in the United States, as required by...
• Regulatory agency exclusionA directors and officers policy exclusion for claims brought by or on behalf of specified government...
• Regulatory defense and penalties coverageInsurance protection for legal expenses incurred when defending against investigations or actions by...
• Regulatory estoppelA legal doctrine that prevents an insurer from denying coverage based on an interpretation of policy language...
• Regulatory floodwaySee Floodway.
• Regulatory riskThe potential for adverse financial or operational impact on an insurance company due to changes in laws...
• Regulatory sandboxA framework established by regulatory bodies to allow financial technology (fintech) and insurtech companies...
• Rehabilitation managementA structured process within workers' compensation or long-term disability insurance that coordinates medical...
• Reimbursement policiesInsurance policies under which the insurer pays the insured back for covered expenses only after the insured...
• ReinstatementThe restoration of a lapsed or cancelled insurance policy to its full force and effect. An insured must apply...
• Reinstatement premiumA charge levied by an insurer to restore the full limit of liability under a policy after a loss has reduced...
• ReinsuranceInsurance purchased by an insurance company from another insurance company to transfer part of its risk. This...
• Reinsurance agreementA contract between a ceding insurer and a reinsurer that outlines the terms and conditions of the reinsurance...
• Reinsurance assumedThe portion of risk that a reinsurer accepts from a ceding insurer. This represents the business written by...
• Reinsurance captiveA captive insurer that does not issue policies directly but assumes the parent's risk by reinsuring it from a...
• Reinsurance cededThe portion of risk and premium that a primary insurer transfers to a reinsurer under a reinsurance contract...
• Reinsurance commissionA payment made by the reinsurer to the ceding insurer for the business transferred. This commission...
• Reinsurance confirmationA document or communication that formally acknowledges the terms of a reinsurance placement between a ceding...
• Reinsurance creditThe ability of a ceding insurer to reduce its statutory liabilities by the amount of reinsurance ceded to an...
• Reinsurance facilityAn arrangement, often established by a government or an industry association, that provides reinsurance...
• Reinsurance intermediariesSpecialized brokers or agents who act as go-betweens for primary insurance companies and reinsurers. They...
• Reinsurance poolA group of insurance or reinsurance companies that join together to collectively accept and share risks. Each...
• Reinsurance premiumThe payment made by a ceding insurer to a reinsurer in exchange for the transfer of risk. This premium is...
• Reinsurance recoverableAmounts due to a ceding insurer from a reinsurer for paid or unpaid losses and loss adjustment expenses. This...
• Reinsurance sidecarA special purpose vehicle created to provide a sponsoring reinsurer with additional underwriting capacity by...
• Reinsurance treatyA contract between a ceding insurance company and a reinsurer, where the reinsurer agrees to accept all risks...
• ReinsuredThe primary insurance company that transfers a portion of its risks to a reinsurer. This entity, also known...
• ReinsurerA company that provides insurance to other insurance companies, assuming a portion of their risks in exchange...
• Reinsurer's marginThe portion of the premium retained by a reinsurer to cover its expenses and profit, after accounting for...
• Reissuance restatementThe correction and re-release of a company's past financial statements to rectify a material misstatement...
• Related claims provisionsClauses in an insurance policy that group multiple claims arising from a single event, series of related...
• Related party insurance income (RPII)Income derived by a controlled foreign corporation (CFC) from insuring or reinsuring risks of related...
• ReleaseA legal document signed by a claimant, surrendering their right to pursue further legal action or claims...
• Relief well coverageInsurance protection for the expenses incurred in drilling a new well to intersect and control an...
• Remedial actionSteps taken to clean up or mitigate contamination at a hazardous waste site, often mandated by environmental...
• Remedial designThe engineering phase of an environmental cleanup project where detailed plans and specifications for the...
• Remedial investigationA systematic process to determine the nature and extent of contamination at a hazardous waste site and to...
• Remedial project managerThe individual with overall responsibility for managing an environmental remediation project from...
• Remedial responseActions taken to permanently reduce, remove, or treat hazardous substances at a contaminated site to protect...
• RemediationThe process of cleaning up or otherwise reducing the concentration of pollutants or contaminants in...
• Remediation cost cap policyAn environmental insurance policy designed to protect against cost overruns during the cleanup of...
• Remote causeA cause of loss that is far removed in the chain of events from the actual damage or injury. It is not...
• Renewal certificateA document issued by an insurer to confirm the continuation of an existing insurance policy for another term...
• Renewal policyA new insurance contract issued to continue coverage after the expiration of an existing policy. It maintains...
• Rent-a-captiveAn arrangement where a company uses a segregated cell or protected cell within an existing captive insurance...
• Rental captiveAn arrangement in which an organization pays a fee to use the capital and licence of a captive insurer owned...
• Rental cost reimbursement endorsementAn addition to an auto insurance policy that provides coverage for the cost of renting a vehicle while the...
• Rental reimbursement coverage endorsementAn optional addition to a personal auto policy that pays for the cost of a rental car while the insured's...
• Renters insuranceA form of property insurance that provides coverage for a tenant's personal belongings within a rented...
• Rents or rental value insuranceCoverage that protects a property owner against the loss of rental income or the fair rental value of their...
• RepatriationThe process of returning an individual to their country of origin or citizenship, particularly in the context...
• Repatriation of dividends insurancePolitical risk insurance that pays a multinational company when a host government blocks or delays the...
• Repetitive loss structureAn NFIP-insured structure that has had at least 2 paid flood losses of more than $1,000 each in any 10-year...
• Replacement cost (RC)The cost to replace damaged or destroyed property with new property of similar kind and quality, without...
• Replacement cost valueThe cost to replace property with the same kind of material and construction without deduction for...
• Replacement ratioThe proportion of an individual's pre-retirement income that is replaced by post-retirement income sources...
• Reportable quantity (RQ)The minimum amount of a hazardous substance that, if released into the environment, triggers a legal...
• Reported lossesThe total losses that policyholders have reported to an insurer, made up of amounts already paid plus case...
• Reporting form coverageA type of property insurance policy where the insured periodically reports the value of covered property to...
• Reporting lagThe period of time between the occurrence of an insured event and the date it is reported to the insurer...
• Reporting policyA policy under which the insured sends the insurer regular reports of values or exposures, such as monthly...
• Repossessed autos endorsementAn ISO commercial auto endorsement, CA 20 19, that insures a bank or automobile finance company for autos it...
• RepresentationA statement of fact made by an applicant for insurance to the insurer, which the applicant believes to be...
• Representations and warranties insuranceA specialized insurance product that covers financial losses arising from breaches of representations and...
• Reproduction costThe expense to construct an exact replica of an insured property using identical materials, design, and...
• Reptile theory or strategyA litigation strategy used by plaintiffs' attorneys, particularly in personal injury cases, that aims to...
• Reputational riskThe potential for negative public perception or damage to an organization's brand, image, or standing due to...
• Request for proposal (RFP)A formal document issued by an organization to solicit bids from potential vendors for a specific project...
• Res ipsa loquiturA doctrine, Latin for the thing speaks for itself, that lets a jury infer negligence from the nature of an...
• Res judicataA legal doctrine that prevents the same parties from litigating a claim that has already been judged on its...
• RescissionThe legal act of canceling or annulling a contract, returning the parties to their original positions as if...
• Reservation of rightsA formal notice from an insurer to a policyholder indicating that it will proceed with investigating or...
• ReserveAn amount set aside by an insurer from its premiums to meet future obligations on existing policies. These...
• Reserve fund assessmentAn amount dedicated to the NFIP Reserve Fund as authorized by the Biggert-Waters Flood Insurance Reform Act...
• Reserved but not enough (RBNE)A situation in insurance where the initial amount of money set aside by an insurer for a known claim is later...
• Residence employeeAn individual whose duties are related to the maintenance or use of the insured's residence, including...
• Resident agentAn insurance agent whose home state is the state that issued the license, because the agent resides or has a...
• Residential buildingA non-commercial building designed for habitation by one or more families or a mixed-use building that...
• Residential condominium buildingA building, owned and administered as a condominium, containing 1 or more family units and in which at least...
• Residential Condominium Building Association PolicySee "Standard Flood Insurance Policy (SFIP)-Residential Condominium Building Association Policy (RCBAP)."
• Residential propertyEither a residential building or the contents within a residential building, or both.
• Residential wrap-upA specialized insurance program, also known as an Owner Controlled Insurance Program (OCIP) or Contractor...
• Residual marketA mechanism established by states to provide insurance coverage for individuals or businesses that are unable...
• Residual market load (RML)A charge or assessment levied on insurers to cover the losses and expenses incurred by residual market...
• Residual value insuranceA type of insurance that protects an asset owner or lessor against a decline in the market value of an asset...
• Resilient bondA catastrophe bond variant proposed by re:focus Partners in which an infrastructure owner finances resilience...
• Resource Conservation and Recovery Act (RCRA) of 1976A United States federal law that governs the disposal of solid waste and hazardous waste. It establishes a...
• Respite careShort-term institutional or in-home care for an individual who requires supervision, providing temporary...
• Respondeat superiorA doctrine of vicarious liability under which an employer or principal is legally responsible for torts its...
• Response actionMeasures taken to address a release or threatened release of hazardous substances into the environment. These...
• Responsible reporting entity (RRE)An entity that must report certain information about Medicare beneficiaries to the Centers for Medicare &...
• Restitution of feesA remedy requiring a party to repay fees it collected, such as a lawyer or consultant ordered to return fees...
• Restoration of limits provisionA policy clause that automatically reinstates the original aggregate limit of liability after it has been...
• Results standardsPerformance metrics that measure the final outcomes or effects of an organization's actions, rather than the...
• Resumption planA detailed, documented strategy for restarting specific business functions at an alternate location after a...
• Retail agent or brokerAn insurance agent or broker who directly interacts with and sells insurance policies to individual consumers...
• Retail insuranceInsurance products and services sold directly to individual consumers or small to medium-sized businesses, as...
• Retaliation claimsLegal actions brought by employees who allege adverse employment actions were taken against them for engaging...
• Retaliatory lawA state statute that imposes the same or similar burdens, such as taxes, fees, or other requirements, on...
• RetentionThe portion of a risk or loss that an insured party or insurer chooses to bear themselves rather than...
• Retention abilityAn organization's financial capacity to absorb and pay for its own losses without relying on insurance. This...
• Retention planA structured approach adopted by an organization to manage and finance its own risks and potential losses...
• Retired directors liability policiesInsurance coverage specifically designed to protect individuals who have retired from their positions as...
• Retirement annuityAn insurance contract that provides a series of periodic payments to an individual, beginning at a specified...
• Retirement income policyAn insurance product designed to provide a steady stream of funds during an individual's retirement years...
• Retraction provisionsState statutes that let a publisher or broadcaster limit its liability for a defamatory statement by printing...
• Retroactive conversionThe process of changing an insurance policy from one type to another, with the effective date of the new...
• Retroactive dateA provision in a claims-made liability policy that specifies the earliest date an event can occur for...
• Retroactive insuranceCoverage purchased for losses that have already occurred but have not yet been reported or fully developed...
• RetrocedentA reinsurer that transfers a portion of its assumed risks to another reinsurer through a retrocession...
• RetrocessionA transaction where a reinsurer transfers all or part of the reinsurance it has assumed to another reinsurer...
• RetrocessionaireA reinsurer that accepts a portion of the risk from another reinsurer, known as the retrocedent. This...
• Retrocessional poolsAn arrangement where multiple reinsurers combine their capital and share the risks associated with...
• Retrospective ratingA method of calculating an insurance premium that adjusts the final cost based on the actual loss experience...
• Return of premiumA policy provision that guarantees the policyholder will receive a refund of some or all of the premiums paid...
• Return of professional fees exclusionA clause in a professional liability insurance policy that excludes coverage for claims seeking the return of...
• Return of remuneration exclusionAn exclusion in a directors and officers (D&O) liability insurance policy that denies coverage for claims...
• Return on equity (ROE)A financial ratio that measures the profitability of an insurance company in relation to the equity invested...
• Return on risk-adjusted capital (RORAC)A financial metric that measures profitability in relation to the amount of capital required to support a...
• Return premium RPThe portion of the premium paid by the insured that is refunded by the insurer. This occurs when a policy is...
• Return-to-work program RTWA structured program designed to facilitate the safe and timely re-entry of an injured or ill employee into...
• Reverse mergerA transaction where a private company acquires a public shell company, thereby becoming publicly traded...
• Reverse takeoverA transaction in which a private company acquires a controlling interest in a publicly listed shell company...
• ReversionaryRelating to a future interest in property or an annuity that reverts to a grantor or a designated beneficiary...
• Revision to NFIP mapsFEMA has established administrative procedures for changing effective Flood Insurance Rate Maps (FIRMs) and...
• Revocable beneficiaryA designated recipient of life insurance policy proceeds whose designation can be changed by the policyholder...
• RiderAn endorsement or attachment to an insurance policy that modifies the terms and conditions of the original...
• RidesharingThe practice of individuals using their personal vehicles to transport passengers for a fee, arranged through...
• Riggers liability insuranceA specialized form of liability insurance that covers the legal liability of a rigger for damage to property...
• Right of offsetA legal principle allowing an insurer to reduce the amount it owes to a policyholder or claimant by any...
• Right of recourse provisionA fiduciary liability policy provision, driven by ERISA section 410, that preserves the insurer's right to...
• Right to repair lawLegislation that grants consumers and independent repair shops the ability to repair their own products...
• Rights of residentsThe legal protections guaranteed to people who live in nursing homes and other long term care facilities, set...
• Ring fence/fencingA method of separating a specific group of assets and liabilities from the rest of an organization, creating...
• Rip and tear coverageAn extension of coverage in a property insurance policy that pays for the cost of tearing out and replacing...
• RiskThe effect of uncertainty on objectives, characterized by the potential for events to have a negative impact...
• Risk and Insurance Management Society, Inc. (RIMS)A global professional association for risk management professionals, dedicated to advancing the practice of...
• Risk appetiteThe amount and type of risk that an organization is willing to accept in pursuit of its objectives. It...
• Risk capitalThe amount of capital an insurer or financial institution needs to hold to cover potential losses from...
• Risk chargeAn additional amount added to the pure premium in an insurance policy to account for the uncertainty of...
• Risk concentrationA situation where an insurer's potential losses are clustered around a single risk factor, such as a specific...
• Risk controlThe process of identifying, evaluating, and implementing measures to reduce the frequency or severity of...
• Risk dashboardA visual reporting tool that provides a consolidated, at-a-glance view of an organization's key risk...
• Risk distributionThe insurance tax concept that an insurer spreads the risk it assumes across a large number of similar...
• Risk financingThe methods an organization uses to source funds to pay for its financial losses. These techniques are...
• Risk identificationThe process of systematically discovering and documenting potential threats and opportunities that could...
• Risk indexA quantitative measure or score that aggregates multiple risk factors into a single value, providing a...
• Risk management information system (RMIS)A centralized software platform used to collect, manage, and analyze an organization's risk, claims, and...
• Risk management processA structured approach to identifying, assessing, treating, and monitoring risks that could affect an...
• Risk management RMThe systematic process of identifying, assessing, and controlling threats to an organization's capital and...
• Risk management techniquesMethods and strategies employed to address identified risks, aiming to reduce their potential impact or...
• Risk managerA professional responsible for identifying, evaluating, and treating an organization's operational...
• Risk mapA graphical tool used to visualize and prioritize an organization's risks by plotting them on a...
• Risk poolA mechanism where multiple entities combine their risks to achieve greater predictability and spread...
• Risk prioritizationThe process of ranking identified risks based on their potential impact and likelihood of occurrence. This...
• Risk profileAn evaluation of the specific risks an organization faces, considering their nature, magnitude, and...
• Risk purchasing group (RPG)A group of similar businesses or professionals that collectively purchase liability insurance from a...
• Risk quantificationThe process of assigning numerical values to the probability and impact of identified risks. This involves...
• Risk reductionMeasures taken to decrease the likelihood or severity of a potential loss. This involves implementing...
• Risk registerA document or database that systematically records and tracks all identified risks within an organization or...
• Risk retentionThe acceptance of financial responsibility for a potential loss rather than transferring it to an insurer or...
• Risk Retention Act (RRA) of 1986A United States federal law that facilitates the formation of risk retention groups and risk purchasing...
• Risk retention group (RRG)A liability insurance company formed and owned by its members, who are engaged in similar businesses or...
• Risk securitizationThe process of transforming underwriting risks into tradable financial instruments that are sold to capital...
• Risk sharingA method of managing risk by distributing the financial burden of potential losses among multiple parties. In...
• Risk shiftingThe transfer of financial responsibility for a potential loss from one party to another. This is commonly...
• Risk toleranceThe degree of variability in investment or underwriting results an organization is willing to withstand in...
• Risk typesThe classification of potential threats faced by an insurer, categorized by their source and nature. These...
• Risk volatilityA measure of the degree of variation or fluctuation in the potential outcomes of a risk over a period. High...
• Risk-adjusted return on capital (RAROC)A financial performance metric that evaluates the profitability of a business unit, project, or transaction...
• Risk-adjusted return on risk-adjusted capital (RARORAC)A financial performance measure that evaluates the return generated by an activity relative to the...
• Risk-based capital (RBC) requirementsRegulatory standards that mandate the minimum amount of capital an insurer must hold to support its...
• Risk-based pricingThe practice of setting insurance premium rates based on the specific risk characteristics of an individual...
• Road rageAggressive or angry behavior exhibited by a driver of a motor vehicle, which can include verbal insults, rude...
• Roadside assistance coverageAn optional endorsement or separate policy that provides services to motorists experiencing vehicle...
• RobberyThe unlawful taking of property from another person, or in their immediate presence, by force or threat of...
• Robbery and safe burglary coverageInsurance protection against the loss of money, securities, and other property due to robbery or safe...
• Rolling policy limitsA multiyear policy arrangement in which the limit stated at inception serves as a single aggregate for the...
• Rolling stockThe wheeled vehicles of a railway, such as locomotives, freight cars and passenger coaches, and by extension...
• Rolling wrap-upA type of controlled insurance program (CIP) that covers multiple construction projects over an extended...
• Root cause analysis (RCA)A systematic process for identifying the fundamental reasons for an undesirable event or problem, rather than...
• Royalty interestA right to a share of the production from a natural resource property, free of the costs of production. This...
• Rule 11 sanctionsPenalties imposed by a court under Rule 11 of the Federal Rules of Civil Procedure for presenting to the...
• Running down clauseA provision in a marine hull insurance policy that covers the insured vessel owner's legal liability for...
• Runoff provisionA policy provision, found mainly in directors and officers liability coverage, that continues coverage for...

240 of 3,682 terms in Insurance and risk management terminology (MLC-0106). Request the full dataset.