Glossary I 

IBNR See incurred but not reported.

IIA See Insurance Institute of America, Inc.

IIAA See Independent Insurance Agents of America.

III Insurance Information Institute.

IMSA See Insurance Marketplace Standards Association.

IRA See Individual Retirement Account. (Also referred to as Individual Retirement Arrangement.)

ISO See Insurance Services Office.

immediate annuity An annuity contract which provides for the first annuitized payment immediately after issue.

impaired risk One which presents an unduly high probability of loss.

improvements and betterments insurance Additions or changes, made by a lessee at his/her own cost to a building which he/she is occupying, which enhances its value. These become part of the realty and require special insurance consideration. incidents of ownership The rights to exercise any of the privileges in the policy: to change the beneficiary, withdraw cash values, make loans on the policy, assign it, etc.

incontestability clause A clause in an insurance contract that provides the company may not void the policy after it has been in force more than the specified period, usually two years after issue. The policy may be voided only under certain conditions (for example, a misstatement in the application). incurred but not reported

IBNR reserve The liability for future payments on losses which have already occurred but have yet been reported in the insurer's records.

incurred loss ratio This is calculated by applying incurred losses to the earned premium to determine the percentage of losses.

indemnify To restore an individual to the approximate financial position occupied before the loss.

indemnity A type of contract, such as insurance, that serves to restore the individual to the approximate financial position occupied prior to the loss.

independent contractor One who agrees to perform services or supply commodities under a contract. In carrying out his/her contract, he/she is not under the control of, or an employee, of the party with whom he/she contracts.

Independent Insurance Agents of America (IIAA) An association of independent insurance agents. Members in this association are also members of their state associations. indirect loss See consequential loss.

Individual Retirement Account (IRA) A qualified retirement plan established under ERISA for individuals with earned income. An IRA plan enjoys favorable income tax advantages. (Also referred to as Individual Retirement Arrangement.)

inherent explosion An explosion caused by some condition existing in, and natural to, the premises or property (for example, a dust explosion in a grain elevator).

inherent vice A condition which is in the very nature of the property and results in damage. For example, if you fill an ordinary glass vessel with very hot water, it will crack. This is an inherent vice. It is in the very nature of ordinary glasses to crack under such conditions.

inland marine insurance Coverage for goods shipped on land, including insurance on imports and exports, domestic shipments, and means of transportation, such as bridges and tunnels. It is also used to insure fine art, jewelry, furs, and other similar property.

inspection of risk Examination of property to decide as to its desirability.

insurable interest A relationship or condition such that loss or destruction of life or property would cause a financial loss. For property insurance, such interest must exist at the time of loss.

insurance Transferring the risk of a loss to an insurer under the terms and conditions of an insurance contract. The insurer will indemnify said person against loss, damage, or liability arising from a contingent or unknown event.

insurance carrier The insurer, incorporated or otherwise.

insurance commissioner (known in some states as the superintendent of insurance) The official who presides over the regulation of the business of insurance within the state.

Insurance Institute of America (IIA) Offers a number of study programs for which special diplomas or designations can be earned in property and liability insurance, risk management, insurance adjusting and management.

Insurance Marketplace Standards Association (IMSA) An industry organization aimed at promoting ethical life sales practices.

insurance policy The document which is the contract between the insured and the insurer; it defines the rights and duties of the contracting parties.

Insurance Services Office, Inc. (ISO) A leading supplier of statistical, actuarial, and underwriting information for and about the property/casualty insurance industry. ISO provides advisory services to participating insurers and their agents.

insured The person to be indemnified in case of loss or liability. In life insurance, the person whose life is covered by the policy.

insurer The person guaranteeing to provide indemnity in case of loss or liability.

insuring agreements This section of the insurance policy sets forth the specific obligations assumed by the insurance company. Here is where the coverages of the policy are defined.

inter-insurance exchange See reciprocal insurance exchange.

irrevocable beneficiary A designation allowing no change to be made in the beneficiary of a policy without the beneficiary's consent.