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EARLY WARNING SYSTEM

EARLY WARNING SYSTEM - EARLY WARNING SYSTEM A system of measuring insurers‘ financial stability set up by insurance industry regulators. An example is the Insurance Regulatory Information System (IRIS), which uses financial ratios to identify insurers in need of regulatory attention.

EARNED PREMIUM

EARNED PREMIUM - The portion of premium that applies to the expired part of the policy period. Insurance premiums are payable in advance but the insurance company does not fully earn them until the policy period expires.

EARTHQUAKE INSURANCE

EARTHQUAKE INSURANCE - Covers a building and its contents, but includes a large percentage deductible on each. A special policy or endorsement exists because earthquakes are not covered by standard homeowners or most business policies.

ECONOMIC LOSS

ECONOMIC LOSS - Total financial loss resulting from the death or disability of a wage earner, or from the destruction of property. Includes the loss of earnings, medical expenses, funeral expenses, the cost of restoring or replacing property and legal expenses. It does not include noneconomic losses, such as pain caused by an injury.

ELECTRONIC COMMERCE / E-COMMERCE

ELECTRONIC COMMERCE / E-COMMERCE - The sale of products such as insurance over the Internet.

ELIMINATION PERIOD

ELIMINATION PERIOD - A kind of deductible or waiting period usually found in disability policies. It is counted in days from the beginning of the illness or injury.

EMPLOYEE DISHONESTY COVERAGE

EMPLOYEE DISHONESTY COVERAGE - Covers direct losses and damage to businesses resulting from the dishonest acts of employees. (See Fidelity bond )

EMPLOYEE RETIREMENT INCOME SECURITY ACT / ERISA

EMPLOYEE RETIREMENT INCOME SECURITY ACT / ERISA - Federal legislation that protects employees by establishing minimum standards for private pension and welfare plans.

EMPLOYER‘S LIABILITY

EMPLOYER‘S LIABILITY - Part B of the workers compensation policy that provides coverage for lawsuits filed by injured employees who, under certain circumstances, can sue under common law. (See Exclusive remedy )

EMPLOYMENT PRACTICES LIABILITY COVERAGE

EMPLOYMENT PRACTICES LIABILITY COVERAGE - Liability insurance for employers that covers wrongful termination, discrimination and other violations of employees‘ legal rights.

ENDORSEMENT

ENDORSEMENT - A written form attached to an insurance policy that alters the policy‘s coverage, terms, or conditions. Sometimes called a rider.

ENVIRONMENTAL IMPAIRMENT LIABILITY COVERAGE

ENVIRONMENTAL IMPAIRMENT LIABILITY COVERAGE - A form of insurance designed to cover losses and liabilities arising from damage to property caused by pollution.

EQUITY

EQUITY - In investments, the ownership interest of shareholders. In a corporation, stocks as opposed to bonds.

EQUITY INDEXED ANNUITY

EQUITY INDEXED ANNUITY - Nontraditional fixed annuity. The specified rate of interest guarantees a fixed minimum rate of interest like traditional fixed annuities. At the same time, additional interest may be credited to policy values based upon positive changes, if any, in an established index such as the S&P 500. The amount of additional interest depends upon the particular design of the policy. They are sold by licensed insurance agents and regulated by state insurance departments.

ERRORS AND OMISSIONS COVERAGE / E&O

ERRORS AND OMISSIONS COVERAGE / E&O - A professional liability policy covering the policyholder for negligent acts and omissions that may harm his or her clients.

ESCROW ACCOUNT

ESCROW ACCOUNT - Funds that a lender collects to pay monthly premiums in mortgage and homeowners insurance, and sometimes to pay property taxes.

EXCESS AND SURPLUS LINES

EXCESS AND SURPLUS LINES - Property/casualty coverage that isn‘t available from insurers licensed by the state (called admitted insurers) and must be purchased from a nonadmitted carrier.

EXCESS OF LOSS REINSURANCE

EXCESS OF LOSS REINSURANCE - A contract between an insurer and a reinsurer, whereby the insurer agrees to pay a specified portion of a claim and the reinsurer to pay all or a part of the claim above that amount.

EXCLUSION

EXCLUSION - A provision in an insurance policy that eliminates coverage for certain risks, people, property classes, or locations.

EXCLUSIVE AGENT

EXCLUSIVE AGENT - A captive agent, or a person who represents only one insurance company and is restricted by agreement from submitting business to any other company unless it is first rejected by the agent‘s company. (See Captive agent )

EXCLUSIVE REMEDY

EXCLUSIVE REMEDY - Part of the social contract that forms the basis for workers compensation statutes under which employers are responsible for work-related injury and disease, regardless of whether it was the employee‘s fault and in return the injured employee gives up the right to sue when the employer‘s negligence causes the harm.

EXPENSE RATIO

EXPENSE RATIO - Percentage of each premium dollar that goes to insurers‘ expenses including overhead, marketing and commissions.

EXPERIENCE

EXPERIENCE - Record of losses.

EXPOSURE

EXPOSURE - Possibility of loss.

EXTENDED COVERAGE

EXTENDED COVERAGE - An endorsement added to an insurance policy, or clause within a policy, that provides additional coverage for risks other than those in a basic policy.

EXTENDED REPLACEMENT COST COVERAGE

EXTENDED REPLACEMENT COST COVERAGE - Pays a certain amount above the policy limit to replace a damaged home, generally 120 percent or 125 percent. Similar to a guaranteed replacement cost policy, which has no percentage limits. Most homeowner policy limits track inflation in building costs. Guaranteed and extended replacement cost policies are designed to protect the policyholder after a major disaster when the high demand for building contractors and materials can push up the normal cost of reconstruction. (See Guaranteed replacement cost coverage )

Electronic Health Record/Electronic Medical Records**

Computerized patient health records, including medical, demographic, and administrative information. These records can be created and stored within one organization or shared across multiple health care organizations and sites.

Employee Retirement Income Security Act of 1974 (ERISA)**

Enacted in 1974 to provide minimum Federal standards for welfare benefit plans in private industry, and protect the interests of employee benefit plan participants and their beneficiaries by requiring the disclosure to them of financial and other information concerning the plan; by establishing standards of conduct for plan fiduciaries; and by providing for appropriate remedies and access to the Federal courts.

Employer Mandate**

Beginning in 2014 pursuant to the health reform law, employers meeting size or revenue thresholds will be required to offer minimum essential health benefit packages or pay a set portion of the cost of those benefits for use in the Exchanges.

Episode of Care**

Refers to all the health services related to the treatment of a condition. For acute conditions (such as a concussion or a broken bone), the episode includes all treatment and services from the onset of the condition to its resolution. For chronic conditions (such as diabetes), the episode refers to all services and treatments received over a given period of time. Some payment reform proposals involve basing provider payment on episodes of care instead of paying on a Fee-for-Service basis.

Essential Health Benefits**

The health reform law placed certain coverage requirements on essential health benefits, and provides a broad set of benefit categories that would be considered essential to a health benefits package -- including hospitalization, outpatient services, emergency care, prescription drugs, maternity care, preventive services and other benefits. The Secretary of HHS will, in the future, define what constitutes "Essential Health Benefits" and this will be guided by the current scope of benefits provided under a typical employer plan. For plan years beginning in 2010 the only requirement for "Essential Health Benefits" is that if they are included in the plan they may not be subject to a lifetime limit and until 2014 can only be subject to a "restricted annual limit".

Exchange or Health Insurance Exchange**

The health care reform law creates Health Benefit Exchanges (competitive insurance marketplaces) in each state, where individuals and employers can shop for health plans.

External Review**

Health care reform requires all health plans (except Grandfathered plans) to provide an external review appeal process that meets minimum standards. With the exception of a few state processes currently in existence, external review has typically been limited to appeals of clinical decisions. The health reform law has expanded the scope of external review for self-funded health plans to non-eligibility administrative appeals as well. Administrative appeals deal with such issues as benefit exclusions, benefit limits and disputes over member financial responsibility for payments such as Co-payments, Co-insurance and Deductibles.