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*Terms marked with an asterisk are from LOMA’s
Glossary of Insurance and Financial Services Terms. Copyright © 2002
LOMA (Life Office Management Association, Inc.). Used with
permission from LOMA. Click here
for more information
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JOINT AND SURVIVOR ANNUITY
An annuity with two annuitants, usually spouses. Payments continue
until the death of the longest living of the two.
JOINT UNDERWRITING ASSOCIATION / JUA
Insurers which join together to provide coverage for a particular
type of risk or size of exposure, when there are difficulties in
obtaining coverage in the regular market, and which share in the
profits and losses associated with the program. JUAs may be set up
to provide auto and homeowners insurance and various commercial
coverages, such as medical malpractice. (See Assigned risk
plans;
Residual market)
JUNK BONDS
Corporate bonds with credit ratings of BB or less. They pay a higher
yield than investment grade bonds because issuers have a higher
perceived risk of default. Such bonds involve market risk that could
force investors, including insurers, to sell the bonds when their
value is low. Most states place limits on insurers' investments in
these bonds. In general, because property/casualty insurers can be
called upon to provide huge sums of money immediately after a
disaster, their investments must be liquid. Less than 2 percent are
in real estate and a similarly small percentage are in junk bonds.
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