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Insurance Glossary

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Named Insured
Individual, firm, industry or an organization, in whose favor and specific name the policy is issued.

Named Perils policy
Policy in which the perils against which the coverage is granted is listed. Insurer will be liable for losses only when they are caused by any of the listed perils.

National Wealth
Sum total of the value of all the capital and goods held within a nation.

Nationalization
Takeover of a private company's assets or operations by a government. The company may or may not be compensated for the loss of assets.

Nationality of Vessel
Nationality of the vessel is important to the insurer particularly if the vessel sails under a "Flag of Convenience", as he would not like extend cover for cargo shipped by such vessels and insert a warranty to that in the policy or the open cover. (See "flag of Convenience")

Natural Gas
Primarily Methane and also some Ethane with small quantities of entrained heavier fractions, such as Propane, Butane, etc. These and others, are readily condensed from the Natural Gas flow and are known as Natural Gas Liquids, as distinct from Liquid Natural Gas (L.N.G.), which is Methane/Ethane refrigerated under pressure to the liquid state.

Natural Losses
Loss or damage caused by vagaries of nature, such as storm, hurricane, floods, lightning, earthquake etc.

Natural Resources
Actual and potential forms of wealth supplied by nature, such as coal, oil, wood, water power and arable land.

Navigational Limits
Limits prescribed by the Port Authorities and the Director General of Shipping with regard to the area of operation of the ships, which depend upon the size, nature and type of the vessels. Insurance Policies also fix territorial limits for operation of the vessel depending upon its use

NCDRC
National Consumer Disputes Redressal Commission (N.C.D.R.C.): Complaint can be filed in N.C.D.R.C., by an aggrieved insured against an insurer where the value of the claim exceeds Rs.20,00,000/- Territorial Jurisdiction of the Commission is whole of India. Appeals against the orders of any of the State Consumer Disputes Redressal Commission also can be filed before the NCDRC

Negligence
Failure to use the care that a reasonable and prudent person would have used under the same or similar circumstances.

Negotiable Instrument
A document of title to property that may be transferred from one person to another in the course of business

Negotiated Settlement
Settlement of Claim reached on a compromise basis in cases where there is dispute as regards liability or the quantum of loss payable but that it is felt that a compromised disposal is desirable on mutual interest.

Neon Sign Insurance
Insurance Coverage in respect of loss or damage to the neon sign installation by

(a) accidental external means and

(b) fire, lightning, external explosion and theft.

Insured's liability to third parties arising out of an accidental damage to the insured neon sign can also be covered under the policy.

Net Loss
Residual Loss to the insured after taking into account realisation from salvage and/or recoveries from third parties if any, but that such salvage and/or third party recoveries shall be taken net of any expenses incurred towards realisation of such recoveries.

Net Premium
The portion of the premium which is designed to cover losses/ benefits payable under the policy, but not the various expenses.The portion of the premium retained by the office after deduction of expenses of management inclusive of the agent's commission.

Net Premium Written
Total premium written by a ceding company minus premium ceded to the reinsurer.

Net profit
The Net Trading Profit excluding capital receipts and accretions and outlay chargeable to capital. It is arrived at after making provisions for all standing charges but prior to deduction of tax. The Loss of Profit Policy provides cover for the loss of Net Profit and the insured standing charges during the period of interruption to production arising out of a damage in the insured premises by an insured peril.

Net Retained Line Clause
A clause which is applicable to the excess of loss reinsurance cover, which refers to the protection offered by the cover only to the retained net line account of the reinsured. The net account of the reinsured may include the following:

a) Normal Any One Risk Retention as per the reinsurance programme

b) Unplaced share of the proportional treaty after retention. As per the net retained line clause the excess of loss cover will exclude the second item.

Net Retained Lines
The term, in relation to excess of loss reinsurance treaties refers to the provision that the treaty will only protect that portion of the insurance which the reinsured retains to his net account. The treaty will not protect him if one of the proportional reinsurer under a proportional treaty does not settle his share of loss under the treaty and as a result it reflects back as a liability to be borne by the reinsured.

Net Retention
Extent of capacity which an insurance company puts forth to retain the risk to its own account without any recourse to reinsurance.

Net tonnage
Passenger and/or cargo accommodation expressed in a cubic measurement based on 100 cubic feet equals one net registered ton.

Net Worth Of The Company
This indicates the excess of Assets over the Liabilities of the Company, which in turn mean, the Sum of the Equity and Preference Capital and Free Reserves like General Reserve of the Company.

New Attachments
The term refers to the acquisition of new vessels to the existing fleet of vessels of a shipowner. The premium rating of such new vessels will depend on the experience of the fleet in addition to the factors such as type, gross registered tonnage,age, sum insured, trading limits of the individual vessel etc. Premium rates for the vessels depend upon the trading limits opted for by the ship owners, such as worldwide, limited trading, port limits, etc.

New Business Clause
A special clause added to the specification in a loss of profit (Consequential Loss) policy. When insurance is arranged for an entirely new business where no past performance figures exist. This clause amends the definitions of rate of gross profit, annual turnover and standard turnover to expand the results from the commencement of the business to the date of damage to give proportionate figures for a complete twelve months. (See 'Gross Profit', 'Annual Turnover', 'Standard Turnover' and 'Specification')

No Cession without Retention
It is a condition in reinsurance contracts that the ceding company has to retain a portion of the risk and reinsure only the balance. Contract does not permit reinsurance for 100% of the risk. This condition is mainly to safeguard reinsurers' interest to ensure that bad risks are not passed on to them fully.

No Claim Bonus
A reduction as a percentage in the manual or the prospectus premium at the time of renewal of the policy based on favourable claims experience in the previous year/s policy/ies for the same insured property against the same insured perils.

No Claim Refund
Portion of premium agreed under the policy to be refunded to the insured in the event of no claim being reported or paid during the entire policy period. It is customary for the insurance companies to link this with the renewal of the policy, to ensure renewal with them without fail.

No Cure, No Pay
1. A term used in connection with salvage operations of a vessel or cargo in distress. Salvage Award payable to the salvor will be on 'No cure No pay' basis in the sense he is entitled for the award only if and when the property is saved.

2. Recovery Agents pursuing recovery from the carriers, will handle the assignment given to them by the insurers on 'No cure No pay' basis in the sense that they will claim fee only when they recover some amount from the carriers.

No fault liability
Means that the claimant is not required to prove that the death, injury or damage was due to any wrongful act, neglect or default of any person. The relief provided under the following acts come under "No Fault Liability"

1. Public Liability Insurance Act.

2. Motor Vehicle Act in connection with Road Accident Victims.

3. Workmens compensation act

No Known or Reported Loss
This condition is sometimes stipulated by insurers/reinsurers who base their acceptance of a proposal for insurance/reinsurance subject to no known or reported loss to subject matter proposed for insurance/reinsurance as on the date of their acceptance.

Nominee
Person, firm or institution whose name is mentioned in the accident insurance policies to be the recipient of the policy benefits in the event of death of the insured person arising out of an accident

Non - Performing Assets
This refers to the Investments which are classified as Non-performing Assets (NPA) as per the accounting policy of the Company. RBI gives detailed guidelines as to how and when an investment has to be treated as NPA which is with reference to the non-payment of the Loan or Debenture when it is due or non-payment of the interest on the Loan or Debenture when due. The amount to be provided for in these cases is mentioned in the RBI guidelines and they are applicable to Banks and Financial Institutions. Insurance Companies may choose to follow these guidelines and provide for the same in the books of accounts.

Non Destructive Testing
Testing a component without actually destroying it or damaging it.

Non Fare paying passengers
Provision in Motor Insurance Commercial Vehicles Policy to cover, in respect of commercial vehicles which are not authorised to carry fare paying passengers, persons connected with the specific journey allowed to travel on payment of additional premium

Non Hazardous
Refers to the physical/chemical properties of a matter of whatever state which present no undue exposure to the risk in question. Normally the premium rates will be the lowest for non-hazardous goods.

Fidelity Guarantee Policy
An Insurance Policy which reimburses an employer for losses caused by dishonest or fraudulent acts of employees.

Nonassignable Policy
Policy which can not be assigned by the insured to another. Normally property and liability policies are not assignable.

Non-Concurrent Policies
Two or more polcies which cover part only of the properties covered by other policies or which include properties not covered by others. However some property will be common to all.
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