A.L.E
Allocated Loss Expenses are insurance company costs for adjusting and settling claims which can be identified with a specific claim. The A.L.E. are often then included in the claims costs used to adjust premium in some loss-sensitive premium adjustment types of Workers' Comp policies, such as sliding scale dividend plans or some Retro or Retention plans.

AAP (Affirmative Action Plan)
An Affirmative Action Plan ("AAP") sets standards for the recruiting, hiring and promotion of women and minorities (to eliminate the present effects of past employment discrimination). Affirmative Action Plans are required for certain employers by Title VII of the Civil Rights Act of 1964.

Actuary
An actuary analyzes, evaluates and manages statistical information to determine rates.

Admitted Reinsurance
Reinsurance provided by a reinsurer licensed or authorized in the jurisdiction in question. A company is “admitted” when it has been licensed and accepted by appropriate insurance governmental authorities of a state or country.

Admitting Privileges
The right granted to a doctor to admit patients to a particular hospital.

Advisory Organization
The new designation for what were formerly known as Rating Bureaus (such as the NCCI). This new term, recently coined by the National Association of Insurance Commissioners, is meant to reflect more accurately the role of NCCI and other such organizations (like Insurance Services Office) which compile rating data and file policy forms for use by member insurance companies.

Advocacy
Any activity done to help a person or group to get something the person or group needs or wants.

Alternative Risk Transfer
Alternative risk transfer (ART) is an alternative to traditional insurance. A company’s risks are funded by means other than the purchase of insurance through an agent broker from an admitted insurer. ART forms include surplus lines placement, self-insured trusts, risk retention groups and captives. The alternative market seeks to avoid costs associated with insurance brokerage and allow a business to finance its own risk.

ARAP
Assigned Risk Adjustment Program--An additional debit charge placed on Assigned Risk policies (In NCCI jurisdictions) with experience modification factors higher than 1.00.

Arbitration Clause
A clause that provides for a means of resolving differences between the reinsurer and the reinsured without litigation. Usually, each party appoints an arbiter. The two thus appointed select a third arbiter, or umpire, and a majority decision of the three becomes binding on the parties to the arbitration proceedings.

Assigned Risk Plan
Sometimes called the Pool, this is a mechanism established by individual states to make sure that employers can obtain workers' compensation insurance even if insurance companies are not willing to write such insurance on a voluntary basis. Assigned Risk plans in many states carry higher rates than the voluntary market.

Association
Any legal organization of sole proprietorships, corporations, partnerships, limited liability companies or associations that has been in continuous existence for at least one year and has the power to vote all of the outstanding voting securities for its captive.

Association
A group. Often, associations can offer individual health insurance plans specially designed for their members.

Association Captive
Is owned by members of a common industry or trade association in order to share the risks of that industry among its members.

Association Captive Insurance Company
A captive insurance company established by members of an association to underwrite their own collective risks. An association captive usually only insures members of the sponsoring association.

At-Will Employment
The right to terminate employment at will without prior notice by the employee or the employer at any time.

Audit Work Papers
Worksheet prepared by the premium auditor, can be either hand-written or computerized, showing how the auditor arrived at the payroll numbers that are used to determine the audited premium.

Audited Premium
The final premium for the policy term, produced by auditing actual payroll exposures.