A

Accident – Insurance event of Accident Insurance. Based on this type of insurance, an accident is sudden or unexpected event when the insured body is affected by external force against his / her will (also chemical, thermal, hazardous gas or other physical impact) and as a result has negative impact on health or causes death.

Accident Insurance – Non-life insurance for persons in case of death, disability and / or injuries if it is a result of an accident (also see An Accident). This type of insurance may be used by employer to ensure employees (Employee Accident Insurance), and natural entities may insure themselves on voluntary basis.

Actuary – Specialist of math, statistics and accounting responsible for insurance rates, reserves, dividends and other static calculations in insurance company.

Absolute franchise – A part of insured damage coverage as a contribution of the policyholder (the insured client) to the damage payment. The part of damage exceeding unconditional franchise is covered by the insurance company.

Agent – Insurance mediator representing an insurance company.

Authorization (to broker or agent) – The client’s authorization to insurance mediator to represent the client’s interests in negotiations with insurance companies.

B

Benefit Receiver – A person indicated in the contract on the policyholder will, who receives a right to insurance benefit under the terms established in the contract.

Broker – Insurance mediator representing client’s interests.

Business Interruption insurance – Non-life insurance, which insures company revenue lost in case of property damage / destruction due to the insured damage.

C

CAR (Contractors’ All Risks) – civil works insurance covering all risks. See Construction and installation works all risks insurance.

Cargo Insurance – Non-life insurance intended for all types of cargos (exported and imported). Freights may be insured from accidents, fires, explosion, natural disasters, theft and other insurance events specified in the insurance contract.

CASCO Insurance – Non-life insurance intended for serial production vehicles, which are insured from damage, destruction or losing due to an accident, natural disasters (storm, flood, heavy fall of rain, hail, lighting), theft, vandalism, fire. CASCO insurance may be applied for additional vehicle equipment installed not by manufacturer (audio, external antenna, spoilers and similar).

Credit Insurance – Non-life insurance, insolvency, bankruptcy and unfair practices (intentional payoff delay) insurance, which is intended to insure the insured customers, who are granted terminated payment for goods or services.

Civil liability – Property liability when one of the parties shall have a right to claim for compensation of damages or breach of contract (fine, payment penalty), and the other Party shall compensate damage or breach of contract (fine, payment penalty).

Compulsory Insurance – Insurance compulsory to particular group of persons or everybody in accordance with the procedure established by Law. Type of compulsory insurance and the main provisions are established by laws of the Republic of Lithuania.

Conditional Franchise – The part of damage, which shall be covered by the policyholder (the insured client) if the damage does not exceed the franchise. If the damage exceeds conditional franchise, the insurance company covers all the damage.

Construction and Installation All Risks Insurance – Non-life insurance, the object of which is buildings and structures of various purposes construction and installation works. This insurance covers damage to the insured object in case of any events not specified in the contract as non-insurance events. Such events may be the following: fire, explosion, lighting; flood, submergence, rain, snow, storm; earthquake, landslide, landslip; theft with break-in; wrong work due to unhandyness, negligence, nuisance, incompetence.

D

Damage – Monetary terms of damage due to insurance event.

Deduction – A part of insured damage coverage as a contribution of the policyholder (the insured client) to the damage payment.

Diminishing Amount Insurance – After an insurance event the contract according to insurance events group is valid for the amount, which is left after deducting paid insurance damage.

Drivers and Passengers’ Accident Insurance – Covers death and / or disablement cases which occur within the contract validity period when driving or alternatively using the vehicle, also accidents when getting in and getting out.

E

EAR (Erection All Risks) – installation works all risks insurance. See Construction and installation all risks insurance.

Employer Civil Liability Insurance – Type of insurance, which insures employer’s liability in case of employee’s death during the work and on the way to work or on the way home, as well as during business trips.

F

Fixed Amount Insurance – After an insurance event the contract according to insurance events group is valid for the same amount irrespectively of paid insurance premiums as per the contract.

Financial loss insurance – Non-life insurance, which insures company revenue lost in case of property damage/destruction due to the insured damage.

First Risk Insurance – Insurance benefit calculation method. Anticipates insurance benefit equal to actual damage coverage, but not more than the amount agreed by the client and insurance company before. In such case, damage not exceeding insurance amount (the first risk) shall be fully covered, and damage exceeding insurance amount (the second risk) shall not be covered at all. Also see Proportional insurance.

Franchise – A part of insured damage coverage as a contribution of the policyholder (the insured client) to the damage payment.

Franchise, conditional – The part of damage, which shall be covered by the policyholder (the insured client) if the damage does not exceed the franchise. If the damage exceeds conditional franchise, the insurance company covers all the damage.

Franchise, unconditional – A part of insured damage coverage as a contribution of the policyholder (the insured client) to the damage payment. The part of damage exceeding unconditional franchise is covered by the insurance company.

Full value insurance – When vehicle is insured for the full value, insurance amount and market value shall be equal to the first selling value approved by the seller. This provision is applicable only for vehicles procured in the Republic of Lithuania.

G

Green Card – It is material liability, one party of which shall have the right to demand the indemnification of losses or breach of contract and the other party shall pay losses or breach of contract.

General Civil Liability Insurance – Non-life insurance, which may insure the following: civil liability related to property owned by the policyholder (facilities, territory) and activity; civil liability due to damage as a result of the insured product (product liability) and / or service; civil liability arising as a result of the policyholder activity damage to the environment elimination (liability for contaminant cleaning).

H

Health Insurance – Medical services costs insurance (in other words – voluntary health insurance) includes medical services, which are provided in private medical care institutions in any town in Lithuania, charged services in state medical care institutions, dental services (except prosthesis), preferential medicine purchase. These costs shall be covered in case of acute disease, accident or death.

Insurance Activity – Financial and business activity intended to protect natural and legal entities’ property interests in case of insurance events specified in the contract, using reserves and insurance technical delays comprising of the above entities insurance premiums and incomes received after investments according to the established procedure.

Insurance Agent – Insurance mediator representing an insurance company.

Insurance Amount – Amount specified in the insurance contract of property interests.

Insurance Benefit – Benefit anticipated in rules of particular insurance type, which shall be paid to the policyholder, the insured by the company in case of indicated insurance event based on the event supporting documents.

Insurance Broker – Insurance mediator representing client’s interests.

Insurance Contract – Contract, which one of the parties (the insurer) shall be obliged to cover insurance benefit calculated in accordance to procedure set in the contract in case of insurance event for established insurance premium payable by the insured.

Insurance Event – An event indicated in the insurance contract in case of which the policyholder, the insured, benefit receiver or the third party shall have the right to receive insurance payment.

Insurance mediator – Insurance agent and / or insurance broker providing services available for insurance companies and policyholders.

Insurance Period – Validity period of insurance security, provided to the insured.

Insurance Premium – Client’s payments to insurance company in accordance to the insurance contract for the risk accepted by the insurance company.

Insurance Policy – Document proving validity of insurance security.

Insurance Security – Guarantees provided by insurance company to cover damage to the insured / policyholder (the insured client) in case of particular insurance events anticipated in the contract.

Insurance Supervisory Commission – An institution performing Lithuanian insurance market supervision and control with the following aims set: ensure insurance system reliability, efficiency, benefit receivers and the third party interests and rights protection.

Insurance Technical Delays – The insurer obligations related to the insurance contract. Their designation is to ensure insurance companies obligations fulfillment, maintain stable financial situation of insurance companies. Insurance technical delays are composed of insurance premiums, investment income, and if it is not enough private capital shall be used.

Insurance without depreciation – Vehicle is insured with a condition that in case of an insurance event insurance benefit shall not exceed insurance amount and vehicle depreciation shall not be deducted.

Insurance with depreciation – Vehicle is insured with a condition that in case of an insurance event insurance benefit shall not exceed insurance amount and depreciation of the vehicle parts is deducted except the cases when spare parts are replaced with analogous used parts.

Insurer – Insurance company. Insurance contract Party, which undertakes liability to cover damages or provide services.

ISC – An institution performing Lithuanian insurance market supervision and control with the following aims set: ensure insurance system reliability, efficiency, benefit receivers and the third party interests and rights protection.

L

LIA – Lithuanian Insurers Association unifying insurance companies performing in Lithuania and representing interests of the association members.

LIBA – Lithuanian Insurance Brokers Association unifying a part of insurance broker companies performing in Lithuania and representing interests of its members.

Life Insurance – One branch of insurance. (Also see Non-life insurance). Life insurance includes the following groups (in accordance to Insurance Supervisory Commission under the Ministry of Finance of the Republic of Lithuania classification): 1) marriage and birth insurance; 2) life insurance when investment risk is at the policyholder; 3) life insurance (what is not included in items 1 and 2).

M

Medical Services Costs Insurance – Medical services costs insurance (in other words – voluntary health insurance) includes medical services, which are provided in private medical care institutions in any town in Lithuania, charged services in state medical care institutions, dental services (except prosthesis), preferential medicine purchase. These costs shall be covered in case of acute disease, accident or death.

Mortgage – Mortgage procedures when mortgaged property owner shall have the ownership rights, however, investor’s interests are protected. In accordance with the law of mortgage valid in Lithuania, mortgaged property shall be insured.

Motor Vehicle Owners’ Civil Liability Insurance – Non-life insurance of motor vehicle owner or legal possessor liability against the third party for damage to the health, life or property using the insured motor vehicle.

N

Non-insurance Event – Event for which the insurance company shall not be obliged to pay benefit.

Non-life Insurance - A branch of insurance (also see Life insurance). Non-life insurance includes the following groups (in accordance to Insurance Supervisory Commission under the Ministry of Finance of the Republic of Lithuania classification): 1) accident insurance; 2) illness insurance; 3) land transportation insurance except means of railway transportation; 4) means of railway transportation insurance; 5) aircraft insurance; 6) ship insurance (sea, lakes, rivers and channels); 7) transported cargo insurance; 8) property fire and natural phenomenon insurance (except items 3, 4, 5, 6, 7); 9) property other damage insurance (except item 8); 10) land transportation civil liability insurance; 11) aircraft apparatus civil liability insurance; 12) ship civil liability insurance (sea, lakes, rivers and channels); 13) general civil liability insurance; 14) credit insurance; 15) guarantee insurance; 16) financial loss insurance; 17) court expenses insurance; 18) assistance insurance.

P

Policy – Document proving validity of insurance security.

Policyholder – Insurance company client. A party of the contract that concluded a contract with insurance company, pays premiums and in case of insurance event having a right to damage benefit and/or provided services.

Premium – Client’s payments to insurance company in accordance to the insurance contract for the risk accepted by the insurance company.

Product Credit Insurance – Non-life insurance, insolvency, bankruptcy and unfair practices (intentional payoff delay) insurance, which is intended to insure the insured customers, who are granted terminated payment for goods or services.

Property Insurance – It is immovable property (buildings, structures), equipment and mechanisms, resource insurance from fire, natural forces, water-supply damage, theft, illegal third party activity and other insurance events specified in insurance contract.

Proportional Insurance – Insurance benefit calculation method when calculating damage coverage by insurance company proportion between actual value of property (recoverable or residual) and insured value (recoverable or residual) is considered. For example, if insurance amount is equal to 60% of insurance value, insurance damage coverage shall make 60%, and remaining part of damage (40% as per the present example) is on the insured risk. Also see First risk insurance.

Provisions of Insurance Type – In accordance with separate insurance group provisions of insurance type established by the insurance company, based on which, the insurance company performs voluntary insurance.

Passangers’ Accident Insurance – Non-life insurance intended for passengers and driver if they were injured or killed in case of an accident.

R

Rate – Usually percentage representing cost for insurance company risk calculating from insurance amount.

Rate of Insurance Premium – Payment for the risk undertaken by the insurance company usually expressed in percentage of the total insurance amount.

Reinsurance – When an insurance company purchases insurance in other insurance company, usually foreign insurance company.

Reinsured – Insurance company, which transferred a part of accepted risk to other insurance or reinsurance company.

Reinsurer – Insurance company, which insurers other insurance company.

Reserve – (1) amount of money reflecting current and future insurance company liabilities to cover its clients’ current and future claims. (2) amount of money for special purpose. Usually reserve reflects liabilities and does not stand as additional fund. In some cases reserve may be asset, for example, reserve for future payment expenses.

Risk – Probability of insurance event.

S

Sprinkler – Automated fire extinguishing system filled up and connected to fire water or foam supply system, which activates in case of heat or flue gas.

State Insurance Supervisory Commission under the Ministry of Finance – Former name of Insurance Supervisory Commission. 

T

The Insured – Natural entity indicated by the policyholder and in the insurance policy, and in case he/she experiences an insurance event, the insurance company shall pay insurance benefit.

Third Party – A person, who is not indicated in insurance contract but in accordance to insurance provisions, has a right to insurance coverage.

Travel Insurance – Non-life insurance intended for persons going outside Lithuania and it includes: Foreign travel medical service costs insurance; Foreign travel accident insurance; Foreign travel costs insurance (travel financial loss insurance); Luggage insurance. A person traveling abroad may select to purchase one type of insurance or several foreign travel insurances.

U

Unprofitability – Particular insurance premiums and benefits proportion during insurance period in percentage.

Upgrade – Insurance policy upgrade for one more period.

V

Voluntary Insurance – Insurance based on voluntary agreement by the policyholder and insurance company and approved by insurance contract.