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Term Definition
F&C fire and casualty
FAA Federal Aviation Administration
FAC facultative reinsurance

A reinsurance policy that provides an insurer with coverage for specific individual risks that are unusual or so large that they aren’t covered in the insurance company’s reinsurance treaties. This can include policies for jumbo jets or oil rigs. Reinsurers have no obligation to take on facultative reinsurance, but can assess each risk individually. By contrast, under treaty reinsurance, the reinsurer agrees to assume a certain percentage of entire classes of business, such as various kinds of auto, up to preset limits.

FAIR Fair Access to Insurance Requirements

nsurance pools that sell property insurance to people who can’t buy it in the voluntary market because of high risk over which they may have no control. FAIR Plans, which exist in 28 states and the District of Columbia, insure fire, vandalism, riot and windstorm losses, and some sell homeowners insurance which includes liability. Plans vary by state, but all require property insurers licensed in a state to participate in the pool and share in the profits and losses. (See Residual market )

FALU Fellow of the Academy of Life Underwriting
FAP family automobile policy (more commonly PAP)
FAR Federal Aviation Regulations
FARMOWNERS-RANCHOWNERS INSURANCE Package policy that protects the policyholder against named perils and liabilities and usually covers homes and their contents, along with barns, stables and other structures.
FAS free along side (ocean marine cargo)
FASB Financial Accounting Standards Board
FC&S free of capture and seizure (warranty)
FCAS Fellow of the Casualty Actuarial Society
FCC Federal Communications Commission
FCE functional capacity evaluation
FCIC Federal Crop Insurance Corporation
FCII Fellowship of the Chartered Insurance Institute (British)
FCMH&SA Federal Coal Mine Health & Safety Act
FCPL farmers comprehensive personal liability
FCRA Fair Credit Reporting Act
FDA Food and Drug Administration
FDI foreign direct investment
FDIC Federal Deposit Insurance Corporation
FDPA Flood Disaster Protection Act
FECA Federal Employees Compensation Act
FEDERAL FUNDS Reserve balances that depository institutions lend each other, usually on an overnight basis. In addition, Federal funds include certain other kinds of borrowing by depository institutions from each other and from federal agencies.
FEDERAL INSURANCE ADMINISTRATION / FIA Federal agency in charge of administering the National Flood Insurance Program. It does not regulate the insurance industry.
FEDERAL RESERVE BOARD Seven member board that supervises the banking system by issuing regulations controlling bank holding companies and federal laws over the banking industry. It also controls and oversees the U.S. monetary system and credit supply.
FEGLI Federal Employees Group Life Insurance
FELA Federal Employers Liability Act
FEMA Federal Emergency Management Agency
FERMA Federation of European Risk Management Associations
FET federal excise tax
FHBM flood hazard boundary map
FHWA Federal Highway Administration
FIA Federal Insurance Administration; Fellow of the Institute of Actuaries; full interest admitted
FIC Fraternal Insurance Counselor
FICA Federal Insurance Contribution Act
FICC Federation of Insurance and Corporate Counsel
FIDELITY BOND A form of protection that covers policyholders for losses that they incur as a result of fraudulent acts by specified individuals. It usually insures a business for losses caused by the dishonest acts of its employees.
FIDUCIARY BOND A type of surety bond, sometimes called a probate bond, which is required of certain fiduciaries, such as executors and trustees, that guarantees the performance of their responsibilities.
FIDUCIARY LIABILITY Legal responsibility of a fiduciary to safeguard assets of beneficiaries. A fiduciary, for example a pension fund manager, is required to manage investments held in trust in the best interest of beneficiaries. Fiduciary liability insurance covers breaches
FIFO first in, first out
FIIC Fellow of the Insurance Institute of Canada
FILE-AND-USE STATES States where insurers must file rate changes with their regulators, but don?t have to wait for approval to put them into effect.
FINANCIAL GUARANTEE INSURANCE Covers losses from specific financial transactions and guarantees that investors in debt instruments, such as municipal bonds, receive timely payment of principal and interest if there is a default. Raises the credit rating of debt to which the guarantee

A state law requiring that all automobile drivers show proof that they can pay damages up to a minimum amount if involved in an auto accident. Varies from state to state but can be met by carrying a minimum amount of auto liability insurance. (See Compulsory auto insurance)

FINITE RISK REINSURANCE Contract under which the ultimate liability of the reinsurer is capped and on which anticipated investment income is expressly acknowledged as an underwriting component. Also known as financial reinsurance because this type of coverage is often bought to
FIRE INSURANCE Coverage protecting property against losses caused by a fire or lightning that is usually included in homeowners or commercial multiple peril policies.
FIRM flood insurance rate map
FIRREA Financial Institutions Reform Recovery and Enforcement Act

Coverage for the policyholder’s own property or person. In no-fault auto insurance it pays for the cost of injuries. In no-fault states with the broadest coverage, the personal injury protection (PIP) part of the policy pays for medical care, lost income, funeral expenses and, where the injured person is not able to provide services such as child care, for substitute services. (SeeNo-fault, Third-party coverage )

FIXED ANNUITY An annuity that guarantees a specific rate of return. In the case of a deferred annuity, a minimum rate of interest is guaranteed during the savings phase. During the payment phase, a fixed amount of income, paid on a regular schedule, is guaranteed.
FLMI Fellow of the Life Management Institute

Attached to a homeowners policy, a floater insures movable property, covering losses wherever they may occur. Among the items often insured with a floater are expensive jewelry, musical instruments and furs. It provides broader coverage than a regular homeowners policy for these items


Coverage for flood damage is available from the federal government under the National Flood Insurance Program but is sold by licensed insurance agents. Flood coverage is excluded under homeowners policies and many commercial property policies. However, flood damage is covered under the comprehensive portion of an auto insurance policy. (See Adverse selection )

FLSA Fair Labor Standards Act
FM factory mutual
FMCSA Federal Motor Carrier Safety Administration
FMCSR Federal Motor Carrier Safety Regulations
FMLA Family and Medical Leave Act of 1993
FMV fair market value
FNMA Federal National Mortgage Association
FOB free on board
FOC Fire Office Committee Forms

Act of God: a natural and unavoidable catastrophe that interrupts the expected course of events. This clause is included in contracts to remove liability for natural and unavoidable catastrophes that may restrict participants from fulfilling obligations.


Insurance purchased by a bank or creditor on an uninsured debtors behalf so if the property is damaged, funding is available to repair it.

FOREIGN INSURANCE COMPANY Name given to an insurance company based in one state by the other states in which it does business.
FPA free of particular average
FPAAC free of particular average (American conditions)
FPAEC free of particular average (English conditions)
FPEB Fire Prevention and Engineering Bureau
FR farm and ranch (forms); fire resistive
FRAUD Intentional lying or concealment by policyholders to obtain payment of an insurance claim that would otherwise not be paid, or lying or misrepresentation by the insurance company managers, employees, agents and brokers for financial gain.
FREE-LOOK PERIOD A period of up to one month during which the purchaser of an annuity can cancel the contract with no penalty. Rules vary by state.
FREQUENCY Number of times a loss occurs. One of the criteria used in calculating premium rates.
FRM Fellow in Risk Management

A procedure in which a primary insurer acts as the insurer of record by issuing a policy, but then passes the entire risk to a reinsurer in exchange for a commission. Often, the fronting insurer is licensed to do business in a state or country where the risk is located, but the reinsurer is not. The reinsurer in this scenario is often a captive or an independent insurance company that cannot sell insurance directly in a particular country.

FRV fair rental value coverage
FSA Fellow of the Society of Actuaries; flexible spending account; field service advice
FSLIC Federal Savings and Loan Insurance Corporation
FT financial transformation
FTC Federal Trade Commission
FTCAC fire, theft, and combined additional coverage
FUTURES Agreement to buy a security for a set price at a certain date. Futures contracts usually involve commodities, indexes or financial futures.
FVD full value declared

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