Health Carrier Information Definitions

Some terms that will appear in your report are defined by Washington law and others are used by the National Association of Insurance Commissioners (NAIC). Below is a partial glossary of terms that may appear in your report. Your report will contain three sections of information: Group Data, Company-wide Data and the Five Largest Non-medical Administrative Expenses. The Terms are listed under the sections as they may appear in a report.

You may find it helpful to print these definitions before you begin your comparison report.


Group Data - “Group” means the type of plan – individual, small group, large group or government group.

Member Months - A member month is defined as 1 member being enrolled for 1 month. For example, an individual who is a member of a plan for a full year generates 12 member months and a family of 5 enrolled for 6 months generates (5 X 6) 30 member months. To obtain an approximate number of enrollees in a health plan, divide the member month figure by twelve.

Revenue Amount - Includes premium income and other revenues.

Hospital and Medical Payments - Amount of claims paid for hospital costs, medical provider services, prescriptions, etc.

Medical Loss Ratio - A ratio that shows how much of your premium is spent on medical costs compared to other costs. It is calculated by dividing Hospital and Medical Payments by the Revenue Amount.

Average Monthly Premium -The approximate monthly cost for insurance coverage. This amount is calculated by dividing the Revenue Amount by Member Months.

Premium Percent Change from the Previous Year - The percentage change in the average monthly premium when compared to the previous year.

Washington State Health Insurance Pool (WSHIP) Assessment - A fee that health carriers pay to help fund Washington’s “high-risk” health insurance pool. WSHIP was created by the legislature to offer insurance coverage to residents who are rejected for coverage in the individual market because of their health.


Company-Wide Data - This data is the sum for all lines of business. Some life insurance companies also offer health insurance. If so, their data will include information for both lines of insurance.

Total Claim Adjustment Expenses - The cost of settling, recording and paying claims.

Total General Administrative Expenses - The operating costs that are not allocated to Hospital and Medical Payments, Claim Adjustment Expenses or Investment Expenses.

Total Reserves for Unpaid Claims - Expected payments for claims, including reported claims and estimates of potential claims.

Total Net Underwriting Gain or Loss - The operating costs that are not allocated to Hospital and Medical Payments, Claim Adjustment Expenses or Investment Expenses.

Net Change in Capital and Surplus - This is the difference between the amount of Capital and Surplus reported for the prior year and the current year.

Total Capital and Surplus - Total assets minus total liabilities; also known as equity.

Net Income After Taxes - All expenses and losses over the year subtracted from all revenues and gains over the year. This calculation includes investment income, investment gains and other charges.

Dividends to Stockholders -The distribution of earnings to the carrier’s owners during the year.


Five Largest Non-medical Administrative Expenses - Your report will show the five largest non-medical administrative expenses. These expenses are defined by the NAIC Annual Statement Instructions. There are 30 possible expenses that could appear in a report. Most are self-explanatory, but we believe the following terms needed further explanation:

Commissions (less $ ceded plus $ assumed) - Commissions paid to agents and brokers who market a company’s products.

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