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Maintenance Bond. A type of surety bond under which the surety guarantees that the contractor will fulfill its obligations during the warranty period.

Major Medical Insurance. A form of health insurance covering expenses relating to a catastrophic illness or injury.

Malpractice Insurance. See Medical Malpractice Insurance and Professional Liability Insurance.

Managed Care. A health care system integrating the financing and delivery of health care services by a group of providers. In a managed care system, standards are set for efficiency and quality assurance. A coordinated approach to the design, financing and delivery of health care, which balances price and utilization controls with access to care. Also a general term for organizing doctors, hospitals and other providers into groups in order to enhance the cost-effectiveness and manage the quality of health care.

Managed Care Organization (MCO). An entity that provides or contracts for managed care. Includes entities such as HMOs, PPOs, POS plans, EPOs, etc.

Managed Competition. A purchasing strategy for health care that encourages those managed care plans that do the best job of improving quality, cutting cost and satisfying patients to flourish.

Managed Indemnity Plan. An indemnity plan that uses some utilization management techniques (such as hospital precertification) to monitor how doctors and patients use health care services. As there is no network, providers have no relationship or contract with the health plan. This is not a true managed care plan.

Managing Agent. The agency support mechanism behind syndicates on Lloyd's. Employs the underwriting staff and maintains compliance with Lloyd's rules.

Managing General Agent (MGA). An agent who produces and underwrites business for an insurer and either adjusts or pays claims or negotiates reinsurance on behalf of the insurer.

Mandatory Securities Valuation Reserve (MSVR). A reserve required by state insurance regulators as a liability on a life insurer's statutory financial statements intended to capture realized and unrealized gains and losses sustained by the insurer's fixed-income and equity portfolios. In December, 1991, the National Association of Insurance Commissioners (NAIC) proposed that the MSVR be replaced by Asset Valuation Reserves and Interest Maintenance Reserves, effective with 1992 statutory financial statements. See Asset Valuation Reserve and Interest Maintenance Reserve.

Manual Rates. An insurer's standard rates as established in its rating or underwriting manuals.

Manuscript Policy. An insurance policy drafted to meet the specific needs of insurer and insured.

Marine Insurance. A form of insurance covering transportation and communication activities, as well as goods in transit. See Inland Marine Insurance and Ocean Marine Insurance.

Market Assistance Plan. A program that provides assistance to consumers of insurance who have experienced difficulty in obtaining coverage in the voluntary markets.

Market Capacity. The aggregate amount of insurance capable of being underwritten by all insurers operating in a relevant market.

Master Policy. The practice of combining several locations or operations under coverage provided by a single insurance policy.

Mature. Within the context of life insurance, a policy whose face amount has become payable.

Maximum Probable Loss. See Probable Maximum Loss.

McCarran-Ferguson Act. Federal legislation enacted in 1945, in which Congress agreed to defer to state regulatory authorities in the regulation of the insurance industry. The legislation specifically provides for a limited federal antitrust exemption.

MCO. See Managed Care Organization.

Medicaid. State-administered programs created by federal legislation in 1966 that provide assistance to pay for health care benefits for disadvantaged persons regardless of age. Federal matching funds supplement such payments. The state, under broad federal guidelines, determines what benefits are covered, who is eligible and how much providers will be paid.

Medical Malpractice Insurance. A form of insurance that covers a health care professional's liability for any actual or alleged breach or neglect of duty committed in the conduct of the insured's duties.

Medical Trend. A quantitative measure of the change in medical costs per plan member. Medical trend is driven by numerous factors, including inflation, medical care consumption patterns, physician practice patterns (e.g., referrals), new medical technology, defensive medicine and cost shifting.

Medical Savings Account (MSA). A program analogous to an Individual Retirement Account (IRA), permitting tax-preferred savings toward medical expenses. The Health Insurance Portability and Accountability Act of 1996 provided for an experiment of the concept, and some Republicans have proposed its adaptation (via a Medicare Medical Savings Account, or MMSA) to Medicare.

Medicare. A federally funded insurance program adopted in 1966 that provides health insurance coverage for hospital and physicians' services to persons age 65 and older and certain other disabled persons. A nationwide, federal health insurance program for people age 65 and older. It also covers certain people under 65 who are disabled or have chronic kidney disease. Medicare Part A is the hospital insurance program; Part B covers physicians' services.

Medigap Insurance. A form of health insurance sold by private insurers to supplement coverage or otherwise fill in coverage gaps provided by the Medicare program. Also known as MedSupp (Medicare Supplemental) Insurance.

Members' Agent. A Lloyd's underwriting agency; introduces members to an underwriting syndicate but does not manage one.

MGA. See Managing General Agent.

Miller Act. Federal legislation enacted in 1935 that requires surety bonds to be supplied by those providing goods and services to the federal government. Some individual state governments have enacted similar legislation in relation to their own outside contracting activities.

Minimum Premium Plan. A program under which an insurer provides administrative services and insures large claims for a self-insured group.

Miscellaneous Surety Bond. A surety bond that guarantees the performance of various obligations of a principal, including guarantees of honesty (such as notary public bonds), financial guarantees (such as utility deposit bonds) and other credit guaranty bonds.

Monetary Threshold. A type of "no fault" insurance system, in which the claimant has the right to sue for damages if they exceed a specified minimum dollar limit.

Monoline Insurer. An insurer that writes only a single line of business. Over time, the term has been expanded to include insurers writing predominantly a single line of business.

Monopolistic Fund. A state-run workers' compensation insurance that allows virtually no competition from private insurers for primary business. (Private insurers may insure excess business.)

Moral Hazard. The increase in the chance of loss caused by the disregard of traditionally "moral" behavior, e.g., misrepresentation, concealment, arson.

Morale Hazard. The increase in the chance of loss caused by the insured's indifference or carelessness because of the existence of insurance, e.g., failure to check brakes regularly.

Morbidity Experience. The incidence of disability due to disease or physical impairment.

Mortality Experience. The incidence of death based upon the experience of a particular insurer.

Mortality Table. A statistical listing of anticipated death rates for various age groupings, normally expressed as deaths per thousand.

Mortgage Redemption Insurance. A form of decreasing term insurance that covers the life of a person taking out a mortgage. Death benefits are designed to provide for payment of the outstanding balance of the loan. See Decreasing Term Insurance.

MSA. See Medical Savings Account.

MSVR. See Mandatory Securities Valuation Reserve.

Multiline Insurer. An insurer that issues insurance policies covering a wide range of perils. Such insurers may underwrite life, health and property-casualty risks.

Multi-Peril or Multiple-Peril. A term describing an insurance policy covering a wide range of perils, rather than a single peril or limited range of perils.

Multiple Employer Trust. An arrangement whereby a number of unrelated employers join together for the purpose of providing group medical coverage.

Multiple Fund. A fund operated by an investment company that raises money from shareholders and invests in a group of stocks, bonds or other investments. It is professionally managed for the benefit of the shareholders. Each share in the fund represents part ownership of many different stocks, bonds, etc. Many insurance companies sell mutual funds.

Mutual Insurance Company. An insurance company owned by its policyholders, in contrast to a stock insurance company, which is owned by its stockholders.