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Tail. The period of time that elapses between the writing of an insurance policy and the payment of the claim or between the loss occurrence (or the insurer's knowledge of the loss) and the payment of the claim.

Tax-Qualified Annuity. An annuity that is issued to a tax-qualified retirement plan. TQAs also are referred to as Tax-Sheltered Annuities (TSAs) and 403(b) plans. Generally sold on a payroll deduction basis to teachers, government employees and employees of hospitals and nonprofit organizations. The 403(b) is tax-qualified in that it allows for pretax contributions and often is an alternative to 401(k) plans. Like other annuities, the inside build-up is tax-deferred. TSAs are marketed under a two-tier system. First, a company must obtain an endorsement from the school board or other oversight committee. Then, the selling agents market directly to the individual employees. This two-tier system creates relatively high barriers to entry for potential new participants in the market.

Tax Equity and Fiscal Responsibility Act of 1982 (TEFRA). Federal tax legislation that modified tax rules and qualifications for tax shelters, changed the computation of taxes on life insurance earnings and limited tax-free withdrawals from annuity plans. The Act also defined the primary and secondary coverage responsibilities of the Medicare program and the provisions to be used by health plans in their contracts with the Health Care Financing Administration (HCFA). Among other things, this legislation spurred a rapid shift toward privatization and managed care for Medicare beneficiaries.

Tenants' Policy. A form of homeowners insurance policy modified to meet the needs of tenants. Also known as "renters' policy."

Term. (1) The period of time for which an insurance policy is effective and in force; and (2) a provision in an insurance policy.

Term Life Insurance. Life insurance protection that pays the sum insured only if the insured dies within the term of the policy. See also Decreasing Term Insurance, Deposit Term Insurance and Convertible Term Insurance.

Terminal Funding Plans. A type of defined benefit plan, not widely used, in which an annuity is purchased for each employee, in an amount based on service and salary, as the employee reaches retirement, with the required funding amounts coming from the general resources of the plan sponsor.

Territorial Rating. A rating formula that takes into account geographical factors in the setting of rates.

Third-Party Administrator (TPA). A service provider engaged in the performance of administration, clerical and managerial functions related to insurance policies or employee benefit plans.

"Three-Legged Stool." An historical ideal "model" of retirement income, under which people ultimately would rely on a combination of personal savings, Social Security and an employer-sponsored pension plan to fund their retirement.

"Time and Distance" Cover. A form of reinsurance policy that provides the cedant with guaranteed payments. The payment schedule is dependent upon investment yields and not upon traditional risk criteria. See Financial Reinsurance.

Title Insurance. Insurance that insures the owner of property or the holder of a mortgage upon such property against defects in the title to the property.

Tontine Scheme. A pooling arrangement, no longer legal, in which a group of people agree to the payment of funds to those living after a specified period of time at the expense of those who have died.

Tort. A civil wrong or injury, other than that arising from a breach of contract.

Tort Liability System. A liability system in which fault must be established as a basis for liability, in contrast with a no-fault system where fault need not be established.

Total Disability. A disability that prevents an insured from performing every duty related to the insured's employment or from engaging in any other type of employment appropriate to the insured. See Disability.

TPA. See Third-Party Administrator.

Treasury List. A listing maintained by the United States Department of the Treasury of those sureties eligible to provide surety bonds on federal projects.

Treaty. A contract between an insurer and a reinsurer pursuant to which the reinsurer must automatically accept the business being ceded.

Treaty Reinsurance. The reinsurance of a class of business by a cedant that the reinsurer must automatically accept. Also known as obligatory reinsurance.

Trending. The process of using historical data and other statistics to forecast future events, especially with regard to price inflation of loss costs.

Triangle. An exhibit used by actuaries to show historical loss development for an insurer. The exhibit is triangular in form because losses for earlier underwriting years have longer development than those for later underwriting years.

Triennial Examination. A periodic examination of an insurer's books and records by regulators to verify its financial condition and compliance with applicable laws and regulations. These are labeled triennial examinations because, under NAIC guidelines, they are to occur at least once every three years.

12(b)-1 Fee. A fee charged by mutual funds to cover promotional expenses, including advertising and commissions, or to pay custodian and service fees to insurers, brokerage houses, etc.

Twisting. The (illegal) practice of inducing a policyholder to terminate existing life insurance coverage through misrepresentation or incomplete disclosure.