occupation class
A group of occupations that present a similar risk to an insurance company. If all other factors are equal, people in the same occupation class will pay the same premium rates for health insurance.

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Office of the Superintendent of Financial Institutions (OSFI)
In Canada, the government office that administers the federal laws pertaining to the various financial institutions, including insurance companies.

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Office of the Superintendent of Insurance
In Canada, a provincial executive agency that is responsible for administering the province's insurance laws and regulations.

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offset
A tax law provision that allows an insurer to use the amount paid for one type of tax to reduce another aspect of the company's tax liability.

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offset approach
A way of integrating benefits from a private defined benefit pension plan with benefits from a government plan. The benefit payable from the private plan is reduced by a specified percentage of the benefit received from the government plan.

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Old Age Security Act (OAS)
Canadian legislation that provides a pension to virtually all citizens who are age 65 or older.

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Old Age, Survivors, Disability and Health Insurance Act (OASDHI)
The legislation that created Social Security in the United States. See Social Security.

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open contract
A type of insurance contract used by fraternal benefit societies. Under this type of contract, the society's charter, constitution, and bylaws become a part of the insurance contract, and any amendments to them automatically become amendments to the insurance contract. No such amendment, however, can destroy or diminish benefits that the society is contractually obligated to pay. See also closed contract and fraternal benefit society.

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open debit
In a home service sales territory, a block of policyowners that does not have an assigned servicing agent.

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option
A choice that a policyowner can make when deciding how to apply settlements, dividends, or nonforfeiture values. See also dividend options, nonforfeiture options, and settlement options.

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option A plan
A plan used in universal life insurance in which the potential policy proceeds remain level. In an option A plan, the policy proceeds are equal to the policy's death benefit. Consequently, the net amount at risk is equal to the difference between the policy's death benefit and the policy's cash value. As the cash value increases, the net amount at risk decreases. Contrast to option B plan.

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option B plan
A plan used in universal life insurance in which the potential policy proceeds increase. In an option B plan, the policy proceeds are equal to the death benefit plus the policy's cash value. Consequently, the net amount at risk is always equal to the death benefit of the policy. Contrast to option A plan.

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optionally renewable policy
An individual health insurance policy that is renewable on a policy anniversary only if the insurer chooses to renew it. See also cancellable policy, conditionally renewable policy, guaranteed renewable policy, noncancellable and guaranteed renewable policy, and noncancellable policy.

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ordinary insurance
See individual insurance

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ordinary life insurance
Life insurance which is available to individuals in relatively unrestricted maximum death benefit amounts, and premiums may be paid monthly or less frequently.

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original age conversion
The fact or the act of changing a term life insurance policy to a whole life policy at a premium rate based on the age of the insured at the time the term policy was purchased.

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out-of-pocket maximum
The maximum amount of money you will be required to pay in a calendar year for deductibles and coinsurance. It is a stated dollar amount set by the insurance company. Regular premiums and charges in excess of usual and customary rates do not count toward the maximum out-of-pocket amount.

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outliers
Medicare patients whose illnesses are unique and whose conditions may not be classifiable under one of the diagnostic related groups.

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outstanding premium
In Canada, a premium that is due on or before the policy statement date but that has not been received by that date.

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overinsurance
An amount of insurance that is excessive in relation to the loss insured against.

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overinsurance provision
A provision in an individual health insurance policy specifying that, under certain circumstances, policy benefits will be reduced if the insured has more insurance than needed to cover medical expenses or if disability income would exceed the insured's predisability earnings. See also coordination of benefits (COB) clause.

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overlapping territory
Under the general agency system, a territory in which some portion of the territory is open to an agent other than the general agent, while the rest of the territory is the exclusive domain of the general agent. See also exclusive territory and nonexclusive territory.

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over-retained
The situation in which an insurance or reinsurance company has accepted an amount of insurance which exceeds the company's normal capacity on a specific risk. Also referred to as overlined.

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overriding commission
A commission earned by a field office manager that is based on the business produced by the agents in that office. An overriding commission may be earned each time an agent sells business or it may be based on the overall production of the field office. Also called the override.

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