Glossary

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QPP. See Quebec Pension Plan.

qualification period. See elimination period.

qualified annuity. An annuity that is purchased to either fund or distribute funds from a tax-qualified employee benefit retirement plan and that is exempt from current income taxation during the accumulation period.

qualified beneficiaries. For purposes of the Consolidated Omnibus Budget Reconciliation Act (COBRA) in the United States, specified individuals who have the right to continue their group health insurance coverage following a qualifying event without providing evidence of insurability. See also Consolidated Omnibus Budget Reconciliation Act (COBRA).

qualified LTC plan. In the United States, a long-term care (LTC) insurance policy that is eligible for favorable tax treatment under federal law because it provides all the features required by the Health Insurance Portability and Accountability Act (HIPAA).

qualified retirement plan. In the United States, an employer-sponsored retirement plan that satisfies complex legal requirements to receive federal income tax benefits. Known as a registered plan in Canada.

qualifying events. For purposes of the Consolidated Omnibus Budget Reconciliation Act (COBRA) in the United States, specified events including the death of a covered employee and termination of a covered employee's employment that would otherwise result in the termination of an individual's group health insurance coverage but that entitle the individual to continue the group health insurance for a limited time. See also Consolidated Omnibus Budget Reconciliation Act (COBRA).

quality rating. In the insurance industry, an alphabetical grade or rating assigned to an insurer by an insurance rating agency to indicate the level of the insurance company's financial strength, its ability to pay its obligations to customers, or its ability to pay its obligations to creditors.

Quebec Civil Code. In Canada, a regulation that governs all life and health insurance contracts in Quebec and specifies what provisions must be included in insurance contracts.

Quebec Pension Plan (QPP). A provincial pension plan that provides Quebec contributors and their families with benefits that are comparable to those provided by the Canada Pension Plan. The QPP provides retirement benefits, disability income benefits and survivor benefits to wage earners who reside in Quebec and who have contributed money into the plan during their working years.

quick liquidity ratio. For insurers, the ratio of an insurer's liquid assets to its contractual reserves. See also ratio.

quick ratio. One way of determining a company's ability to liquidate debt immediately, this ratio is calculated by dividing a company's most liquid current assets by the company's current liabilities. Also known as acid-test ratio.

quota share. (1) A type of proportional reinsurance in which a reinsurer agrees to accept a certain percentage of each insurance risk, and a ceding company retains the remaining percentage, up to a maximum retention limit. See also proportional reinsurance. (2) The portion of risk assumed by each reinsurer in a reinsurance pool.

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