The fraud, identity & insurance glossary
Definitions for the vocabulary of identity fraud and fraud loss insurance — written for risk, finance, and growth leaders.
CECL Allowance
The reserve institutions set aside for expected credit losses under the Current Expected Credit Loss accounting standard.
CET1 (Common Equity Tier 1)
The highest-quality regulatory capital a bank holds, used as the core measure of financial strength.
Tier 1 Capital
The core capital a bank holds, and the primary buffer regulators use to gauge its ability to absorb losses.
BSA / AML
The Bank Secrecy Act and Anti-Money-Laundering framework requiring institutions to detect, prevent, and report financial crime.
CIP (Customer Identification Program)
A U.S. regulatory requirement for financial institutions to verify the identity of customers opening accounts.
KYB (Know Your Business)
The process of verifying the identity, ownership, and legitimacy of a business customer during onboarding.
KYC (Know Your Customer)
The regulatory process of verifying the identity of customers during onboarding to prevent fraud and financial crime.
Account Takeover (ATO)
A form of third-party fraud where an attacker gains control of a legitimate account and uses it to transact or extract value.
Chargeback Liability
The financial responsibility a business bears when a customer disputes a transaction and the payment is reversed.
False Decline
A legitimate customer wrongly rejected by fraud controls — a hidden revenue loss that grows as thresholds tighten.
First-Party Fraud
Fraud in which a real person uses their own or a manipulated identity to obtain goods, credit, or services they never intend to repay.
Synthetic Identity Fraud
Fraud committed using a fabricated identity that combines real and fake information to pass verification and open accounts.
Third-Party Fraud
Fraud committed using stolen identity credentials belonging to a real, unwitting victim, without their knowledge.
Denial-Free Claims
A claims process in which covered losses are reimbursed without the usual denial friction, typically within a fixed window.
Identity Fraud Loss Insurance
A financial-services product that indemnifies a business against monetary losses from identity fraud, transferring that liability to an insurer for a fixed premium.
MGA (Managing General Agent)
An entity that underwrites and administers insurance on behalf of insurers, with delegated authority to price and bind coverage.
Reinsurance-Backed Protection
Coverage whose claims-paying capacity is backed by rated reinsurers, giving it insurance-grade financial strength.
Risk Transfer
Shifting the financial consequences of a risk from your balance sheet to an insurer for a fixed premium.
TPA (Third-Party Administrator)
An organization that processes claims and administers insurance operations on behalf of an insurer or program.
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