minimum and deposit premium (M&D)
Minimum and deposit premium is a premium that is fully earned by the insurer at the inception of the policy and is nonrefundable if the policy is canceled.
Additional Information
Though infrequently used, this approach can be used for policies that have a flat premium or a premium that is adjusted at the end of the policy term to reflect the actual exposure as determined via an audit. This is a common approach with excess of loss reinsurance, which requires initial premium payment in advance, adjusted annually in arrears based on exposure audits.
