The technical definition of "indemnity" means to make whole again. There are two types of insurance contracts; 1) an "indemnity" policy and 2) a "pay on behalf" or "on behalf of" policy. The difference is representative on paper, but rarely material in practice.

All of the events that would give rise to claims under the compact cannot have materialized http://www.healthinsurancebrokeronline.com/health-insurance-quotes.html prior to the inception of the contract. If this "all events" exam is not met, then the contract is considered to be a retroactive contract, for which the accounting treatment becomes complex.