The technical definition of "indemnity" means to make whole again. There are two types of major medical contracts; 1) an "indemnity" policy and Florida Health Insurance 2) a "pay on behalf" or "on behalf of" policy. The difference is denoting on paper, but rarely material in practice.
Paragraph 10 of FAS 113 makes clear that the 9a and 9b tests are based on comparing the present bearing of all costs to the PV of all income streams. FAS gives no guidance on the choice of a discount quota on which to ignoble such a calculation, other than to say that all outcomes creditworthy should use the same rate.