Cancellation: The discontinuance of an insurance policy before its normal
expiration date, either by the insured or the company.
Capacity: The amount of capital available to an insurance company or to the
industry as a whole for underwriting general insurance coverage or coverage for specific
perils.
Capital Gain: Profit realized on the sale of securities. An unrealized capital gain
is an increase in the value of securities that have not been sold.
Capital Retention Approach: A method used to estimate the amount of life insurance
to own. Under this method, the insurance proceeds are retained and are not liquidated.
Captive Insurance Company: A company owned solely or in large part by one or more
non-insurance entities for the primary purpose of providing insurance coverage to the
owner or owners.
Captive Insurer: Insurance company established and owned by a parent firm in order
to insure its loss exposures while reducing premium costs, providing easier access to a
reinsurer, and perhaps easing tax burdens. See also Association captive; Pure captive.
Cargo Insurance: Type of ocean marine insurance that protects the shipper of the
goods against financial loss if the goods are damaged or lost.
Casualty Insurance: Insurance concerned with the insider's legal liability for
injuries to others or damage to other persons' property; also encompasses such forms of
insurance as plate glass, burglary, robbery and workers' compensation.
Catastrophe: Event which causes a loss of extraordinary magnitude, such as a
hurricane or tornado.
Causes-of-loss Form: Form added to commercial property insurance policy that
indicates the causes of loss that are covered. There are four causes-of-loss forms: basic,
broad, special, and earthquake.
Cede: To transfer all or part of a risk written by an insurer (the ceding, or
primary company) to a reinsurer.
Certificate of Insurance: A statement of coverage issued to an individual insured
under a group insurance contract, outlining the insurance benefits and principal
provisions applicable to the member.
Certified Financial Planner (CFP): Professional who has attained a high degree of
technical competency in financial planning and has passed a series of professional
examinations by the College of Financial Planning.
Certified Insurance Counselor (CIC): Professional in property and liability
insurance who has passed a series of examinations by the Society of Certified Insurance
Counselors.
Cession: Amount of the insurance ceded to a reinsurer by the original insuring
company in a reinsurance operation.
Chartered Property and Casualty Underwriter (CPCU): Professional who has attained a
high degree of technical competency in property and liability insurance and has passed ten
professional examinations administered by the American Institute for Property and Liability
Underwriters.
Choice no-fault: Allows auto insureds the choice of remaining under the tort system
or choosing no-fault at a reduced premium.
Claim: A request for payment of a loss which may come under the terms of an
insurance contract.
Claims Adjustor: Person who settles claims: an agent, company adjustor, independent
adjustor, adjustment bureau, or public adjustor.
Claim-made policy: A liability insurance policy under which coverage applies to
claims filed during the policy period.
Class Rating: Rate-making method in which similar insureds are placed in the same
underwriting class and each is charged the same rate. Also called manual rating.
Coinsurance: 1) A provision under which an insured who carries less than the
stipulated percentage of insurance to value, will receive a loss payment that is limited
to the same ratio which the amount of insurance bears to the amount required; 2) a policy
provision frequently found in medical insurance, by which the insured person and the
insurer share the covered losses under a policy in a specified ratio, i.e., 80 percent by
the insurer and 20 percent by the insured.
Collateral Source Rule: Under this rule, the defendant cannot introduce any
evidence that shows the injured party has received compensation from other collateral
sources.
Collision Insurance: Protection against loss resulting from any damage to the
policyholder's car caused by collision with another vehicle or object, or by upset of the
insured car, whether it was the insured's fault or not.
Combined Ratio: Basically, a measure of the relationship between dollars spent for
claims and expenses and premium dollars taken in; more specifically, the sum of the ratio
of losses incurred to premiums earned and the ratio of commissions and expenses incurred
to premiums written. A ratio above 100 means that for every premium dollar taken in, more
than a dollar went for losses, expenses, and commissions.
Commercial General Liability Policy (CGL): Commercial liability policy drafted by
the Insurance Services Office containing two coverage forms, an occurrence form and a
claims-made form.
Commercial Lines: Insurance for businesses, organizations, institutions,
governmental agencies, and other commercial establishments.
Commercial Multiple Peril Policy: A package of insurance that includes a wide range
of essential coverages for the commercial establishment.
Commercial Package Policy (CPP): A commercial policy that can be designed to meet
the specific insurance needs of business firms. Property and liability coverage forms are
combined to form a single policy.
Commission: The part of an insurance premium paid by the insurer to an agent or
broker for his services in procuring and servicing the insurance.
Commissioner: A state officer who administers the state's insurance laws and
regulations. In some states, this regulator is called the director or superintendent of
insurance.
Common Stock: Securities that represent an ownership interest in a corporation.
Community Property: A special ownership form requiring that one half of all
property earned by a husband or wife during marriage belongs to each. Community property
laws do not generally apply to property acquired by gift, by will, or by descent.
Company Adjustor: Claims adjustor who is a salaried employee representing only one
company.
Comparative Negligence: Under this concept a plaintiff (the person bringing suit)
may recover damages even though guilty of some negligence. His or her recovery, however,
is reduced by the amount or percent of that negligence.
Completed Operations: Liability arising out of faulty work performed away from the
premises after the work or operations are completed. Applicable to contractors, plumbers,
electricians, repair shops, and similar firms.
Comprehensive Automobile Insurance: Protection against loss resulting from damage
to the insured auto, other than loss by collision or upset.
Comprehensive Personal Liability Insurance: Protection against loss arising out of
legal liability to pay money for damage or injury to others for which the insured is
responsible. It does not include automobile or business operation liabilities.
Compulsory Auto Liability Insurance: Insurance laws in some states required
motorists to carry at least certain minimum auto coverages. This is called "compulsory"
insurance.
Compulsory Insurance: Any form of insurance which is required by law.
Compulsory Insurance Law: Law protecting accident victims against irresponsible
motorists by requiring owners and operators of automobiles to carry certain amounts of
liability insurance in order to license the vehicle and drive legally within the state.
Concealment: Deliberate failure of an applicant for insurance to reveal a material
fact to the insurer.
Concurrent Causation: Legal doctrine that states when a property loss is due to two
causes, one that is excluded and one that is covered, the policy provides coverage.
Conditional Receipt: A receipt given for premium payments accompanying an
application for insurance. If the application is approved as applied for, the coverage is
effective as of the date of the prepayment or the date on which the last of the
underwriting requirements, such as a medical examination, has been fulfilled.
Conditions: Provisions inserted in an insurance contract that qualify or place
limitations on the insurer's promise to perform.
Conservation: The attempt by the insurer to prevent the lapse of a policy.
Consideration: One of the elements for a binding contract. Consideration is
acceptance by the insurance company of the payment of the premium and the statement made
by the prospective policyholder in the application.
Consideration Clause: The clause that stipulates the basis on which the company
issues the insurance contract. In health policies, the consideration is usually the
statements in the application and the payment of premium.
Consequential Loss: Financial loss occurring as the consequence of some other loss.
Often called an indirect loss.
Contents Broad Form: See Homeowners 4 policy.
Contingent Liability: Liability arising out of work done by independent contractors
for a firm. A firm may be liable for the work done by an independent contractor if the
activity is illegal, the situation does not permit delegation of authority, or the work
is inherently dangerous.
Contract: A binding agreement between two or more parties for the doing or not
doing of certain things. A contract of insurance is embodied in a written document called
the policy.
Contractual Liability: Legal liability of another party that the business firm
agrees to assume by a written or oral contract.
Contribution by Equal Shares: Type of other insurance provision often found in
liability insurance contracts that requires each company to share equally in the loss
until the share of each insurer equals the lowest limit of liability under any policy or
until the full amount of loss is paid.
Contributory: A group insurance plan issued to an employer under which both the
employer and employee contribute to the cost of the plan. Seventy-five percent of the
eligible employees must be insured. (See Noncontributory.)
Contributory Negligence: Negligence of the damaged person that helped to cause the
accident. Some states bar recovery to the plaintiff if the plaintiff was contributory
negligent to any extent. Others apply comparative negligence.
Convertible Bond: A bond that offers the holder the privilege of converting the
bond into a specified number of shares of stock.
Cost Basis: An amount attributed to an asset for income tax purposes; used to
determine gain or loss on sale or transfer; used to determine the value of a gift.
Coverage: The scope of protection provided under a contract of insurance; any of
several risks covered by a policy.
Coverage for Damage to Your Auto: That part of the personal auto policy insuring
payment for damage or theft of the insured automobile. This optional coverage can be used
to insure both collision and other-than-collision losses.
Covered: A person covered by a pension plan is one who has fulfilled the
eligibility requirements in the plan, for whom benefits have accrued, or are accruing, or
who is receiving benefits under the plan.
CPCU: See Chartered Property and Casualty Underwriter.
Credibility: A statistical measure of the degree to which past results make good forecasts of future results.
Credibility Factor The weight given to an individual insured's past experience in computing
premiums for future coverage.
Credit Insurance: A guarantee to manufacturers, wholesalers, and service
organizations that they will be paid for goods shipped or services rendered. Applies to
that part of working capital which is represented by accounts receivable.
Crop-hail Insurance: Protection against damage to growing crops as a result of hail
or certain other named perils.
Cross Purchase Agreement: specifies the terms for the surviving partners or
shareholders to buy a deceased's share of the business's ownership.
CSR: Customer service representatives support the work of insurance agents with a
variety of tasks that must be done within a company or agency to deliver services to and
handle requests from clients.
Currently Insured: Status of a covered person under the Old-age, survivors, and
Disability Insurance (OASDI) program who has at least six quarters of coverage out of the
last thirteen quarters, ending with the quarter of death, disability, or entitlement to
retirement benefits.
Click on the letter of alphabet, which the word you are looking for begins with:
