Cyber Insurance Glossary

A complete glossary of essential Insurance terms.

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  • Captive Insurer
    an insurance company established by a parent firm for the purpose of insuring the parent's exposures
  • Carrying Value(Amount)
    the SAP book value plus accrued interest and reduced by any valuation allowance and any non-admitted adjustment applied to the individual investment.
  • Cash
    a medium of exchange
  • Cash Equivalent
    short-term, highly liquid investments that are both (a) readily convertible to known amounts of cash, and (b) so near their maturity that they present insignificant risk of changes in value because of changes in interest rates. Investments with original maturities of three months or less qualify under this definition.
  • Casualty Insurance
    a form of liability insurance providing coverage for negligent acts and omissions such as workers compensation, errors and omissions, fidelity, crime, glass, boiler, and various malpractice coverages
  • Catastrophe Bonds
    Bonds issued by an insurance company with funding tied to the company's losses from disasters, or acts of God. A loss exceeding a certain size triggers a reduction in the bond value or a change in the bond structure as loss payments are paid out of bond funds.
  • Catastrophe Loss
    a large magnitude loss with little ability to forecast.
  • Ceded Premium
    amount of premium (fees) used to purchase reinsurance
  • Ceding Company
    an insurance company that transfers risk by purchasing reinsurance.
  • Change in Valuation Basis
    a change in the interest rate, mortality assumption or reserving method or other factors affecting the reserve computation of policies in force.
  • Chartered Life Underwriter (CLU)
    a professional designation awarded by the American College to persons in the life insurance field who pass a series of exams in insurance, investment, taxation, employee benefit plans, estate planning, accounting, management, and economics.
  • Claim
    a request made by the insured for insurer remittance of payment due to loss incurred and covered under the policy agreement.
  • Claims Adjustment Expenses
    costs expected to be incurred in connection with the adjustment and recording of accident and health, auto medical and workers' compensation claims.
  • Claims-Made Form
    A type of liability insurance form that only pays if the both event that causes (triggers)the claim and the actual claim are submitted to the insurance company during the policy term
  • Class Rating
    a method of determining rates for all applicants within a given set of characteristics such as personal demographic and geographic location.
  • Coinsurance
    A clause contained in most property insurance policies to encourage policy holders to carry a reasonable amount of insurance. If the insured fails to maintain the amount specified in the clause (Usually at least 80%), the insured shares a higher proportion of the loss. In medical insurance a percentage of each claim that the insured will bear.
  • Collar
    an agreement to receive payments as the buyer of an Option, Cap or Floor and to make payments as the seller of a different Option, Cap or Floor.
  • Collateral Loans
    unconditional obligations for the payment of money secured by the pledge of an investment.
  • Collateralized Bond Obligations (CBOs)
    an investment-grade bond backed by a pool of low-grade debt securities, such as junk bonds, separated into tranches based on various levels of credit risk.
  • Collateralized Mortgage Obligations (CMOs)
    a type of mortgage-backed security (MBS) with separate pools of pass-through security mortgages that contain varying classes of holders and maturities (tranches) with the advantage of predictable cash flow patterns.
  • Combinations
    a special form of package policy composed of personal automobile and homeowners insurance
  • Combined Ratio
    an indication of the profitability of an insurance company, calculated by adding the loss and expense ratios
  • Commencement Date
    date when the organization first became obligated for any insurance risk via the issuance of policies and/or entering into a reinsurance agreement. Same as "effective date" of coverage.
  • Commercial General Liability
    flexible & broad commercial liability coverage with two major sub-lines: premises/operations sub-line and products/completed operations sub-line.
  • Commercial Multiple Peril
    policy that packages two or more insurance coverages protecting an enterprise from various property and liability risk exposures. Frequently includes fire, allied lines, various other coverages (e.g., difference in conditions) and liability coverage. Such coverages would be included in other annual statement lines, if written individually. Include under this type of insurance multi-peril policies (other than farmowners, homeowners and automobile policies) that include coverage for liability other than auto.
  • Commercial Package Policy
    provides a broad package of property and liability coverages for commercial ventures other than those provided insurance through a business owners policy.
  • Commercial Property
    property insurance coverage sold to commercial ventures.
  • Commission
    a percentage of premium paid to agents by insurance companies for the sale of policies.
  • Community Rating
    a rating system where standard rating is established and usually adjusted within specific guidelines for each group on the basis of anticipated utilization by the group's employees.
  • Company Code
    a five-digit identifying number assigned by NAIC, assigned to all insurance companies filing financial data with NAIC.
  • Completed Operations Liability
    policies covering the liability of contractors, plumbers, electricians, repair shops, and similar firms to persons who have incurred bodily injury or property damage from defective work or operations completed or abandoned by or for the insured, away from the insured's premises.
  • Comprehensive General Liability (CGL)
    coverage of all business liabilities unless specifically excluded in the policy contract.
  • Concurrent Causation
    property loss incurred from two or more perils in which only one loss is covered but both are paid by the insurer due to simultaneous incident.
  • Conditions
    requirements specified in the insurance contract that must be upheld by the insured to qualify for indemnification
  • Contingency Reserves
    required by some jurisdictions as a hedge against adverse experience from operations, particularly adverse claim experience.
  • Contract Reserves
    reserves set up when, due to the gross premium structure, the future benefits exceed the future net premium. Contract reserves are in addition to claim and premium reserves
  • Contractual Liability
    liability coverage of an insured who has assumed the legal liability of another party by written or oral contract. Includes a contractual liability policy providing coverage for all obligations and liabilities incurred by a service contract provider under the terms of service contracts issued by the provider.
  • Convertible Term Insurance Policy
    an insurance policy that can be converted into permanent insurance without a medical assessment. The insurer is required to renew the policy regardless of the health of the insured subject to policy conditions.
  • Coordination of Benefits (COB)
    provision to eliminate over insurance and establish a prompt and orderly claims payment system when a person is covered by more than one group insurance and/or group service plan.
  • Copay
    a cost sharing mechanism in group insurance plans where the insured pays a specified dollar amount of incurred medical expenses and the insurer pays the remainder.
  • Corrective Order
    commissioner's directive of action to be completed by an insurer.
  • Covered Lines
    The total number of lives insured, including dependents, under individual policies and group certificates.
  • Credit
    individual or group policies that provide benefits to a debtor for full or partial repayment of debt associated with a specific loan or other credit transaction upon disability or involuntary unemployment of debtor, except in connection with first mortgage loans
  • Credit- Assumption Agreement
    an insurance certificate issued on an existing insurance contract indicating that another insurer has assumed all of the risk under the contract from the ceding insurance company.
  • Credit Disability
    makes monthly loan/credit transaction payments to the creditor upon the disablement of an insured debtor.
  • Credit Health Insurance
    policy assigning creditor as beneficiary for insurance on a debtor thereby remitting balance of payment to creditor should the debtor become disabled.
  • Credit Life Insurance
    policy assigning creditor as beneficiary for insurance on a debtor thereby remitting balance of payment to creditor upon death of debtor.
  • Credit Personal Property Insurance
    insurance written in connection with a credit transaction where the collateral is not a motor vehicle, mobile home or real estate and that covers perils to the goods purchased through a credit transaction or used as collateral for a credit transaction and that concerns a creditor's interest in the purchased goods or pledged collateral, either in whole or in part; or covers perils to goods purchased in connection with an open-end transaction.
  • Credit Placed Insurance
    insurance that is purchased unilaterally by the creditor, who is the named insured, subsequent to the date of the credit transaction, providing coverage against loss, expense or damage to property as a result of fire, theft, collision or other risks of loss that would either impair a creditor's interest or adversely affect the value of collateral. "Creditor Placed Home" means "Creditor Placed Insurance" on homes, mobile homes and other real estate. "Creditor Placed Auto" means insurance on automobiles, boats or other vehicles
  • Credit Risk
    part of the risk-based capital formula that addresses the collectability of a company's receivables and the risk of losing a provider or intermediary that has received advance capitation payments.