Insurance Glossary: C

Capital - Equity of shareholders of a stock insurance company. The company's capital and surplus are measured by the difference between its assets minus its liabilities. This value protects the interests of the company's policyowners in the event it develops financial problems; the policyowners' benefits are thus protected by the insurance company's capital. Shareholders' interest is second to that of policyowners.

Capitalization or Leverage - Measures the exposure of a company's surplus to various operating and financial practices. A highly leveraged, or poorly capitalized, company can show a high return on surplus, but might be exposed to a high risk of instability.

Captive Agent - Representative of a single insurer or fleet of insurers who is obliged to submit business only to that company, or at the very minimum, give that company first refusal rights on a sale. In exchange, that insurer usually provides its captive agents with an allowance for office expenses as well as an extensive list of employee benefits such as pensions, life insurance, health insurance, and credit unions.

Case Management - A system of coordinating medical services to treat a patient, improve care and reduce cost. A case manager coordinates health care delivery for patients.

Casualty - Liability or loss resulting from an accident.

Casualty Insurance - That type of insurance that is primarily concerned with losses caused by injuries to persons and legal liability imposed upon the insured for such injury or for damage to property of others. It also includes such diverse forms as plate glass, insurance against crime, such as robbery, burglary and forgery, boiler and machinery insurance and Aviation insurance. Many casualty companies also write surety business.

Ceded Reinsurance Leverage - The ratio of the reinsurance premiums ceded, plus net ceded reinsurance balances from non-US affiliates for paid losses, unpaid losses, incurred but not reported (IBNR), unearned premiums and commissions, less funds held from reinsurers, plus ceded reinsurance balances payable, to policyholders' surplus. This ratio measures the company's dependence upon the security provided by its reinsurers and its potential exposure to adjustment on such reinsurance.

Change in Net Premiums Written (IRIS) - The annual percentage change in Net Premiums Written. A company should demonstrate its ability to support controlled business growth with quality surplus growth from strong internal capital generation.

Change in Policyholder Surplus (IRIS) - The percentage change in policyholder surplus from the prior year-end derived from operating earnings, investment gains, net contributed capital and other miscellaneous sources. This ratio measures a company's ability to increase policyholders' security.

Chartered Property and Casualty Underwriter (CPCU) - Professional designation earned after the successful completion of 10 national examinations given by the American Institute for Property and Liability Underwriters. Covers such areas of expertise as insurance, risk management, economics, finance, management, accounting, and law. Three years of work experience also are required in the insurance business or a related area.

Claim - A demand made by the insured, or the insured's beneficiary, for payment of the benefits as provided by the policy.

Class 3-6 Bonds (% of PHS) - This test measures exposure to noninvestment grade bonds as a percentage of surplus. Generally, noninvestment grade bonds carry higher default and illiquidity risks. The designation of quality classifications that coincide with different bond ratings assigned by major credit rating agencies.

Coinsurance - In property insurance, requires the policyholder to carry insurance equal to a specified percentage of the value of property to receive full payment on a loss. For health insurance, it is a percentage of each claim above the deductible paid by the policyholder. For a 20% health insurance coinsurance clause, the policyholder pays for the deductible plus 20% of his covered losses. After paying 80% of losses up to a specified ceiling, the insurer starts paying 100% of losses.

Collision Insurance - Covers physical damage to the insured's automobile (other than that covered under comprehensive insurance) resulting from contact with another inanimate object.

Combined Ratio After Policyholder Dividends - The sum of the loss, expense and policyholder dividend ratios not reflecting investment income or income taxes. This ratio measures the company's overall underwriting profitability, and a combined ratio of less than 100 indicates an underwriting profit.

Commercial Lines - Refers to insurance for businesses, professionals and commercial establishments.

Commission - Fee paid to an agent or insurance salesperson as a percentage of the policy premium. The percentage varies widely depending on coverage, the insurer and the marketing methods.

Common Carrier - A business or agency that is available to the public for transportation of persons, goods or messages. Common carriers include trucking companies, bus lines and airlines.

Comprehensive Insurance - Auto insurance coverage providing protection in the event of physical damage (other than collision) or theft of the insured car. For example, fire damage or a cracked windshield would be covered under the comprehensive section.

Concurrent Periods - In hospital income protection, when a patient is confined to a hospital due to more than one injury and/or illness at the same time, benefits are paid as if the total disability resulted from only one cause.

Conditional Reserves - This item represents the aggregate of various reserves which, for technical reasons, are treated by companies as liabilities. Such reserves, which are similar to free resources or surplus, include unauthorized reinsurance, excess of statutory loss reserves over statement reserves, dividends to policyholders undeclared and other similar reserves established voluntarily or in compliance with statutory regulations.

Coverage - The scope of protection provided under an insurance policy. In property insurance, coverage lists perils insured against, properties covered, locations covered, individuals insured, and the limits of indemnification. In life insurance, living and death benefits are listed.

Convertible - Term life insurance coverage that can be converted into permanent insurance regardless of an insured's physical condition and without a medical examination. The individual cannot be denied coverage or charged an additional premium for any health problems.

Copayment - A predetermined, flat fee an individual pays for health-care services, in addition to what insurance covers. For example, some HMOs require a $10 copayment for each office visit, regardless of the type or level of services provided during the visit. Copayments are not usually specified by percentages.

Cost-of-Living Adjustment (COLA) - Automatic adjustment applied to Social Security retirement payments when the consumer price index increases at a rate of at least 3%, the first quarter of one year to the first quarter of the next year.

Coverage Area - The geographic region covered by travel insurance.

Creditable Coverage - Term means that benefits provided by other drug plans are at least as good as those provided by the new Medicare Part D program. This may be important to people eligible for Medicare Part D but who do not sign up at their first opportunity because if the other plans provide creditable coverage, plan members can later convert to Medicare Part D without paying higher premiums than those in effect during their open enrollment period.

Current Liquidity (IRIS) - The sum of cash, unaffiliated invested assets and encumbrances on other properties to net liabilities plus ceded reinsurance balances payable, expressed as a percent. This ratio measures the proportion of liabilities covered by unencumbered cash and unaffiliated investments. If this ratio is less than 100, the company's solvency is dependent on the collectibility or marketability of premium balances and investments in affiliates. This ratio assumes the collectibility of all amounts recoverable from reinsurers on paid and unpaid losses and unearned premiums.

CAA - Clean Air Act of 1970
CAC - combined additional coverage
CAE -chief audit executive
CAGR - compounded annual growth rate
CAI - computer assisted instruction
CAI - Commercial Auto Insurance
CAL - comprehensive automobile liability

C and F - cost and freight

CAN-SPAM - Controlling the Assault of Non-Solicited Pornography and Marketing Act of 2003
Cancellation Guide - IRMI Insurance Cancellation Guide
CAPA - Certified Automotive Parts Association

CAPEX-capital expenditures

CAPM-Capital Asset Pricing Model

CAPP-Conference of Actuaries in Public Practice

CAR-contractors all risks (insurance)

CARE-Concerned Alliance of Responsible Employers

CARF-Commission on Accreditation of Rehabilitation Facilities

CARFM-Coalition of Alternative Risk Funding Mechanisms

CARFRA-Coordinated Advertising, Rate and Form Review Authority

CAS-Casualty Actuarial Society

CAT-catastrophe

CBE-computer-based education

CBMU-Canadian Board of Marine Underwriters

CBOT-Chicago Board of Trade

CBRA-Coastal Barrier Resources Act of 1982

CBRN-chemical, biological, radiological, nuclear weapon

CBRS-Coastal Barrier Resources System

CCC-care, custody, or control (exclusion)

CCIA-Consumer Credit Insurance Association

CCIP-contractor controlled insurance program

CCIR-Canadian Council of Insurance Regulators

CCLA-Casualty Claim Law Associate

CCLS-Casualty Claim Law Specialist

CC&R-covenants, conditions, and restrictions

CD-certificate of deposit

CDS-credit default swap

CDW-collision damage waiver

CE-continuing education

CEB-Council of Employer Benefits

CEBS-Certified Employee Benefits Specialist

CEN-confiscation, expropriation, nationalization (insurance)

CEND-confiscation, expropriation, nationalization, and deprivation (insurance)

CEO-chief executive officer

CEPT-credit equivalent bypass trust

CERCLA-Comprehensive Environmental Response, Compensation, and Liability Act of 1980

CF-contract frustration

C&F-cost and freight

CFA-Chartered Financial Analyst

CFC-Chartered Financial Consultant; controlled foreign corporation

CFMA-Construction Financial Management Association

CFO-chief financial officer

CFP-Certified Financial Planner; coordinated financial planning

CFROI-cash flow return on investments

CFTC-Commodities and Futures Trading Commission

CFU-customary freight unit

CGL-commercial general liability (formerly comprehensive general liability)

CHCM-Certified Hazard Control Manager

CHIAA-Crop-Hail Insurance Actuarial Association

CIA-Canadian Institute of Actuaries

CIAA-Canadian Independent Adjusters Association

CIAB-The Council of Insurance Agents and Brokers

CIC - Certified Insurance Counselor
CICA - Captive Insurance Companies Association
CICR - Captive Insurance Company Reports
CIF - cost, insurance, and freight

CIH-Certified Industrial Hygienist; Compensated Intercorporate Hauling

CII-Chartered Insurance Institute

CIM-commercial inland marine

CIP-consolidated insurance program; controlled insurance program

CIPO-controlled insurance program for operations

CIRB-Crop Insurance Research Bureau

CISR-Certified Insurance Service Representative

CIT-critical incident technique

CL-claims leakage

CLHIA - Canadian Life & Health Insurance Association
CLI - Commercial Liability Insurance
CLIEDIS - Canadian Life Insurance EDI Standards Association

CLM-Commercial Lines Manual

CLU-Chartered Life Underwriter

CM-construction management; construction manager

CMAA-Construction Management Association of America

CMP-commercial multiple peril

CMS-Centers for Medicare and Medicaid Services

CMT-crisis management team

CNHI-Committee for National Health Insurance

CNP-cotton named perils (insurance)

C/O-completed operations

COAA-Construction Owners Association of America

COB-coordination of benefits

COBRA-Consolidated Omnibus Budget Reconciliation Act of 1985

COC-course of construction

CO-CIP-cooperative controlled insurance program

COGSA-Carriage of Goods by Sea Act of 1936

COGWA-Carriage of Goods by Water Act of 1993

COI-certificate of insurance

COIL-Conference of Insurance Legislators

COLA-Cost of Living Adjustment

COO-chief operating officer

COP-commercial output policy

COPE-construction, occupancy, protection, exposure

COPPA-Children's Online Privacy Protection Act of 1998

COR-cost of risk

COSO-Committee of Sponsoring Organizations

CP-commercial property (forms)

CPA-Certified Public Accountant

CPCU-Chartered Property Casualty Underwriter

CPE-Certified Professional Engineer

CPI - Consumer Price Index
CPI - Commercial Property Insurance

CPIW-Certified Professional Insurance Woman

CPL-comprehensive personal liability (insurance); contractors pollution liability (insurance)

CPM-critical path method

CPP-Certified Protection Professional; commercial property program

CPPA-Cable Communications Policy Act of 1984

CPPL-care providers professional liability

CPrL-contractors professional liability

CPSA-Consumer Product Safety Act of 1972

CPSC-Consumer Product Safety Commission

CPSM-Certified Product Safety Manager

CPU-central processing unit

CPWR-Center to Protect Workers' Rights

CQE-Certified Quality Engineer

CR-commercial crime (forms)

CRA-Cargo Reinsurance Association

CRE-certified reliability engineer

CRIS-Construction Risk and Insurance Specialist

CRM - Canadian Risk Management (program); Certified Risk Manager
CRM - Construction Risk Management
CRO - chief risk officer
CRS - Commercial Risk Services (ISO); Community Rating System
CRT - Contractual Risk Transfer
C&S - capital and surplus

CSC-Construction Safety Council

CSIO-Centre for Study of Insurance Operations

CSL-combined single limit

CSO-claim services only

CSO Table-Commissioners Standard Ordinary Table

CSP-Certified Safety Professional; commercial statistical plan

CSR-customer service representative

CTD-cumulative trauma disorder

CTG-control technique guidelines

CURT-Construction Users Roundtable

CV-cash value (life insurance); coefficient of variation

CVA-captive value added

CVIF-compound value interest factor

CWA - Clean Water Act of 1972
CWCI - California Workers' Compensation Institute
CWR - countrywide rate pages