Glossary

The cash surrender value is the amount of cash available to the insured in an individual life insurance policy when the insured cancels and surrenders the policy.

Casualty Claim Law Associate (CCLA) is a claims law specialist designation offered by the American Educational Institute (AEI). It requires successful completion of both the AEI legal principles and liability claims self-study programs.

Casualty Claim Law Specialist (CCLS) is a claims law specialist designation offered by the American Educational Institute (AEI). It requires successful completion of the AEI liability claims self-study program.

Casualty insurance is primarily concerned with the losses caused by injuries to persons and legal liability imposed on the insured for such injury or for damage to property of others.

A catastrophe or "cat" is a severe loss characterized by extreme force and/or sizable financial loss.

A catastrophe bond is a derivative debt investment vehicle issued by insurers and reinsurers designed to raise investor capital to cover catastrophic loss events. "Cat" bonds are issued to cover either a specifically identified event (e.g., a Japanese earthquake) or the possibility of a certain magnitude of loss associated with hurricane activity in a particular geographic location (e.g., the Texas Gulf Coast). Unlike traditional reinsurance that is highly leveraged (i.e., reinsurance limits sold represent many multiples of a reinsurer's capital), "cat" bonds carry no such leverage since their value is equal to the amount of insurance limits for sale.

Catastrophe equity put refers to a contract that allows an insurer to exercise an opportunity, but not the obligation, to exercise an option at a specific index value in the event that losses (the index value) exceed a predetermined level, thus requiring additional equity capital.

A catastrophe plan is a prepared strategy detailing how a particular organization will respond to a disaster.

A catastrophe policy is the name previously used for major medical insurance.

Catastrophe reinsurance is a form of reinsurance that indemnifies the ceding company for the accumulation of losses in excess of a stipulated sum arising from a single catastrophic event or series of events.