Glossary

A certificate of reinsurance is a record of reinsurance coverage pending replacement by a formal reinsurance contract, which is usually a facultative certificate. Opportunity is given for the ceding company to acknowledge acceptance of terms, with the reinsurer's obligation contingent on validity of key information stated in the certificate.

A certified act of terrorism is a terrorist act that is eligible for coverage under the Terrorism Risk Insurance Act (TRIA). Such acts are certified by the Secretary of the Treasury, applying criteria spelled out in TRIA. To qualify as a certified act of terrorism, the incident must (1) be a violent act or an act that is dangerous to human life, property, or infrastructure; (2) cause damage within the United States or other area of US sovereignty (e.g., a US embassy, airplane, ship); (3) be committed as part of an effort to coerce the civilian population of the United States or to influence the policy or affect the conduct of the US government by coercion; and (4) produce property-casualty (P&C) insurance losses in excess of $5 million. Insurers paying claims in response to certified acts of terrorism qualify for federal reimbursement.

Certified Risk Manager (CRM) is a designation awarded by The National Alliance upon the successful competion of five risk management courses. The five CRM courses, each consisting of 2½ days of intensive classroom instruction, are Principles of Risk Management, Analysis of Risk, Control of Risk, Financing of Risk, and Practice of Risk Management.

Cession is the portion of insurance transferred to a reinsurer by the ceding company. Cession of reinsurance by reinsurers is called "retrocession."

A cession number is a number assigned by an underwriting office to identify reinsurance premium transactions.

A cession statement is a periodic statement of subject premiums and the losses and expenses incurred under the reinsured policies, provided by the ceding company to a reinsurer.

Cestui que vie refers to the person on whose life contingency an insurance contract is based. It does not have to be the policy owner or policyholder but is the named insured.

A chameleon carrier is a trucking company that, if cited or closed down by the Federal Motor Carrier Safety Administration (FMCSA), generally for a marginal safety record or a tenuous financial situation, quickly changes its name and address and restarts operations. It often does not comply with government regulations and may have little regard for safe processes.

The change of beneficiary provision is a life insurance policy provision that permits the owner of the policy to change beneficiaries at will unless a beneficiary has been designated as irrevocable, which is rarely the case.

Channeling is a program in which a hospital and its affiliated physicians (i.e., physicians employed by the hospital and independent contractor physicians who have admitting privileges) are insured under a master medical malpractice policy issued by one insurer. Depending on the type of channeling program, the hospital and the physicians may or may not share limits of liability. The two advantages of channeling programs are cost effectiveness and a common defense team, which reduces the adversarial relationship when hospitals and physicians are named in the same malpractice suit. One downside of such arrangements is that they give the hospital considerable power over the claims administration process, so that physicians in a channeling program rarely have the authority to object to the settlement of a claim.