Glossary

A buyout settlement clause is a provision found in media liability insurance policies allowing an insured the option to refuse settlement of a claim for an amount offered by an insurer and agreed upon by a claimant. The clause allows the insurer to tender that amount to the insured, thereby "buying out" of the claim. At that point, the insured takes complete control of the case, bearing the risk that ultimate settlement and defense costs will exceed the buyout figure. If the case is resolved for less than that amount, the insured may keep the difference.

A buy/sell agreement refers to a contract among members of a firm that provides for the continuation of the business through an agreement by which each principal agrees that, in the event of their death, their estate will sell its interest back to the business entity for a predetermined amount. The amount may be calculated as a fixed amount or as a variable amount, depending on business factors. The agreement is usually funded by life insurance.

A bystander claim is a type of liability claim in which a witness to an accident suffers some form of mental anguish due to witnessing this event. Whether a witness's emotional distress and trauma falls under the definition of "bodily injury" may arise in a court case. Some auto accidents involve situations in which one person suffers severe bodily injury, and another occupant may walk away with minor scratches. In that case, the uninjured occupants may make a claim for emotional distress or trauma from witnessing the injuries to the other passengers. Another example would be a mother who witnesses her small child being mauled by a neighborhood dog. Some courts recognize these types of claims if (1) the witness was located at or near the scene of the accident, (2) the mental anguish resulted from a direct emotional impact upon the witness from the sensory observance of the event, and (3) the witness and the victim were closely related (e.g., mother and child), as contrasted with a more distant relationship.

The Cable Communications Policy Act (CCPA) of 1984 governs the collection and disclosure of personally identifiable information (PII) gathered by cable operators. With the exception of information that is used to provide service or detect unauthorized reception, cable operators must obtain written permission from subscribers before collecting or disclosing specific information about the individual. The CCPA provides for disclosure of information to government bodies when the government offers sufficient evidence that the customer engaged in criminal activity to which the information is relevant.

The calendar year experience refers to incurred losses and loss adjustment expenses (LAE) for all losses (regardless of when reported) related to a specific calendar year divided into the accounting earned premium for that same period. Once calculated and established, this amount does not change.

California Information Privacy Act (SB 1386) is a law requiring organizations that collect and store personal information on California residents to disclose any breach of security to those individuals affected. As the law applies to any California resident, companies located outside California are also affected, though notification to non-California residents is not required.

Cancelable refers to the fact that most insurance contracts can be terminated by the insurer or the insured at any time. If an individual policy is not a cancelable policy, then it will probably be designated guaranteed renewable or noncancelable. Individual life insurance policies are noncancelable by the insurer. Most property and liability policies can be canceled.

Cancellation is the termination of an insurance policy or bond, before its expiration, by either the insured or the insurer. Insurance policy cancellation provisions require insurers to notify insureds in advance (usually 30 days) of canceling a policy and stipulate the manner in which any unearned premium will be returned. As respects reinsurance, cancellation is used in the following contexts: (1) Runoff basis means that the liability of the reinsurer under policies that became effective under the treaty prior to the cancellation date of such treaty shall continue until the expiration date of each policy. (2) Cutoff basis means that the liability of the reinsurer under policies that became effective under the treaty prior to the cancellation date of such treaty shall cease with respect to losses resulting from accidents taking place on and after said cancellation date. Usually, the reinsurer will return to the company the unearned premium portfolio, unless the treaty is written on an earned premium basis.

Cancel and rewrite refers to an insurer's cancellation and reissuance of the same policy. This is typically used to switch a policy renewal to a new date.

Candidate analysis is a restricted form of optimization risk modeling in which only a finite number of prespecified decision options are considered, and the best set among those options is determined through the analysis.