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Cafeteria plan: An employee benefit plan which gives each employee several choices as to the types and/or amounts of group benefits. Also known as a flexible benefit plan.
Canada Pension Plan (CPP): A plan that primarily provides retirement income and long-term disability income benefits to residents of Canadian provinces other than Quebec.
Canadian Council of Insurance Regulators (CCIR): A Canadian organization of provincial insurance regulators who meet regularly to discuss insurance issues and to develop model insurance legislation that it encourages provincial legislatures to adopt. Similar to the National Association of Insurance Commissioners in the United States.
Canadian Institute of Chartered Accountants (CICA) Handbook Section 3460: See Section 3460.
Canadian Life and Health Insurance Association (CLHIA): An association of most of the life and health insurance companies in Canada which conducts research on insurance issues and promotes the best interests of the insurance industry. The CLHIA is the primary source of information about the life and health insurance industry in Canada.
Canadian Life and Health Insurance Compensation Corporation (CompCorp): In Canada, a federally incorporated, nonprofit company established by the Canadian Life and Health Insurance Association (CLHIA) in order to protect consumers against loss of benefits in the event a life or health insurance company becomes insolvent.
Canadian method: A method prescribed in Canada for calculating modified net premiums and reserves.
Cancelable policy: An individual health insurance policy that can be terminated at any time by the insurer. See also conditionally renewable policy, guaranteed renewable policy, non-cancelable and guaranteed renewable policy, non-cancelable policy, and optionally renewable policy.
Capacity: The largest amount of insurance an insurer or a reinsurer is willing or able to underwrite. The term can refer to an insurer's capacity on one individual or to the insurer's capacity for all its business.
Capitation basis: A compensation plan used in some health maintenance organizations (HMOs) in which a physician is paid a flat amount per year per subscriber who has elected to use that physician. For that amount, the physician must treat the subscriber as often as necessary during that year. See also fee schedule basis.
Captive agents: See exclusive agents.
Captive insurance company: An insurance company, formed and controlled by a separate company, whose purpose is to provide insurance to the controlling company. Companies which form captive insurance companies include all types of companies which extend credit to customers, including banks and retailers. See also agent-owned reinsurance company (AORC).
Career agent: A full-time commissioned salesperson who works out of an insurance company's field office, holds an agent contract with that company, and sends all, or almost all, of his or her business to that company. A career agent may occasionally broker business with other companies.
Career average (career earnings) benefit formula: A type of defined benefit formula in which the retirement benefit amount is derived on the basis of a participant's compensation during the entire period of participation in the plan. See also defined benefit formula. Contrast with final average benefit formula.
Carry-over provision: A provision found in most medical expense policies stating that expenses incurred during the last three months of a benefit period that are used to satisfy the current benefit period's deductible may be used to satisfy any or all of the following benefit period's deductible.
Case management: A cost-containment program designed to identify alternate, less costly methods of treatment for seriously ill patients without sacrificing the quality of care a patient receives. Also known as catastrophic claim management, large claim management, or medical case management.
CASH AMOUNT (Table: BATCH): This is the accumulating total amount of cash actually entered.
CASH CONTROL AMOUNT (Table: BATCH): This is the control total of cash to be entered into the batch, as entered by the operator.
Cash or Deferred Arrangement (CODA): See Section 401(k) plan.
Cash payment option: A life insurance policy dividend option under which policy dividends are paid to the policy owner in cash.
Cash premium accounting system: A premium accounting system used for industrial insurance. Under this system, the agent informs the home office of the amount collected on each policy. The home office then updates the policy records to reflect these collections and prepares new route collection records. Contrast with advance and arrears system.
Cash refund option: A form of the life income option with refund which specifies that any proceeds remaining when the beneficiary dies will be paid in a lump sum to the contingent payee. Contrast with the installment refund option.
Cash surrender value: In a life insurance policy, the amount of money, adjusted for factors such as policy loans or late premiums, that the policy owner will receive if the policy owner cancels the coverage and surrenders the policy to the insurance company. Also called the net cash value. Compare to cash value.
Cash surrender value option: A life insurance policy nonforfeiture option which specifies that a policy owner who discontinues premium payments can elect to surrender the policy and receive the policy's cash surrender value.
Cash value: In a life insurance policy, the amount of money, before adjustment for factors such as policy loans or late premiums, that the policy owner will receive if the policy owner allows the policy to lapse or cancels the coverage and surrenders the policy to the insurance company. Cash values are a feature of most types of permanent life insurance, such as whole life and universal life. Compare to cash surrender value. Also called inside build-up and policy owner's equity.
CASH VALUE FACTOR (Table: PLAN_VALUES): Enter the Cash Value factor per thousand for this age and duration.
CASH WITH APPLICATION (Table: GRP_POL): A flag indicating wether or not cash was received with application.
Cash-balance pension plan: A type of defined benefit plan in which each participant has an account which is credited with amounts reflecting the employer's contributions and amounts reflecting investment interest. The balance in the account indicates the participant's accrued benefit. Upon retirement or withdrawal, the participant may receive the full account balance in a lump sum, provided that the benefits are fully vested, or may use the account balance to purchase an annuity.
Catastrophic claim management: See case management.
Causal relation requirements: Proof required by statute in Kansas, Missouri, Rhode Island, and Puerto Rico to show that the facts misrepresented in an application for insurance were related to the loss insured against.
Ceding company: In a reinsurance transaction, the insurer that purchases reinsurance to cover all or part of those risks that it does not wish to retain in full. Also called the direct insurer, direct writer, or direct-writing company.
Certain payment: A payment that will definitely be made under any circumstances, its payment not being contingent upon any predesignated condition.
Certificate of assumption: In assumption reinsurance, a certificate sent to each policyholder whose policy has been ceded to give the policy owner (1) notice of the assumption and (2) information concerning the new insurer.
Certificate of authority: (1) A document created by an insurer detailing the authority granted to an agent or group of agents to act on behalf of the insurer. (2) In the United States, a certificate issued by a state's insurance department authorizing an insurer to issue certain types of insurance within the state.
Certificate of indebtedness: A certificate issued by an insurer to the beneficiary of a life insurance policy that specifies a guaranteed minimum interest rate and the frequency with which the insurer will make interest payments under the interest settlement option.
Certificate of insurance: A document given to each person insured by a group insurance plan. This document shows the type and amount of coverage to which the group member is entitled and the beneficiary of the coverage. The certificate may also contain a summary of the contract terms as they affect individual group members. See also master contract.
Cession: (1) In reinsurance, the act of ceding. (2) In reinsurance, a parcel or unit of insurance that a company cedes to a reinsurer.
Change of condition provision: An insurance provision stipulating that, for a policy to become effective, all conditions described in the application must still be true at the time of delivery.
Change of occupation provision: An individual health insurance policy provision that grants the insurer the right to adjust a policy's premium rate or benefits when the insured changes jobs or careers.
CHECK AMOUNT (Table: GENACCTRN): The field contains the amount of the cheque.
CHECK NUMBER (Table: GENACCTRN): This field contains the cheque number for the disbursement.
CITY (Table: BANK_DETAILS): City of the bank.
Claim: A request for payment under the terms of an insurance policy.
Claim administration department: The department in a life and health insurance company responsible for processing claims. In this department, claim examiners review claims presented by policy owners or beneficiaries, verify the validity of claims, and authorize the payment of benefits to the proper person.
Claim examiner: An employee of an insurance company whose responsibilities include investigating claims, approving he claims that are valid, and denying those that are invalid or fraudulent.
Claim frequency rate: In health insurance calculations, the claim frequency rate is the expected percentage of insured people who will file claims and the number of claims they will file during a given period. The claim frequency rate is used to calculate average claim costs, which are used to calculate premium rates.
Claim investigation: The process of obtaining necessary claim information in order to decide whether or not to pay a claim.
CLAIM IX (Table: GRP_POL): Claim Settlement Index - All Settlements related to the Group Policy
Claim reserve: A claim department's estimate of the amount of money needed to pay a claim. The estimate is made with the help of information that the claim department gathers in the course of handling the claim. This information may involve, for example, the extent to which the claim is covered by the policy, the effect of previously paid claims on the amount of coverage available to pay a current claim, and the effect of any applicable reinsurance coverage on the claim.
Claimant: The person or party making a formal request for payment of benefits due under the terms of an insurance contract.
Class beneficiary designation: A beneficiary designation that names several people as a group -- for example, "children of the insured"-- rather than naming each person individually.
Clean-up fund: A lump-sum life insurance death benefit designed to pay the insured's outstanding debts and final expenses .
CLHIA Guidelines: Recommendations to insurance companies adopted by the Canadian Life and Health Insurance Association (CLHIA). Insurers are expected to abide by these guidelines as a condition of membership in the CLHIA.
CLIENT (Table: BILLING_PAYMENTS): For group policies, this will be the certificate number.
Closed contract: An insurance contract in which the terms of the insurance contract and the application constitute the entire agreement between the policy owner and the insurer. commercial insurance companies use closed contracts. See also open contract.
Closing: The process of securing a purchase commitment from a prospect by requesting and obtaining the prospect's agreement to submit an application for the coverage recommended in a sales proposal.
Coinsurance: (1) In a health insurance policy, the percentage of all eligible medical expenses, in excess of the deductible, incurred as a result of a sickness or injury, that an insured is required to pay. Also called percentage participation. (2) A type of reinsurance plan in which the ceding company pays the reinsurer part of the premium paid by the insured, minus a proportionate share of the commission and premium taxes associated with the policy that is being reinsured and a portion of the ceding company's general overhead expenses. In return, the reinsurer agrees to pay the ceding company a proportionate part of the death benefit when a claim is filed and to contribute to all other policy benefits, including dividends, on a scale determined by the ceding company. In addition, the reinsurer agrees to accumulate the required reserves for the reinsured portion of the policy.
Coinsurance provision: A stipulation found in most health insurance policies that requires an insured to pay a stated percentage, in excess of the deductible, of all eligible medical expenses.
COLA: See cost-of-living adjustment (COLA).
Collateral assignment: A transfer of some ownership rights in a contract from one party to another, generally for a temporary period. Insurance policies are often assigned as collateral for a loan, in which case all transferred rights revert to the assignor when the loan is repaid. See also assignment.
Combination clause: A clause in a disability income contract that specifies a point at which the definition of total disability will no longer be based on an insured's inability to perform his or her "own occupation" but on the insured's inability to perform "any occupation."
Combination company: A life and health insurance company that sells both industrial and ordinary insurance products.
Combination dental plan: A dental plan which contains features of both scheduled and nonscheduled plans. Typically, combination plans cover preventive and diagnostic procedures on a nonscheduled basis and other services on a scheduled basis. See also nonscheduled dental plan and scheduled dental plan.
Combination plan: A pension plan which employs an approach to funding wherein part of the funding is allocated and part is unallocated. The allocated part of the employer's contribution is used to purchase annuities or life insurance contracts with cash values. The unallocated part is placed in a side fund, also called a conversion fund. See also allocated funding and unallocated funding.
Commission: The amount of money paid to an insurance agent for selling an insurance policy. A commission is almost always calculated as a percentage of the premium.
COMMISSION CHECK? (Table: GENACCTRN): If this cash disbursement is for an issued commission check, enter a "Y". This will cause the program to check at least one account is for the pseudo AGBAL. Regardless of the flag input, for every line relating to the AGBAL account a record is written to the commission entry transaction file (COMMENTRY) to be later picked up by the commission statement programs.
COMMISSION EARNT TO DATE (Table: GRP_POL): This field holds the amount of commission earned to date for each agent, held coverage level. at the PTR / coverage level.
COMMISSION PATTERN CODE (Table: GRP_POL): This is the pattern code from the schedule record that determines the way that direct sell agents earn commission during the initial period of the coverage (at agent level). that direct sell agents earn commission during the initial period of the coverage (at agent level). coverage (at agent level).
COMMISSION RATES CODE (Table: GRP_POL): Enter the code representing the pattern to be used for commission calculations if you need to override the standard commission pattern for this plan as set out in the agent's contract.
Commissioners Method: A method prescribed in the United States for calculating modified net premiums and reserves for life insurance policies.
Common accident provision: (1) A provision of many medical expense insurance contracts which specifies that, if two or more members of the same family are injured in the same accident, their combined medical expenses will only be subject to one deductible. (2) A provision found in many voluntary group accidental death and dismemberment plans which specifies that the amount payable by the insurance company is limited to a stipulated maximum for all employees killed or injured in a single accident.
Common disaster clause: A life insurance policy provision which states that the primary beneficiary must survive the insured by a specified period, such as 60 or 90 days, in order to receive the policy proceeds. Otherwise, the policy proceeds will be paid as though the primary beneficiary had died before the insured.
Community-rating: Applying the same premium rate structure to certain group insurance subscribers, regardless of their past or potential loss experience. See also pooling.
Commuted value: In Canada, the present value of the pension benefits expected to be paid to a retiree from the date of retirement until death.
COMPANY (Table: BATCH): This field contains the company code for this batch (from SIGNON).
COMPANY (Table: POST_VOUCHERS): COMPANY Company Code
COMPANY CODE (Table: GRP_POL): The code for the company issuing the policy.
Company retention method: A method of comparing the costs of various life insurance policies wherein the present value of premiums, cash values, and dividends is calculated by weighting each item each year by the probability that it will be paid. See also cost comparison methods.
Comprehensive major medical insurance: A form of health insurance coverage that combines the features and benefits of a hospital-surgical expense policy and the features and benefits of a major medical policy.
Conditional premium receipt: A type of premium receipt given when the applicant pays the initial premium and under which life insurance will become effective before a policy is issued only if the proposed insured is found to be insurable. Also called a conditional receipt. Compare to binding premium receipt. See also approval type temporary insurance agreement and insurability type temporary insurance agreement.
Conditionally renewable policy: A health insurance policy that grants an insurer the right to refuse to renew the policy for reasons specified in the policy at the end of a premium payment period. See also cancelable policy, guaranteed renewable policy, non-cancelable policy and optionally renewable policy.
Confirmation certificate: A certificate issued to the beneficiary of a life insurance policy that outlines the amount of life insurance proceeds in a retained asset account, the account number, and the current interest rate.
Conservation: An agent's or an insurer's efforts to prevent a policy from lapsing.
Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA): In the United States, a statute which requires that employers sponsoring group health plans offer continuation of coverage under the group plan to employees and their spouses and dependent children who have lost coverage because of the occurrence of a "qualifying event." Qualifying events include reduction in work hours, many types of termination of employment, death, and divorce.
Constructive delivery: Legally equivalent to physical delivery of a policy. Constructive delivery occurs (a) when an insurer parts with control of the policy with the intention that the insurer will be unconditionally bound by the policy as a completed instrument or (b) when the policy is physically delivered to an agent of the applicant.
Consumer report: As defined by the Fair Credit Reporting Act, a consumer reporting agency's communication of any information pertaining to an individual consumer's creditworthiness, credit standing, credit capacity, general reputation, or personal characteristics.
Consumer reporting agency: Any person or organization that regularly prepares consumer reports and furnishes them, either for profit or on a cooperative, nonprofit basis, to other persons or organizations. Also called a credit reporting agency. See also Fair Credit Reporting Act (FCRA).
Contestable period: The period of time (usually two years) during which an insurer may challenge the validity of a life insurance policy. See also incontestable clause.
Contingencies: Events that are possible but that may or may not happen. Insurers base their premium rates and their willingness to accept risks partly on the probability that certain contingencies will or will not occur.
Contingency reserve: A voluntary reserve established by an insurance company to help pay any unusual and unexpectedly large claim amounts. See also special surplus funds.
Contingent beneficiary: The party designated to receive life insurance policy proceeds if the primary beneficiary should die before the person whose life is insured. Also called the secondary beneficiary or the successor beneficiary.
Contingent payee: The party who will receive any life insurance policy proceeds that are still payable under a settlement option at the time of the primary payee's death. Unlike the contingent beneficiary, the contingent payee's rights do not end when the insured dies. Also called the successor payee.
Contingent payment: A payment that will be made only if some predesignated condition is met, such as the recipient being alive.
Continuance tables: Tables containing morbidity statistics that indicate the distribution of claims according to the duration of the illness or amount of expense involved in the claims.
Continuous-premium whole life insurance: A type of whole life insurance in which premiums are payable until the death of the insured. Also called straight life insurance.
Contract of adhesion: A legally binding agreement that is prepared by one party and that must be accepted or rejected as a whole by the other party, without any bargaining between the parties to the agreement. Insurance contracts are contracts of adhesion.
Contract of indemnity: A type of contract in which the amount of the benefit to be paid is based on the actual amount of financial loss as determined at the time of loss. For example, many hospital expense insurance contracts are contracts of indemnity. See also valued contract.
Contributed surplus: On a Canadian life insurance company's balance sheet, the amount in excess of par value paid in by stockholders minus the amount of dividends paid to stockholders.
Contribution limit: The maximum annual addition permitted by law to be made to a participant's account in a defined contribution pension plan. The annual contribution includes employer contributions, employee contributions, and forfeitures that have been reallocated from other participants' accounts. The limit is subject to legislative change and is generally indexed to inflation so that it increases as price levels increase. In the United States, the contribution limit is set under Section 415 of the Internal Revenue Code. See also maximum benefit and Section 415 limits.
Contribution to surplus: In mutual insurance companies, the income that results when an insurance company makes more money than is needed to pay for the cost of providing insurance.
Contributory group insurance: Any group insurance plan that calls for the insured to pay a portion of the cost of the group insurance coverage. Contrast to noncontributory group insurance.
Contributory plan: Any pension or employee benefit plan in which plan participants can or must make contributions to the plan out of their own funds. Contrast with noncontributory plan.
Convention blank: The standardized Annual Statement form that all United States insurers must complete and submit yearly to their state's insurance regulators. See Annual Statement.
Conversion fund: The fund in which unallocated employer contributions to a combination plan are accumulated. Also called a side fund.
Conversion privilege: (1) The right of a person who is covered by a group insurance policy to convert his or her group coverage to coverage under an individual insurance policy. Such a conversion can be made when a person leaves the group, benefits are downgraded or terminated for a specific class, or when the group master policy is ended. (2) The right to change insurance coverage in certain prescribed situations from one type of policy to another. For example, the right to change from an individual term insurance policy to an individual whole life insurance policy.
CONVERTED POLICY (Table: GRP_POL): This field indicates if the policy details have been converted to this system from another system (affects commission processing). from another system (affects commission processing).
Convertible term insurance: A type of term insurance that allows the policy owner to change the term insurance policy to a whole life policy without providing evidence of insurability. The premium rate is normally based on the age of the insured at the time of the conversion.
Coordination of benefits (COB) clause: A provision in a group health insurance policy specifying that benefits will not be paid for amounts reimbursed by other group health insurers. The purpose of a coordination of benefits provision is to assure that an insured's benefits from all sources do not exceed 100 percent of allowable medical expenses. See also overinsurance provision.
Corridor: (1) In the United States, the required difference between a universal life insurance policy's death benefit and the policy's cash value. This difference is a specified percentage that depends on the insured's age. If a policy's cash value exceeds the required percentage of the death benefit (that is, intrudes on the corridor), the policy will be considered an investment contract rather than an insurance contract. Also called the TEFRA corridor. (2) In reinsurance, an amount of insurance which is in excess of the ceding company's retention limit but which is less than the reinsurer's minimum cession. The ceding company must usually retain this amount of insurance.
Corridor deductible: A flat amount that an insured must pay above the amount paid by his or her hospital-surgical expense policy before any benefits are payable under the major medical policy. In a sense, the deductible bridges the gap between a hospital-surgical policy and a major medical policy.
Cost comparison methods: The different formulas that insurance companies use to show prospective policy owners the cost of different insurance policies. See also company retention method, interest-adjusted net cost method, and rate of return method.
Cost-of-living adjustment (COLA): An increase in a pension benefit, disability income benefit or life income benefit to compensate for an increase in the cost of living. See also indexation.
COUNT (Table: BILLING_PAYMENTS): Counter; generated by the system to ensure the key is unique; starts from 1.
Coupon advertisement: As defined by the Superintendent's Guidelines in Canada, (1) a sales inducement designed to invite the public to contract for insurance by the inclusion of an application for an individual insurance contract or (2) a broad description of coverage designed to invite the public to request an application for insurance with additional printed material for the purpose of issuing the applicant an individual insurance contract.
COV AMT (Table: POST_VOUCHER_BILL): Net modal premium per coverage
COV AMTS (Table: POST_VOUCHERS): COVERAGES AMOUNTS Net modal premiums/coverage
COV NO (Table: DAILY_FORWARD_PRICE): The coverage number pertaining to the transaction (base plan = 0)
COVERAGE (Table: BANK_TRANSACTIONS_DONE): Coverage number on policy
COVERAGE (Table: BONUS_PRT): Coverage that the bonus is being paid on. Base plan = 1.
COVERAGE (Table: BILLING_PAYMENTS): Coverage number.
CREATE DT (Table: POST_VOUCHER_BILL): Date record created
CREATE OP (Table: POST_VOUCHER_BILL): Operator who created record
CREATE TM (Table: POST_VOUCHER_BILL): Time record created
CREATED BY (Table: VALUATION_PRICES): The User who created the details.
CREATED DATE (Table: VALUATION_PRICES): The date that the details were created.
CREATED DATE (Table: GRP_POL): Date of creation of the policy.
CREATED OPERATOR (Table: GRP_POL): Operator responsible for the creation of the policy.
CREATED TIME (Table: GRP_POL): Time ofcreation of the policy.
CREATED TIME (Table: VALUATION_PRICES): The time that the details were Created.
Credibility percentage: The amount of credit or weight given to a group's actual claims experience in determining a projection of future claims or in the calculation of a dividend. Sometimes called the credibility factor. See also experience rating and experience refund.
Credit life insurance: A type of decreasing term insurance designed to pay the balance due on a loan if the borrower dies before the loan is repaid.
Credits: In the numerical rating system, credits represent underwriting factors that have a favorable effect on an individual's mortality rating. Credits are assigned negative values. See also debits and numerical rating system.
Cross-selling: The process of selling both property/casualty and life and health insurance, as well as other financial services products, to the same customer.
CURRENCY (Table: SSAPS_ASSETS): The Currency code of the SSAPS Assets in which all holdings are valued
CURRENCY (Table: BANK_TRANSACTIONS_DONE): Currency of bank transaction
CURRENCY (Table: GENACCTRN): This field contains the currency code, if applicable.
CURRENCY (Table: BILLING_PAYMENTS): Currency
CURRENCY (Table: BONUS_PRT): The bonus payment currency.
CURRENCY (Table: GRP_POL): The currency of the base plan and all riders.
Current assumption whole life insurance: A type of whole life insurance in which premium rates and cash values vary according to the insurer's assumptions regarding mortality, investment, and expense factors. Each policy owner can decide whether he or she wants favorable changes in assumptions to result in a lower premium or a higher cash value for the policy. If changes in assumptions result in a higher premium than that paid when the policy was purchased, the policy owner may choose to lower the policy's death benefit and maintain the previous premium or pay the higher premium and maintain the original death benefit. As with indeterminate premium life insurance, current assumption whole life insurance guarantees that the premium will not increase above the rate guaranteed when the policy was purchased. Also called interest-sensitive whole life insurance.
Current review: A component of a utilization review program that monitors an insured's care while the insured is hospitalized and encourages the dismissal of an insured from the hospital as soon as the insured's medical condition no longer warrants continued in-patient care.
Current settlement option rates: Settlement option rates that reflect the interest rates currently earned by the insurer.
CURRENT VALUATION (Table: SSAPS_ASSETS): The Valuation (No. Held * Unit Value) as last performed
Curtailment: An event or amendment to a pension plan that significantly reduces plan benefits or employer contributions. Types of curtailments include a reduction of the expected years of future service of present employees, and the elimination of the accrual of defined benefits for some or all of the future services of a significant number of employees.
Customer service department: The department in a life and health insurance company that is charged with providing assistance to the company's policy owners, agents, and beneficiaries. Customer service specialists answer policy owners' requests for information, help them interpret policy language, answer questions about policy coverage, and make changes requested by the policy owner, such as changing the policy owner's address, beneficiary designation, and mode of premium payment. The customer service department may also send premium notices to customers, collect premium payments, and calculate and process policy loans, nonforfeiture options, dividends, and surrenders. In some companies, the customer service department also processes commission payments for company agents. Also called the client service department, the policy administration department, the policy owner service department, and the service and claim department.