Cat Spread
Definition of "Cat spread"
Type of derivative traded on the Chicago Board of Trade that takes the form of an option on a catastrophe futures contract using a call-option spread as the basis for the contract. The thesis of this kind of derivative is to simulate an artificial layer of excess of loss reinsurance coverage. This derivative has the origin of its value in the excess of loss reinsurance plan to be used as a mechanism for the primary insurer hedging its risk coverage.
Popular Insurance Terms
Insured's income prior to the disability minus the insured's income after the disability. ...
Amendments to the water quality improvement act of 1970 that extends liability of shipowners to any hazardous substances discharged by their ships. The 1970 act made shipowners responsible ...
In insurance, company revenues from underwriting and investment. Insurance companies make money first, by underwriting good risks so that their premium dollars cover claims losses and ...
Act of practicing law or providing legal advice without a license. ...
Addition to reflect exposures with a greater probability of loss than standard exposures. For example, insuring a munitions factory obviously requires a premium greater than that required ...
Typical non qualified plans of life insurance for key employees include: permanent life insurance dividends generated by the policy are used to pay the income tax of the key employee that ...
Means of funding permitted under the employee retirement income security act of 1974 (ERISA). The administrator of a pension plan can comply with required minimum funding standards by ...
List of cash allowances for various types of surgeries. ...
Coverage for personal effects of a tourist, including apparel, books, toilet articles, watches, jewelry, luggage, portable typewriters, photographs and photography equipment and supplies. ...
Have a question or comment?
We're here to help.