(i) Insurance against relatively remote possibilities e.g., loss arising through the reappearance of a missing beneficiary or secondary liability arising because a person primarily liable is not indemnified by an insurer. (ii) Marine insurance under which the insurer undertakes to pay a fixed amount in the event of a contingency occurring.
Insurance Encyclopedia
Contingency insurances
A term describing those policies that do not fall naturally into one of the principal classes of insurance business. The term embraces insurances such as abandonment of events, pluvius insurance and others often of an unusual nature.
Contingency loading
An allowance in the insurer’s premium calculation for possible fluctuations in claims costs. It is added to the risk premium that covers the average claims’ cost for the year. Wide fluctuations in claims experience necessitate a greater contingency cushion than narrow range fluctuations. Other premium computation elements: expenses loading and profit loading.
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The part of the Insurance premium used to cover the possibility of unexpectedly large or frequent losses having to be paid by the Insurer.
Contingency margin
Amount included in the actuarial rates to provide for changes in the contingency level in the trust fund. Positive margins increase the contingency level and negative margins decrease it.
Contingency Reserve
A reserve in an insurer’s annual statement, in addition to the legal requirements to provide for unexpected contingencies or losses.
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A reserve set aside for unforeseen events or damages. Found in the insurance company’s annual statement.
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UK: An amount reserved in the books of a company or other entity in respect of a specific future liability, e.g. payment of taxes.
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MEDICAL,USA: Portion of funds that insurance companies separate from surplus funds to provide for unusual and unexpectedly large claim amounts for catastrophic losses.
Contingent
Conditional; depending on another happening – a contingent beneficiary is one next in line after the first named.
Contingent (or Profit) Commission (Reinsurance)
An allowance payable to the ceding insurer, in addition to the normal ceding commission, based on the net profit derived from a reinsurance treaty.
Contingent (or survivorship) annuity
Also known as a reversionary annuity. The payments to the annuitant start on the death of a named person. One spouse can use this type of annuity to make provision for a surviving spouse.
Contingent (or survivorship) insurance
Life policy under which the sum insured is payable on the death of one person (the life insured), provided it occurs during the lifetime of another (the counter life). The ages of both lives must be proved, but only the life insured is required to prove his state of health.
Contingent beneficiary
MEDICAL,USA: Person or persons named in a life insurance policy to receive the proceeds in the event the original or primary beneficiary should die before the person whose life is insured. Also called alternate beneficiary, secondary beneficiary, or successor beneficiary.
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Person or persons named to receive proceeds in case the original beneficiary is not alive. An individual who is entitled to benefits only after the death of a primary beneficiary.
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This is the second person to receive benefits if the primary beneficiary is not alive or does not collect all available benefits from a life insurance policy or annuity. For example, a husband may name his wife as primary beneficiary on his life insurance policy and, if his wife predeceases him, his children as second or contingent beneficiaries. (See Beneficiary).