A criminal act involving the illegitimate use of credit cards to obtain goods or money. Limited coverage for such losses is automatically provided in most homeowners policies.
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Credit Card Forgery (Credit Card Insurance)
This protects the insured against losses caused by forgery in the use of credit cards or alteration of them or of any other written instruments connected with them.
Credit card insurance (Property Insurance)
Coverage usually provided under a homeowner’s policy that covers the insured in the event of fraudulent credit card use.
Credit card protection insurance (CCPI)
Provides cover up to £75,000 against fraudulent use of a lost or stolen credit card. The policy also provides £1,000 interest free advance if the insured is stranded overseas and includes other emergency benefits.
Credit card repayment protection (CCRP)
Meets monthly repayments up to £1,000 per month for a specified period if the insured is unable to work following accident or sickness or involuntary unemployment. Life cover to secure full repayment is normally included. See CREDIT PROTECTION INSURANCE.
Credit carried forward (Reinsurance)
Under a spread loss or another form of long-term reinsurance, “credit carried forward” refers to the process of transferring credit or profit from one accounting period to another.
Credit Carry Forward (CCF)
The transfer of credit or profit from one accounting period, as defined within the reinsurance agreement, to the succeeding accounting period under the existing contract or the replacing contract. See also Deficit Carry Forward
Credit Control
The measures taken by a business to safeguard itself against loss through slow payment, or failure to pay, by debtors.
Credit default swaps
A credit derivative structured as a swap. One party is a lender facing a credit risk from a third party and the counterparty in the swap agrees to insure this risk in exchange for regular periodic payments (essentially an insurance premium). If the third party defaults the counterparty insurer will have to purchase from the the insured defaulted asset. In turn, the insurer pays the insured the remaining interest on the debt as well as the principal. See CREDIT EVENT.
Credit derivative
An over-the-counter, ‘off balance sheet’ instrument, derived directly or indirectly from the price of a credit instrument. They take numerous forms, including swaps (e.g. credit default swaps and options), and are used to transfer the credit risk from one party to another, e.g. banks to insurance companies (insuritisation). The amount of credit derivatives transferred to insurers rose from zero in 1998 to 30 per cent in 2002 (www. vinodkothari.com/glossary).