A method of tracking losses stemming from claims made during a year-long time frame.
Tag: RAW
Index case
First infected person who started the outbreak of a disease (e.g., state department of health will investigate students attending a school to locate the index case of an outbreak of meningitis).
Index clause
See: stability clause.
index convention
Space-saving rule used in the Index, which is the last section of the annually published Current Procedural Terminology code book. For example:KneeIncision (of)In this example, the word in parentheses (of) does not appear in the Index, but it is inferred. As another example:PancreasAnesthesia (for procedures on)In this example, because there is no such entity as pancreas anesthesia , the words in parentheses are inferred (i.e., anesthesia for procedures on the pancreas).
Index linked
See: INDEXATION.
Index or Stability clause
A clause in liability excess of loss Reinsurance tying treaty limits to an appropriate price or earnings index.
Index tracking
An index tracking fund aims to follow a particular index as closely as possible, not necessarily aiming to beat it. It invests only in the companies that make up that index. Index tracking removes the need to employ fund managers and so reduces charges.
Index-based products
Option contracts based on an index. The value of a derivative is derived from the underlying index as in the case of weather derivatives. Variations between the actual losses and those derived from the index creates the basis risk.
Indexation
Adjustment of postretirement benefits to compensate for the effects of inflation such as increasing pension benefits to the Consumer Price Index (CPI) to make up for a change in the cost of living.
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UK: A method whereby benefits or sums insured are increased periodically by a factor derived from an index of prices or earnings. Household building sums insured are linked to a rebuilding cost index and contents cover increases annually in line with an index reflecting replacement costs. Regulations oblige exempt approved schemes to increase pension payments for post April 1997 service by at the least the appropriate percentage taken from the retail price index up to 5 per cent per annum but this cap reduces to 2.5 per cent in 2005 under what is called limited price index (LPI). LPI does not apply to AVCs and FSAVCs. See ESCALATION; STABILITY INDEX CLAUSE.
Indexed life insurance
Whole life plan of insurance that provides for a premium rate increase automatically every year to correspond with any increase in the Consumer Price Index (CPI) to make up for a change in the cost of living.