What Is the Cash Value Accumulation Test (CVAT)? The cash value accumulation test (CVAT) is a test for determining whether a financial product can be taxed as an insurance contract rather than as an investment. The cash value accumulation test is used to make sure that the cash value of the insurance policy does not exceed the present
What Is Cash Value Life Insurance? Cash value life insurance is a form of permanent life insurance—lasting for the lifetime of the holder—that features a cash value savings component. The policyholder can use the cash value for many purposes, such as a source of loans or cash or to pay policy premiums. Key Takeaways Permanent life
What Is Cost Per Available Seat Mile? Cost per available seat mile (CASM) is a common unit of measurement used to compare the efficiency of various airlines. It is obtained by dividing the operating costs of an airline by available seat miles (ASM). Generally, the lower the CASM, the more profitable and efficient the airline.
What Is Casualty Insurance? Casualty insurance is a broad category of insurance coverage for individuals, employers, and businesses against loss of property, damage, or other liabilities. Casualty insurance includes vehicle insurance, liability insurance, and theft insurance. Liability losses are losses that occur as a result of the insured’s interactions with others or their property. For homeowners or
What Are Casualty and Theft Losses? Casualty and theft losses are deductible losses that arise from the destruction or loss of a taxpayer’s personal property. To be deductible, casualty losses must result from a sudden and unforeseen event. Theft losses generally require proof that the property was actually stolen and not just lost or missing. Key Takeaways Casualty
What Was the Catalog of Federal Domestic Assistance (CFDA)? The Catalog of Federal Domestic Assistance (CFDA) was a compilation of federal U.S. assistance programs that provided a full listing of programs available to corporate and government agencies, United States territories, and members of the American public. Today, the CFDA’s content is listed through the SAM.gov website.
What Is Catastrophe Accumulation? In the insurance industry, the term “catastrophe accumulation” refers to the aggregate claims that would need to be paid if one or more catastrophes were to occur across an entire region. In this sense, the catastrophe accumulation is a type of estimate of potential damages caused by catastrophes such as earthquakes
What Is a Catastrophe Bond (CAT)? A catastrophe bond (CAT) is a high-yield debt instrument that is designed to raise money for companies in the insurance industry in the event of a natural disaster. A CAT bond allows the issuer to receive funding from the bond only if specific conditions, such as an earthquake or
What Is Catastrophe Excess Reinsurance? Catastrophe excess reinsurance protects catastrophe insurers from financial ruin in the event of a large-scale natural disaster. For instance, if a regional insurer covers 60% of the properties along a coastline affected by a storm surge, it can be suddenly hit with multiple claims that must be paid out in
What Is a Catastrophe Hazard? In the insurance industry, a catastrophe hazard is a type of risk that could cause a large number of policyholders to file claims at the same time. Common examples of catastrophe hazards include earthquakes, tornadoes, or acts of terrorism. Catastrophe hazards can be particularly costly for insurance companies. For this
