Index Title Contract For Free

An index clause, also referred to as an inflation clause, a stability clause, or an indexation clause, redistributes inflation-related increases in the costs of claims between the ceding insurer and its reinsurer.

It is also referred to as floating or variable price contract. It means that the price paid for the commodity depends on the evolution of market prices, spot or forward. The index price may be the price on that day or the average price over a certain historical time window.

The Indexation Clause is primarily designed to protect the position of the reinsurer against bearing an over-proportional amount of the inflation-driven increase in a claim that is subject to an XL recovery.

Indexation of contracts. Definition: A procedure whereby a long-term contract for the provision of goods or services includes a periodic adjustment to the prices paid for the goods or services based on the increase or decrease in the level of a nominated price index.

Indexation is used in some countries to offset ?bracket creep,? which occurs in any progressive tax (q.v.) system when inflation pushes taxpayers into higher income tax brackets. Indexation may also refer to the linking of wage rates and financial instruments to a price index.

Social Security payments, for example, are indexed to the annual increase in the Consumer Price Index. In addition to indexation over time, prices and wages can be indexed over different geographic areas.

The articles are numbered I, II and so on. The sections are numbered 1.01, 1.02 and so on. The subsections are lettered; for example, subsection 1.02(a), 1.02(b), 2.01(a) and so on. The clauses are in lowercase roman numerals; for example, clause 4.06(a)(i), 4.06(a)(ii), and so on.