WESTERN LIVESTOCK PRICE INSURANCE GENERAL DEFINITIONS
Hundred weight (cwt)
One hundred pounds of live weight or live weight equivalent cattle and is commonly abbreviated to ‘cwt’
Hundred Kilograms (ckg)
One hundred kilograms of dressed weight or dressed weight equivalent hogs and is commonly abbreviated to ckg.
Insurable coverage levels, based on the forecasted Futures price, expressed in dollars per cwt/ckg and below which an Indemnity is recoverable under a Price/Basis Insurance Policy.
The index of prices that a Price/Basis Insurance Policy is compared to, in order to determine if any indemnity is payable under a policy.
The last four weeks of every WCPIP policy (does not apply to WHPIP) during which a policy holder may claim some, or all of their insured weight on the policy*.
*policies nearing the end of a blackout are not guaranteed 4 weeks of claim.
Basis: typically defined as the difference between the price of a futures contract and the underlying commodity’s spot (or cash) price. This ‘cash to futures’ basis is what the WCPIP and WHPIP insurance takes into account. WCPIP-Fed basis insurance refers to basis as the difference between the WCPIP provincial fed cattle index and the US (Nebraska) cash price, or the ‘cash to cash’ basis.
Blackout Week: a week during the year when sufficient data is unavailable to calculate a settlement index. Example: The week between Christmas and New Year.
Chicago Mercantile Exchange (CME): an organization providing an electronic trading platform to facilitate trade in commodity futures.
(WCPIP only) Claim Date: the date during the Claim Window when the Client makes a claim. A Policy allows for partial claims (i.e., on a portion of the total hundredweight insured), therefore there may be more than one Claim Date in relation to a given policy.
(WCPIP only) Claim Window: the last four weeks of a policy. A claim can be filed for any amount of weight in any one or more of these weeks. Not all policies are guaranteed a 4 week claim if close to a blackout.
Effective Date of a Policy: the date associated with the beginning of insurance for a given policy.
Expiration Date: the last day that an insurance policy is in effect.
Indemnity: the payment made from the Insurer to the Client upon settlement of a claim.
Individual Aggregate Threshold: the total weight a client can have insured at any one time.
Individual Daily Threshold: the total weight a client can purchase during one day.
Insurable Period: the total length of time in weeks that a policy is in effect. All policies expire on Mondays.
Insured Weight: expected live weight prior to or on the Expiration Date of Policy, estimated based on reasonable rate of gain assumptions.
Insurance Calendar: a calendar that includes dates pertinent to selling/claiming policies.
System Aggregate Threshold: the total dollar amount the system will insure in total.
System Daily Threshold: the total dollar amount the system will insure during one day.
Statement of Coverage and Premium: Generated after the purchase of a policy. One Statement of Coverage is generated per invoice (per session).
Claim Request Confirmation: Generated after a claim has been filed. One statement is generated per session.
Settlement Statement: Generated when a policy expires or when all the weight has been claimed, whichever comes first.
Statement of Coverage and Premium: Generated after the purchase of a policy, one Statement of Coverage is generated per invoice.
Settlement Statement: Generated when a policy expires.