Definition of Contingent claim

Contingent claim

A claim that can be made only if one or more specified outcomes occur.

Claim dilution

A reduction in the likelihood one or more of the firm's claimants will be fully repaid,
including time value of money considerations.

Claimant

A party to an explicit or implicit contract.

Contingent deferred sales charge (CDSC)

The formal name for the load of a back-end load fund.

Contingent immunization

An arrangement in which the money manager pursues an active bond portfolio
strategy until an adverse investment experience drives the then-available potential return down to the safetynet
level. When that point is reached, the money manager is obligated to pursue an immunization strategy to
lock in the safety-net level return.

Contingent pension liability

Under ERISA, the firm is liable to the plan participants for up to 39% of the net
worth of the firm.

Disclaimer of opinion

An auditor's statement disclaiming any opinion regarding the company's financial
condition.

Equity claim

Also called a residual claim, a claim to a share of earnings after debt obligation have been
satisfied.

Marketed claims

claims that can be bought and sold in financial markets, such as those of stockholders and
bondholders.

Nonmarketed claims

claims that cannot be easily bought and sold in the financial markets, such as those of
the government and litigants in lawsuits.

Residual claim

Related: equity claim

contingent pay

compensation that is dependent on the
achievement of some performance objective

Unclaimed Pay

Net pay not collected by an employee, which is typically transferred
to the local state government after a mandated interval has passed from
the date of payment.

Contingent Liability

An obligation that is dependent on the occurrence or nonoccurrence of
one or more future events to confirm the existence of an obligation, the amount owed, the payee,
or the date payable.

Preferred Stock Stock that has a claim on assets and dividends of a corporation that are prior

to that of common stock. Preferred stock typically does not carry the right to vote.

Contingent Beneficiary

This is the person designated to receive the death benefit of a life insurance policy if the primary beneficiary dies before the life insured. This is a consideration when husband and wife make each other the beneficiary of their coverage. Should they both die in the same car accident or plane crash, the death benefits would go to each others estate and creditor claims could be made against them. Particularly if minor children could be survivors, then a trustee contingent beneficiary should be named.

Contingent Owner

This is the person designated to become the new owner of a life insurance policy if the original owner dies before the life insured.

Claim

Request for payment of benefits under the terms of an insurance policy.

Claimant

Person or party making request for payment of benefits under the terms of an insurance policy.

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