Index Age Contract For Free

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.

Indexed wage contracts typically adjust wages to the evolution of prices infrequently and with a lag, so that cost of living adjustments are determined ing to lagged inflation rather than current inflation.

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.

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.

The Index Date is the last day of each annual period beginning on the Policy Date and the same day of each year thereafter. Example: If the Policy Date is January 1, 2003, the first Index Date is January 31, 2003 and the last day of each following month.

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.

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.