Glossary
Abbreviations
General
AAA
Associations of Average Adjusters
ABI
Association of British Insurers
ACA
Association of Consulting Actuaries
ACCA
Association of Chartered Certified Accountants
ACII
Associate of the Chartered Insurance Institute (CII)
ACLI
American Council of Life Insurers
ACME
Association des Assureurs Coopératifs et Mutuels Européens (known in English as the Association of European Cooperative and Mutual Insurers)
ACORD
Association for Co-operative Operations Research and Development
ACP
African, Caribbean and Pacific (countries) (international trade term)
ACPO
Association of Chief Police Officers
ACSB
Accounting Standards Board (Canada)
ADR
alternative dispute resolution
AEO
authorised economic operator
AFA
automatic fire alarm
AFBD
Association of Futures Brokers and Dealers
AFS
Association of Friendly Societies
AFSP
Association for Specialist Fire Protection
AGEA
Fédération Nationale des Syndicats d’Agents Généraux d’Assurance (French insurance agents’ association)
AIA
(1) Associate of the Institute of Actuaries
(2) American Insurance Association
AIBA
African Insurance Brokers’ Association
AIDA
Association Internationale de Droit des Assurances (International Insurance Law Association)
AIFA
Association of Independent Financial Advisers
AIMA
Alternative Investment Management Association
AIOA
Aviation Insurance Offices Association
AIRMIC
Association of Insurance and Risk Managers in Insurance and Commerce
AIRP
Association of Independent Research Providers
AISAM
Association Internationale des Sociétés d’Assurance Mutuelle (International Association of Mutual Insurers)
AITC
Association of Investment Trust Companies
ALM
asset-liability management
AMI
Association of Mutual Insurers
AMRO
Association of Medical Reporting Organisations
ANIA
Associazione Nazionale fra le Imprese Assicuratrice (Italian Insurance Association)
AOA
Accident Offices Association (superseded in 1985 by the ABI)
APCIMS
Association of Private Client Investment Managers and Stockbrokers
APIL
Association of Personal Injury Lawyers
APRA
Australian Prudential Regulation Authority
ARC
Association of Run-off Companies
ARIAS(UK)
AIDA Reinsurance and Insurance Arbitration Society (UK)
ARROW
advanced risk response operating framework
ART
(1) alternative risk transfer
(2) annual renewable term (life assurance)
ASEM
Asia-Europe Meeting – refers to both the meeting of Asian and European heads of government and the accompanying ministerial, business and non-governmental meetings. Idea emerged at the end of 1994 – proposed by government of Singapore; first summit took place in Bangkok in 1996. Meets every two years. Involves 38 states at government level plus the European Commission = EU-27, the members of the Association of South East Asian Nations (Brunei, Burma, Cambodia, Indonesia, Laos, Malaysia, the Philippines, Singapore, Thailand and Vietnam) plus China, South (but not North) Korea and Japan; Mongolia and India interested in membership (2006); no Russian participation
ASLO
Association of Scottish Life Offices
ASIC
Australian Securities & Investments Commission
Assuralia
name of the Belgian Insurance Association since February 2004, formerly the UPEA (q.v.)
ASSURPOL
French co-reinsurance pool, formerly GARPOL (pollution cover)
AUT
authorised unit trust
Re/insurance
AAD
annual aggregate deductible
AC
Arbitration Clause
a/c(s)
account(s)
ACC
Average Claims Cost
acc
accident
Acc Yr
Accident Year
ACOD
Occupational Disease Clause
ACPC
Average Cost per Claim
acr
additional case reserves
ADP
Advance Deposit Premium
agg
aggregate
AIF
Acts in Force (Clause)
ALAE
Allocated Loss Adjustment Expenses
ANC
absolute net claims
ANL
aggregate net loss
ANP
absolute net premiums
ao
any one (loss occurrence etc)
ao acc
any one accident
ao occ
any one loss occurrence
a/o
account of
aob
any one bottom (cargo cover limit)
aoe
any one event
aol
any one loss
aor
any one risk
aoy
any one year
ap
(1) additional premium
(2) annual premium
(3) advance premium
APH
asbestos, pollution, health hazards (claim)
APL
a programming language
appd
approved
ar
all risks
ASD
Average Shortage and Damage
AT
After Tax
ATE
after-the-event (see below)
av
average
AVIA
Aviation
Definitions
A1:
the highest classification for seaworthiness of a vessel accorded by Lloyd’s Register of Shipping. The designation A means that the vessel’s hull is strong and seaworthy and the designation 1 means that her rigging and gear are in perfect order.
a fortiori:
much more; with stronger reason
ab initio:
from the beginning
ABANDONMENT:
notice given to an insurer that a constructive total loss has been claimed.
ABSOLUTE NET CLAIMS:
claims paid less returns less reinsurance recoveries.
ABSOLUTE NET PREMIUM:
premiums plus additional premiums less return premiums less reinsurance’s, brokerage and commission.
ACCEPTANCE:
notification by a party to a proposed contract that he accepts the offer of the other party of the terms proposed or where an underwriter initials a slip. The proposer of a life assurance, on receiving an offer of cover from an assurer, signifies his acceptance by paying the premium.
ACCIDENT YEAR:
the calendar or accounting year in which the accident or loss occurred.
ACCOMMODATION LINE:
an interest which the company accepts to assist a broker, which would ordinarily be declined/diverted if considered strictly in accordance with underwriting philosophies.
ACCOUNTING CLASS:
see FSA Class.
ACCUMULATION:
concentration of risk, as where an insurer may find that he has many policies on properties in adjacent locations that could result in losses arising from one event, e.g. fire.
ACQUISITION COSTS:
total costs incurred in writing or issuing an insurance policy. Commission, plus all expenses (direct and allocated), excluding claims expenses.
ACT OF GOD:
an accident or event which happens independently of human intervention and due to natural causes, such as storm, earthquake, etc. It will relieve from liability if it amounts to circumstances which no human foresight can provide against, and of which human prudence is not bound to recognise the possibility.
actio person alis mortitur cum persona:
a personal action dies with the person (now largely superseded by statute law)
ACTIVE UNDERWRITER:
in relation to a Lloyd’s syndicate, the person at, or deemed by the Committee to be at, the underwriting box with the principal authority to accept risks on behalf of the members of the syndicate.
ACTUAL TOTAL LOSS:
an actual total loss occurs when:
(a) the subject matter of insurance is completely destroyed;
(b) it ceases to be a thing of the kind insured;
(c) the insured is irretrievably deprived of it; or
(d) the ship is posted missing, in which case both the ship and its cargo are deemed to be an actual total loss.
ACTUARIAL VALUATION:
a valuation by an actuary of the present value of future liabilities using probability tables and other statistical techniques to evaluate the long-term business liabilities.
ACTUARY:
a specialist who applies the mathematical theory of probability to statistics.
actus Dei (nemini facit injuriam :
the Act of God (prejudiced no one)
ad hoc:
for a special purpose
ad litem:
for the suit (a guardian ad litem is a person appointed to defend an action for a minor or other person under a disability)
ad valorem:
according to the value
ADDITIONAL PREMIUM:
extra premium due from the insured either because the insurance is more hazardous than normal, change in circumstances which give rise to an endorsement or because additional benefits are added to the policy.
ADMITTED COMPANY:
(1) an insurer licensed to conduct business in a given state.
(2) A reinsurer licensed or approved to conduct business in a given state.
ADJUSTABLE POLICY:
an insurance where a premium is payable at inception and adjusted after expiry.
ADVANCE DEPOSIT:
a rebate system to adjust premiums to the treaty loss experience (not to be confused with advance premium or deposit premium).
ADVANCE:
see deposit premium.
AFTER-THE-EVENT INSURANCE:
insurance that is taken out only once the ‘event’ has occurred to insure the policyholder against the risk of losing his/her case. For example, if an accident has already happened and somebody has decided to make a claim, it is possible to take out a policy which will cover legal costs incurred as a result of the claim. It is usually used by people who do not have a ‘Before the Event’ insurance. After the event insurance is purchased when a course of legal action has been decided upon. It is usually paid as a single premium. This insurance is often offered by solicitors and claim management companies.
AGENCY AGREEMENT:
a contract between the company and a broker, which lists all the conditions under which the company grants an agency upon appointment, i.e. commission terms, types of business etc.
AGENCY SYSTEM:
system of producing business through a network of agents. Such agents have a contract to represent the underwriter and are of three classes: part?time, brokers and general. Brokers (but not part?time and general agents) are also agents for the client and therefore may encounter problems of conflict of interest. Agents are compensated at differing rates of commission, general agents having much greater responsibilities and duties than part?time agents and brokers. In the UK, general agents are usually confined to marine and home foreign business.
AGENT’S ACCOUNT:
a statement of the period's business showing each premium transaction, the policy number, the insured's name, the premium or return premium and claims in the appropriate column with commission, postage and other charges and the balance due either to the company or to the agent, in accordance with the contract between the agent and the underwriter.
AGENT ? LLOYD'S UNDERWRITING:
a company, firm or person approved by Lloyd's and authorised to manage the affairs of syndicates or Names at Lloyd's.
Managing Agent:
the agent who manages a syndicate, appointing the underwriter and other staff, investing syndicate funds and preparing accounts. A managing agent frequently also acts as a members' agent.
Members:
agent who looks after the interests of the Name to ensure he derives maximum benefit from his participation in syndicates.
Co?ordinating:
the agent appointed by a Name to co?ordinate his affairs at Lloyd's where more than one agent is involved.
AGENT'S SALARY:
within Lloyd's, the amount charged to a Name by the Members' Agent for dealing with his affairs as a Member of a Syndicate. If there is a different Managing agent, the greater part will usually be retained by him. The charge is often based on 1% of a Name's participation in a Syndicate with a minimum lower level.
AGGREGATE EXCESS OF LOSS REINSURANCE:
a form of reinsurance providing excess of loss cover for losses arising from any one event (or vessel) in excess of the reinsured's retention up to an agreed limit, but only when the aggregate of claims otherwise recoverable under the excess of loss treaty exceeds a stated amount.
AGGREGATE STOP LOSS REINSURANCE:
this is a wider application of the ordinary stop-loss treaty in that it applies to the entire portfolio of one branch of the reinsured's activities (see "stop-loss reinsurance").
AGGREGATION:
the process of accumulating claims as specified by an excess of loss reinsurance agreement for the purpose of establishing the amount recoverable.
aliunde:
from elsewhere (e.g. indemnification aliunde)
ALL RISKS INSURANCE:
insurance of property against loss or damage however caused, subject only to stated exceptions.
ALIEN INSURER OR REINSURER:
an insurer or reinsurer organised under the laws of a non-United States jurisdiction.
ANNUAL REPORT ? LLOYD'S:
a document prepared by the Managing Agent of a syndicate for the underwriting members participating therein comprising:
(a) the underwriting accounts;
(b) a balance sheet;
(c) a seven-year summary;
(d) a disclosure of interests statement; and
(e) such other information as is necessary for a proper understanding of the annual report ( e.g. a statement of accounting policies), as defined in the syndicate accounting rules.
ANNUAL SUBSCRIPTION:
a subscription paid by a Name each year to Lloyd’s (to cover expenses incurred by Lloyd’s). It is geared to the Name’s premium income limit and normally paid by the Syndicate on behalf of each Name.
ANNUITY:
(1) a contract of insurance to provide an income to the annuitant for a set period (commonly for life or for joint lives). The contract will provide for periodic payments, e.g. monthly or quarterly
(2) the annual sum paid under (1).
ANTEDATING:
where a policy is expressed as operating from a date before final agreement was reached on its terms, it is said to be antedated.
ANY ONE BOTTOM (OR ANY ONE POLICY):
a term applied by a reinsurer to a limit in marine reinsurance treaty to avoid a potential accumulation of liability (bottom hull).
APPOINTED REPRESENTATIVE:
someone who carries out activities that are part of the business for which their principal has accepted responsibility in writing.
ARBITRATION CLAUSE:
a clause providing a means of resolving differences between the reinsurer and the reinsured without litigation. Usually, each party appoints an arbitrator. The two thus appointed selected a third arbitrator, or umpire, and a majority decision of the three becomes binding on the parties to the arbitration proceedings.
ARRANGED TOTAL LOSS (COMPRISED TOTAL LOSS):
a compromise settlement where a total loss has not in fact occurred, but is deemed to have done.
ARROW VISIT:
Advanced Risk Responsive Operating frameWork, the FSA risk assessment framework undertaken with individual firms to assess their internal risk and capital allocation calculations. The FSA assesses the risk posed by individual firms. Firms are assigned to one of four supervision categories, with category ‘A’ representing firms that are viewed as ‘high impact’, i.e. in the event of their collapse, the impact on customers would high. Such firms can expect a close and continuous relationship, while those in category ‘D’ can expect little or no individual contact.
AS ORIGINAL:
a term used in reinsurance to denote that the reinsurance is on the same conditions as the original insurance.
assecuatus non quaerit lucrum sed agit ne in damno sit:
the insured does not seek to make a profit, but takes steps to secure himself against loss
ASSURANCE:
a term interchangeable with insurance, but generally used in connection with life business, as assurance implies the certainty of an event and insurance the probability.
ats (ad sectan):
at the suit of
ATTACHMENT DATE:
the date on which insurance cover comes into force.
ATTACHMENT POINT:
the dollar amount of loss (per occurrence or in the aggregate, as the case may be) above which excess of loss reinsurance becomes operative.
AUDIT CATEGORIES:
the headings under which different types of risk are grouped for analysis.
AUDIT CODES:
each audit category of risk is given a one letter audit code the purpose of which is to ensure that there are clearly defined categories for audit, accounting and reporting purposes.
AUDIT RESERVES:
reserves created according to rules laid down by Lloyd's and approved by the FSA. They are made on open years of account to ensure that Names have sufficient funds to wind up their accounts after 36 months have elapsed. This solvency must be on an individual Name basis (i.e. aggregating the name’s participation in all relevant syndicates) and any deficiency must be covered by the lodgement of additional assets.
AVERAGE:
(1) in marine insurance, a partial loss.
(a) general average is a loss which arises in consequence of an extraordinary sacrifice made, or expenses incurred for the preservation of the ship and cargo. All underwriters involved in the ship and cargo will participate to indemnify the insured against the actual loss incurred;
(b) particular average is partial loss of the subject matter insured, caused by a peril insured against, and which is not a general average loss;
(2) a clause in non?marine insurance policies (mostly for fire business) under which, in the event of under?insurance, the claim paid out by the insurer is restricted to the same proportion of the loss as the sum insured under the policy bears to the total value of the insured item.
AVERAGE COST PER CLAIM RESERVE:
total claims outstanding divided into the total reserves (less payments) equal an average claim reserve. Reserves in this context means all amounts provided for all known claims less any deductions for subrogation.
AVIATION HULL INSURANCE:
in aviation insurance, hull insurance (i.e. the aircraft’s structure) is distinguished from cargo, passenger and liability insurance.
AVOIDANCE:
the right of the underwriter to treat an insurance contract as though he had never accepted the risk. This can occur in cases where there is a breach of good faith, a significant change in the actual risk involved or a delay in the commencement of a voyage.
Find us on the web
Keep up to date with information from Guardian General in the following ways:
Get in touch with
a GGIL Agent
Simply select your region from the drop down list below and you will be presented with a list of GG Agents nearest to you.
