Ab initio
Latin for from the beginning.
Accident year
The calendar or accounting year in which a loss occurs.
Accreditation
The process by which a firm may obtain registration as a Lloyd’s broker.
Accredited Lloyd’s broker
A Lloyd’s broker.
Active Underwriter
The individual at the underwriting box with principal authority to accept insurance and reinsurance risk on behalf of the members of a syndicate.
Actual Total Loss
This term derives from section 57 of the Marine Insurance Act 1906 (MIA) and refers to situations in marine insurance where -
(a) the subject matter of the insurance is destroyed;
(b) the subject matter of the insurance is so damaged as to be no longer be capable of still being described as the thing insured; or
(c) the insured is deprived of the subject matter of the insurance forever.
Section 58 of the MIA adds that where there is no news of a missing ship then after a reasonable period an actual loss may be presumed.
Adjuster
See loss adjuster.
Adjustment premium
An additional or return premium that is payable in relation to a deposit premium depending on the performance of an insurance or reinsurance contract.
Agent
Someone who acts for another person (the principal) usually for reward.
There are four main classes of agent that may be involved in the underwriting of insurance and reinsurance risks by Lloyd’s underwriters: members’ agents, managing agents, brokers and coverholders. In addition, there are Lloyd’s agents which are independent businesses that provide surveys and loss adjusting services to managing agents, insurance companies and others on a worldwide basis. Further in some situations one underwriter may act as the agent of other underwriters (see general underwriters’ agreement).
Aggregate
Total (limit of indemnity, premium, retention etc).
Aggregate excess of loss reinsurance
A form of excess of loss reinsurance in which the excess and the limit of liability are expressed as annual aggregate amounts.
Agreed business plan
A syndicate business plan that has been approved by or on behalf of Lloyd’s Franchise Board. No managing agent may underwrite for a syndicate without an agreed syndicate business plan. Agreed syndicate business plans may be amended with the agreement of the Franchise Board or someone acting on its behalf.
Agreed value policy
An insurance contract under which the insurer agrees to pay the insured a stated amount in the event of the total loss of the property insured without any adjustment for depreciation or appreciation.
Aligned Member
A corporate member of a syndicate that is directly or indirectly owned by the same firm that owns the managing agent of the syndicate.
All risks
A property insurance which covers any accidental loss or damage that is not specifically excluded under the policy.
Allocated Capacity
This may refer to a member’s allocated capacity or syndicate allocated capacity.
Annual accounting
The reporting of syndicate results on a calendar year basis, with profit taking being restricted to earned premiums.
Annual venture
This term refers to the reconstitution of a syndicate as an annual business venture where insurance and reinsurance business is written on a year of account basis.
Appreciation
In the context of property insurance an increase in value of the property insured.
Approved person
An individual who has been approved by the Financial Services Authority (FSA) to perform a FSA controlled function for an authorised person.
Approved run-off company
A company that is permitted by Lloyd’s to perform specified functions that would normally be performed by a managing agent of a run-off syndicate on behalf of that agent or a substitute agent.
Assured
Another name for an insured.
Attachment date
Another term for inception date, being the date on which an insurance or reinsurance contract comes into force.
Attorney in Fact
A person appointed by a power of attorney to act on behalf of another person.
A Lloyd’s attorney in fact is a representative appointed by Lloyd’s to represent Lloyd’s and Lloyd’s underwriters in a particular country or US state. An attorney in fact may be a natural person or a company and performs a similar role to a Lloyd’s General Representative.
Authorised person
A person (usually a firm) that has been approved by the Financial Services Authority (FSA) to carry on one or more FSA regulated activities.
Average
If the sum insured under non-marine insurance is expressed to be “subject to average” and that sum is less than the value of the subject matter of the insurance then any claim that is agreed under the policy will be reduced proportionately to reflect the under insurance.
Section 81 of the Marine Insurance Act 1906 say that an insured shall be his own insurer as regards any under insurance.
In marine insurance the term average may also refer to one of two types of loss, general average and particular average.
Avoidance of a contract ab initio
The cancellation of an insurance or reinsurance contract from its beginning by an insurer or reinsurer on the basis of the misrepresentation and/or non-disclosure of material facts. The result is that the insurer/reinsurer has no liability under the contract but must repay the premium to the insured/reassured.
