Glossary

Large Risks

An official term used in EEA insurance regulation. The formal definition of “Large Risks” is found in the EU’s 2nd Non-Life Insurance Directive (88/357). It can be summarised as meaning: (i) Risks classified as: Railway rolling stock Aircraft (including aircraft liability) Ships (sea, lake and river and canal vessels) (including liability) Goods in transit (including merchandise, baggage, and all other goods). (ii) Risks classified as Credit or Surety where the policyholder is engaged professionally in an industrial or commercial activity or in one of the liberal professions, and the risks relate to such activity. (iii) Risks classified as: Fire and natural forces Other damage to property General liability Miscellaneous financial loss in so far as the policyholder exceeds the limits of at least two of the following three criteria: - balance-sheet total: 6.2 million euros, - net turnover: 12.8 million Euros, - average number of employees during the financial year: 250. If the policyholder belongs to a group of undertakings for which consolidated accounts are drawn up, the criteria mentioned above is applied to the consolidated accounts.

Leading underwriter

The underwriter of a syndicate or insurance company who is responsible for setting the terms of an insurance or reinsurance contract that is subscribed by more than one syndicate or insurance company and who generally has primary responsibility for handling any claims arising under such a contract. Where an insurance or reinsurance contract that is underwritten by more than one syndicate Xchanging Claims Services normally acts as the representative of the following underwriters as regards the agreement of claims under the contract. In certain situations a managing agent of a following syndicate will be appointed together with Xchanging Claims Services to represent the following underwriters. However some matters require to be referred to all the following underwriters on risk and an insured may always insist that its claim is shown to each following underwriter.

Leading underwriter's agreement

An agreement that allows for certain changes to the terms of an insurance or reinsurance contract to be agreed by the leading underwriter(s) without reference to the following underwriters.

Liability insurance

An insurance which covers the insured against third party claims or, in the case of employer’s liability insurance, claims by employees, subject to specified terms and conditions.

Life assurance

Another term for life insurance.

Life assured

The person whose life is insured under a life insurance.

Life insurance

A policy that pays a specified sum to beneficiaries upon the death of the life assured, or upon the assured surviving a given number of years, depending on the terms of the policy. Life insurance policies may be for fixed or indefinite term. See term life as regards fixed term policies.

Limit of indemnity

Another term for policy limit. It refers to the maximum amount payable under a policy of insurance or reinsurance, either overall or with reference to a particular section of a policy.

Line

The proportion of an insurance or reinsurance risk that is accepted by an underwriter or which an underwriter is willing to accept. When it refers to a line that is entered on a slip it is commonly expressed as a percentage of the limit of indemnity.

Lloyd’s

Depending on the context this term may refer to - (a) the society of individual and corporate underwriting members that insure and reinsure risks as members of one or more syndicates. Lloyd’s is not an insurance company; (b) the underwriting room in the Lloyd’s Building in which managing agents underwrite insurance and reinsurance on behalf of their syndicate members. In this sense Lloyd’s should be understood as a market place; or (c) the Corporation of Lloyd’s which regulates and provides support services to the Lloyd’s market.

Lloyd's Act 1982

The most recent of seven private Acts of Parliament that define the powers of the Society of Lloyd’s. The Council of Lloyd’s was made the governing body of Lloyd’s under this Act.

Lloyd’s Agent

A firm that is appointed to conduct or arrange surveys of ships and cargoes for Lloyd’s underwriters, other insurers and commercial interests throughout the world. Many Lloyd’s agents also undertake non-marine surveys, act as loss adjusters and provide information about shipping movements and losses. There are over 300 Lloyd’s agents, 160 of whom have authority to settle claims on behalf of Lloyd’s underwriters and insurance companies.

Lloyd’s American Trust Fund

A trust fund that is maintained in the USA for the protection of holders of US dollar denominated policies which incepted between August 1939 (when the fund was established) and 31 July 1995. It is a premiums trust fund. Compare Lloyd’s Dollar Trust Funds.

Lloyd's broker

A firm that is listed in the register of Lloyd’s brokers maintained under the Intermediaries Byelaw which is permitted to broke insurance business at Lloyd's. A syndicate can generally only accept insurance business that has been broked or placed from or through a Lloyd’s broker.

Lloyd’s Canadian Trust Fund

A trust fund that is maintained in Canada for the protection of holders of insurance policies covering Canadian risks. It is a premiums trust fund.

Lloyd’s Dollar Trust Funds

These funds are maintained in the USA for the protection of holders of US dollar denominated policies which incepted on or after 1 August 1995 (when the fund was established). They are premiums trust funds. Compare Lloyd’s American Trust Fund.

Lloyd’s Franchise Board

The board established by the Council of Lloyd’s which is responsible for developing and directing the implementation of the franchise policy to create an maintain a commercial environment at Lloyd’s in which the long term return to all capital providers is maximised. The Council delegates certain of its powers to the Board which may operate within limitations set by Council.

Lloyd’s market

This term may refer to the place where business is transacted between managing agents and Lloyd’s brokers, or to the syndicates that provide cover at Lloyd’s.

Lloyd's Market Board

The committee of the Council of Lloyd’s that was formerly responsible for the development and growth of Lloyd's worldwide business. It was abolished in 2002 in anticipation of the transfer of its responsibilities to Lloyd’s Franchise Board.

Lloyd’s Policy Signing Office Ltd

Lloyd’s Policy Signing Office used to be part of the Corporation of Lloyd’s. Following its incorporation it is now part of the Xchanging group of companies.