Glossary

Glossary of insurance related terms used by Lloyd's and market participants. The following definitions are intended for general guidance. They do not override or qualify any definition that appears in any Lloyd’s byelaw or regulation, in any contract or in any other document.

An asterisk indicates that there is a legal definition of the relevant term in the Lloyd’s Definitions Byelaw. It should be noted that other byelaws may have legal definitions of terms that do not appear in the Definitions Byelaw. Copies of Lloyd’s byelaws may be found here

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.

Lloyd's Regulatory Board

The committee of the Council of Lloyd’s that was formerly responsible for the regulation of the Lloyd’s market. It was abolished in 2002 in anticipation of the transfer of its responsibilities to Lloyd’s Franchise Board.

Lloyd's solvency test

A test that is undertaken annually to ensure that members of the Society have sufficient eligible assets to meet their underwriting liabilities. The test is undertaken at member level and also on an aggregate basis for all members taking in account the centrally held assets of the Society such as the New Central Fund. Any member that fails the solvency test at member level will be required to provide additional funds or cease underwriting. The centrally held assets of the Society must be sufficient to cover any shortfall of assets at member level.

Lloyd's underwriters

This term may variously refer to - (a) the professional underwriters who are employed by managing agents to underwrite insurance and reinsurance business on behalf of the members of the syndicates that those agents manage. (b) the members of one or more syndicates that underwrite a particular policy; or (b) all members (of the Society) collectively.

Lloyd's waiter

A liveried member of Lloyd’s staff.

LMP slip

A standard form slip that managing agents must use to underwrite insurance at Lloyd’s except (a) if the insured requires some other slip to be used; or (b) the slip relates to motor business, personal lines including motor business or term life business and the slip will not be processed by LPSO Ltd. For further information visit www.lmp2001.com. Please note: Lloyd's accepts no responsibility for the content of external sites.

Long tail (risk)

This refers to a type of insurance where claims may be made many years after the period of the insurance has expired. Liability insurance is an example of long tail business. The opposite of long tail business is short tail business.

Loss

This term generally refers to some injury, harm, damage or financial deteriment that a person sustains. Losses may be insured or uninsured. Whether a loss is covered by a policy or certificate of insurance depends on the terms of that document and local law.

Loss adjuster

A person who is appointed to investigate the circumstances of a claim under an insurance policy and to advise on the amount that is payable to the policyholder in order to settle that claim. Loss adjusters are generally appointed by underwriters but sometimes policyholders appoint their own loss adjusters to negotiate claims on their behalf.

Loss event

The event which causes a loss, for example a fire or hurricane.

Managing agent

An underwriting agent which has permission from Lloyd’s to manage a syndicate and carry on underwriting and other functions for a member.

Managing agents agreement

A standard form agreement between a member and the managing agent of a syndicate on which the member participates which sets out the powers of the managing agent and the obligations of the managing agent and the member towards one another. There are two forms of managing agent’s agreement: the managing agent’s agreement (general), which applies to every member that has a members’ agent and the managing agent’s agreement (corporate) which applies to every member that does not have a members’ agent. Copies of current versions of these agreements are annexed to the Agency Agreements Byelaw.

Mandataire General

The title used by a Lloyd’s General Representative in certain countries, predominantly those that are French speaking.

Market agreement

An agreement between all the underwriters in a certain section of the Lloyd's market.

Mass risks

An official term used in EEA insurance regulation. It means any risk that is not a 'large risk'. See large risks.

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