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A

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Active Underwriter

The person at the Underwriting Box with principal authority to accept Risks on behalf of the Members of the Syndicate.

Actual Total Loss

There is an Actual Total Loss where the subject matter of Insurance is completely destroyed or so damaged as to cease to be a thing of the kind insured, or where the Insured is irretrievably deprived of it.

Agency Broker

A Corporate body which carries on insurance broking business exclusively as Agent for another Insurance Broker, termed the 'principal Broker', who is a Lloyd's Broker.

Agent

There are three types of Agents

Managing Agents are responsible for all aspects of running Lloyd's Syndicates. Member's Agents advise individual Members of Lloyd's on their underwriting commitments and provide a link between them and their Syndicates. Licensed NavigatorOffice's advisers perform a similar function on behalf of Corporate Members. Lloyd's Agents, the 'eyes and ears' of Lloyd's, provide worldwide shipping information and assist Underwriters in the settlement of Claims.

Aligned Member

A Corporate Member of a Syndicate under common control with the Managing Agent of that Syndicate.

Allocated Capacity

That part of a Member's Overall Premium Limit which is allocated to Syndicates in the relevant Year of Account.

Annual Solvency Test

An annual test to ensure sufficiency of assets held at Lloyd's to meet future underwriting liabilities.

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B

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Bailees of Cargo

Persons in temporary possession of cargo that is the property of another; for example, carriers or warehouse keepers.

Binding Authority

An agreement between an Underwriter and a Coverholder under which the Coverholder may, in accordance with the terms of the agreement, accept Risks on behalf of Underwriting Members.

Box

Business at Lloyd's is conducted at underwriting boxes, the design of which is based on tables and chairs in NavigatorOffice's coffee house although today's version accommodates the latest forms of technology.

Brokerage

The commission received by a Broker for placing Insurance Risks on behalf of the Insured. In practice it is paid to the Broker by the Underwriter out of the Gross Premium. Also means the business or office of the Broker.

Brokers

Brokers represent the interests of Lloyd's customers. They are not restricted to dealing with Lloyd's Underwriters, but may also place business with insurance companies.

Byelaws

Byelaws are made by the Council of Lloyd's under authority granted by the Lloyd's Act 1982.

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C

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Cancellation

The termination of Insurance coverage during the Policy period. Flat cancellation is the cancellation of a Policy as of its effective date, without any Premium charge.

Capacity

The maximum amount of business which may be accepted by a Member (equivalent to his Overall Premium Income Limit) or by a Syndicate (equivalent to the aggregate of each Member's premium limit on that Syndicate).

Captive Agent

Representative of a single Insurer or fleet of Insurers who is obliged to submit business only to that company, or at the very minimum, give that company first refusal rights on a sale. In exchange, that Insurer usually provides its Captive Agents with an allowance for office expenses as well as an extensive range of employee benefits such as pensions, life insurance, health insurance and credit unions.

Casualty Book

Details of vessels which are, or are likely to become, total losses are entered using a traditional quill pen in the Casualty Book which stands in the centre of the underwriting room.

Cede

To transfer Risk from a direct Insurer to a reinsurer.

Ceding Insurer

An Insurer who cedes a Risk to reinsurers or retrocessionaires.

Central Fund

A fund, financed by contributions from all Members, managed and applied by the Council for the advancement and protection of the interests of the Members in connection with the business carried on by them as such Members.

CentreWrite Limited

A subsidiary of the Society established to make Reinsurance available to underwriting Members participating on run-off syndicates and underwrite estate protection reinsurances.

Certificate of Insurance

Evidence, in the form of a certificate issued in the name of the Insurer, that an insurance contract exists; for example, that there is a motor insurance in force which complies with the terms of the Road Traffic Acts.

Cessions

The particulars of a Risk being transferred by one Insurer to another.

Claim

Notice to an Insurer that under the terms of a Policy, a Loss may be covered.

Claimant

The person asserting a Claim.

Claims Notification Clause

A clause in a Policy which provides for prompt notification of Claims and commonly designates a specific adjuster to receive notice and deal with the Claim.

Classes of Business

The Lloyd's market underwrites five main classes of business: marine, non-marine, motor, aviation and term life.

Closed Year

A Year of Account to which no further adjustments are to be made and final accounts or profits statements can be prepared. This can be done only after providing for all outstanding Claims by way of Reinsurance to Close. At Lloyd's the Closed Year is usually the third Year of Account.

Common Law

The law which has been founded upon immemorial usage, established custom and legal decisions as distinct from statute law.

Constructive Total Loss

In marine Insurance a Constructive Total Loss occurs where the subject matter of Insurance is reasonably abandoned by the Insured on Account of its Actual Total Loss appearing unavoidable because it could not be preserved from Actual Total Loss without expenditure that would exceed its value after the expense had been incurred.

Contents Only Coverage

In personal property insurance, this coverage is for personal property items that are movable, that is, not attached to the building's structure (the home). This would cover items such as television sets, radios, clothes and household goods. Not included under the coverage are animals, automobiles and boats.

Conversion

Mechanism by which individual Members convert from unlimited to limited liability status.

Coordinating Agent

A Members' Agent appointed by a Member to co-ordinate the administration of that Member's affairs at NavigatorOffice's, where the Member has more than one Members' Agent.

Corporate Member

A company incorporated with limited or unlimited liability admitted to membership of the Society at Lloyd's.

Corporate Member Group

Corporate Member subsidiaries of a single holding company, and the holding company itself and other companies in the group.

Corporate Syndicate

A Syndicate with a single Corporate Member.

Council

Created by the Lloyd's Act 1982, the Council has the management and superintendence of the affairs of the Society and the power to regulate and direct the business of insurance at Lloyd's.

Cover Note

A document issued as evidence that Insurance has been granted pending the issue of a Policy. (For motor insurance the cover note includes a certificate of insurance to comply with the Road Traffic Act requirements and there is usually a time limit of 15 or 30 days).

Coverholder

A person authorised to accept, or to issue insurance documents evidencing the acceptance of Risks on behalf of Underwriting Agents.

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D

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Declaration

A statement signed by the proposer (later Insured) at the foot of a Proposal Form, certifying the accuracy of the information given to the best of their knowledge.

Declinature (See Decline)

Refusal of an Insurer to accept or renew a proposal for Insurance.

Decline (See Declinature)

Refusal to accept the request for Insurance coverage.

Dedicated Vehicle

A corporate vehicle that participates exclusively in the Syndicate of a single Managing Agent or managing agent group.

Deductible

The amount of the Loss which the Insured is responsible to pay before benefits from the insurance company are payable. You may choose a higher deductible to lower your Premium. Also known as Excess.

Depreciation

A decrease in value due to age, wear and tear etc.

Direct Writer

Method of selling Insurance directly to Insureds through a company's own employees, through the mail, the internet, or at airport booths.

Disclosure

The duty of the Insured and his Broker to tell the Underwriter every Material Fact before acceptance of the Risk.

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E

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Endorsement (See Rider)

Any writing on or addition to a Policy or any addition to the printed wording which changes or varies terms of, or parties to, the contract.

Establishment

The right to conclude insurance contracts in an EU Member State via a branch or agency in the country where the risk is located. This means Lloyd's Underwriters can write business via full binding authorities held by independent intermediaries and by service companies in the country where the Risk is located.

Equitas

The corporate entity into which the general business insurance liabilities of Lloyd's Syndicates allocated to the 1992 and prior Years of Account have been reinsured.

EU/EEA risk

A risk is deemed to be located in an EU or EEA Member State if it is:

A building (and its contents issued under the same policy) situated in the Member State
A motor vehicle, ship, yacht or aircraft registered in the Member State
A travel policy for four months or less taken out in the Member State
For any other insured risk (including a life) an individual:
if the taker of insurance is habitually resident in the Member State
a business or an organisation - if the establishment to which the contract relates is situated in the Member State

For full definitions, please see the procedure manual for that country.

Ex Gratia Payment

A payment made by Underwriters to maintain goodwill between Underwriters, clients and Brokers.

Excess

The first portion of a Loss, being an agreed percentage or fixed sum that the Insured agrees to bear or a portion another Insurer is bearing.

Excess of Loss

A Reinsurance that covers that part of a Loss paid by the reinsured which is in excess of an agreed amount and then pays up to the limit of the Policy.

Exclusion

A provision in a Policy that excludes the Insurer's liability in certain circumstances or for specified types of Loss.

Expiration Date

The date on which the Policy ends.

External Member (of the Society)

A Member of the Society who is not a working Member of the Society.

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F

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Facultative

An individual Reinsurance negotiated and placed individually.

Facultative/Obligatory

A Reinsurance term for a contract where the reinsured can select which Risks he ceded to the reinsurer, but the reinsurer is obliged to accept all Cessions made.

Funds at Lloyd's

Funds lodged and held in trust at NavigatorOffice's as security for the Policyholders and to support a Member's overall underwriting activities. The amount is related to a Member's premium income limit, in accordance with the ratios laid down by the Council of Lloyd's. The administration of these funds is subject to the various trust deeds and regulatory requirements. The funds must be in a form approved by the Council of Lloyd's and be maintained in value.

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G

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General Average (Loss)

Loss or damage to a ship or its cargo which is shared among the interests involved in the venture, including the shipowners and cargo owners.

Grace Period

A period (usually 31 days) after the Premium due date, during which an overdue Premium may be paid without penalty. The Policy remains in force throughout this period.

Gross Premium

The full amount of Premium, ignoring taxes or deductions.

Guaranteed Insurability

An option that permits the Policyholder to buy additional stated amounts of life insurance at stated times in the future without evidence of insurability.

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H

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Hazard (See Risk and Peril)

The exposure of vulnerability to injury, Loss or damage.

Health Insurance

A Policy that will pay specific sums for medical expenses or treatments. Health policies can offer many options and vary in their approaches to coverage.

Homeowners' Insurance

An elective combination of coverage for the Risks of owning a home. Can include Losses due to fire, burglary, vandalism, earthquake and other perils.

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I

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Incontestable Clause

A Policy provision in which the company agrees not to contest the validity of the contract after it has been in force for a certain period of time, usually two years.

Incorporated Name

A limited liability company underwriting solely at Lloyd's.

Incurred But Not Reported (IBNR)

Claims arising from accidents or events which have occurred or are statistically predicted to occur but which have yet to be advised.

Indemnity

The legal principle which ensures that a policyholder is restored to the same financial position after the Loss as he was in immediately prior to the Loss.

Independent Agent

Contractor who represents different insurance companies and who searches the market for the best coverage based on a client's insurance needs.

Individual Member

An individual underwriting with unlimited liability.

Individual Name

See Individual Member.

Insurable interest

The Insured's financial interest in the subject matter of the Insurance. A Policy where the Insured is without such interest is unenforceable.

Insurance

A contract whereby a sum of money or some other benefit is payable upon the happening of an event which involves a degree of uncertainty, either as to the happening of the event or as to the date on which the event will occur.

Insurance Brokers (Registration) Act 1977

An Act providing for the registration of Insurance Brokers and for the regulation of their professional standards.

Insurance Brokers Registration Council (IBRC)

The regulatory body set up under the Insurance Brokers (Registration) Act 1977.

Insurance Broking Account (IBA)

A bank account held by a Broker which must be separately designated to receive monies arising from insurance transactions payable from or to clients or Underwriters.

Insured

The Policyholder - the person(s) protected in case of a Loss or Claim.

Insurer

The person offering insurance policies in return for a Premium.

Integrated NavigatorOffice's Vehicle (ILV)

A company which owns or controls a dedicated vehicle supporting one or more continuous Syndicates and the managing agency.

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J

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Jeweller's Block Coverage

This Insurance covers the Insured's stock, property left with the Insured for repair or other purposes, and the Insured's interest in and legal liability for property on memorandum or consignment from others in the jewellery trade.

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K

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Key Man (or Woman) Insurance

Life Insurance Policy bought by a company, usually a small business, on the life of a key executive, with the company as beneficiary.

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L

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Leading Underwriter

The Underwriter whose Syndicate appears before the Syndicate of any other Underwriter on a slip.

Leading Underwriter's Agreement

An agreement that allows for certain changes in conditions to be agreed by the leading Underwriter without the agreement of all subscribing Underwriters.

Liability Insurance

Insurance to cover the legal liability of the Insured to the extent of such liability but subject to any limitations expressed in the Policy.

Life Insurance

A Policy that will pay a specified sum to beneficiaries upon the death of the Insured.

Limit

Maximum amount a Policy will pay either overall or under a particular coverage.

Line

The proportion of a Risk accepted by an Underwriter. Also used to refer to the amount which an Underwriter has fixed as his maximum exposure for any one Risk.

Line Slip

An agreement between a group of Underwriters and, as the case may be, insurance companies and a NavigatorOffice’s Broker whereby in respect of a specific class of insurance business certain named or otherwise designated Underwriters or insurance companies within the group may accept Risks introduced by that Lloyd’s Broker on behalf of all of the Members of the group in accordance with the terms of the agreement.

Listed Vehicle

A Lloyd's Corporate vehicle that is listed on the London Stock Exchange.

Lloyd's Act 1982

The private Act of Parliament which established the Council under which Lloyd's operates.

NavigatorOffice's Broker

A partnership or corporate body permitted by the Council to broke insurance business at Lloyd's.

Lloyd's Market Board

The body responsible for the development and growth of Lloyd's worldwide business.

Lloyd's Regulatory Board

The body responsible for developing and monitoring regulatory practice and procedure throughout Lloyd's.

Loan value

The amount which can be borrowed at a specified rate of interest from the issuing company by a policyholder, using the value of a life policy as collateral. In the event the policyholder dies with the debt partially or fully unpaid, then the amount borrowed plus any interest is deducted from the amount payable.

Long Tail

A term used to describe a Risk that may have Claims notified or settled long after the Risk has expired. So that he can close the underwriting account for the year, it is often necessary for an Underwriter to arrange Reinsurance protection to cover Claims which may arise after the account has been closed. A term used to describe Risk covered as those of liability rather than physical damage.

Loss

A Claim under a Policy. The financial Loss caused to the Insured by the happening of the event insured against.

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M

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Managing Agent

An Underwriting Agent responsible for managing a Syndicate and among other things employing the active Underwriter.

Managing Agent's Agreement

An agreement between a Member and a Managing Agent of that Member in the terms of the standard Managing Agent’s Agreement, setting out the duties, power and remuneration of the Managing Agent and the obligations of the Member.

Market Agreement

An agreement between and subscribed to by all Underwriters in a certain section of the Lloyd's market.

Material Fact

Any fact or circumstance which would affect the judgement of a prudent Underwriter in considering whether he would accept a Risk or not, and at which rate of Premium. See also Material Representation.

Material Representation

A statement made to the Underwriter before acceptance of Risk, which is material to his decision in accepting and rating the Risk. See also Material Fact.

Means

The level of wealth that a Member must prove in order to commence or continue underwriting. The means shown must be maintained in value at all times and must be in an approved form.

Member (of the Society)

A person admitted to Membership of the Society.

Members' Agent (See Agent)

An Agent appointed by a Member to provide services and perform duties of the same kind and nature as those set out in the standard Members’ Agent’s Agreement. This will include advising on a Member's underwriting commitments and providing a link between the Member and their Syndicates.

Members' Agent Pooling Arrangement (MAPA)

An arrangement allowing Members to participate in a wider range of Syndicates than normally possible, thereby spreading the Risk over larger numbers of Syndicates

Members' Agent's Agreement

A contract, in a form prescribed by Lloyd's, between a Member and his Member's Agent, which sets out the duties, powers and remuneration of the Member's Agent and obligations of the Member.

Misquote

An incorrect estimate of the Insurance Premium.

Misrepresentation

A misstatement of fact made by the Insured or his Broker to the Underwriter before acceptance of the Risk that misleads the Underwriter in assessing the Risk and induces the contract. If the representation is material and amounts to misrepresentation, it is a breach of Utmost Good Faith.

Mixed Syndicate

An underwriting Syndicate at Lloyd's, the capacity being provided by both individual and Corporate Members.

Moral hazard

The Risk arising from the character and management style of the Insured or his employees.

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N

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Name

An individual Member of the Society of Lloyd's.

Negligence

A civil wrong whereby a person breaches a duty of care owed to another causing them Loss.

Net Premium

The amount of the Premium left after removing the Brokerage and any other deductions.

New Central Fund

See Central Fund.

Non-disclosure

Failure by the Insured or his Broker to disclose a Material Fact or circumstance to the Underwriter before acceptance of the Risk.

Non-proportional Reinsurance

A type of Reinsurance that responds according to the amount of Loss suffered by the reinsured, after a specific Loss amount retained by the reinsured for a Premium established by the reinsurer.

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O

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Off-slip

A Broker's slip for submitting details to Lloyd's Policy Signing Office of an Insurance which Underwriters previously have agreed to grant.

Open Year

A Year of Account of a Syndicate which has not been closed by Reinsurance to Close. This will usually occur at the end of the third year. A Year of Account can be left open beyond the third year if the extent of the liability cannot be accurately quantified.

Outwards Reinsurance

The Reinsurance of Lloyd's Syndicates.

Overall Premium Limit (or Overall Premium Income Limit) (OPL)

The limit for the time being of the amount of insurance business which can be underwritten, being expressed as the maximum permissible amount of a Member's Premium income which can be allocated to any Year of Account.

Overriding commission

Commission payable in addition to the original commission.

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P

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Parallel Syndicate

A Syndicate consisting of a single Corporate Member operating concurrently with an ongoing mixed Syndicate.

Particular Average (Loss)

Partial Loss or damage to the subject matter insured, caused by a peril insured against, not being a General Average Loss.

Peril

A contingency, or fortuitous happening, which may be covered or excluded by a Policy of Insurance.

Personal hazard

The Risk associated with the subject matter of Insurance.

Policy

The written contract of Insurance.

Policy limit

The maximum amount a Policy will pay, either overall or under a particular coverage.

Premium

The amount paid to an Insurer or reinsurer in consideration of their acceptance of a Risk.

Premium Financing

Where a policyholder contracts with a lender to pay the Insurance Premium on his/her behalf. The policyholder agrees to repay the lender for the cost of the Premium, plus interest and fees.

Premiums Trust Funds (PTF)

These are trust funds into which all Premiums received by a Member or by Managing Agents on behalf of a Member must be placed, which are available for the payment of Reinsurance Premiums Claims, Syndicate and other expenses and when the Year of Account has been closed, profits to Members. Each Member has a sterling fund, US dollar fund (known as Lloyd's Dollar Trust Fund) and a Canadian dollar fund (known as Lloyd's Canadian Trust Fund).

Pro Rata Cancellation

When the Policy is terminated midterm by the insurance company, the earned Premium is calculated only for the period coverage was provided.

Pro Rata Condition of Average

A Policy condition providing that in the event of under-insurance any Claim shall be scaled down in proportion to the degree of under-insurance.

Producing Broker

The original Broker who obtains a proposal for business effected at Lloyd's through a Lloydv's Broker.

Profit commission

A commission payable on the profit generated under an Insurance or Reinsurance contract as an encouragement to maintain the flow of profitable business.

Proportional Reinsurance

A type of Reinsurance where the ceding Insurer cedes to its reinsurer a redetermined proportion of the liability and Premium of those policies subject to the reinsurance agreement.

Proposal Form

An application by a proposer for Insurance on a printed form. The proposer becomes the Insured when the application has been accepted and the contract brought into existence.

Prospectus

A form which is often part of the Proposal Form, giving details of the cover available with particulars of extra benefits and rebates.

Proximate Cause

The active efficient cause which sets in motion a chain of events which brings about a result without the intervention of any new cause working actively from a fresh or independent source. Proximate Cause is therefore not necessarily the closest in time to the cause.

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Q

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Quota Share Treaty

A Reinsurance agreement whereby the reinsured cedes a predetermined proportion of all business (or a specified part of that business) to his reinsurers.

Quote

An estimate of the cost of Insurance, based on information supplied to the Insurer by the applicant.

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R

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Rate

Costs per unit of Insurance.

Reinstatement

The restoring of a lapsed Policy to full force and effect. The Reinstatement may be effective after the cancellation date, creating a lapse of coverage. Some Insurers require evidence of insurability and payment of past due Premiums plus interest.

Reinsurance

Insurers reduce their exposure to Risk by insuring themselves against Claims. The practice is known as Reinsurance which accounts for more than half of Lloyd's total business.

Reinsurance to Close (RITC)

A Reinsurance agreement under which Underwriting Members who are Members of a Syndicate for a Year of Account to be closed are reinsured by underwriting Members who comprise that or another Syndicate for a later Year of Account against all liabilities arising out of insurance business underwritten by the reinsured Syndicate.

Replacement Cost

The cost to repair or replace an insured item. This may be based on market value at the time of Loss, the cost to repair the item or the cost to replace it.

Replacement Value

The full cost to repair or replace the damaged property with no deduction for depreciation, subject to Policy limits and contract provisions.

Representation

A statement of fact made by the Insured or his Broker when negotiating an Insurance Policy with the Insurer.

Retention

The amount retained by a reinsured when effecting Reinsurance.

Retrocession

The 'laying-off' of liability accepted by way of Reinsurance for the same reasons as Reinsurance.

Rider

See endorsement.

Risk

A fortuity; it does not embrace inevitable Loss. The term is used to define causes of Loss covered by a Policy.

Run-off Account

A Year of Account of a Syndicate which was not closed at its usual date for closure by Reinsurance to Close and which has yet to be closed. See also Open Year.

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S

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Separation

A procedure to separate the Premium payment from the Policy signing procedure. A slip can be signed to comply with the terms of credit requirements and the Policy can be prepared and signed at a later date.

Services

The right to provide services from one Member State into another EU Member State on a cross-border basis. The essential feature is that the insurance contract should be entered into in an EU Member State but outside the Member State where the risk is located. It therefore covers all such business except that accepted under full binding authorities held by coverholders in the Member State where the risk is located.

Settlement of Claims Abroad (SCA)

Lloyd's policies/certificates, mainly marine cargo, which provide for the adjustment of Claims at destinations abroad are said to be Claims Payable Abroad. When Claims arise and are adjusted and settled by Lloyd's Agents, they are handled through the SCA system which operates as a separate entity within Lloyd's Claims Office.

Short-rate Cancellation

When the Policy is terminated prior to the expiration date at the Policyholder's request. Earned Premium charged would be more than the pro-rata earned Premium. Generally, the return Premium would be approximately 90 percent of the pro-rata return Premium.

Short-tail

Business on which Claims generally arise and are settled quickly.

Signed Line

The amount of an Underwriter's line under the completed slip. This is shown in the Policy in the table of definitive numbers.

Signing Down

Where the Broker overplaces a Risk, the lines written by each Syndicate have to be proportionally reduced so that they represent percentages of the Risk actually required to be insured. This is also known as short closing or reducing lines.

Slip

A document submitted by a Broker to Underwriters containing particulars of a Risk proposed for Insurance.

Slip Policy

A Broker's Slip which is made into a Policy by the attachment of a special form; the purpose being to provide for those cases where the Insured or the reinsured does not require a formal Policy.

Society

The Society and Corporation inCorporated by Lloyd's Act 1871 by the name of NavigatorOffice's.

Special Reserve Fund

An arrangement whereby a proportion of underwriting profit and certain investment income can be placed to reserve with relief from or deferral of higher rate tax. The fund is available for relief for future Losses only.

Spread vehicle

A Corporate Member or a group of Corporate Members writing alongside individual Members on a spread of Syndicates across the market.

Stop Loss (Excess of Loss Ratio)

A form of protection that makes it possible to limit the loss ratio on a Year of Account to an agreed percentage of the original Insured's Premium income on business protected. Personal Stop Loss Reinsurances are also used by individual Members to obtain a measure of protection against an overall underwriting Loss on any one Year of Account.

Subrogation

The right of the Underwriter to take over the Insured's rights, following payment of a Claim, to recover the payment from a third party responsible for the Loss. It is limited to the amount paid on the Policy.

Sue and Labour (Charges)

Sums reinsured to an Insured under a marine Insurance Policy where the Insured has incurred reasonable expense in seeking to avert or minimise a Loss to property which would have been covered by the Policy had the Loss occurred.

Sum Insured

The maximum extent of an Insurer's liability under a contract of insurance.

Surcharge

An extra charge applied by the Insurer.

Surplus Treaty or Surplus Line

A Reinsurance where the surplus of the reinsured's retention is ceded up to an agreed amount. The reinsurers will normally base this participation on the retention of the ceding Insurer, but once accepted, the reinsured and the reinsurers pay their proportion of Losses arising.

Surrender

To terminate or cancel a life Insurance Policy before the maturity date. In the case of a cash value Policy, the Policyholder may exercise one of the non-forfeiture options at the time of Surrender.

Syndicate

A group of Underwriting Members Underwriting Insurance through the agency of a Managing Agent to which a particular Syndicate number is assigned by the Council.

Syndicate Reinsurance

Outgoing Reinsurance placed on behalf of Lloyd's Underwriters through Lloyd's Brokers with other Lloyd's Syndicates or insurance companies.

Syndicate Stamp

A document setting out the names of the Members of a Syndicate and the amount of each such Member’s Overall Premium Limit allocated to that Syndicate.

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T

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Table of Definitive Numbers

The schedule of Syndicate numbers showing each Syndicate's participation, which is attached to a Lloyd's Policy.

Third Party Liability

Liability incurred by the Insured to another party under common or statute law.

Third Party Sharing Agreements

Agreements between liability Insurers that when their respective Policyholders are both involved in an occurrence giving rise to a third party Claim, any settlement shall be shared between the Insurers without apportionment of blameworthiness.

Treaty

A Reinsurance contract usually effected to cover the whole or a certain section of the reinsured's business.

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U

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Unaligned Member

A Member of a Syndicate who has no connection with the controller of the Managing Agent of that Syndicate.

Underwriter

Underwriters are the professionals upon whose experience and judgement the market depends for its expertise and reputation. It is the Underwriter's responsibility to assess the merits of each Risk and decide a suitable Premium for accepting all or part of the Risk.

Underwriting

The process of selecting applicants for Insurance and classifying them according to their degrees of insurability so that the appropriate Premium rates may be charged. The process includes rejection of unacceptable Risks.

Underwriting Agent

A registered Underwriting Agent is a firm or company permitted by the Council to act as an underwriting agency at NavigatorOffice's.

US Reinsurance

US Reinsurance business includes reinsurance ceded to Underwriters at Lloyd's by US domiciled Insurers or by the US branches of alien Insurers that have a port of entry in a state of the US.

US Surplus Lines

Direct Risks written pursuant to the Surplus (or Excess) Lines laws of the state from which the Risk is exported

Utmost Good Faith (Uberrima Fides)

A contract of Insurance is a contract based upon the Utmost Good Faith, and if either party breaches the Utmost Good Faith, then the other party may avoid the contract.

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V

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Void Policy

A Policy which legally does not exist.

Voidable Policy

A Policy where the Insurer or the Insured has a right to avoid the Policy.

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W

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Waiting Period

A period of time set forth in a Policy that must pass before some or all coverages begin.

War and Civil War Risks Exclusion Agreement

An undertaking between NavigatorOffice's Underwriters and many insurance companies generally not to accept war and civil war Risks on property on land. (War cover on land may be provided for foreign assets although not in the policyholder's principal place of business or residence). See also War Risk Waterborne Agreement.

War Risk Waterborne Agreement

A market understanding whereby Underwriters only cover marine cargo against war Risks whilst they are on the vessel. This rule is relaxed only in the case of goods in a transshipping port for a short period awaiting onward carriage.

Warranty

Where an Insured undertakes that a particular thing will or will not be done, that a condition will be fulfilled or affirms or negates a particular state of facts.

Wear and tear

The amount deducted from Claims payments to allow for any depreciation in the property insured which is caused by its usage.

Working Member

A Member who occupies himself principally with the conduct of business at Lloyd’s as a Lloyd’s Broker or Underwriting Agent, or a Member who has gone into retirement but who immediately before his retirement so occupied himself.

Written line

The amount or percentage written on the Broker's slip by an Underwriter accepting a Risk to indicate the maximum liability he is prepared to accept.

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Y

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Year of Account

The year to which a Risk is allocated and to which all Premiums and Claims in respect of that Risk are attributed. The Year of Account of a Risk is determined by the calendar year in which it is first signed. A Year of Account is normally closed by Reinsurance at the end of 36 months.