UK: 1. Occurs when an individual, on reaching retirement, exchanges a part of his pension for a tax-free lump sum. In approved final salary schemes the maximum tax-free lump sum permitted is 1.5 times (based on 3/80ths for each year of service) final salary. For approved defined contribution schemes it is 25 per cent of the accumulated pension fund.
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UK: in relation to reinsurance, the termination by mutual agreement of all past, present and future liabilities between the parties to a reinsurance contract, in consideration of a final, usually cash, settlement. May also apply, less commonly, to an insurance contract.
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Payment to discharge an actual or potential liability to make payments in the future.
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MEDICAL,USA,REFERENCE: See: financial settlement.
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The termination of all obligations between the parties to a reinsurance agreement, normally accompanied by a final cash settlement. Commutation may be required by the reinsurance agreement or may be effected by mutual agreement.
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US: Usually refers to the cancellation or dissolution of a reinsurance contract in which there are profits or losses to be allocated.