1. Form of total loss only reinsurance of: (a) vessels over or between specified tonnages; or (b) aircraft over or between specified hull values and/or seating capacities. The policies are effected on policy proof of interest without the benefit of salvage to the insurer. 2. An aviation reinsurance under which the reinsurer agrees to pay a fixed amount if an air crash results in a stated number of deaths.
Insurance Encyclopedia
Tontine bonus method
A method of distributing bonuses to ‘with profits’ life insurance policyholders which has been used in the US but not in the UK. There are variations but the general principle is that declared surpluses are retained for ultimate distribution to the policyholders who survive a certain fixed period.
Tontine policy (Life Insurance)
A policy that was popular after the Civil War, which is now illegal. The policy paid dividends to the policyholders who were still living at the end of a certain period. The money for these dividends came from people who had paid in and were now deceased or who had let their policies lapse.
Tool of trade risk
Risk arising out of the use of a special type, such as a mobile digger, as a tool of trade, i.e. used for its intended function, digging, lifting etc. This risk is distinguished from the road risk necessitating compulsory third party motor insurance. Tool of trade risks are of a third party nature, e.g. liability for damage to underground cables, and insurable under commercial motor, public liability or engineering insurances.
Tooley Street fire
London’s second largest fire (1861) is a landmark in the development of fire insurance. It highlighted inadequacies in both the method of pricing fire insurance and fire-fighting arrangements. Differential rates of charges were introduced to penalise unsatisfactory features and reward favourable ones.
Top and drop layer/arrangement
Drop down cover means the unexhausted limit of the top layer of excess of loss cover drops down to a stated lower layer(s) to respond to further losses when that layer is exhausted. The reinsured uses a back up policy to cover the risk of the top layer itself being exhausted by an earlier loss. The risk can be mitigated by not combining too many layers in one top and drop arrangement when the total amount of cover is limited. Top and drop may be whole account or class specific. Dropping to the bottom of the programme is termed ‘cascade’. Top and step is a variation, the top layer only drops to reinstate the immediate underlying layer.
Top and step
See: TOP AND DROP LAYER.
Top-heavy plan
Employee benefit or retirement plan that provides 60% or more of its accrued benefits to the owners, executives, and key employees and specific minimum benefits to non–key employees.
Top-up cover
See: Gap; Vehicle Replacement Cover.
Tornado
A rotating column of whirling wind over land, usually accompanied by a funnel shaped downward extension of calumnious cloud and having a vortex several hundred yards in diameter whistling destructively at speeds of upto 300 miles per hour, usually very violent and destructive in a narrow path, often for miles
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UK: A storm of wind of extreme violence. It originates in a funnel-shaped cloud that rotates. The barometric pressure may drop so severely and rapidly that buildings may actually explode from within.