This is the official formula for measuring the price of money the true interest rate. APR is the total credit cost expressed as an annual percentage rate of charge.
Insurance Encyclopedia
Annual Policies (Marine)
An annual Policy is issued in respect of goods that belong to the insured and/or held in trust by him but not under a contract of sale or purchase. The depots must be owned or hired by the insured. An annual Policy may also be issued in respect of goods, owned by the insured and deliverable to specified dealers premises. Sum insured will be the aggregate maximum estimated value in transit (in land- both rail and road) at any one time of all goods in respect of a specified transit. When several specified transits are carried under the Policy, the maximum estimated value in transit at any one time will be the sum insured. As and when a claim is paid the sum insured will be reduced by the claim paid. This amount has to be reinstated by payment of additional premium.
Annual Premium
A premium paid to obtain Insurance for one year.
Annual premium method
A method of determining the premiums payable under an insurance contract with the object of keeping the premium of each life insured or member of a pension scheme at a constant rate until there is a change in circumstances.
Annual Renewal Agreement
Clause in which the Insurance Company agrees to renew the covered Policy under stated conditions.
Annual Report
The insurer’s published statement to its stockholders giving pertinent financial information and review of the year’s activities.
Annual return
Financial statements that insurers must submit to the FSA after the end of the financial year in the prescribed format (volume 2 of IPRU (INS)). The returns are made up of: balance sheet and profit and loss account; general business revenue account and additional information; long-term business revenue account and additional information; abstract of the actuary’s annual valuation report; auditor’s report under Companies Act 1985, s.235, for companies incorporated in the UK or the equivalent for companies not so incorporated. Certificates must accompany the report from the directors, the appointed actuary and the auditors. The returns must also include statements about major reinsurers and cedants, the company’s policy on investing in derivatives and a statement of the controllers of the company. Companies engaging in cross-border EEA business must provide separate statistics on this business.
Annual Slide
A method used in calculating the premium for an excess of loss contract.
Annual solvency test
Lloyd’s carries out two annual solvency tests 1. Lloyd’s as a whole (as if a single insurance company) must demonstrate that the total eligible assets of members, coupled with centrally held assets such as the Lloyd’s central fund, exceed their liabilities by the required minimum margin. 2. Lloyd’s must also show that each member has sufficient assets to meet his liabilities and that any shortfall can be covered by centrally held assets. Also each member’s assets must exceed its liabilities by the prescribed margin. This is the higher of 16 per cent of total annual premiums or 23 per cent of average claims, incurred over a three-year period, less a credit for reinsurance recoverables. Lloyd’s must show that it has sufficient central assets to cover any aggregate shortfall from this test. See MEMBER’S MARGIN.
Annual Statement (also known as Convention Blank, Statutory Annual Statement)
The annual report format prescribed by the National Association of Insurance Commissioners and utilized to submit financial data and related information to insurance regulators. All states use the annual statement blank promulgated by the NAIC, but each state retains the authority to make changes in those statements. Changes made by states generally require only supplemental information and do not change the basic financial information.