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Contribution by Limits

Proportional apportionment of an insured loss by two or more Insurers in the ratio of their individual Policy limits to the total of all Policy limits. For example, if Insurer A has a Rs. 2,00,000 Policy for a particular loss, and Insurer B has a Rs. 3,00,000 Policy for the same loss (a total of Rs. 5,00,000 coverage), Insurer A pays 2/5 of the loss, and Insurer B pays 3/5 of that loss, with neither paying more than the amount of its Policy.

Contribution Clause

There is nothing to prevent an insured from effecting two or more Insurances, on the same property. But the insured shall not be entitled to recover more than the full amount of his loss. Contribution also ensures the equitable distribution of losses as between Insurers. Contribution arises in the case of contracts of indemnity where the same interest, the same peril and the same subject matter are insured with more than one Insurer.

Contribution limit

Maximum yearly contribution legally permitted to a participant’s account in a defined benefit pension plan (DBPP). This may include employer and employee contributions and forfeitures that have been reallocated from other participants’ accounts. The contribution limit is set under Section 415 of the Internal Revenue Code.

Contribution limits

The maxima that IR allows for tax relief purposes when paid into approved occupational pension schemes, personal pension plans and retirement annuities. Contributions to personal pension schemes including self-invested personal pensions and retirement annuity contracts are based on a scale of age-related percentages of net relevant earnings (17.5 per cent for persons aged 35 or less up to 40 per cent for age 61 and over). Contributions to approved occupational scheme members are limited to a maximum of 15 per cent of taxable remuneration in any year regardless of age. This limit remains unchanged when contributing concurrently to a personal pension or stakeholder plan (contributions to stakeholder pensions are limited to £3,600 irrespective of age (2002/3)). Except for retirement annuity contracts, all contributions are subject to the earnings cap. There are no limits on employers’ contributions other than those required to ensure that benefits remain inside IR maxima. See CONCURRENCY.