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Financial Services Authority

an independent body that regulates the financial services industry in the UK; it was set up by the Financial Services and Markets Act 2000 and is accountable to Treasury Ministers; it is financed by the financial services industry; its statutory objectives are to maintain confidence in the financial system, promote public understanding of the financial system, secure appropriate degrees of consumer protection for consumers, and reduce financial crime.

Financial Services Authority (FSA)

The UK’s statutory financial regulator. Almost all kinds of financial services firms must secure FSA authorisation. It regulates and monitors banks, building societies, friendly societies, Lloyd’s, credit unions, insurance and investment firms (stockbrokers and fund managers) and independent financial advisers. The FSA does not cover loans, credit and debt, and does not regulate occupational pension schemes. The FSA has powers to investigate, discipline and prosecute, and can impose unlimited fines on anyone guilty of market abuse. The FSA’s four objectives are: maintaining market confidence; promoting public understanding of the financial system; protecting consumers; fighting financial crime. See FSA HANDBOOK. (Visit www.fsa.gov.uk).

Financial Services Compensation Scheme (FSCS)

Compensation scheme for private customers of financial services firms that have gone out of business. If possible, FCSC transfers UK policyholders to new insurers but otherwise compensates them for their unexpired premiums. Compensation also covers unpaid claims. Compulsory third party motor insurance and employers’ liability is compensated in full; in non-compulsory insurance (e.g. household or general) the first £2,000 is fully compensated with 90 per cent of the remainder. Under long term business, the first £2,000 is fully protected plus 90 per cent of the value of the policy in liquidation. The scheme is funded by an industry levy.

Financial settlement

1. Lump sum dollar amount paid by an insurance company to a disabled insured who has disability insurance to pay off an obligation. 2. Payment of a lump-sum benefit to an insurance plan participant. Also known as buy-out settlement , commutation , or settlement .

Financial statement

A firm’s operating statements, including balance sheet and profit and loss statement, along with associated information. Underwriters frequently request financial statements when they provide both new business and renewal quotations. This is because an insured’s financial condition is an important factor in assessing its insurability, commitment to loss control programs, and ability to pay premiums.
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The disclosure of the financial results of a firm’s operations. It involves the balance sheet, profit and loss statement, and associated information.

Financing Risk

Measures to finance the losses that do occur. Funds may be required to repair or restore damaged property, to settle liability claims, or to replace the services of disabled or deceased employees or owners. In some instances, the firm will decide not to restore the damaged property or replace the disabled or deceased person. Nevertheless, it may also have suffered a financial loss through a reduction in its assets or its future earning power. he tools in this second category include (i) those transfers, including purchase of Insurance, that are not considered risk control devices and (ii) retention, which includes “self-Insurance.”

Fine

Punishment established by law to pay a sum of money that is imposed on an individual who has committed an act of wrongdoing.