A principle whereby all manufacturers of a particular type of product share liability for its injurious nature in proportion to their market shares for that particular product. The principle is adopted in some US courts where the cause of the harm cannot be traced to particular manufacturers.

reduction that may be applied by an insurer to the value of a with-profits policy (sum assured plus accumulated bonuses) on withdrawal prior to termination, designed to reflect the situation where the value of the underlying assets falls short; sometimes called Market Value Adjustment (MVA) or Market Level Adjustment (MLA).

A collection of wordings created from duplicate wordings being registered by Lloyd’s brokers. It means that more wordings are available to other brokers and underwriters.

The Scottish equivalent of the Married Women’s Property Act 1882.

Allows a married woman to effect a policy on her own life or the life of her husband for her separate use. The Act further provides that a policy effected by a man on his own life for the benefit of his wife and/or children, creates a trust in favour of the stated objects. The policy proceeds do not form a part of the husband’s estate or become subject to his debts. The same applies when a wife takes out the policy for benefit of her husband and/or children. The Act creates a trust of life policies where, apart from the Act, they would not be created and gives special protection against creditors.

The suspension of ordinary law due to war and rebellion. It is not a law in the proper sense but the exercise of will by a military commander who takes the responsibility for suspending ordinary law to ensure safety of the state. It is illegal in time of peace but, by inference, lawful in times of war or civil commotion. Insurance policies may exclude losses during a period of martial law.

marine, aviation and transport business (classes of general insurance).

The risk that liabilities and assets are not properly matched. The risk arises from mismatches related to currency and timing, interest rate risk and inflation risk. It is of major importance to life insurers as mismatching could lead to the sale of investments to meet claims as they fall due at a time of low values. In regard to annuities it is necessary to match annuity liabilities with investments of a similar pattern, e.g. fixed income securities. The FSA prescribes asset and liability valuation rules aimed at minimising this risk.

The insurance of tangible property as distinct from the insurance of persons (life and limb), rights, pecuniary interests, and liability. Fire, theft, motor, cargo and hull policies are all policies that are entirely or partly of a material damage nature where the subject matter of insurance takes the form of tangible property. The property can usually be insured against named perils or on an ‘all risks’ or accidental damage basis.

Business interruption insurance proviso requiring that, before a claim can be allowed, a material damage claim must be admitted; the absence of such insurance would prolong the interruption. When the interruption results from damage at external premises, e.g. the supplier’s, the only requirement is that the damage should have been caused by an insured peril. See CUSTOMERS’ EXTENSION; SUPPLIERS’ EXTENSION; LOSS OF ATTRACTION; DENIAL OF ACCESS; EXTERNAL DEPENDENCIES.