UK: 1. An amount retained as reasonably necessary to provide for asset depreciation, or any liability or loss which is likely to be incurred. 2. In a pensions context, the unfunded obligation to provide employees’ pensions and shortfall of funding payments over the amount calculated by the actuary as being his estimate of the costs of providing pensions. Pensions costs in employers’ accounts should be actuarially assessed and included in the employer’s balance sheet under ‘provisions for liabilities’ as ‘pensions and other similar obligations. 3. Term in a policy, contract or statute.
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MEDICAL,USA: Section of an insurance contract describing in detail a benefit, condition, feature, or requirement of the policy. Also called clause , insurance clause, or insurance provision.
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UK,REFERENCE: See: reserve.

Where there is a chance that, in the future, an injured person will suffer serious deterioration in his condition, the court is empowered to issue a declaratory judgment, which, in the event of such deterioration, enables the plaintiff to apply for a review of the original award. Where the declaration is made, the damages awarded are provisional.

The risk that insurance company accounting provisions may be set at a lower level than is actually required. It misleadingly enhances the company’s financial situation upon which inappropriate underwriting decisions could be made. The capital available may not be sufficient to support the type or level of business that is accepted.

Any term or clause in an insurance policy that describes its benefits, cover stipulations, conditions, limits or exclusions.

An underwriter who underwrites risks on a reasonable basis and who is neither unduly apprehensive nor duly incautious. The concept of the prudent underwriter is at the heart of the fundamental principle of utmost good faith as a fact will be judged to be material (see material fact) if it is one that would have influenced the judgement of a prudent and experienced underwriter in his assessment of the risk. The assertion that the particular underwriter would have been influenced by it does not make it a material fact and the fact that another would have ignored it does not prevent it from being material. The test is objective.

Deals with the financial management and viability of a firm. It is aimed at ensuring that company failures do not endanger the stability of the financial markets or cause financial loss for the customers of that firm. The FSA sets the standards for the maintenance of capital resources proportionate to a firm’s risks. The provisions will shortly be incorporated into a single Prudential Sourcebook.

An abbreviation or set of letters used at Lloyd’s for the purpose of identifying syndicates or brokers.
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An abbreviation or combination of letters used in Lloyd’s practice to identify a broker or underwriting syndicate.