The influence that an approved person has over any of the controlled functions (1 to 20 in the FSA’s table of controlled functions). Persons with significant influence must: (a) take reasonable steps to ensure that the firm’s regulated business is so organised that it can be controlled effectively; (b) exercise due skill, care and diligence in managing that business; and (c) take reasonable steps to ensure that the business complies with relevant regulatory requirements. (Visit www.fsa.gov.uk).
Tag: UK
Signing down
UK: See: SHORT CLOSING.
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The process of reducing. Pro-rata, the proportion of risk that each co-insurer has accepted for a given risk where the slip has been more than 100% subscribed.
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Where a risk is oversubscribed, which is to say that the underwriters’ written lines exceed 100% then, absent some contrary instruction, those lines will be proportionally reduced (‘signed down’) by the broker until they total 100%. An underwriter may insist on preserving his written line in which event the written lines of the other underwriters will be proportionally reduced until they total 100% when added to the preserved written line of the other underwriter.
Silent risk
A risk or insurance in respect of premises where no activities are currently undertaken and no machinery used.
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Premises in which no trade is carried on or no machinery is worked for manufacturing purposes.
Simple reversionary bonus
A bonus added to a with profit life insurance policy expressed as a percentage of the sum insured only. Bonuses once declared are guaranteed and are paid with the sum insured at death or maturity.
Simplified defined contribution scheme (SDCS]
Money purchase scheme with additional limitations, e.g. lump sum not to exceed twice final remuneration. IR no longer considers applications for SDCSS but existing schemes continue.
Simultaneous payments clause
A reinsurance clause binding the reinsurer to pay a claim simultaneously with the direct insurer’s payment to the original insured.
Single article limit
A limit the maximum an insurer will pay in respect of any one article which has been insured under a general description, e.g. personal possessions/belongings. A collective sum insured may not fully reflect the aggregate of the values at risk. The single article limit encourages the insured to insure high value items separately for appropriate amounts.
Single European Licence
See: SINGLE INSURANCE MARKET.
Single insurance market
Market allowing EC insurers to set up establishment business, e.g. branches, in any other state without being subject to host state restrictions. Also an insurer authorised in its home state can engage in service business by selling freely across national frontiers. The EC has published three generations of Insurance Directives. The effect is to make EC insurers subject to home country control creating an authorisation known as the ‘Single European Licence’.
Single liability
When two ships collide, the shipowner with the greater share of the blame pays the other the difference between their respective liabilities; according to maritime law there are not two liabilities. However, marine hull policies provide that claims shall be settled on the basis of cross liabilities.