Method of estimating the size of the pension fund needed to secure the benefits for occupational scheme members. Each year the employer pays a premium to secure the total expected benefits at normal retirement age for the oldest employees either individually or in age groups. The insurer and the employer agree the level of funding to cover a period of years. This funding is appropriate where funds are not ‘earmarked’, e.g. final salary schemes.

FSA definition of persons or entities owning 10 per cent or more of the shares in an authorised firm or parent company of such firm or is able to exercise significant influence over management through shareholding in such a firm or parent.

A director who owns (or controls) at least 20 per cent of a company’s voting power. In view of the influence such a person may have over his employer, special restrictions apply to a controlling director’s membership of the company’s pension scheme. The full details appear in Practice Notes (IR12) (1991).

The combining of traditional (re)insurance and the capital markets. Banks and insurers transfer risks to each other by securitisation and insuritisation. They have borrowed from each other as part of the broader process of convergence, a visible sign of which is bancassurance.

UK: 1. Tort committed by a person who keeps property belonging to another or who disposes of it wrongfully, e.g. selling another person’s car without authority. Conversion may occur deliberately or innocently. The Torts (Interference with Goods) Act 1977 extends conversion to include negligent loss of another’s property by a bailee. Insurance is available for motor traders who unwittingly sell stolen vehicles and solicitors (and others) who misdeliver documents (professional indemnity insurance). 2. In life insurance convertible term policies can be converted to either whole life or endowment policies without further evidence as to health. Whole life policies can be converted into endowment policies. Also, existing policies having a surrender value can be converted to paid-up policies for reduced sums with no further premiums payable.
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It is the wrongful disposition and detention of personal property belonging to another. Conversion usually results from the failure of a person who had legal possession of personal property to return it as agreed.
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MEDICAL,USA,REFERENCE: See: conversion plan and conversion privilege.

In the Lloyd’s market this means any currency other than sterling, US dollars and Canadian dollars. In the company market it means any currency other than the main currencies in which the business is transacted. Convertible currency is normally accounted for in sterling.

a term insurance policy containing an option to convert to a whole of life or life and endowment policy without further evidence of health.

A measure of how much the average of the daily high and low temperature is greater than a reference temperature (typically 18°C or 65°F). Cumulatively CDDs measure the intensity and duration of warmth and indicate how much ‘cooling’ is required by, say, UK energy companies suffering poor sales during warm weather. An average daily temperature of 23°C creates 5 CDDs towards the season’s aggregate. UK energy companies hedge against warm weather by purchasing call options indexed by CDDs. Each CDD has a notional value, the tick, and the payout occurs when the cumulative CDDs exceed the strike. See WINTER SEASON; HEATING DEGREE DAYS; COOLING SEASON; GROWING DEGREE DAYS.

1. Under the FSA’s Conduct of Business rule 6.7, it is the period allowed to a customer following his receipt of the statutory notice during which he may cancel his investment agreement. The period allowed in the case of life policies, pension contracts, appropriate personal pensions and other cancellable investment agreements varies between 14 and 30 days (www.fsa.gov.uk). 2. Periods of reflection are also allowed under the Consumer Protection (Distance Selling) Regulations, and this has implications for those selling insurance over the Internet and by other distance methods. 3. The cancellation rights of retail customers buying general insurance products are contained in Chapter 6 of the FSA’s Insurance: Conduct of Business Sourcebook. ICOB allows 30 days for pure protection contracts and 14 days for general insurance.
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A period during which one has agreed to enter into a transaction such as a health insurance agreement may withdraw without penalty.