Well-established US system under which insurance companies grant to independent contractors the right to effect all insurances and generally represent insurers in their areas or localities. The agents own the records and expirations of the policies issued through them.

***

Also known as the independent agency system, a system in which insurance is sold through independent agents.

***

The system of selling Insurance through Agents compensated on a commission basis. This is in contrast to the system of selling Insurance through salaried Company representatives who write Insurance for one Company only.

***

The system of selling insurance through agents who receive commissions in lieu of salary.

A classification society. It grants vessels their ‘class’ if the vessel meets the standards of construction, material and workmanship, and maintenance to be certificated as ‘seaworthy. ABS publishes the RECORD, an alphabetical register of vessels with detailed information on construction, dimensions, etc.

Liability insurers regard any US exposure as material and therefore all known exposures should be disclosed. The exposure may arise through: (a) having employees and/or representation in the US; (b) products exported to the US; (c) US business trips. The concern has its origin in: (i) strict liability in many states; (ii) jury awards; (iii) an established contingent fee system (lawyers work on a ‘no win, no fee’ basis); (iv) punitive damages awards; (v) liberal interpretations of policies; (vi) reluctance to take contributory negligence into account.

Marine policy forms and clauses that are the US equivalent of Institute Clauses. They are approved and issued by the American Institute of Marine Underwriters.

A New York-based association of marine underwriters. They discuss problems common to their business and operate many technical committees that produce marine forms and clauses.

A fund established in New York to hold all Lloyd’s dollar premiums, whether originating in the US or not, and from which dollar claims are met. The fund, managed for Lloyd’s underwriters by Citibank, makes Lloyd’s one of the largest customers of one of the world’s largest banks. Most of the fund is invested in US Treasury Bonds making Lloyd’s one of the largest private investors in the US government.