A method of transferring capacity from one Lloyd’s member to another. Syndicate participants in one year have the right to remain in that syndicate in the following year or transfer their capacity to other members by auction. The auctions have particularly helped integrated Lloyd’s vehicles to increase their capacity. Sellers of capacity are called tenderers, buyers are called subscribers. The auctions are governed by Auction Byelaw (14/97). See CAPACITY TRANSFER MARKET.

Primary insurers boost their ability to accept larger or more risks, by availing themselves of reinsurance facilities.

Market for the transfer of syndicate capacity at Lloyd’s. The transfer is usually from names to aligned corporate members through capacity auctions or bilateral agreements (byelaw 8/98). See MANDATORY OFFERS.

The part of Lloyd’s created by the Franchise Board that administers the capacity transfer market. It is concerned with capacity auctions and, in particular, mandatory offers and minority buyouts. CTP has three independent members – a nominated member of the Council as chairman, a lawyer and a financial expert. They also have a Lloyd’s Members’ Association nominee and one nominee from the third party capital providers; both can be changed on a case-by-case basis.

A property insurance clause providing automatic cover for buildings and contents acquired during the period of insurance up to the lesser of 10 per cent of the sum insured or £500,000 provided they are not otherwise insured. The insured is required to give particulars of additions and to arrange specific insurance retrospectively.
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A provision in a Standard Fire and Allied Perils Policy to cover new buildings or machinery added by the insured during the period of insurance.

Term denoting the amount payable on death under life policies, less the mathematical reserves in respect of the relevant contracts. The term is used in connection with life solvency margins.

The single payment of a lump sum as opposed to smaller regular payments (as with temporary disablement). Personal accident policies pay lump sums for death, dismemberment, loss of sight.

An annuity term referring to that part of an annuity payment that is paid tax-free to the annuitant. It is treated as a return of capital while the balance of the payment is taxed at the annuitant’s marginal income tax rate.

A market where debt and equity are traded. By selling securitised bonds (re)insurers transfer insurance risk to the capital market. See CATASTROPHE BONDS; SECURITISATION.