The shipowner ordinarily carries the cost of hauling the vessel for maintenance, but the insurer pays when the ship is brought in for insurance repairs. Consequently when the shipowner arranges maintenance to coincide with insurance repairs, the haulage charge is ‘common’ to both causes and is therefore shared between the shipowner and the insurer.

Defined in the Hotel Proprietors Act 1956. Essentially an establishment open to ‘all and sundry’, which does not pick and choose its guests. Special responsibilities attach to its proprietor including strict liability in respect of the property of guests who have booked sleeping accommodation. However, innkeepers who have displayed a statutory notice in pursuance of the Act benefit from limited liability.

Refers to the investment of two or more pension schemes being managed by a single employer or a group of associated employers. It does not create a pooled fund.

The law that has been founded upon immemorial usage, established custom and legal precedents as distinct from statute law. Broadening down from precedent to precedent has developed the common law.
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Common Law comprises the body of principles and rules of action, relating to the government and security of persons and property, which derive their authority solely from usage and customs of immemorial antiquity, or from the judgments and decrees of the courts. It is outside the laws created by enactment of Statutes.

Feature: (a) pooling of all assets in a central fund, (b) payment of benefits from the central funds, and (c) trustees having wide powers of investment. The scheme may be insured so the funds are held centrally in insurance policies only. Alternatively, the fund is self-administered as in the case of small self-administered schemes where the funds are held centrally in investments such as commercial property, shares and cash deposits. Large schemes, i.e. those with 12 or more members, can also be self-administered.

An insurance company whose head office is within a member state of the European Community.

UK: 1. Occurs when an individual, on reaching retirement, exchanges a part of his pension for a tax-free lump sum. In approved final salary schemes the maximum tax-free lump sum permitted is 1.5 times (based on 3/80ths for each year of service) final salary. For approved defined contribution schemes it is 25 per cent of the accumulated pension fund.
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UK: in relation to reinsurance, the termination by mutual agreement of all past, present and future liabilities between the parties to a reinsurance contract, in consideration of a final, usually cash, settlement. May also apply, less commonly, to an insurance contract.
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Payment to discharge an actual or potential liability to make payments in the future.
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MEDICAL,USA,REFERENCE: See: financial settlement.
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The termination of all obligations between the parties to a reinsurance agreement, normally accompanied by a final cash settlement. Commutation may be required by the reinsurance agreement or may be effected by mutual agreement.
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US: Usually refers to the cancellation or dissolution of a reinsurance contract in which there are profits or losses to be allocated.

The rate of exchange that determines the amount of pension that needs to be sacrificed to provide a given lump sum benefit at retirement. The commutation factor indicates how much cash is available for each £1 of pension exchanged. Scheme rules specify the commutation factor that will apply either to all members or specifically to individuals. The commutation factor is a ratio, e.g. 12:1 mean a pension of £883 per annum can be exchanged for a lump sum of £10,000.

A single market agreement used in the non-marine market. The agreement authorises the leading CCSA company to sign a collective policy on behalf of all other CCSA companies on risk. The agreement indemnifies the signatory company respect of any liability that attaches that would not have attached had the policy been individually signed by all compain nies.

Enables a court to make a disqualification order against a director convicted of an indictable offence connected with promotion, formation, management or liquidation.