The total of degree days occurring over the period of a weather derivative. The cumulative figure is multiplied by the amount of the tick to give the payout for the period, subject to the strike being breached but not exceeding any cap.

An accrued benefits valuation method in which the actuarial liability is based on earnings at the valuation date. The standard contribution rate is that necessary to cover the cost of benefits that will accrue in the control period following the valuation date by reference to earnings projected to the end of that period and non-discretionary revaluation thereafter.

a method of claims reserving that uses the deterioration that has already occurred in business written in the year in question to forecast how it will continue, by fitting a standard type of curve to the pattern of deterioration to date, and using the fitted curve to predict the final loss (contrast with chain ladder, which uses the experience of older years to predict what will happen to newer years).

Public liability policy exclusion, of property in the care, custody or control of the insured. The property concerned is ‘bailment’ property insurable by the bailor under a first party insurances or by bailees’ modified liability policies, e.g. hotel proprietors. In any event the general exclusion is overridden in respect of: (a) the effects of directors, employees and visitors, including their vehicles and contents; (b) premises (including contents) temporarily occupied by the insured for work purposes; (c) leased or rented premises; (d) third party property at premises, etc., other than the insured’s premises. See OWN PROPERTY EXCLUSION.

FSA controlled functions covering: investment adviser; trainee investment adviser; corporate finance; pensions transfer; Lloyd’s adviser; customer trading; and investment management.

The FSA classifies customers as either retail or commercial customers. The former is defined as a policyholder or potential policyholder acting outside their trade, business or profession. The latter is someone who is not a retail customer. All businesses are commercial customers regardless of size. For the purpose of the rule on complaints the FSA uses the definition eligible complainants. This includes private individuals; commercial customers with a turnover below £1 million.; a charity with an annul income below £1 million; a trustee of a trust with a net asset value of less than £1 million.

An extension to a business interruption insurance that protects the insured against loss due to reduction in turnover after damage by an insured peril at a customer’s premises. The cover is expressed as a percentage of the gross profit based on the significance of the customer concerned.

Bonds are required by HM Customs and Excise to secure indemnities against loss through fraudulent or improper dealing with dutiable goods. The principal bonds include: 1. VAT/Duty Deferment Bond. Required from companies who import goods into the UK that are subject to VAT. The bond enables the company to defer payment of VAT or duty to the 15th day of the following month. 2. Warehouse bonds. Dutiable goods are held in bonded warehouses before they are required for sale and, provided they remain in the warehouse, duty is notpayable. When they leave the warehouse duty becomes payable and the bond secures HMCE against loss due to default.