An arrangement that enables certain motor syndicates at Lloyd’s to deal directly with non-Lloyd’s brokers. However, the premiums payable have to be guaranteed by, and paid through, a Lloyd’s broker.

UK: an immediate insurer of a risk, as opposed to a reinsurer who insures derivative risks, that is the risks assumed by a direct insurer.
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UK: An insurer, as opposed to a reinsurer. The direct insurer provides the primary insurance for the business community or general public with or without the involvement of an intermediary. In the US particularly, the term is also used for an insurer dealing direct with their policyholder and not through brokers or agents.
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RAW: See: direct writer .

a friendly society which is subject to the provisions of the EC Insurance Directives, as implemented in UK law.

Amend Directive 73/239/ EEC (life undertakings) and 79/267/EEC (non-life undertakings) to strengthen solvency margin requirements. The new requirements (not applicable to mutuals, life or non-life, with less than €5 million annual contribution income): (a) allow Member States to establish more stringent solvency requirements; (b) increase the minimum guarantee fund, (to €3 million index-linked; (c) increase the threshold levels of premiums and claims below which a higher solvency margin is required; (d) allow earlier supervisory intervention; (e) increase the solvency margin for certain volatile categories of non-life business (marine, aviation and general liability) by 50 per cent; (f) allow a life company to include up to 50 per cent of its future profits for solvency until 31 December 2009 subject to supervisory approval; (g) the division of assets, for solvency purposes, into three categories those acceptable without limitation, those acceptable subject to limitations and those acceptable only with approval. The new measures start in 2004.

Companies Act 1985, s.741 states that director includes any person occupying the position of director by whatever name called’. A director is therefore anyone who ‘directs’ (identified by function rather than title). De jure directors are formally appointed and registered. De facto directors (constructive) are never formally appointed but act openly. Shadow directors do not act openly, they ‘lurk in the dark behind those who do’, being persons ‘in accordance with whose directions and instructions the directors of the company are accustomed to act’ (s.741(2)). Both executive and non-executive (i.e. outsiders) have the same general legal duties. The Higgs Report (2003) on corporate governance has introduced the concept of independent director, i.e. a non-executive director determined by the board as being independent in character and judgement and there are no circumstances (e.g. former employee) which could affect, or appear to affect, the director’s judgement. The Code on Corporate Governance also calls for the appointment of a senior independent director to liaise between the board and major shareholders.

Indemnifies directors and officers for loss arising from claims against them by reason of a wrongful act related to their duties. The indemnity is on annual aggregate limit basis inclusive of legal costs and expenses incurred in responding to any allegation against directors and officers. Defence costs related to certain criminal or regulatory charges are also covered. The policy does not cover fines, penalties or punitive damages or, unless extended, liability as pension trustees. The insurer indemnifies the company where it has reimbursed a director or officer in relation to an insured event. The policy is claimsmade, carries an excess and may be extended to cover employment practices liability. See ALLOCATION.

A director has extensive powers to bind the company but may be personally liable for a breach of duty. The duties embrace: compliance with the Companies Acts and the Articles of Association; exercise of reasonable care and skill; and a fiduciary duty to act in good faith. Directors principally owe their duties to the company but may also owe duties to creditors and the company’s employees in general. Certain sections of the Companies Acts and other legislation (e.g. Health and Safety) expose the director to criminal liability. Directors may also attract personal liability for fraudulent trading or wrongful trading or exceeding their authority. See DIRECTORS’ AND OFFICERS’ LIABILITY INSURANCE.

Insurance scheme set up by the Institute of Directors for its members for up to £1 million indemnity and £25,000 insolvency defence claims and other extensive cover.