Pension under which an insurance company manages the assets of the plan. The fund managers have to be FSA authorised. This authorisation also applies to private managed funds but not selfinvested personal pensions or small self-administered schemes where the investment decisions are the responsibility of the member.

Pension scheme under which the pensions and other benefits are secured solely by insurance policies or annuity contracts managed by the insurance company. Compare with managed fund policy.

An extended warranty where the cover is supplied by an authorised insurer and therefore subject to FSA regulation. Service-backed warranties provide repair cover that is not insurance backed. When issued on domestic electrical goods the retailers concerned may be exempt from FSA authorisation and regulation takes the form of a code of conduct (e.g. British Retail Consortium Code of Practice). Motor EWs are regulated by the FSA.

Clause in liability policies to the effect that in the event of the insured’s death the insurer will continue the cover in favour of the deceased’s personal representatives subject to compliance by them with the terms of the policy. See PERSONAL REPRESENTATIVE.

Insurers who, under the Motor Insurers’ Bureau’s Unisured Drivers Agreement, settle a third party claim because at the time of the accident a policy, albeit invalid, issued by them was in force in respect of the defendant. The payment is made notwithstanding that the defendant, by reason of breach of policy, had no valid right to indemnity under the policy. As insurer concerned they have a right of recovery against the uninsured motorist himself.

Material damage insurers reserve the right to provide the indemnity by monetary payment, repair, reinstatement or replacement. In the absence of an option the insured could demand a cash payment. The insurer loses the option if he fails to exercise his alternative rights in a reasonable period of time. An insurer who has indicated his preference may be estopped from choosing an alternative course.

The transfer of financial risk from the capital to the insurance market. A bank securitises a portfolio of corporate bonds or loans known as collateralised debt obligations or through a portfolio of credit default swaps. A special purpose vehicle buys the CDOs and passes them through to (re)insurers who are significant investors in subordinated debt based on relatively homogenous assets such as residential mortgage loans, credit card receivables or car loans. Other examples: residual value insurance, revenue guarantee products and other customised financial products. Other risks transferred to the insurance market have included project finance and royalty streams embracing film, franchises, drugs and music. The insurer forfeits repayment of interest and/or capital if there is default on the loans.

A revolt against civil authority or established government. It has been defined as a ‘rising of the people in open resistance against established authority with the object of supplanting it’.
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A rising of people against established authority with the object of supplanting it.

Holding company owning/controlling both a managing agent and also a corporate member as a supplier of capacity to the managing agent’s syndicate(s). Lloyd’s regulations prevent the two companies combining into one. An ILV providing 100 per cent of the capacity is virtually an insurance company operating at Lloyd’s. ILVS can acquire capacity by way of (a) capacity auctions; (b) acquisition of a fellow corporate member; (c) direct offers to other members. Much of the new capital has come from insurance and reinsurance companies, and institutional and other investors, based principally in Bermuda, the US and the UK. ILVS are relatively low-cost insurance operations. The Chairman’s Strategy Group recommended that all managing agents and syndicates should become ILVs.
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A company which owns a corporate member of a syndicate and the managing agent of that syndicate.

The IPC regime, under Part 1 of the Environmental Protection Act 1990, applies an integrated approach to the environmental regulation of certain industrial activities. Emissions to air, water and land must be considered together. The IPC regime has regulated polluting processes by issuing (or refusing) permits that are shortly being phased into the new Integrated Pollution and Control Regime. (Visit www.environment-agency.gov.uk).