Purchased life annuities to fund the care of the elderly entering residential or nursing homes at a time of need. The annuity takes the form of tax-free payments to the care provider as it is a part of their taxable income. Immediate care annuities are ‘designated investments’ and therefore subject to the FSA’s Conduct of Business Rules. The annuities may be linked to the Retail Price Index.

This means the proximate cause, i.e. the nearest cause in efficiency and not the nearest in time. Bacon summarised this by saying, ‘it were infinite for the law to consider the cause of causes, and their impulsions one of another, therefore, it contenteth itself with the immediate cause, and judgeth of acts by that, without looking to any further degree.

Has been held to mean ‘with all reasonable speed considering the circumstances of the case’ (Re Coleman’s Depositories Ltd and Life and Health Assurance Association (1907). In Farrell v. Federated Employers Insurance Association Ltd (1970) a writ served on 7 January 1966 was not given to the insurer until 3 March 1966. Lord Denning MR said that ‘with all reasonable speed would mean by the end of January at the latest’. Insurers often require notification of a claim immediately and, under liability policies, require the insured to forward every writ, notice, letter or other document served on him immediately on receipt.

Goods in transit clause requiring vehicles to be fitted with an approved anti-theft device that is put into effective operation when the vehicle is left unattended. The particular wording of the clause is important. See ALARM SYSTEM IN OPERATION.

Cost-saving agreement that operates when a motor vehicle collides with immobile property (e.g. buildings and fences) that may be insured against impact damage. The terms of the agreement vary between insurers but normally the motor insurer pays 75 per cent of the damage to immobile property regardless of actual liability.

1. Engineering insurance term insuring ‘damage by physical impact to surrounding plant or property belonging to the insured or held in trust by the insured or on commission or for which the insured is responsible resulting from fragmentation of any part of any insured item of plant. The cover can be applied to: boilers and pressure plant; cranes and other lifting machines; lifts and hoists; and electrical and mechanical plant. 2. An additional peril included in a ‘named peril’ household policy. It covers impact damage caused by vehicles or aircraft or anything dropped therefrom. Damage caused by falling trees and branches is also covered. 3. Impact cover is also added to named perils commercial property insurance and covers the risk of third party (and sometimes own) vehicles and animal damage to the insured property.

A US term describing the financial position of an insurer whose net current assets are less than its fully paid-up shares.
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When liabilities and claims consume an Insurance Company’s Surplus the capital is impaired. Suspension of the right to do business normally follows.

An enhanced annuity granted to a person with a shortened life expectancy. Serious health conditions, e.g. cancer, heart disease, as well as some lifestyle habits may bring annuitants into this category.

Persons with health conditions that limit their life expectancy. They cannot secure life insurance on normal terms but get better annuity rates.
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Persons who suffer from some condition that may shorten their life.

Contractual terms that by law are tacitly binding and do not have to appear in the contract. Conditions can be implied by statute (e.g. Sale of Goods Act 1979). The following conditions are implied in insurance contracts: (a) that the subject matter of insurance is in existence at the date of effecting the policy; (b) that the insured has an insurable interest; (c) that the parties observe utmost good faith towards each other at all material times and in all material particulars; and (d) that the subject matter of insurance is so described as to clearly identify it and define the risk undertaken by the insurers.