Assets comprising the fourth link in the Lloyd’s chain of security. On 31 December 2002 they amounted to £563m (the central fund of £467m plus other Society assets of £87m). They are the central assets of Lloyd’s less the liabilities of the Society (less the liabilities of the members) valued in accordance with the Lloyd’s Sourcebook (LLD 9-15). For margin of solvency purposes they must cover, in the aggregate: members’ defined deficiencies on general and long-term business, the Society’s required minimum margin and the excess (if any) of €3,000,000 (when converted at a designated rate to sterling) over the sum of members’ margins for long-term business and the amount of any increase in the Society margin invoked under the relevant rule. If net central assets fall below the required amount, the Society must inform the FSA.

This is usually taken as gross premium income less premium returns and rebates, reinsurance premiums, and often production costs, brokers’/ agents’ commission, etc.

The income that can be used to assess the maximum contribution that can be made to a personal pension scheme by the self-employed or employees in non-pensionable employment. In the case of the self-employed this is income (tax schedule D) less business expenses. For the employed it is income (tax Schedule E) including profit-related pay and taxable benefits.

Allows the reinsured to effect other reinsurances in priority so that the treaty itself protects only the net account, e.g. the treaty comes into play after proportional or facultative cessions. The insolvency of other reinsurers clause is embedded within this clause.

UK: The amount retained by the reinsured for its own account after coinsurance, proportional or acultative reinsurance have been taken into account. See NET RETAINED LINES CLAUSE.
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The final amount of insurance retained by the Company after reinsuring such amounts as it did not wish to retain.
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The insurance a ceding company keeps and does not reinsure.

The remaining residual risk after the intrinsic hazards of the business or organisation have been reduced in terms of nature, scale and probability of occurrence by the precautions taken by the insured. Ascertaining the net risk is a part of risk assessment.