An annuity purchased under a contract approved by the IR or by an individual out of his own capital. They are taxed as investments the capital content is tax-free and the interest content is treated as unearned income. Exempted from these provisions are all annuities secured under approved pension schemes of any nature, including retirement annuities under the current legislation (ICTA88). These are taxed as earned income on the total of each instalment.

Fire insurance clause to protect the interest of the purchaser of property if, at the time of loss, the insured property is the subject of an uncompleted contract of sale. The policy covers the interests of the purchaser and vendor up to the completion. The clause refers to buildings only and only to the extent that the property is not otherwise insured by the purchaser.

A captive insurance company that confines its underwriting to the risks of its parent company.

Contracts that are a sub-category of long-term insurance contracts, e.g. critical illness and income protection, in respect of which: (a) the benefits are payable only on death or in respect of incapacity due to injury, sickness or infirmity; (b) the benefits are payable on death (other than accidental death) only where death occurs within 10 years of the date on which the person in question was first insured, or where death occurs before that person attains a specified age not exceeding 70 years; (c) the contract has no surrender value, or the consideration consists of a single premium and the surrender value does not exceed the premium; (d) the contract makes no provision for conversion or extension causing it not to comply with (a), (b) or (c); and (e) the contract is not one of reinsurance. These contracts are governed by the Insurance: Conduct of Business rules. Long-term care is regulated as an investment product and therefore excluded from the definition.

an insurer who carries on only reinsurance.

The figures relating to premiums, claims, etc., refer only to the particular year of account. Figures relating to business written in earlier years but transferred into that year are excluded.