Insurance policy that secures the protected rights of an active or deferred pensioner on the winding up of a contracted out money purchase scheme.

The UK Treasury order under an FSMA s.404 scheme following an FSA ‘report and review’ proposal on the alleged widespread or regular failure by authorised persons to comply with rules relating to a particular kind of activity (e.g. mis-selling of pension schemes).

An s.53 scheme (PSA93, s.53) is an occupational pension scheme that used to be contracted out and still has a guaranteed minimum pension scheme or protected rights. An s.590 scheme (ICTA88, s.590) is an occupational scheme that gets mandatory approval. An s.608 scheme is an occupational scheme approved before 6 April 1980 but not approved under the new code. Consequently no contributions have been made since 1980.

A means by which selfliquidating financial assets such as loans and mortgages are packaged by a business as bonds and sold through a special purpose vehicle to capital market investors. The business continues to service the securitised assets although the credit risk has been transferred to investors whose concern is the creditworthiness of the assets not the business which granted the loans. See SECURITISATION OF INSURANCE RISK.

Transfer of insured risks from the insurance market to the capital market through a special purpose vehicle. The SPV sells bonds on the proviso that it can default on interest and/or capital repayments if the insured risk, e.g. a hurricane, occurs. The retained amounts fund the losses of the (re)insurer. Securitisation has provided alternative sources of capital when reinsurance capacity has been in short supply. See CATASTROPHE BONDS; INSURITISATION.

Part of the pension scheme’s assets managed by an external investment manager. These investments are separated from the remaining assets controlled by the fund’s investment manager. The segregated fund often indicates an individual portfolio of stocks and shares as opposed to a pooled fund.

Exclusions in the Institute Cargo Clauses and International Hull Clauses warrant the policy free of capture, seizure, etc. Seizure means ‘every act of taking forcible possession, either by lawful authority or by overpowering force’. None of these elements were present when Dominican Republic customs officials stole cars due for transshipment (Bayview Motors Ltd v. Mitsui Fire & Marine Insurance Co. Ltd (2002), 1 Lloyd’s Rep 652).

A mortality table based on selected lives only and not the general population, e.g. lives accepted for insurance.

This occurs when rates of mortality are differentiated by age and duration. Most mortality tables used in life insurance have two or three periods of select mortality.

Life insurance practice of categorising lives as standard, substandard or declined. The object is to guard against anti-selection, as the substandard lives have the greatest incentive to insure, disturbing the mortality balance. Standard lives attract normal terms while sub-standard (i.e. impaired) lives are rated according to their impairment.