A policy that contributes to a loss only when the loss exceeds the sum payable by a more specific insurance. See AVERAGE/TWO CONDITIONS OF AVERAGE.
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Insurance that covers only a loss in excess of that covered by a first loss insurance.

A supplementary treaty to a first surplus treaty. Cessions may only be made to the second surplus after the capacity of the first treaty has been satisfied.

Exposure to risk indirectly through association with a person more directly exposed. Mrs Gunn died of mesothelioma caused by inhaling asbestos dust from her husband’s working clothes (Gunn v. Wallsend Slipway & Engineering Co. Ltd (1989)).

A commission taken by an agent without the consent of his principal. It is a breach of good faith and the agent forfeits his rights against the principal. An employee who secretly accepts a commission on his employer’s insurance commits a crime (Prevention of Corruption Act 1906).

An insurance policy, taking its name from the Finance Act 1981, s32, into which pension scheme leavers may transfer their preserved benefits.

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.