Any goods supplied under contracts govern by the Act must conform to the implied terms stated in the Sale of Goods Act 1979. In addition any service provided must be carried out: (a) with reasonable skill and care; (b) for a reasonable price (unless a price has been agreed); (c) within a reasonable time (unless time is made of the essence, i.e. a date has been agreed at the time of making the contract).

The insurer (the surety) provides a bond to guarantee the fulfilment of the obligations of its client (the obligor) to a third party (the obligee) derived from a contract relating to goods, services and performance. See CONSTRUCTION BONDS; COURT BONDS; GOVERNMENT BONDS; FIDELITY GUARANTEE.

UK: 1. An accounting expression to describe the excess of income over expenditure of mutual companies rather than profit. 2. The amount ceded by way of reinsurance after the direct office has fixed its retention. 3. In life insurance, the difference between assets and liabilities as revealed at the annual valuation, out of which bonuses are paid to with profits policyholders. 4. Pension fund surplus. The retirement benefits of final salary scheme members may be enhanced as a result of a surplus in their fund. ICTA, s.603, obliges the trustees to eliminate any surplus above the calculated statutory surplus. The retirement benefits can be improved or the employer may be permitted a contribution holiday or given a refund subject to tax at a rate of 40 per cent.
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REINSURANCE: A form of pro rata reinsurance indemnifying the ceding insurer against loss to the extent of the surplus insurance liability ceded, on a share basis similar to quote share. Essentially, this can be viewed as a variable quote share contract wherein the reinsurer’s pro-rata share of insurance on individual risks will increase as the amount of insurance increases, given the same reinsurer’s retained line, in order that the primary insurer can limit its net exposure to one line, regardless of the amount of insurance written.
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MEDICAL, US:Dollar amount that shows an insurance company’s assets exceed its liabilities and capital.
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REINSURANCE: Reinsurance of amounts over a specified amount of insurance, premiums and losses being shared proportionately between insurer and reinsurer.
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US: The amount by which an insurer’s assets exceed its liabilities. It is the equivalent of “owners’ equity” in standard accounting terms. The ratio of an insurer’s premiums written to its surplus is one of the key measures of its solvency.
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The amount by which an insurer’s assets exceed its liabilities. Statutory surplus is an insurer’s or reinsurer’s capital as determined under statutory accounting rules. Surplus determines an insurer’s or reinsurer’s capacity to write business.
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The amount given off by way of Reinsurance after the direct Insurer has decided upon his retention. See Also: “Reinsurance, Surplus.”
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The assets of the insurer, minus the insurer’s liabilities.

for a life insurer, its actuarial surplus, being that part of the fund in excess of its liabilities to policyholders and shareholders; holders of with-profits policies expect, in accordance with the insurer’s duty of fairness, to receive a share in the surplus usually by allocation as a reversionary bonus added to the sum assured and payable with it.

in reinsurance, the amount by which the gross sum insured accepted by a ceding company exceeds the cedant’s own retention.

a form of reinsurance under which the cedant decides the limit of the liability which it wishes to retain on any risk or class of risk, this being its maximum retention; the surplus above the retention is allotted to reinsurers; the limit of the liability which may be ceded to the reinsurer is normally expressed in term of lines (that is multiples of the cedant’s retention).

Proportional treaty that allocates risk, losses and premium on a variable-percentage basis between the cedant and reinsurer. The cedant’s retention is a fixed monetary amount for each policy but the percentage reduces as the policy limit increases. Where the retention, called a line, is not exceeded, 100 per cent of the risk is retained by the cedant. The treaty capacity is expressed as a multiple of the cedant’s line; a retention of £3m plus a four line treaty (£12m) means that the cedant is able to accept up £15m without recourse to further reinsurance facultatively or by a second surplus treaty. See Figure 8.

UK: 1. The act of terminating an existing life insurance (whole life or endowment) and receiving the current surrender value in cash. 2. A pensions term to describe allocation (the giving up of part of a pension in return for a pension payable to the member’s spouse or dependants) or commutation.
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The giving up of an insurance policy by the insured to the insurer before the insurance has run its full course.
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To terminate or cancel a life insurance policy before the maturity date. In the case of a cash value policy, the policyholder may exercise one of the non-forfeiture options at the time of surrender.

UK: cash value of a whole of life or endowment assurance policy when discontinued.
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Surrender value is the amount payable to the policy holder on his surrendering his right under a policy and terminating the contract of insurance.
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UK: The cash due when a life insured terminates his policy before maturity. The existence of a reserve makes the payment possible but due allowance is made for expenses and the cover granted. Often there is no surrender value during the first two years.