Where a managing agent reduces the underwriting capacity of a syndicate, for example when it expects to write less business in future. The participations of the members of the syndicate are reduced proportionately.

The amount that is deducted from some or all claims arising under an insurance or reinsurance contract. The practical effect is the same as an excess: the insured or reassured must bear a proportion of the relevant loss. If that loss is less than the amount of  deductible/excess then the insured or reassured must bear all of the loss (unless there is other insurance in place to cover the deductible).

An increase in deductible should result in a reduction in premium.

A corporate member that only participates on one or more syndicates that are managed by the same managing agent or group of managing agents. The term is often used interchangeably with the expression aligned member.

The refusal of an insurer or reinsurer to offer terms of cover.

A company or partnership authorised by a managing agent to enter into a contract or contracts of insurance to be underwritten by the members of a syndicate managed by it, in accordance with the terms of a binding authority.

A document issued by a broker pending the issue of a policy which confirms the arrangement of cover for the named insured/reassured.

Motor insurance cover notes that are issued in the United Kingdom (which incorporate a certificate of insurance) are usually of short duration.

Insurance or reinsurance as it applies to one or more specific risk exposures.

A syndicate with a single corporate member as its only member.

A member of the Society which is a body corporate (including for the avoidance of doubt limited liability partnerships) or a Scottish limited partnership.

A members’ agent who is appointed by a member who has more than one member’s agent to co-ordinate the administration of the member’s affairs

A scheme sponsored by a members’ agent which allows an individual member to switch from underwriting on an unlimited liability basis to underwriting on a limited liability basis.

Refers to the situation where the terms of an insurance or reinsurance contract are agreed before the inception date of the contract rather than being negotiated afterwards.

Section 60 of the Marine Insurance Act 1906 states that, subject to any policy provision, a constructive total loss arises where the subject matter of an insurance is reasonably abandoned to the insurer by the insured on account of its actual total loss appearing unavoidable or because it could not be preserved from actual total loss without an expenditure that would exceed its value.

The term is sometimes used to refer to insured property, e.g. a car, which is damaged beyond economic repair.

An agreement between a group of two or more insurers according to which each member of the group agrees to accept a proportion of all risks of a specified type that are underwritten by one or more designated members of the group which act as leading underwriters.. Unlike a line slip there is usually no restriction on which companies brokers may place business with a consortium.

The termination of a reinsurance contract by agreement of the parties on the basis of one or more lump sum payments by the reinsurer which extinguish its liability under the contract. The payment made by the reinsurer commonly relates to incurred losses under the contract.

Insurance which is sold to firms. This term is used in contrast to personal lines.

A biannual procedure currently undertaken in June and November each year which requires members to  demonstrate that they have sufficient eligible assets to meet their current underwriting liabilities and to support future underwriting before they may underwrite for the next following year of account.

The claims and expenses of an insurer/reinsurer for a given period divided by its premium for the same period. It is normally expressed as a percentage with any figure in excess of 100% signifying a technical underwriting loss.

This may refer to either of the following situations:

(a) Where two or more insurers underwrite the same risk with several liability such that each insurer is not bound to follow the decisions of any co-insurer unless it has agreed to do so.

(b) Where the insured acts as its own insurer for a specified proportion of the sum insured.

A year of account that has been closed into another year of account by means of a reinsurance to close contract. Historically most companuies syndicates have operated a three year underwriting account according to which the profit or loss of an underwriting account is determined by the managing agent 36 months after the beginning of that account which is always the start of a calendar year. According to this system the normal closure date of the 2000 year of account (which commenced on 1 January 2000) was 31 December 2003 with the calculation of the reinsurance to close as at that date being finalised in or about February/March 2004.