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INSURANCE TERMINOLOGY

Gambling

Staking money on a chance.

Gambling Policies Act

Same as Marine Insurance (Gambling Policies) Act 1909.

Gaming

Playing a game of chance for money.

Gaming Act 1845

An Act providing that all contracts or agreements by way of gaming or wagering are void.

Gearing

The ratio of non-profit assurances to with-profits assurances in the portfolio of a life assurance company / The ratio of fixed interest capital, including prior charges, to the ordinary share capital of a company.

General agency system

The system of obtaining insurance business through general agents rather than through branch offices.

General agent

An agent with wide powers / An agent, often with an exclusive territory, employed by an insurance company to obtain business for it.

General average

The principle in maritime law that when a sacrifice is made or an expense voluntarily incurred to preserve the rest of a venture the loss or expense should be shared among all the interests involved in proportion to their value.

General average act

A sacrifice made or an expense incurred voluntarily to preserve a marine venture, e.g., jettisoning a part of the cargo.

General average adjustment

A statement of losses, values and proportionate contributions prepared by an average adjuster nominated by the shipowner for the purpose of adjusting a general average loss.

General average agreement

When a general average act (q.v.) occurs the carrier has a lien on the cargo to secure the consignee's contribution. To remove this the consignee must deposit money or provide an insurer's guarantee. Collaterally the consignee must execute a general average agreement (or average bond) undertaking to abide by the decision of the average adjuster and to accept liability for the general average contribution.

General average bond

Same as Average bond.

General average contribution

The payment due from a party in a marine venture to pay for a general average loss. It is in proportion to the value of his interest as compared with the total values of all interests in the venture.

General average deposit

A deposit which a shipowner requires of a cargo owner as a condition of releasing his lien on cargo that is subject to a general average contribution.

General average expenditure

Expenditure incurred by a shipowner in connection with a general average act (q.v.), e.g., the hire of a tug to pull a vessel off a strand.

General average fund

A fund collected jointly by a shipowner and his average adjuster consisting of general average deposits (q.v.) and available for the payment of general average expenditure and, eventually, of contributions.

General average guarantee

An insurer's guarantee that may be accepted by a shipowner in lieu of a general average deposit (q.v.).

General average sacrifice

The sacrifice of one of the interests in a marine venture made to preserve the other interests from a total loss.

General bond

A customs and excise bond covering all transactions during a specified period.

General business

By the Insurance Companies Act 1982, "general business" is defined as 17 classes of insurance in contrast to long-term business (q.v.).

General damages

Compensation at law, e.g., for pain and suffering, which cannot be quantified and proved specifically as can special damages (q.v.).

General expenses

The overhead expenses of an insurance company that have not been allocated to the account of any one class of the company's business.

General hazard

A feature tending to the inception or spread of fire found in most classes of risk, as opposed to a special hazard in a particular class.

Gentleman's agreement

An understanding, binding in honour only, that is not expressed in a formal document intended to have legal effect.

Geographical limits

Same as Territorial limits.

Gilt-edged security

A British Government security.

Glass insurance

The insurance of glass used commercially or domestically against breakage.

Global policy

Same as Blanket policy.

Gold franc

A unit of value formerly found in international conventions, consisting of 65.5 milligrammes of pure gold.

Golfer's insurance

Insurance of golf clubs with, often, the addition of personal accident benefits, third party liability, and a cash benefit to cover hospitality costs if the insured holes in one.

Good faith

See Utmost good faith.

Goods

By the Marine Insurance Act, 1906, First Schedule, Rule 17, "goods" means goods in the nature of merchandise, and does not include personal effects or provisions and stores for use on board.

Goods-in-transit insurance

The insurance of goods in transit domestically or internationally other than purely by sea. The insurance may cover either the goods or the carrier's liability for them.

Government bond

A guarantee given by a surety such as an insurance company to a government department in respect of the actions of a third party, referred to as the principal.

Graded schedule scheme

An insured pension scheme under which benefits are calculated according to earnings in each year of membership.

Grades of construction

A scheme of grading buildings for appraisal for fire insurance.

Graduation

The adjustment of crude data in a statistical table to produce smooth functions.

Grantee

One on whom legal rights are conferred.

Green card

A document evidencing the existence of third party motor insurance, issued to a motorist for use internationally.

Gross arrived damaged value

See Damaged value.

Gross earned premiums

Premiums received by or due to an insurer, without deduction of the cost of any reinsurance, but adjusted to take account of the difference between the unexpired risk reserves at the beginning and end respectively of the period concerned.

Gross fund

A fund not liable to tax on income or capital gains.

Gross line

The share of an insurance accepted by an underwriter before a deduction is made for any reinsurance by him.

Gross net premium

The gross premium for a marine insurance, before deduction of brokerage and discounts but less gross returns of premium.

Gross premium

The total premium before deduction of brokerage or discounts.

Gross proceeds

By the Marine Insurance Act, 1906, s.73, gross proceeds of the sale of goods or merchandise means the actual price obtained at a sale where all charges on sale are paid by the seller.

Gross system

A system of preparing accounts without offsettable items, specifically without allowing for the effects of reinsurance.

Gross value

By the Marine Insurance Act 1906, s.71, gross value means the wholesale price of goods or merchandise or, if there be no such price, the estimated value with, in either case, freight, landing charges, and duty paid beforehand.

Gross written premiums

Premiums received by or due to an insurer without deduction of the cost of any reinsurance or any adjustment for the fact that some of the income has to be reserved for unexpired risks.

Gross yield

The interest or dividend on an investment without deduction of tax payable on it.

Ground risks

The risk of damage to an aircraft while stationary on the ground.

Grounding

The running aground of a ship / The withdrawal of an aircraft from service.

Grounding risk

The risk under an aviation products liability insurance that the manufacturer will incur liability if aircraft are grounded pending investigation and rectification of an alleged defect.

Group

A number of insurance companies acting under a single control / A body of persons, such as the employees of a company or the members of an association. They may be insured either under a single master policy or under separate contracts. In some cases all members are insured. In others, members of the group have an option whether to insure or not.

Group insurance

The insurance of groups of persons, as distinct from individual insurance. See Group (2).

Group life assurance

Life assurance on groups of persons as distinct from individual life assurance. See Group (2).

Group underwriting

The centralisation of underwriting within a group of insurance companies, thus maximising the group's underwriting capacity.

Growth bond

Same as Capital bond.

Guarantee

A written undertaking given by one party to another to answer for the fulfilment of the obligations of a third party / A Facultative reinsurance.

Guarantee deposit

A deposit by way of security as a guarantee against obligations.

Guarantee fund

One-third of the margin of solvency prescribed for general insurance companies by the E.E.C., subject to a minimum that varies according to the classes of business transacted. A company that does not maintain its guarantee fund is required to submit a short-term financial scheme to redress its affairs.

Guaranteed annuity

A life annuity of any kind which has a proviso that it shall be paid for at least a stated number of years in any event.

Guaranteed annuity option

In respect of a life assurance or a pension scheme producing a benefit in the form of a lump sum the assurance company may offer the option to take an annuity of a guaranteed minimum amount.

Guaranteed bonus

Where a life assurer guarantees that a given rate of bonus will be added to the sum assured each year the assurance becomes in effect a without-profits assurance for an automatically increasing sum assured.

Guaranteed minimum pension

The minimum amount of pension that a vocational pension scheme must provide for periods during which a member is contracted out of the state scheme.

Guaranteeing office

In life reassurance, the reassurer.

Guarantor

One who gives a guarantee.

Hague-Visby Rules

A set of internationally agreed rules governing the rights and immunities of carriers of goods by sea. They are incorporated in the Carriage of Goods by Sea Act 1971 which came into effect on 23 June 1977.

Hailstorm insurance

Insurance against damage to crops or glass breakage caused by hailstorm.

Halving agreement

An agreement between two insurers to share equally the cost of claims made against one or both of them arising out of an occurrence, regardless of the liability of their respective insured.

Hamburg Rules

Proposed rules for the carriage of goods by sea which substantially eliminate shipowners' exemptions from liability for damage to cargo arising from, e.g., fault in management, fault in navigation, or fire.

Hancock annuity

An annuity purchased by an employer for the benefit of an ex-employee in respect of which, subject to the fulfilment of certain conditions, tax relief on the purchase price may be obtained by the employer.

Hangarkeeper's liability insurance

Insurance of the liability of a provider of accommodation for aircraft on the ground.

Harmonisation

A process that the E.E.C, seeks to apply to the laws of its member-states in some fields so that their respective laws, while not made uniform, have a broadly similar effect.

Hazard

A physical or moral feature that introduces or increases the possibility of a loss arising from a peril or that may influence the extent of a loss.

Health and Safety at Work, etc, Act 1974

An Act to enforce provisions for the health, safety and welfare of persons at work and for protecting members of the public against health and safety risks.

Health Insurance

See Permanent health insurance and Private health insurance.

Heave

Horizontal displacement upwards, as distinct from subsidence.

Hedging

Protecting oneself against a risk of loss in respect of a transaction by entering into a countervailing transaction, e.g., when buying an annuity effecting a life assurance to recoup all or part of the annuity purchase money on death.

Held covered

A risk is said to be held covered when an insurer agrees to insure it temporarily pending completion of insurance arrangements / A marine insurance policy may provide that some contingency which may or may not arise shall be held covered if it does arise, subject to notice and payment of an additional premium.

Hidden reserve

Under English law insurance companies have been allowed to hold reserves that do not appear in their published accounts which may, for example, show their investments at less than their true value.

Hold-harmless agreement

An agreement by one party to indemnify another against claims of a defined nature.

Hold-up cover

Cover for theft accompanied by violence or the threat of it.

Holloway society

A deposit society (q.v.) whose members' contributions increase progressively after age 30.

Home business

Insurance transacted with policy holders in the British Isles.

Home Foreign

Insurance from overseas effected in the U.K. market.

Home office

Head office (U.S.).

Home service insurance

Same as Industrial life assurance.

Home Trade insurance

Marine insurance within the U.K., and including trade with European ports between the Elbe and Brest.

Honeycomb slip

A slip with a honeycomb of boxes in which the syndicate numbers of insurers on the risk are inserted in the same order as they appear on the original slip. The slip is used when special agreements are added to the initial slip to ensure that none of the original underwriters has been omitted.

Honour policy

A policy that has no legal effect and is binding in honour only.

Honourable undertaking

Reinsurance treaties commonly contain a clause saying that the agreement is an honourable undertaking, the purpose of which is not to be defeated by a strict or narrow interpretation of the language used in the treaty.

Hospital and medical expenses insurance

Insurance against hospital and medical expenses. Used by persons not wishing to rely wholly on the national health service.

Hospital cash insurance

Insurance providing for payment of a cash sum during a period of treatment as a hospital in-patient, regardless of whether the patient is incurring expenses for treatment.

Hospital charges

The Road Traffic Act 1988 entitles a hospital to recover its charges (up to a specified amount) for treatment of a person injured in a road accident when a third party motor insurer has made a payment under its policy in respect of the injury. The maxima were increased in 1980.

Hotel Proprietors Act 1956

An Act setting out the strict liability of hotel proprietors for the property of guests up to s50 any one article or s100 in the aggregate.

Hours clause

A clause in an excess of loss property catastrophe reinsurance which specifies the number of hours after an accident or catastrophe during which losses must occur in order to be aggregated for the purpose of calculating a claim against the reinsurers.

House purchase assurance

Endowment assurance issued for the purpose of repaying a mortgage at the end of its term or on the death of the assured if this occurs meanwhile.

Household goods and personal effects

Furniture, clothing and the other customary contents of a private dwelling.

Householders' insurance

A package of insurances for private householders, including the insurance of contents against fire, theft and other perils and the liability of the householder as occupier.

Housekeeping

The care, cleanliness and maintenance of premises, including the systematic collection and disposal of waste.

Houseowners' insurance

A package of insurances for the owners of private dwellings, including the insurance of buildings against fire and other perils and the liability of the owner to third parties.

Housing Cost Index

An index of building costs prepared by the Royal Institution of Chartered Surveyors, used as a guide in determining replacement values of buildings for insurance purposes.

Hovercraft insurance

The insurance of air cushion vehicles in respect of damage to hull or liabilities. The insurance, though placed mainly in the aviation insurance market, is governed by the Marine Insurance Act 1906. Liability to passengers in the United Kingdom is governed by the Hovercraft (Civil Liability) Order 1971, made under the Hovercraft Act 1968.

Hull

A ship, boat, hovercraft or aircraft.

Hull insurance

Insurance on a ship, boat, hovercraft or aircraft, including its machinery and equipment. Marine hull insurance commonly includes indemnity for of collision liability.

Hull interest

An insurable interest connected with a ship exposed to maritime perils, e.g., the interest of shipowner, charterer or mortgagee.

Hull Paramount clauses

Clauses in a marine hull policy which override anything in the policy with which they are inconsistent. Notably, war risk exclusion.

Hull returns

Returns of premium allowed under a hull policy, notably when the vessel insured is laid up.

Hull syndicate

A marine insurance syndicate engaged primarily in hull insurance.

Hundred per cent treaty basis

A basis of rendering accounts to a number of treaty reinsurers by showing only the full amounts of premiums and claims etc, and not the proportion applicable to each reinsurer, the proportion being given solely for the net balance due to or from each reinsurer.

Hurricane

A wind of over 74 mph, especially a cyclonic wind in the Caribbean.

Hybrid policy

A policy which contains two different types of cover.

Hybrid scheme

A company pension scheme partly self-administered and partly managed by an insurance company.

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