- Tap (E)
-
Where the Bank of England gradually sells more of a new issue of gilts (ie
if not all of a new issue was sold initially).
- Taplet (E)
-
A small new tranche of an existing gilt.
- Tax (A/D)
-
A payment payable to the Inland Revenue in relation to earnings,
investment income, investment gains, business profits or transfer of
capital.
- Technical Analysis (E)
-
Estimation of future share prices based on the use of past share prices
and/or trading volumes. Chartism is a form of technical analysis.
- Technical Reserves (G)
-
The reserves held by an insurance company in respect of outstanding
claims and unexpired risks. Catastrophe reserves and claims equalisation
reserves are also called technical reserves.
- Temporary Assurance (F)
-
An alternative name for term assurance.
- Term Annuity (A/D)
-
An annuity under which payments are limited to a specified period.
- Term Assurance (A/D)
-
An assurance under which cover is limited to a specified period.
- Term Assurance (F)
-
This is a type of life assurance contract, under which the life insurance
company only pays a benefit if the policyholder dies within a certain
period. If he or she survives until the end of the contract, the company
pays nothing. Could be written on one life, joint lives (first or second
death) or (rarely) more complex arrangements.
Normally term assurance is a non-profit contract which never acquires a
surrender value. There are some unitised contracts which offer high levels
of protection and may acquire a small surrender value. Normally, however,
these are written as whole life policies and are therefore not true term
assurances.
Non-profit term assurance may have options attached (renewable at end of
term, increasable, convertible) although term assurance with options became
much less common when AIDS became known as a risk.
- Term Deposit (A)
-
An investment medium that pays an agreed rate of interest on cash
deposits, provided the funds are invested for a specified number of days.
- Term Structure of Interest
Rates (E)
-
The relationship between yields on gilts and term to maturity (ie the
yield curve).
- Term (A/D)
-
The period of time since the start of a financial contract or the stated
"lifetime" of a contract or investment.
- Term (Temporary) Assurance (N)
-
Benefit is payable only on death of the life assured before a
predetermined date. Not available on with profits basis.
- Terminal Funding (H)
-
An arrangement whereby a payment to meet the present value of a benefit
is made only at or about the time when the benefit is due to commence.
- Third Party Total Loss Only (G)
-
An insurance policy which pays out on total loss only. Partial losses may
be covered by other policies.
- Third Party (A/D)
-
In general insurance, the insurer and the Insured
are the first and second parties (to the insurance contract). Anyone else (eg
the driver of another vehicle) is a third party.
- 365ths Method (G)
-
A basis for estimating unearned premium reserve, based on the assumption
that the risk is spread evenly over the 365 days of a year of cover. For
example, where a policy was written 100 days ago, 265 365ths of the premium
is taken as being unearned.
- Three Year Accounts (G)
-
The accounting basis which groups premiums and claims on the basis of
business written in a given underwriting year. The accounts for a given
underwriting year are kept open until the end of the third year at least (eg
the account for business written in 1993 will be closed at the end of 1995
or later). Three year accounting is used within Lloyd's and it is especially
suitable for long tail classes.
- Tick (E)
-
The size of the minimum movement in a quoted price (eg 1132nd for gilts).
- Tickler Clause (E)
-
A clause within a trust deed for a debenture which prevents the borrowing
company from fundamentally changing the nature of the assets charged.
- Time and Distance Reinsurance
(G)
-
A type of financial reinsurance whereby an insurer pays a single premium
in return for a fixed schedule of future payments matched to estimated dates
and amounts of the insurer's claim outgo. It is used in the London Market,
but largely by Lloyd's syndicates to achieve a similar effect to
discounting, which is not permitted under Lloyd's Bye-Laws.
- Time Value (E)
-
The excess of an option's value (or a security with an option feature)
over its intrinsic value. Also known as "option value".
- Time Weighted Rate of Return (A)
-
The rate of return achieved by an investment fund, weighted by time and
not by the amount of funds invested.
- Touch Price (E)
-
The narrowest spread amongst the market makers between buying and selling
prices. A narrow touch price indicates good marketability.
- Transaction Statistic (G)
-
A rate of change in total policy numbers, for example, lapse rate, new
business rate, cancellation rate.
- Transfer Club (H)
-
A group of occupational pensions schemes that have agreed a common
treatment of and calculation method for transfer values.
Common amongst public sector schemes.
- Transfer Value (H)
-
The amount of the transfer payment, usually based on actuarial advice,
which the trustees are prepared to make to another pension scheme or an
insurance company.
- Travel Insurance (A/D)
-
Travel insurance provides protection to holidaymakers and business
travellers against unexpected costs eg flight delays and cancellations, lost
luggage and overseas medical bills.
- Treasury Bill (E)
-
A bill issued by the British Government. Usually issued with terms of 91
or 182 days.
- Treasury Bills (A)
-
Short dated loans to the British Government, issued with terms of either
3 months or 6 months. Lenders (ie buyers of the bills) can trade (ie sell)
their holdings.
- Treaty Reinsurance (G)
-
Reinsurance that a reinsurer is obliged to accept, subject to conditions
set out in a treaty, agreed with the ceding office, relating to specific
types of risk. The ceding office may also agree under the treaty to cede all
such risks.
- Treaty (F)
-
In the context of reinsurance, a treaty is an agreement between the
ceding company and the reinsuring company. The ceding company usually agrees
to cede all business that comes within the treaty with the reinsuring
company and the latter agrees to accept it.
Some of the items covered in reinsurance treaties include:
- Form of agreement (eg facultative/obligatory)
- Policies to be covered
- Automatic cover to be provided
- Arrangements for contracts over automatic limit
- Basis and terms of reinsurance ...
- ... premium rates and return commission especially
- Accounting procedures (when will premiums/claims be paid)
- Administration procedures
- Arbitration procedure, should the two sides fall out
The fac/oblig choice may not be the same for both of the direct writer
and the reinsurer. This gives rise to three common arrangements, fac/fac,
fac/oblig and oblig/oblig.
- True Monthly Premium (A/D)
-
True monthly premiums cease immediately on the death of the policyholder.
See also:Instalment
Premiums.
- Trust Deed and Rules (A/D)
-
The legal document that sets out how a company pension scheme should
operate, and the benefits it will provide.
- Twenty-fourths Method (G)
-
A basis for estimating unearned premium reserve, based on the assumption
that annual policies are written evenly over each month and risk is spread
evenly over the year. For example, policies written in the first month of
the year are assumed to contribute 1/24th of the month's written premium to
the unearned premium reserve at the end of the year.
