Glossary

 

Beneficiary clause: Clause in a life insurance policy whereby the policyholder designate the person(s) who will be beneficiaries of the sums guaranteed on the death of the insured(s) (Beneficiary in case of death) or at the end of the term policy (Beneficiary in case of life).

Beneficiary: Person(s) designated by the policyholder who receives the benefits under the life insurance policy at the time of the insured event.

Bond: Units in borrowings /Debt securities issued by a company or a state.
Commissariat aux Assurances: It is the official Luxembourg supervisory body for the insurance and reinsurance sector.

Custodian bank: Bank mandated by the issuer of a fund to safeguard the securities of the fund and carry out transactions on behalf of the fund.

Death benefit: Sums guaranteed by the insurance policy in the event of the death of the insured.

Discretionary management: Type of management of a portfolio of assets or of a fund whereby the financial manager takes the investment decisions itself on behalf of its client, often in the context of a predefined investment profile.

External fund: An external fund is a collective investment undertaking established outside the insurance company and subject to an approval procedure and to continuous prudential oversight on the part of a state supervisory authority. (Example: UCITS, investment funds, etc.)

Freedom to Provide Services: European Directive granting all approved insurance companies established in a member state of the European Union (EU) the benefit of a European passport allowing it to exercise its activity in all the other EU countries without having to be physically established there.

Guaranteed fund (EURO Fund): guaranteed financial support offered by the insurance company and which may give rise to a possible profit-sharing.

High Net Worth Individuals (HNWI): term used by financial sector professionals to categorize people whose financial assets exceed USD 1 million. Ultra High Net Worth Individuals exceed USD 30 million in financial assets.

Insured: Person on whose life the risk of the insured event rests.

Internal collective fund (FIC): Limited set of assets of an insurance company, with or without a guaranteed return, open to a large number of subscribers.

Internal dedicated fund (FID): Internal fund with no guaranteed return and serving as the vehicle for a single policy.

Internal fund: Collective or dedicated segregated set of assets of an insurance undertaking, with or without a guaranteed return.

Life insurance /life assurance: Insurance contract guaranteeing the payment of a capital or an annuity in favour of the beneficiary(ies) at the time of the occurrence of the insured event.

Manager / Financial Manager: An entity duly approved by the competent controlling body of its country of residence, mandated by the insurance company to execute the management mandate of a fund, whether internal collective or internal dedicated.

NAV: Net asset value or price of a unit of account at a given time.

Policyholder or subscriber: Natural or legal person entering into commitments with the insurance company.

Share: Part of a company's capital in the form of a negotiable security.

Speciality Insurance Fund (FAS): Internal fund, other than dedicated fund that serves as a support for only one contract; in which the policyholder selects the underlying assets himself and under his sole responsibility.

Switch: (In the context of a unit-linked life insurance policy) Transactions consisting in buying units in one or more funds with the proceeds from the sale of units in one or more other funds.

Technical reserves: Sum of an insurance company's commitments to all policyholders.
Undertaking for Collective Investment in Transferable Securities (UCITS): Fund / Investment vehicle investing in transferable securities and allowing collective management.

Unit of account: Share of an investment fund. Its value increases or decreases according to market trends. In a unit-linked life insurance policy, the insurer guarantees the number of shares but not their value.

Unit-Linked contract: A contract whose underlying assets allow it to invest in a variety of underlying instruments and which risk is borne by the policyholder. Its value varies upwards and downwards according to financial market developments

Unlisted securities:  A share is said to be unlisted when it cannot be traded in a stock exchange. In this case, the unlisted company has not called upon the public for its savings.