Made good

The value of that part of a ship or cargo that is sacrificed in a general average (q.v.) is called the "made good". The owner is entitled to the cost of repairs to the ship or the net value of the cargo sacrificed.

Maintenance bond

A bond providing indemnity if work completed under contract is not of the required standard or does not function satisfactorily for a specified period.

Major medical expenses insurance

Insurance for payment of a specified sum when certain defined medical operations are carried out.

Malicious damage

Deliberate damage by individuals in circumstances that do not constitute a riot.


Pretending to be disabled from work when one is not.


A penalty addition to an insurance premium because one or more claims have been made.

Managed fund

A fund managed by an insurance company or other financial institution with a discretion in the choice of types of investment.

Managing agent

See Underwriting agent (2).


A book containing a guide to its users on the practice of the insurer who publishes it. Thus an underwriting manual will set out premium rates, the classes of risk that are acceptable, and the conditions to be imposed in particular cases.

Mare and foal policy

A livestock insurance covering a mare and her unborn foal against mortality risk.

Mareva injunction

An injunction by a court restraining a party to an action from removing his assets out of the court's jurisdiction or disposing of them.

Margin of Solvency

Same as Solvency Margin.

Marine and Aviation Insurance (War Risks) Act 1952

An Act empowering the Department of Trade to reinsure war risks in respect of British ships and aircraft, and to reinsure cargo and foreign ships and aircraft when the United Kingdom is at war; also to insure directly British ships, aircraft and cargo against war risks if reasonable facilities are not otherwise available. Such insurance facilities may be extended to foreign ships and aircraft when the United Kingdom is at war.

Marine hull insurance

Insurance on ships and their machinery and equipment.

Marine insurance

The insurance of ships (including oil-rigs at sea) and their cargoes and freight.

Marine Insurance (Gambling Policies) Act 1909

An Act prohibiting gambling on loss by maritime perils. The Act made anyone effecting a gambling policy, and brokers and insurers concerned, subject to fine or imprisonment. It has been rarely, if ever, invoked.

Marine Insurance Act 1906

An Act that codified the law relating to marine insurance.

Marine insurance policy

Marine insurance policies were till 1982 issued in traditional form. The so-called S.G. form is reproduced in the first schedule to the Marine Insurance Act 1906 though the Act did not make its use obligatory. S.G, stands for Ship and Goods but in practice separate policies were issued for hull and cargo, the traditional wording being largely overridden by sets of clauses endorsed on the policy.

Marine insurance policy

The SG form has been replaced in the UK by the MAR (marine) policy form.

Market capacity

The amount of insurance that can be absorbed by all the insurers in the relevant market.

Market level indicator

A factor statutorily applied in the calculation of premiums payable by a pensions fund to the Department of Health and Social Security when an employer ceases to be contracted out of the social security scheme and a payment for accrued and vested rights in respect of guaranteed minimum pensions becomes payable.

Market value

The value of property, being what it will fetch in a transaction between a willing buyer and a willing seller.


The process of optimising the use of the resources of an enterprise by seeking to identify and satisfy the needs of consumers, actual or potential, in the best way for the enterprise.

MARPOL Convention

The International Convention for the Prevention of Pollution from Ships, 1973.

MARPOL Protocol

A draft instrument of 1978 giving effect to the MARPOL Convention (q.v.) subject to certain changes.

Marriage and issue risks

Reversionary interests may be affected by the marriage of a person or if he or she should have issue. Where the contingency is remote by virtue of age or other circumstances insurance on behalf of persons who stand to lose financially if there is a marriage or issue may be effected to cover potential loss.

Married Women's Policies of Assurance (Scotland) Act 1870

An Act applying to Scotland provisions about life assurance similar to those of the Married Women's Property Act 1882 (q.v.) for England.

Married Women's Property Act 1882

An Act enabling a person to effect an assurance on his or her life for the benefit of his spouse and/or children so as to create a trust for their benefit.

Master cover

A form of open cover, usually operated by a broker or agent, under which a variety of insurances from a given source may be accepted.

Master policy

A single policy in respect of a number of persons or insurances. In some circumstances certificates of insurance or even separate policies may be issued to persons concerned with a portion of the cover.


Paying regard, in the selection of assets, to the dates on which liabilities will or may accrue, or the currencies in which they are payable, with the object of ensuring that the realisable value of the assets at any such dates will suffice to discharge the liabilities.

Material damage warranty

A warranty in a business interruption insurance policy stipulating that before the interruption insurance becomes effective there must be a policy in force in respect of the material damage and a claim paid or admitted thereunder for such damage caused by an insured peril.

Material fact

A fact that would influence the mind of a prudent insurer in deciding whether to accept a proposed insurance and, if so, on what terms.

Material property

Tangible property as distinct from legal rights such as patents.

Mathematical reserve

The amount required by an insurer to meet his potential liability under a life policy, taking into account interest and the discounted value of future premiums payable.


The time at which payment of the sum assured under a life assurance policy falls due at the end of its term.

Maturity bonus

A bonus payable at the end of the term of a life assurance contract.

Maturity guarantee

A guarantee by a life assurer that the value of a policy on maturity will be at least Lx. Such a guarantee is common with unit-linked assurances.

Maximum possible loss

The largest loss thought possible under a given insurance.

Maximum probable loss

Same as Probable maximum loss.

Maximum value insurance

A system used for fire insurance in some trades whereby the sum insured on stock represents the maximum amount at risk at any time. A discount is allowed off the premium but no adjustment is made if the stock falls short of the maximum value.

Mean method of apportionment

A method of apportionment of loss between two or more property insurances that are non-concurrent and not subject to average.

Means test

An evaluation of the assets and/or income of a person for the purpose of determining his eligibility for social security benefits, or for underwriting membership of Lloyd's.

Measure of indemnity

The basis for calculation of the sum that an insured is entitled to recover in respect of a claim under an insurance that is a contract of indemnity.


The value which divides a distribution into two halves, with as many below it as above it.

Member charge

A fixed sum per member added to the basic premium for a group insurance.

Member of Lloyd's

An individual elected to membership of the Corporation of Lloyd's either as an underwriting member or, very rarely, as a non-underwriting member.

Members' agent

See Underwriting agent (2).

Memorandum advice

An advance notification to an underwriter of a premium or claim.

Memorandum of Association

The document that sets out the constitution of a company and states its objects. It is complemented by by-laws, referred to as Articles of Association.

Memorandum, The

A clause at the end of the S.G. form of marine insurance policy which exclude claims for partial loss or damage to certain commodities and impose a franchise (q.v.) on claims in respect of damage to other named commodities or to ship and freight.


The absorption of one company by another / The principle that when a partial loss under an insurance policy is followed by a total loss the insurers are not required to pay for the partial loss in addition to the total loss.

Merit rating

A system of calculating premium rates whereby some favourable (or unfavourable) feature is allowed for by deduction from (or addition to) the standard rate.

Metal workers' extension

Extension of a fire insurance to cover property such as plant and machinery while in transit to or from or at the premises of machine makers, engineers, founders, metal workers, customers and sub-contractors.

Methylated spirits bond

An excise bond guaranteeing that methylated spirits will be used only in permitted processes and that any duty becoming due on the spirits will be paid.

Minimising a loss

It is the duty of a policyholder, when an insured loss occurs, to take all reasonable steps to minimise the loss, acting as he would in his own interest if the loss were uninsured.

Minimum premium

Because of administration expenses insurers often prescribe a minimum premium for a particular class of insurance.

Minimum rate

A rate of premium below which an insurer refuses to quote, as in fire insurance.

Mirror syndicates

Lloyd's syndicates with identical membership.


An incorrect statement by a proposer in describing the risk proposed for insurance.


The improper performance of an act, as distinct from nonfeasance (q.v.).


A situation where the term or nature of the assets of an insurance company is not adapted to the term or nature of its liabilities.


An untrue statement.

Missing beneficiaries indemnity

An indemnity given to executors, administrators or trustees who desire to distribute an estate when one of the beneficiaries is missing and they wish to divide his or her share among other beneficiaries.

Missing document indemnity

Where it is desired to complete a transaction although a relevant document such as a share certificate or a life assurance policy is missing insurers may agree to indemnify against liability that could arise if another person subsequently produces the document and substantiates a claim to payment or rights based on it.

Misstatement of age

In life assurance the age of the life proposed for assurance is a material fact affecting the premium to be charged. A misstatement makes the assurance voidable but in practice ordinary life assurers on learning the true age will treat the assurance as valid for a sum assured corresponding to the premium that should have been paid. For industrial life assurance this procedure is statutorily sanctioned by the Industrial Assurance Act 1923, s.20 (4).

Mixed policy

A marine insurance policy covering both a voyage and a period of time.

Mixed schemes

Pension schemes that are a combination of schemes approved under section 208 and 222 respectively of the Income and Corporation Taxes Act 1970.

Money purchase scheme

A pension scheme under which the amount payable is governed by the value of the contributions rather than length of service or earnings in employment.

Moral hazard

The hazard arising from the possible behaviour of the insured or his family or employees which may increase the possibility of loss by reason of carelessness or dishonesty.


A legal authorisation to debtors to postpone payment.

Morbidity table

A table showing the incidence of sickness in the population or in a selected group.



Mortality function

Function depending on the duration of human life.

Mortality loss

A reduction in the surplus of a life assurance company that is attributable to the mortality experienced being less favourable than the rate of mortality assumed at a previous valuation.

Mortality profit

That part of the surplus of a life assurance company that is attributable to the mortality experienced being more favourable than the rate of mortality assumed at a previous valuation.

Mortality risk

The risk of death.

Mortality table

A table that includes the data in a life table (q.v.) as well as other mortality functions such as the rate of mortality and the expectation of life.


A conveyance of real or personal property as security for a debt, subject to the proviso that the property will be reconveyed when the debt is discharged.

Mortgage guarantee

A guarantee to a mortgagee that the sums owing to him will be paid.

Mortgage guarantee certificate

A certificate issued by the insurer of property to a mortgagee undertaking to inform the mortgagee if the insurance is changed to his or her detriment and not to settle a loss without the mortgagee's consent.

Mortgage protection policy

A life policy that provides by means of decreasing term assurance for a mortgage to be paid off in the event of the borrower's death.

Mortgage repayment plan

Any scheme whereby life assurance is used to ensure that a mortgage is eventually repaid. The money may be advanced either by a building society or by the life assurance company. In some cases the policy moneys serve to repay the mortgage. In others, where the building society lends, the role of life assurance is limited to paying off the mortgage in the event of premature death.


A lender to whom property is conveyed as security for a debt on the condition that the property will be reconveyed when the debt is discharged.

Mortgagee clause

A clause in a property insurance policy giving beneficial rights to a lender.


A borrower who conveys his property to another on condition that it will be reconveyed to him when the debt is discharged.

Mortuary bonus

An addition to the sum assured under a life assurance policy applicable to claims arising during some specified period.

Motor cycle insurance

A section of motor insurance embracing all two-wheeled power-driven vehicles.

Motor insurance

Insurance of motor vehicles, in British practice, provides a choice of two types of cover; (a) comprehensive, including both accidental damage to the insured vehicle, loss by theft, and third party liability; (b) third party liability for bodily injury or damage to property, with or without cover for loss or damage to the insured vehicle by fire and theft.


Personal property as opposed to real property (interests in land). By the Marine Insurance Act 1906, s.90, means any moveable tangible property other than the ship, and includes money, valuable securities, and other documents.


Changes in the portfolio of a life assurance company (e.g., new business and exits) that affect its value.

Moving average

An average that is regularly recalculated on the basis of a time series, For example, a three-year moving average of claims paid will be based on the first place on years 1, 2 and 3. Next year it will be based on years 2, 3 and 4; and so forth.

Multiple birth insurance

Insurance to provide a stated sum of money in the event of a multiple live birth.

Multiple line insurer

An insurer who writes a number of classes of insurance (U.S.).

Multiplicand and multiplier

In a claim for damages for serious bodily injury the court will calculate the compensation due for one year of disability (the multiplicand) and to arrive at the sum payable as damages will apply a multiplier based on the expected duration in years of the disability, but subject to reductions on various grounds.


A factor applied to pure loss costs to produce a rate of premium. In an action for damages for personal injury a factor applied to annual loss of earnings in calculating damages for death or permanent disablement. It is a number based on the expected duration in years of the disability but may be reduced on various grounds.

Mutatis mutandis

With the necessary changes.

Mutual insurance

Insurance undertaken by a group of persons for their own benefit, without risk capital being provided from outside sources.

Mutual insurance company

A company that conducts mutual insurance. In non-life insurance the company may confine its business to that of insurances of the risks of persons in the group that formed it, such as the members of a trade association, who may have subscribed capital. In life assurance it is common for the policyholders, especially the holders of with-profits policies, to become members (that is, nominally, part owners) on effecting a policy. A mutual life assurance company has no risk capital.


Turning an insurance company with risk capital into a mutual insurance company by buying out the shareholders.