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Glossary

A	B	C	D	E	F	G	H	I	J	K	L	M	N	O	P	Q	R	S	T	U	V	W	X	Y	Z

A
Actuary	A professional who provides commercial, financial and prudential advice on the management of assets and liabilities.
Annual management charge (AMC)	An annual charge made by the fund manager to cover the running costs of the fund.
Appropriately licensed adviser	An adviser who is authorised to sell the product in the country/ market where it is being sold.
Asset	Anything owned by an individual, company or trust that has a cash value. This includes property, goods, savings or investments.
Assets received date	Means, in terms of title, the time when registration into the Company's name has been completed.
Assignee	The person to whom an asset is assigned.
Assignment	A transfer of ownership or interest in a payment obligation between two or more parties.
Assurance	Also known as insurance but generally used for life assurance. Insurance covers an uncertain event whereas life assurance covers a certain event (ie death) only where the date is unknown.

B
Bankers Automated Clearing System (BACS)	BACS is a banking system owned by the UK's major banks and building societies for the automated processing of Direct Debits, Direct Credits, Standing Orders and other inter-bank payments.
Beneficiaries	An individual or corporation that stands to benefit financially from a will, trust, gift, insurance policy, pension, charity or bequest.
Bond	A life insurance investment bond, a lump sum investment plan that provides an element of life cover, either guaranteed or unit linked.
Bonds	A certificate of debt (usually interest-bearing or discounted) that is issued by a corporation in order to raise money; the issuer is required to pay a fixed sum annually until maturity and then a fixed sum to repay the principal. Bonds issued by the British Government are called Gilts.

C
CMI	CMI Insurance Company Limited.
CMIFM	CMI Fund Managers (IOM) Limited.
CMITC	CMI Trust Company (IOM) Limited.
Cash received date	It is the day that the Company receives notification of clear title to the assets that comprise the initial investments in lieu of a cash premium.
Chargeable event	This occurs when there is a significant change to a life assurance investment bond. Examples include a death claim, a partial or full surrender and regular withdrawals that exceed the annual 5% tax deferred allowance.
Chargeable event gain	Where a chargeable event occurs there may be a liability to income tax on any gain (profit) made. This is normally assessed on the policyholder. The rules for calculating the gain are complex and it is recommended that you always seek financial advice.
Collective Investment Schemes	Any investments which enable participants to benefit from profits or income arising from the acquisition, holding, management or disposal of some or all of the underlying investments in which they participate. These investments include: Authorised unit trusts Unauthorised unit trusts OEICs Investment trusts Managed funds Mutual funds. The scheme is essentially a fund run by an individual manager or institution made up of investments from a large number of small investors and divided into one class of units or shares that represent the amount invested.
Commission	The payment made to a financial adviser for services rendered, often based on the value of the product sold. Such commission is often paid at a predetermined percentage rate.
Commencement date	The date when all new business functions are complete, monies are deemed to be 'cleared' and/or clear title to any asset transfer has been confirmed.
The Company	CMI Insurance Company Limited.
Compliant product	A product that is compliant in the country in which it is being sold, and which is sold by an appropriately licensed adviser (where necessary).
Contribution	Also known as a ’premium’ and usually used with regard to personal payments into a pension scheme or into investment-based products.

D
Dealing day	The day on which an investment or redemption is processed.
Discretionary management	A third party adviser with the ability to act directly on investments according to their own discretion or judgment.
Dividend	An amount paid to shareholders from a company’s after-tax earnings.
Domicile	The country of a person's permanent home, and not their nationality or temporary place of residence. Domicile is determined by both the physical fact of residence and the intention to reside there permanently. For example, a citizen of a foreign country who is resident in the UK is not necessarily domiciled there unless there is a clear intention to make the UK a permanent home. Under the common law, it is domicile and not residence or nationality that determines a person's civil status. A corporation may also have a domicile, which is determined by the location of its registered office.

E
Early surrender charge	A charge that may be deducted when a policy is surrendered early or when withdrawals exceed certain limits.
Encashment	To terminate or cancel a policy.
Equities	This is a term given to investments in a stock market. Investment is in listed companies, as opposed to a fixed interest investment or property. It is a general term for ordinary shares.
Expatriate	An applicant who is not a national of the country in which they are residing, eg a British national living in Spain.

F
FTSE 100 index	The FTSE 100 is a benchmark index tracking the performance of the 100 top companies traded on the London Stock Exchange. The full name is Financial Times Stock Exchange 100, but it's commonly called the Footsie 100.
Financial Services Authority (FSA)	This is the government body that regulates all aspects of the financial services industry in the UK.
Financial Supervision Commission (FSC)	The government body responsible for the licensing and supervision of banks, building societies, investment business, collective investment schemes and corporate/trust service providers in the Isle of Man. CMI Fund Managers (IOM) Limited is licensed to conduct business by the FSC.
Fund manager	The professional who runs an investment fund and decides what shares, bonds or gilts the fund should buy or sell.
Funds	A pool of assets managed by a professional fund manager.

G
Gilts	Fixed rate bonds issued and guaranteed by the UK Government.
Gross	The gross amount is a figure before the deduction of tax and/or expenses and other charges. This can be contrasted with net which means the value after the deduction of tax, costs or charges.

I
Income	Money received from wages (earned) or from investments (unearned).
Inflation	Put simply, inflation is the general increase of prices and subsequent fall in purchasing power of money. The cycle of price inflation starts when production costs increase for the same level of production which results in an increase in the product price. This leads to a reduction of purchasing power which in turn, leads to higher wage demands, and therefore, higher production costs.
Inheritance tax (IHT)	This is a tax that is levied on the value of an individual's estate (all the assets owned) upon death or certain lifetime transfers. Inheritance tax is only paid (at a rate of 40%) once the estate value exceeds a certain limit. For the tax year 2007/2008 the limit is £300,000 (plus the value of any transferable nil rate band).
Initial charge	The initial charge is an upfront charge for the contract before unit allocation, and covers administration costs and commission paid to the adviser.
Insurance	A contract in which the recipient of agreed payments agrees to compensate the payer in the event of certain events i.e. loss, damage, injury, death, etc.
Insurance & Pensions Authority (IPA)	The government body responsible for the supervision of Isle of Man companies carrying on insurance and pensions business from the island. CMI Insurance Company Limited is regulated by the IPA.
Investment	The use of money to generate income and/or capital growth.
Investment adviser	A financial adviser with the authorisation to place dealing recommendations on behalf of the policyholder

J
Joint life assurance	An assurance policy which is usually, but not exclusively, taken out on two lives, typically husband and wife. It can be written on a first death or last survivor basis, and will either pay out when the first life dies or when the last life dies, respectively.

L
Life assurance	A general term used to describe different types of policy whose aim is to provide payment in the event of death.
Life assured	The person upon whose life a life assurance policy is based.

M
Market Value Adjuster (MVA)	The MVA is a deduction which may be made from money taken out of a unitised with-profits fund in which units have previously been allocated to a policy in order to protect the interests of remaining investors.
MVA-free date	For Offshore With-Profits, this is any time during the life of the investment when the MVA rate is zero, regardless of the market conditions.

O
OEICs (open-ended investment companies)	A limited investment company whose business it is to manage an investment fund. A stake is made in the fund by buying shares in the OEIC. As it is an open-ended fund, the fund gets bigger and more shares are created the more investors there are. Likewise, the fund reduces if investors sell their shares back to the company.
Offshore	Anywhere outside the United Kingdom.
Open architecture	Open architecture means the investor is not restricted to a single fund, or range of funds, provided by one or a pre-selected number of investment houses.

P
Partial encashments	A withdrawal taken without terminating or cancelling a policy in full.
Premium	A regular payment of money into a policy to secure the contract. Premiums are sometimes also known as contributions.
Policy certificate	Formal document produced by an insurance company which includes all contract details, i.e., sum assured or insured, premium and payment frequency, term of contract, etc.
Policy owners / Policyholders	The underlying clients of the Company to whom the Company has issued a life assurance policy in exchange for the assets which comprise the Funds.

R
Reduction in yield	This is a calculation used to represent the effect on the growth of premiums paid into a policy as a direct result of the charges or expenses incurred by the policy.
Regular dealing facility	The facility to set up a standing instruction to redeem a specific amount from one or more nominated funds on a predetermined frequency.
Regular withdrawal	Payment of a specific amount of money from a policy on a predetermined frequency.
Risk	In terms of insurance, risk is the likelihood of a claim being made on a policy. In terms of investment, risk is a subjective view that comprises a balance of potential loss with potential gain.

S
Segmentation	The process of dividing the bond into a number of identical policies.
Settlement period	The time taken to complete the purchase or sale of an investment.
Settlor	The person who sets up a trust.
Single premium	A one-off premium paid and/or assets transferred in a manner acceptable by the Company
Stock transfer	Changing the ownership of an investment between two parties
Surrender	To terminate or cancel a policy.
Switch	Selling units in one fund and buying units in another fund as a replacement.

T
Telegraphic transfer	A transfer of funds between different accounts or banks, made without the use of cheques or drafts. Sometimes known as bank transfers, these are normally used to transfer large amounts of capital without delay.
Transferable nil rate band	The amount of any unused inheritance tax nil rate band of the first spouse/civil partner to die, which was available for transfer to the surviving spouse/civil partner to be used on second death.
Trust	A trust is a where a person or persons (the trustee(s)) has legal control over certain property (trust property) for the benefit of certain individuals, known as beneficiaries. The trustees, as legal owners and managers of the trust, must act in accordance with the terms of the trust and the law. They have clear legal responsibilities to manage the trust property on behalf of the beneficiaries.
Trustee	An individual, group of people or independent institution responsible for the management of the trust and the legal owner of trust property, as defined by the trust deed.

U
Uninvested cash	Money held by the Company, which is not due for settlement of an investment transaction.
Unit linked	Any policy in which the policyholder invests a premium that buys units in a fund. This policy may be a life assurance or investment policy.
Unit trust	A unit trust is a mutual fund or collective investment that pools investors' cash and invests it on their behalf. It is the role of the unit trust manager to make sure the money is invested properly and delivers the best return for the investors.

W
Working day	The official working days of the Company

Y
Yield	The income from an investment, expressed as a percentage of its current market price

A
Actuary	A professional who provides commercial, financial and prudential advice on the management of assets and liabilities.
Annual management charge (AMC)	An annual charge made by the fund manager to cover the running costs of the fund.
Appropriately licensed adviser	An adviser who is authorised to sell the product in the country/ market where it is being sold.
Asset	Anything owned by an individual, company or trust that has a cash value. This includes property, goods, savings or investments.
Assets received date	Means, in terms of title, the time when registration into the Company's name has been completed.
Assignee	The person to whom an asset is assigned.
Assignment	A transfer of ownership or interest in a payment obligation between two or more parties.
Assurance	Also known as insurance but generally used for life assurance. Insurance covers an uncertain event whereas life assurance covers a certain event (ie death) only where the date is unknown.

C
CMI	CMI Insurance Company Limited.
CMIFM	CMI Fund Managers (IOM) Limited.
CMITC	CMI Trust Company (IOM) Limited.
Cash received date	It is the day that the Company receives notification of clear title to the assets that comprise the initial investments in lieu of a cash premium.
Chargeable event	This occurs when there is a significant change to a life assurance investment bond. Examples include a death claim, a partial or full surrender and regular withdrawals that exceed the annual 5% tax deferred allowance.
Chargeable event gain	Where a chargeable event occurs there may be a liability to income tax on any gain (profit) made. This is normally assessed on the policyholder. The rules for calculating the gain are complex and it is recommended that you always seek financial advice.
Collective Investment Schemes	Any investments which enable participants to benefit from profits or income arising from the acquisition, holding, management or disposal of some or all of the underlying investments in which they participate. These investments include: Authorised unit trusts Unauthorised unit trusts OEICs Investment trusts Managed funds Mutual funds. The scheme is essentially a fund run by an individual manager or institution made up of investments from a large number of small investors and divided into one class of units or shares that represent the amount invested.
Commission	The payment made to a financial adviser for services rendered, often based on the value of the product sold. Such commission is often paid at a predetermined percentage rate.
Commencement date	The date when all new business functions are complete, monies are deemed to be 'cleared' and/or clear title to any asset transfer has been confirmed.
The Company	CMI Insurance Company Limited.
Compliant product	A product that is compliant in the country in which it is being sold, and which is sold by an appropriately licensed adviser (where necessary).
Contribution	Also known as a ’premium’ and usually used with regard to personal payments into a pension scheme or into investment-based products.