Glossary 51
Protection: A policy providing a cash sum on the Threadneedle Asset Management (TAM):
death or critical illness of the life assured. A leading international investment manager with
a strong track record of outperformance across
PVIF: Present value of acquired in-force business asset classes.
occurs when a life insurance company makes an
acquisition. Part of the purchase price represents TCF: Treating Customers Fairly is an industry-wide
the value of the insurance contracts in the target initiative designed to ensure financial providers
company. This is in effect, the present value of the meet basic principles of product information,
policies acquired. suitability and performance.
RCM: Risk capital margin is the additional capital UK Corporate Governance Code: The Code sets out
a firm would need to hold to cover the effects of standards of good practice for listed companies.
a number of ‘What if ?’ scenarios that have been It covers, amongst other things, the board
prescribed by the FSA. These scenarios assess the composition and its accountability and relations with
capital implications from combined movements in business owners. Mutual organisations such as LV=
financial markets (equity, property, credit spreads, do not have to adhere to the Code, but we choose
interest rates) and persistency of the business. to comply with the Annotated Code as published by
The RCM is the capital required to cover the worst the AFM as we believe it is good business practice
case scenario. to do so.
Retail Distribution Review (RDR): A fundamental Unallocated divisible surplus (UDS): The amounts
review by the FSA designed to help address insufficient that have yet to be formally declared as bonuses
trust and confidence in financial services products and for participating policyholders together with the free
services. In particular, it is intended to drive increased assets of the group.
professionalism in the tied and independent financial
advice areas and will change the way that financial Underlying operating profit: The operating profit
advice is organised and paid for. before one-off items such as basis and methodology
changes, short-term investment fluctuations and
RNPFN: Royal National Pension Fund For Nurses. amortisation of intangibles.
Risk appetite: The amount of risk that a business With-profits fund: An investment fund where we
is prepared to accept or keep when carrying out its combine all of our with-profits investors’ money and
everyday activities. manage it on their behalf. The fund normally invests
in UK and overseas shares, fixed interest securities
Self Invested Personal Pension (SIPP): Unlike including Government stocks and bonds, property,
normal personal pension plans, where the pension cash, and our own business activities. We regularly
company limits your choice of investments to monitor where we invest the fund to take account of
those that it manages, SIPPs allow investors the future liabilities.
opportunity to make their own investment decisions.
SME: Small, Medium Enterprises – within the
commercial line of the general insurance business.
Solvency II: An EU-wide project that sets out
to provide a comprehensive new framework for
insurance supervision and regulation. This aims to
strengthen protection for policyholders by ensuring
that companies allocate enough capital to cover all
the risks in their business.
Strategic business unit (SBU): LV= is made up of
two business units (Life and General Insurance),
each of which focuses on profitably delivering a
specific part of our overall group business plan.