Association of International Life Offices
Representing the cross-border life industry
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Not sure about a name or phrase used in our documentation or website? Or perhaps you’ve come across some financial terminology elsewhere that you’re not familiar with? Find out its meaning in our glossary below and if there is a word not in there you think needs adding please do contact us.



The CAC-40 is France's benchmark stockmarket index.

Capital adequacy

Central banks impose capital adequacy ratios (also known as solvency ratios) that set the amount of its own money a bank needs to have relative to its total loan portfolio.

Chargeable Lifetime Transfer (UK-Specific)

A transfer, which is neither exempt nor potentially exempt. The most common chargeable transfers occur on transfers into discretionary trusts.


The fee paid to an agent by a life company for services rendered to the policyholder for advice on setting up or maintaining a policy. It is often expressed as a percentage of the premium.

Committee of the Regions (CoR)

The Committee of the Regions (CoR) is an EU advisory body composed of locally and regionally elected representatives coming from all 28 Member States. Through the CoR they are able to share their opinion on EU legislation that directly impact regions and cities.

Computer Emergency Response Team (CERT)

CERT's remit is to help manage threats to EU institutions' computer systems – supporting IT security teams in each EU Institution and liaising with public-sector CERT counterparts in EU countries. Set up on 1 June 2011, CERT will operate as a pilot project for its first year, and could eventually become fully operational in 2012, depending on the assessment of the pilot phase. This is an Interinstitutional body.

Convertible bonds

A convertible bond issued by a public company is one that starts as a bond but that can also be converted into ordinary shares in that company at any time before the bond matures, and at a previously specified price. In legal and accounting terms, until a convertible bond has been converted, it counts as a loan. Once converted, it is identical to other shares in issue and receives the same dividend.

Convertible rights

Also known as 'conversion rights', these give the buyer of a preference share or bond the right to convert it into a set number of ordinary shares for a pre-agreed 'strike' price at an agreed point in the future.

Council of Europe

The Council of Europe is the continent's leading human rights organisation. It includes 47 member states, 28 of which are members of the European Union. All Council of Europe member states have signed up to the European Convention on Human Rights, a treaty designed to protect human rights, democracy and the rule of law.

Council of the European Union

Together with the European Parliament, the Council is the main decision-making body of the EU. Not to be confused with: European Council - quarterly summits, where EU leaders meet to set the broad direction of EU policy making Council of Europe - not an EU body at all.

Court of Justice of the European Union (CJEU)

The Court of Justice interprets EU law to make sure it is applied in the same way in all EU countries, and settles legal disputes between national governments and EU institutions. It can also, in certain circumstances, be used by individuals, companies or organisations to take action against an EU institution, if they feel it has somehow infringed their rights.

Critical Illness

Relates to a policy that provides a lump sum payment benefit if the policyholder is diagnosed with a specified critical illness during the cover term.

Currency risk

This is the type of risk that comes from the change in price of one currency against another. The risk is that the exchange rate will move against you and reduce the value of an investment which is denominated in a foreign currency.