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Glossary

Advice

Underwriting agents/brokers provide advice when they make a recommendation or a statement of opinion (or a report containing either of these) which is intended (or could reasonably be regarded as being intended) to influence a person in making a decision in relation to a financial product, e.g. purchasing insurance, endorsing a policy, increasing sums insured etc.

Information or advice that is not intended to influence, and could not reasonably be regarded as being intended, to influence a person making a decision about a financial product is not a financial service and therefore not advice.

Broker

An intermediary, who acts on behalf of a person who is applying for insurance. Broker earn commission from the insurer, however, they have a responsibility to obtain the best cover for the best price possible. In certain circumstances a broker can also act as an agent for the insurer in terms of issuing a policy or collecting a premium, in which case they are known as an underwriting agent of the insurer.

Cancellation of policy

The termination of the insurance policy before its expiry date.

Declaration of Health

In some instances, before accepting a risk, the insurer may waive the need to obtain a current veterinary certificate. As an alternative, the insurer will accept a currentdeclaration of good health and soundness, signed by the owner or custodian of the animal. It saves the owner having to incur the cost of obtaining an independent veterinary certificate. If however, the animal has received veterinary attention, other than routine, in the previous 12 months, it is advisable to obtain a veterinary certificate.Similarly, if an exclusion is presently in force, a veterinary certificate with specific reference to the condition giving rise to the exclusion should be obtained.

Fair Market Value

The price at which ownership of the animal would change between a willing buyer and a willing seller, neither being under any compulsion to buy or sell and both having reasonable knowledge of the relevant facts. GST is not included.

Financial Services

Australian Financial Services (AFS) Licensees, such as underwriting agents/insurance brokers, provide a financial service to a client if they:

  • Provide advice regarding a financial product, or
  • Deal in a financial product i.e. arrange for the issue, variance or disposal of an insurance contract.

The licensee’s AFS Licence will stipulate what financial services a licensee is authorised to provide.

Financial Services Guide (FSG)

A Financial Services Guide is intended to assist clients to decide whether to obtain financial services from the broker, encompassing services offered, basis of remuneration, avoiding potential conflict of interests and complaints procedures.

Brokers must give an up to date FSG to all actual and potential retail clients as early as possible after they have contacted the broker to make an enquiry, seek advice or to ask the broker to provide services to them. The FSG must be given to the retail client before the broker provides any advice or arranges any financial product on their behalf.

Humane Destruction or Euthanasia

a) an animal incurs an injury or is afflicted with an excessively painful disease, and a veterinary surgeon appointed by the insurer shall first have given a certificate that the suffering of the animal is incurable and so excessive that immediate destruction is imperative for humane reasons;

b) an animal incurs an injury and a veterinary surgeon appointed by the insured shall first have given a certificate that the suffering of the animal is incurable and so excessive that immediate destruction is imperative for humane reasons without waiting forthe appointment of a veterinary surgeon by the insurer;

c) where an animal is destroyed whilst on board an aircraft and such destruction is carried out by or on the order of the responsible authority at the time and later confirmed by a sworn statement (affidavit) by the said authority that in his/her/its opinion the animal was so uncontrollable as to have been a danger to the safety of the aircraft, crew, passengers or cargo.

Insured

The party to an insurance arrangement to whom the insurer agrees to provide cover against specified losses, subject to the terms of the insurance contract. The person(s), partnership, corporation, entity or organisation as stated in the Certificate of Insurance with a legitimate insurable interest in the animal. Also referred to as the Assured.

Insurer

The party to an insurance arrangement who undertakes to provide insurance cover upon the happening of a specified event.

Loss Adjuster

Also known as an assessor, is a representative of the insurer who seeks to determine the extent of the insurer’s's liability for loss when a claim is lodged

Non-Disclosure

Failure by the insured to disclose a material circumstance or occurrence to the insurer before the risk was accepted. It is an act that constitutes a breach of good faith and mutual trust.

Post Mortem

A post mortem, which shall include a necropsy examination, made by a veterinary surgeon to establish the cause of death or the reason for the humane destruction of the animal.

Premium

The price of insurance cover for a specified risk for a specified period of time.

Premium Rate

The cost of a unit of insurance, expressed as a percentage.

Product Disclosure Statement (PDS)

A Product Disclosure Statement (PDS) sets out the essential features of an insurance policy as well as other information about the policy, including but not limited to its benefits, rights and calculation of the premium. PDS's are required to be prepared by the product issuer, i.e. the insurer, or by a person/entity authorised by the product issuer to prepare the PDS on the product issuer’s behalf i.e. the underwriting agent or broker.Product Disclosure Statements must be given to retail clients bybrokers when, in the course of providing personal advice, they recommend that the client acquire an insurance contract or offer to arrange for the issue of an insurance contract to the client.

Underwriter

A technical person trained to evaluate risks and determine premium rates.

Veterinary Certificate (also referred to as AEVA Certificate of Examination for Mortality Insurance purposes)

A certified current report issued by anVeterinary Surgeon following a clinical examination of the animal, in accordance with AEVA (Australian Equine Veterinary Association) insurance guidelines. For added infertility cover, the report must make specific reference to external genitalia. For newborn foals, under 30 days of age,it must record the Foal IgG (immunoglobulin G deficiency) and level. Before accepting any risk,the insurer may call for a more detailed examination and tests.

Veterinary Surgeon or Veterinary Practitioner

Experienced in equine practice with a currently valid licence, issued by the appropriate governing agency, allowing him/her to practice veterinary medicine.

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