GLOSSARY

List of Financial Terms in alphabetical order:

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NAIC See National Association of Insurance Commissioners.

Naked Position Condition when an investment company holds securities that are not sold or hedged.

Names Refers to the people who invest in the Lloyd's of London Insurance syndicates.

Narrow Market Securities or commodities market where there is minimal trading activity. The light trading results in greater price fluctuations than if there were moderate to heavy trading.

Narrowing the Spread The process of narrowing the gap between the bid and ask price for a financial instrument as a result of activities by marketmakers in that instrument.

NASD See National Association of Securities Dealers

NASDAQ An automated stock market owned and operated by the National Association of Securities Dealers. The system provides dealers and brokers with price quotations for securities traded over-the-counter and for stocks listed on the NASDAQ.

NAV See Net Asset Value.

National Association of Insurance Commissioners (NAIC) An association of insurance regulators in the U.S. who promote uniform insurance regulation, draft model laws for implementation by the states and monitor the solvency of insurance companies.

National Association of Securities Dealers (NASD) An association that includes nearly all of the major investment banks and firms dealing in the over-the-counter market. Operating under the supervision of the SEC, this organization's goals are to standardize practices, set ethical standards for securities trading, and ensure that members maintain a high degree of solvency and financial integrity.

National Bank A U.S. bank that is chartered on the federal level (as opposed to the state level). National banks are required to be members of the Federal Reserve System. The FDIC insures their deposits.

Net Asset Value (NAV) This represents the share value of a mutual fund. NAV is calculated at the end of each day is calculated by adding total assets less liabilities to arrive at equity (or net worth). The equity is then divided by the number of outstanding shares in the mutual fund, to get NAV.

Net Interest Income Interest income less interest expense.

Net Premium Amount of premium required to provide insurance benefits for a policy.

Net Premiums Earned Net insurance premiums adjusted for an increase or decrease of unearned premiums during the year of the Net Premiums Written Refers to gross insurance premiums written less returned premiums plus reinsurance assumed premiums less reinsurance of ceded premiums.

New Issue A stock or bond that is offered to the public for the first time. This can include initial public offerings by previously private companies or additional stock or debt issued by existing companies.

Non-accrual Loan Loan carried on a bank's balance sheet on which the bank is no longer accruing interest. Any payments received are deducted from the principal rather than being treated as interest income. Loans are typically placed on non-accrual status when interest payments are 90 days past due, although this may vary from country to country.

Non-admitted Insurance Can refer to U.S. based insurance companies operating in states where they are not licensed or to insurance offered by a foreign insurer without being licensed in that country.

Non-performing Loans Loans on which payments, either principal or interest, are overdue by a specific amount of time, as stipulated by the relevant regulatory authorities or by the institution. For example, loans that are 90 days or more past due may be considered non-performing. This timeframe is becoming the international standard for classifying loans as non-performing.

Non-proportional Reinsurance A form of reinsurance that, for a specified limit, indemnifies the ceding company against the amount of loss. It includes various types of a reinsurance, including catastrophe, per risk and aggregate excess of loss reinsurance. (A.k.a., excess of loss reinsurance.)

Nostro Account A current (transactional) account maintained by a bank with a bank in another country, usually in the currency of the country where the account is held. The bank maintaining the account refers to it as a nostro account ("our account with you"). This account is typically viewed as a reciprocal arrangement related to the vostro account ("your account with us"). The terms "nostro" and "vostro" are frequently used in the context of foreign exchange transactions and the related transfer of funds.

Note Unsecured debt (promise to pay) that usually has a maturity of less than 15 years.

Novation Discharge of one obligation in a debtor/creditor relationship and the creation of an entirely new obligation. Novation is necessary in clearinghouse arrangements because the direct obligation to pay one of the participants is typically replaced with an obligation to pay an overall net position to the clearinghouse.

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