Maluses

Maluses, and malus in the singular, are penalties or adjustments applied to incentives, charges, or payments in response to adverse outcomes or increased risk. The term comes from the Latin malus meaning “bad” and is used across several fields with related but distinct meanings. In general, a malus functions as a corrective or punitive adjustment, often used alongside bonuses to shape behavior or pricing.

In insurance, maluses are part of bonus–malus systems that adjust premiums based on risk history. A malus increases the cost of coverage after negative events, such as claims or risky behavior, while a bonus reduces premiums for favorable history. The system aims to align incentives with risk and reward safer behavior.

In corporate finance and remuneration, malus provisions allow reductions, deferrals, or clawbacks of variable pay when later information reveals risk-taking failures, misconduct, or misstatements. Regulators in some jurisdictions require malus or clawback mechanisms to temper incentives for excessive risk-taking and to improve accountability in financial institutions.

In banking regulation, malus concepts appear in rules governing executive compensation and risk management. They enable pre-payout reductions of anticipated bonuses or post-event adjustments, complementing other risk-control measures to discourage excessive short-term risk.

Disambiguation: Malus (capitalized) is also a genus of apple trees, Malus domestica being the cultivated apple; this biological use is unrelated to the penalty sense of malus. The terms are sometimes used in the context of “bonus–malus” systems, where bonuses and maluses together modulate overall rewards or costs.