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S

  • Sacrifice
  • Safe burglary insurance
  • Safe driver rating plan
  • Safe harbor
  • Safe-harbor provisions
  • Safety engineering
  • Safety responsibility laws
  • Salary continuation plan
  • Salary reduction plan
  • Salespersons sample floater
  • Salvage
  • Salvage corps
  • Salvors
  • Sanborn Map
  • SAP--statutory accounting principles
  • Sarbanes-Oxley Act
  • Satellite and space vehicles insurance
  • Savings bank life insurance (SBLI)
  • SCLA
  • Schedule
  • Schedule bond
  • Schedule policy
  • Schedule rating
  • Scheduled personal property endorsement
  • Scopes Manual
  • Seasonal risk
  • SEC liability
  • Second Injury Fund
  • Second to die life insurance
  • Section 403(b)
  • Section 79
  • Securities valuation
  • Securities Valuation Office
  • Securitization
  • Security bond
  • Segregated cell insurer
  • Selection
  • Self-administered plan
  • Self-insurance
  • Self-insured retention
  • Self-reported
  • Self-storage risks
  • Selling agents commission insurance
  • Selling price clause
  • SEMCI--Single Entry Multiple Company Interface
  • Semiautomatic treaty
  • SEP--simplified employee pension
  • Separate account
  • SERFF
  • Servicemen's Group Life Insurance (SGLI)
  • Settlement option
  • Settlement or settlement offer
  • Settling agent
  • Setoff
  • SEUA--Southeastern Underwriters Association
  • S.E.U.A. Case
  • Sex-based harassment
  • Sexual harassment
  • Sexual harassment defense coverage
  • SFAA
  • Servicemen's Group Life Insurance (SGLI)
  • Ship repairers' liability
  • Shock loss
  • Short rate cancellation
  • Short-tail
  • Short-term disability income insurance
  • Short term
  • SIA--Society of Insurance Accountants
  • SIAA
  • SIC
  • Sickness insurance
  • Side car
  • Sidetrack agreement
  • Silverware floater
  • Simplified
  • Simplified employee pension (SEP)
  • Simultaneous death acts
  • Single Entry Multiple Company Interface (SEMCI)
  • Single interest cover (or insurance)
  • Single premium deferred annuity (SPDA)
  • Single premium life insurance
  • Single risk reinsurance
  • Sinkhole insurance
  • SIO
  • Sistership exclusion
  • SITE--Society of Insurance Trainers and Educators
  • SIU--Special Investigative Unit
  • Slander
  • Sliding scale commission
  • Slip
  • Smoke damage
  • SMP--special multiperil package
  • Snowmobile insurance
  • SOAR
  • Social inflation
  • Social insurance
  • Social Security
  • Social Security Disability Income
  • Society for Risk Analysis (SRA)
  • Society of Accident Reconstructionists
  • Society of Actuaries
  • Society of Chartered Property & Casualty Underwriters (CPCU)
  • Society of Insurance Accountants (SIA)
  • Society of Insurance Research
  • Society of Insurance Trainers and Educators (SITE)
  • Society of Risk Management Consultants
  • Soft market
  • Software
  • Solvency
  • Sonic boom
  • Southeastern Underwriters Association (SEUA)
  • SOV
  • Sovereign immunity
  • SOX
  • Special acceptance
  • Special automobile policy
  • Special conditions
  • Special damages
  • Special form
  • Special hazard
  • Special Investigative Unit (SIU)
  • Special multiperil policy (SMP)
  • Special purpose vehicle
  • Specific insurance
  • Specific rate
  • Specific retrocession
  • Specified disease insurance
  • Specified perils
  • Speculative risk
  • Spendthrift clause
  • Split limits
  • Spoilage coverage
  • Spread loss reinsurance
  • Spread of risk
  • Sprinkler head
  • Sprinkler leakage insurance
  • SPV
  • SR-22 Form
  • SR-26 Form
  • SR filings
  • SR forms
  • SRMC
  • Staff underwriter
  • Stamping bureau
  • Standard form
  • Standard policy
  • Standard provisions
  • Standard risk
  • State Association of Insurance Agents
  • State funds
  • State-of-the-art defense
  • State responsibility filings
  • Stated amount
  • Statement of values
  • Statistical agent
  • Statute of limitations
  • Statutory accounting principles (SAP)
  • Statutory damages
  • Statutory disability benefits insurance
  • Statutory reserve
  • Statutory underwriting profit or loss
  • Stevedore's legal liability
  • Stock
  • Stock insurance company
  • STOLI
  • Stop loss excess aggregate
  • Stop-loss provision
  • Stop-loss reinsurance
  • Storekeepers burglary and robbery policy
  • Storekeepers liability policy
  • Straight life annuity
  • Straight life income option
  • Straight life insurance
  • Stranding
  • Stranger Originated Life Insurance
  • Strategic Independent Agents Alliance (SIAA)
  • Strategic risk management
  • Strict liability
  • Structured claim settlements
  • Subagents
  • Subchapter S Corporation
  • Subcontract bond
  • Subdivision bond
  • Subject premium
  • Subprime crisis
  • Subrogation
  • Subrogation release
  • Subscription policy
  • Subsidence
  • Subsidiary
  • Substandard premium rate
  • Substandard risks
  • Sudden death clause
  • Sue and labor clause
  • Suicide clause
  • Suit
  • Summary plan description
  • Sunset clause
  • Sunset provision
  • Superfund
  • Superintendent of insurance
  • Superseded suretyship rider
  • Supplemental benefit rider
  • Supplemental executive retirement plan (SERP)
  • Supplemental group life insurance
  • Supplemental major medical coverage
  • Supply bond
  • Surcharge points
  • Surety
  • Surety and Fidelity Association of America (SFAA)
  • Surety Association of America
  • Surety bond
  • Surety Information Office
  • Suretyship
  • Surface water
  • Surgeons professional liability insurance
  • Surgical schedule
  • Surplus
  • Surplus line
  • Surplus lines insurance
  • Surplus lines tax
  • Surplus share
  • Surplus to policyholders
  • Surrender charge
  • Survey
  • Surveyor
  • Survivorship benefits
  • Survivorship clause
  • Sustainability risk management
  • SVO
  • Symbol
  • Syndicate
  • Syndicate policy
  • System for Electronic Rate and Form Filing
Sacrifice

In marine insurance, acts done for the welfare of all interests, such as the throwing overboard (jettison) of part of a cargo to keep the ship from sinking.

(See jettison, and general average.)
[S002]

Safe burglary insurance

This form (now obsolete) protects against loss of property caused by forcible entry into a safe or vault. Damage to safes, vaults and other property on the premises resulting from burglary is also covered unless damaged by fire. This very limited coverage can be purchased through an insuring agreement and endorsement within the Commercial and Governmental Crime Policies.
[S005]

Safe driver rating plan

A merit rating program for private passenger cars where insureds with clean driving records qualify for lower automobile insurance premiums, and insureds who have an accident or moving traffic violation history pay higher premiums. The amount of premium is regulated by a point system, which assigns a certain number of points for accidents and traffic violations in which the insured is involved during a stated period, usually three years.
[S168]

Safe harbor

A generic reference to organizational activity that bears little or no risk of violating any law or regulation. The term is used more actively when new laws and regulations appear and affected persons begin to interpret their impact.
[S006]

Safe-harbor provisions

Legal or regulatory conditions, the compliance with which insulates a taxpayer from unfavorable tax consequences.
[S007]

Safety engineering

Loss control, inspection and safety engineering work that is performed by an account in an attempt to prevent losses from occurring. Loss prevention work applies to property, liability, automobile, workers compensation, and most other P&C insurance. It is also known as loss or accident prevention.
[S008]

Safety responsibility laws

A statute (in force in most states) which requires a motorist to provide evidence of the ability to pay for negligence in causing losses to others from the operation of a motor vehicle. Typically, the evidence furnished is an insurance policy, although most states also permit a bond or cash deposit to be used in lieu of a policy. Also called financial responsibility laws.
[S009]

Salary continuation plan

A disability or life insurance program designed to provide comparable income to an employee and/or family should that employee die or become disabled. Most often this is an employee benefit provided by the employer through a group insurance program.
[S128]

Salary reduction plan

Pays for some employee benefits through the use of salary deductions from a participant's paycheck.
[S010]

Salespersons sample floater

An inland marine policy to protect against theft and other property damage for valuable samples carried by salespersons.
[S011]

Salvage

Property in a loss saved from further loss.
[S012]

Salvage corps

Certain big cities have organizations similar to fire departments, the duties of which are limited to the prevention of damage to property during and after a fire, rather than the extinguishing of the fire. Such organizations are maintained by the fire insurance companies and are called salvage corps.
Salvors

General reference to parties who, through their own expense and effort, gain ownership rights to property that has been abandoned or that has been saved from loss or destruction.
[S013]

Sanborn Map

Maps of cities and towns giving details of construction and fire protection, made by the Sanborn Map Company. Formerly used more frequently than today. Fire insurers kept such map records in their offices to indicate the location and other details of their insured risks in order to prevent undue concentration in a given building, city block, or area.

(See map clerk.)
[S014]

SAP--statutory accounting principles

Those principles required by state law which must be followed by insurance companies in submitting their financial statements to state insurance departments. Such principles differ from generally accepted accounting principles (GAAP) in some important respects. For example, SAP requires that expenses must be recorded immediately and cannot be deferred to track with earned premiums.

(See GAAP--generally accepted accounting principles.)
[S186]

Sarbanes-Oxley Act

This act, created in response to a host of recent corporate scandals (i.e., Enron, WorldCom, Arthur Anderson, et al) created a new set of financial reporting requirements, established a public company accounting oversight board, mandates the use of independent auditors and it substantially tightened the accountability standards for directors and officers, auditors, securities analysts and legal counsel.
[S015]

Satellite and space vehicles insurance

Highly specialized property insurance designed to protect satellites, space vehicles, and related equipment against physical damage losses. Coverage options and endorsements may include protection for loss of income and expenses. Four types of coverage are available: pre-ignition, launch, in-orbit, and ground support.
[S129]

Savings bank life insurance (SBLI)

Life insurance sold by savings banks in New York, Massachusetts and Connecticut.
[S130]

SCLA

Senior Claim Law Associate designation sponsored by the American Educational Institute. Headquarters: Basking Ridge, NJ.
[S016]

Schedule

1) The plan or formula applied to arrive at a fire insurance rate.

2) A list of insured properties, and the amount of insurance on each, which is attached to a "schedule" policy, as distinguished from a "blanket" policy. In the latter, one amount of insurance applies to the total of all insured properties.

(See schedule rating.)
[S017]

Schedule bond

A fidelity bond covering a number of named individuals or positions irrespective of who occupies them, as contrasted with a blanket bond, which covers all.
[S018]

Schedule policy

A listing of two or more items of property in a policy, with specified amounts of insurance applying to each item. On the other hand, if a policy were to provide one amount of insurance on several items of property, the policy would be known as a blanket policy.
[S019]

Schedule rating

A system of making fire insurance rates for commercial properties, determined by a physical inspection of each risk. Such rates are made by modifying the class rates applying to a given classification, to the extent of the good or bad features of the individual risk, according to the schedule. For example, a certain commercial building may receive a credit because it is sprinklered, a debit because it is protected only by a volunteer fire department.

(See schedule.)
[S020]

Scheduled personal property endorsement

An endorsement to a homeowners policy allowing the insured to schedule both the coverage and the value on specific items.
[S169]

Scopes Manual

Produced by NCCI, it contains information on classifying occupational loss exposures into Workers Comp classification codes.
[S021]

Seasonal risk

An insured risk which is occupied for part of the year only, such as a summer dwelling. In the case of a manufacturer, it may be a plant which is operated only a part of a year according to the season, such as a cannery.
[S021a]

SEC liability

The liability that those parties who offer and sell publicly traded stock expose themselves to as a result of the Federal Securities Act of 1933 and the Federal Securities Exchange Act of 1934. These acts place strict obligations on parties offering stock, specifically regarding the issues of disclose of information on the offering. Any misrepresentations, intentional or not, can result in liability.
Second Injury Fund

Refers to a special (state) reserve that is used to pay for workers who need increased compensation when they suffer an additional work injury that complicates a previous disability. The fund pays for the increased portion of necessary financial relief. Usually such funds only respond in cases of severe and/or permanent disability.
[S131]

Second to die life insurance

In a life insurance contract, a clause which states that the beneficiary must survive the insured by X number of days for the beneficiary to be paid the proceeds. Otherwise, the benefits will defer to the contingent beneficiary or the estate of the insured if no contingent beneficiary is designated.
[S132]

Section 403(b)

A form of employee retirement plan for not-for-profit, governmental or charity organizations.

(See also section 403(b).)
[S133]

Section 79

That part of the IRS tax code that gives favorable tax treatment to both the group life employer and the individual plan participant if the group life plan meets certain minimum requirements.
[S022]

Securities valuation

The valuation method used by state insurance department regulators when setting or confirming the values used on the securities of an insurer.
[R182]

Securities Valuation Office

A department of the NAIC (National Association of Insurance Commissioners). Among its duties it monitors the (market) values of securities that comprise the investment portfolios of state-regulated insurers.
Securitization

An alternative risk transfer tool, refers to use of a special financial entity to take a block of similar assets, such as a loan portfolio and convert them into assets that can be sold and traded as securities. It is an increasingly popular method to gain direct access to the capital market.
[S023]

Security bond

A written agreement wherein one party (the surety) obligates itself to a second party (the obligee or beneficiary) to answer for the default of a third party (the principal) in failing to perform specified acts within a stated time. Such obligations include payment of debts and responsibility for defaults.
Segregated cell insurer

A variation of a captive insurer where each company’s asset and liabilities are kept separate. While the combined companies can take advantage of shared operating staff and costs, they only have to deal with the consequences of their own underwriting decisions and liabilities.
[S024]

Selection

The process of accepting and rejecting risks in the attempt to produce a profit in underwriting.

(See classification, discrimination, and unfair discrimination.)
[S025]

Self-administered plan

When an employer decides to fund and administer his/her own employee benefit plan instead of using outside sources. Employee benefit plans are regulated by the U. S. Government by means of the Employees' Retirement Income Security Act (ERISA) of 1974.
[S026]

Self-insurance

The retention of sufficient exposure units by an entity to permit the operation of the law of large numbers. Self insurance is a term often mistakenly used to describe the situation when an entity decides to retain its own risks. The mistake arises when the exposure units are too few in number to permit the application of the law of large numbers. When the exposure units are too few, a better and less misleading term of such a practice is "self-assumption of risk."
[S026a]

Self-insured retention

The portion of each loss that an insured retains by setting aside funds or by possibly using alternative types of financing to meet losses. It acts very similar to a deductible although normally, on a much larger scale. It is also considered to be a form of self-insurance.
Self-reported

Under disability insurance, this refers to a worker reporting his or her own injury or symptom. Due to difficulty of verifying the incident, such instances are typically subject to only partial benefits.
[S027]

Self-storage risks

Facilities designed to provide public rental of storage space for one's own goods while allowing the property owner access and control of the rental space. Mini-warehouses are common examples.
[S028]

Selling agents commission insurance

Protection to indemnify an independent sales agent, sometimes known as a manufacturer's representative, for lost commissions on orders already received due to the inability of the manufacturer to produce the goods because of fire or other insured cause of loss.
[S029]

Selling price clause

An endorsement which can be added to a fire policy covering a stock of merchandise, which extends the policy to cover beyond the actual value of the stock. One form, covering only stock already sold, is available to both mercantile and manufacturing risks and pays the price for which the stock had been sold. The other form, covering unsold stock, is available for manufacturers only and pays the price for which the owner expected to sell the stock.

(See profits insurance.)
[S029a]

SEMCI--Single Entry Multiple Company Interface

An ultimate goal in agency/company automation where one client such as an agency or broker can enter data and information in their own agency system, (coverage application information) and, without human intervention in conversion or manipulation, transmit that data to multiple insurers. A common interface between agencies, brokers, insurers and reinsurers as well as state insurance regulatory agencies.
Semiautomatic treaty

A reinsurance treaty that allows the reinsurer to select certain cases for individual reinsurance consideration within with the provisions of an automatic reinsurance treaty.
[S029b]

SEP--simplified employee pension

A type of retirement plan that was designed for small businesses. It is easier to administer than other plans because a minimal amount of paperwork is required. In this plan, an employer makes contributions to the employees IRA. In one form of SEP call SEP-IRA, the contributions are limited to 15% of the employee's salary up to a specified cap.
[S134]

Separate account

A term usually associated with variable annuities, variable life and variable universal life insurance to define the portion of the assets of the policy invested in nonguaranteed products, e.g., equities.
[S183]

SERFF

(See System for Electronic Rate and Form Filing.)
[S029c]

Servicemen's Group Life Insurance (SGLI)

A group life insurance program developed specifically for members of the armed services who often have difficulty obtaining life insurance at affordable rates in the open market.
[S030]

Settlement option

The choice of payment method and frequency available to the beneficiary of a matured life insurance policy.
[S029d]

Settlement or settlement offer

In liability cases, it is the amount of compensation offered or made by the tortfeasor or the insurer of the tortfeasor, to the injured party(ies), to resolve (settle) the claim or legal action.
[S031]

Settling agent

In marine insurance, a person authorized to pay losses out of funds provided by the marine underwriter. Such agents have broader powers than the claim agent, whose authority is limited to surveying and certification of losses.
[S170]

Setoff

A party that is confronted by a legal action responds by filing a separate action, alleging a different set of circumstances.
[S032]

SEUA--Southeastern Underwriters Association

The defendant in U.S. v. S.E.U.A., 322 U.S. 533 (1944), in which the Supreme Court held that insurance is commerce. Also known as the S.E.U.A. Case.

(See interstate commerce, and S.E.U.A. Case.)
[S033]

S.E.U.A. Case

The defendant in U.S. v. Southeastern Underwriters Association (S.E.U.A.), 322 U.S. 533 (1944), in which the Supreme Court held that insurance is commerce.

(See interstate commerce, and SEUA--Southeastern Underwriters Association.)
[S159]

Sex-based harassment

Actions or conduct which, while nonsexual, humiliate or denigrate a person due to that person’s gender (example, derogatory statements to or treatment of a female auto mechanic or a male registered nurse).
[S034]

Sexual harassment

When one employee is subjected to unsolicited, unwarranted, and unwanted physical or verbal advances, innuendoes, comments, or conditions from either the employer or another employee.
[S035]

Sexual harassment defense coverage

An insurance coverage providing claims-made coverage for the legal defense and costs for alleged charges of sexual harassment. Sexual harassment is when one employee is subjected to unsolicited, unwarranted, and unwanted physical or verbal advances, innuendoes, comments, or conditions from either the employer or another employee.
[S193]

SFAA

(See Surety and Fidelity Association of America.)
[S029c]

Servicemen's Group Life Insurance (SGLI)

A group life insurance program developed specifically for members of the armed services who often have difficulty obtaining life insurance at affordable rates in the open market.
[S171]

Ship repairers' liability

Comprehensive liability insurance that protects ship repair operations against their legal liability for their activities (renovations, repairs, movement of property before or after projects) that may cause damage or injury to third parties.
[S036]

Shock loss

A much larger loss than anticipated. Usually a loss large enough to have an impact on a company's underwriting results in any given territory.

(See probable maximum loss (PML), and maximum foreseeable loss (MFL).)
[S037]

Short rate cancellation

Termination of a policy by the policyholder before its stated expiration, with the insurer refunding to the policyholder a return premium an amount less than the pro rata part that is still unearned to compensate the insurer for expenses incurred to that point, since the termination is at the request of the policyholder.

(See pro rata cancellation.)
[S038]

Short-tail

A term used to designate those types of claims that become known and are made within a short period of time. Short-tail is usually considered to be those claims that become known within the policy period or within one year of expiration. Property claims are a common example.
[S135]

Short-term disability income insurance

Usually less than one year, often 13-, 26- or 52-week plans frequently sold as part of an employee benefits plan. Also known as weekly income plans.
[S039]

Short term

A policy period of less than one year.
[S040]

SIA--Society of Insurance Accountants

An organization devoted to the discussion of accounting and statistical and management problems and to the interchange of ideas with the objective of fostering the value of the accounting and statistical functions to the insurance industry. Headquarters: New York, NY.
[S160]

SIASIAA (Strategic Independent Agents Alliance)SIA

Founded in 1983, it is a national alliance of independent insurance agencies that operate in regional networks. The networks allow agencies to preserve independent ownership while enjoying economies of scale and shared expenses. Headquarters: Swanzey, NH.
[S136]

SIC

The standard industrial classification. A government classification of businesses used in various statistical programs and by insurance companies to place businesses in proper rating classes.

(See also rating classes.)
[S041]

Sickness insurance

A form of health insurance against loss by illness or disease.

(See accident & sickness insurance.)
Side car

An alternative, highly customized reinsurance arrangement, similar to a short-term, retrocession or fully collateralized quota share agreement. In essence, a private party agrees to fund a selected line or book of business at an agreed layer of loss. In exchange, that party is able to participate in the profits and fees earned by that line or book. Among the advantages is that a reinsurer gains access to more capital without the obligation of reporting a traditional reinsurance arrangement or debt obligation.
[S042]

Sidetrack agreement

An agreement between the owners of a premises and a railroad with respect to a railroad sidetrack (transfer or access track) on the premises of the insured. The railroad will allow use of the sidetrack as long as the property owner guarantees access by the railroad to the sidetrack and agrees to certain conditions of property maintenance. It may also contain specified conditions of hold-harmless between the railroad and property owner.
[S043]

Silverware floater

An inland marine form designed to insure silverware worldwide against all risks, usually by endorsement to a homeowners policy.
[S137]

Simplified

In the mid-1980s, standard property and casualty insurance contracts, both personal lines and commercial lines, were rewritten. The intent was to modify the legalistic-style language that most ordinary insureds had difficulty understanding, and make the provisions and wording of the contracts easier to comprehend. Simplified refers to the contract language resulting from the conversion to the easy-to-read and easy-to-understand format and verbiage. Pre-simplified policies are those that existed before the conversion to simplification and contain a more legalistic-styled format and wording.
[S043a]

Simplified employee pension (SEP)

A type of retirement plan that was designed for small businesses. It is easier to administer than other plans because a minimal amount of paperwork is required. In this plan, an employer makes contributions to the employees IRA. In one form of SEP call SEP-IRA, the contributions are limited to 15% of the employee's salary up to a specified cap.
[S138]

Simultaneous death acts

When both the life insured and the beneficiary die in the same accident it may be impossible to determine who expired first. States that have this legislation provide that the beneficiary died first unless the policy states otherwise. This permits the policy to pass the proceeds onto the insured's contingent beneficiary.
[S043b]

Single Entry Multiple Company Interface (SEMCI)

An ultimate goal in agency/company automation where one client such as an agency or broker can enter data and information in their own agency system, (coverage application information) and, without human intervention in conversion or manipulation, transmit that data to multiple insurers. A common interface between agencies, brokers, insurers and reinsurers as well as state insurance regulatory agencies.
[S044]

Single interest cover (or insurance)

Used in connection with property sold on the installment plan, it protects the lender of money advanced to purchase a property, but does not protect the borrower or purchaser directly.

(See credit insurance, and floor plan insurance.)
[S139]

Single premium deferred annuity (SPDA)

An annuity where the premium is paid in a lump sum and benefits will be paid out at a future date.
[S045]

Single premium life insurance

A type of life insurance coverage in which the entire premium is paid at one time at policy inception.
[S172]

Single risk reinsurance

Reinsurance effected item by item and accepted or declined by the reinsuring company after scrutiny, as opposed to reinsurance effected by treaty. The word facultative connotes that both the primary insurer and the reinsurer have the faculty or option of accepting or rejecting the individual submission, as distinguished from the preset obligation to cede and accept already agreed upon by the parties in treaty reinsurance.
[S046]

Sinkhole insurance

Occurs notably in Florida, but is found in other limestone areas, covering physical damage to dwellings and personal property caused directly by sinkhole collapse. Sinkhole collapse is the sudden settlement or collapse of earth resulting from subterranean voids created by the action of water on limestone or similar rock formations. All licensed insurers writing property insurance in Florida were required at one time to join the Florida Sinkhole Reinsurance Association, which assumed all sinkhole policies written by members who shared through the association equitably in the total premiums, losses and expenses. After a five-year operation without a loss, the insurers in Florida were required to insure sinkholes under the extended coverage endorsement. The association was then dissolved, although it was reborn shortly thereafter as the Florida Windstorm Association.
SIO

(See Surety Information Office.)
[S161]

Sistership exclusion

An old term for a policy exclusion that prevents coverage for any cost, loss or expense to an insured who has to recall a product due to a defect that is either known or suspected.
[S047]

SITE--Society of Insurance Trainers and Educators

An organization of education and training directors from all sections of the insurance industry. The society's aim is to improve training methods and techniques for both company personnel and agents.
[S047a]

SIU--Special Investigative Unit

Special insurance company fraud units created for investigating and reporting fraudulent claims.
[S162]

Slander

Refers to an oral distribution of false information that harms another party’s character or reputation.
[S173]

Sliding scale commission

Used in pro rata reinsurance treaties, this arrangement allows a ceding insurer to pay ceding premiums that are inversely proportional to the treaty's ultimate loss ratio.
[S048]

Slip

A piece of paper submitted by a Lloyd's of London broker on which underwriters record their participation in a risk. In broader terms, it applies to any list of insurers or reinsurers providing the capacity for a risk.
[S049]

Smoke damage

Damage caused by smoke other than smoke which accompanies a hostile fire. One of the extended coverage endorsement perils, but subject to certain restrictions.
[S050]

SMP--special multiperil package

A package policy for commercial accounts containing four principal sections of coverage: property, liability, crime and boiler and machinery. The basic policy contains declarations, general provisions and definitions applicable to these sections, and then the specific coverage requirements for each section are handled by separate forms. The types of accounts eligible for this policy can be grouped in eight categories: motel/ hotel, apartment house, office, mercantile, service, industrial and processing, institution, and contractors. This policy is rarely used. It has been replaced in most jurisdictions by the commercial package policy (CPP).
[S051]

Snowmobile insurance

Covers snowmobiles against physical damage to the equipment, and legal liability for their use and operation.
SOAR

(See Society of Accident Reconstructionists.)
[S052]

Social inflation

The increased jury awards, increased liberal treatment of claims by workers compensation boards, legislated increases in benefit levels (in some cases retroactively), and new concepts of tort and negligence that emerge to increase insurance losses.
[S053]

Social insurance

Insurance provided by government.
[S053a]

Social Security

Federal government programs provided in the Social Security Act of 1935 (including all amendments and additions). It is sometimes called Old Age, Survivors, Disability, and Health Insurance and provides economic security for the elderly, the disabled and certain persons who have lost the income of the primary wage earner through death.
[S140]

Social Security Disability Income

That portion of the OASDHI or social security act that provides disability income benefits to persons who are unable to engage in any substantially gainful occupation and who are or are expected to be disabled for more than one year.
[S174]

Society for Risk Analysis (SRA)

An international forum of persons from a variety of professional backgrounds. Its members share information, ideas and network opportunities in the world of risk management. Headquarters: McLean, VA.
Society of Accident Reconstructionists

An international association of persons who are experts in evaluating the circumstances surrounding accidents. Its objectives are to share information, network, provide additional education and training to its members, and to promote safety. Headquarters: Wheat Ridge, CO.
[S054]

Society of Actuaries

An organization formed to promote actuarial and statistical knowledge applicable to life and health insurance. Headquarters: Chicago, IL. Its property-liability insurance counterpart is the Casualty Actuarial Society.
(CPCU)
[S055]

Society of Chartered Property & Casualty Underwriters (CPCU)

Professional society of those who have been awarded the designation of Chartered Property Casualty Underwriter (CPCU). Fosters research and continuing education of its members. Headquarters: Malvern, PA.
[S056]

Society of Insurance Accountants (SIA)

An organization devoted to the discussion of accounting and statistical and management problems and to the interchange of ideas with the objective of fostering the value of the accounting and statistical functions to the insurance industry. Headquarters: New York, NY.
[S057]

Society of Insurance Research

Stimulates research affecting all lines of insurance and fosters exchange on research methodology among society members. Headquarters: Appleton, Wl.
[S058]

Society of Insurance Trainers and Educators (SITE)

An organization of education and training directors from all sections of the insurance industry. The society's aim is to improve training methods and techniques for both company personnel and agents.
[S187]

Society of Risk Management Consultants

An international organization of risk management consultants who provide advice on insurance, risk and related matters and are compensated exclusively by their clients. The Society's stated mission is to advance the profession of risk management consulting and to promote the benefits to be derived from the use of independent consultants. Headquarters: Milwaukee, WI.
[S059]

Soft market

The capacity and availability of insurance is said to progress in cycles of hard market and soft market. The soft market period is the portion of the cycle in which capacity is high, and coverage is readily available at affordable, competitive and even artificially low prices.
[S060]

Software

All documents, manuals, and written instructions which guide a computer operation.

(See hardware.)
[S061]

Solvency

As it applies to the insurance industry, solvency is whether or not an insurer has the funds to pay insured claims. State insurance departments are directly responsible for assuring the solvency of the insurers licensed to write business in their state and are charged with periodic review and evaluation of those insurers. The minimum reserve, surplus and capital requirements mandated in each jurisdiction for insurers will vary by state.
[S062]

Sonic boom

The shock waves, pressure blasts, and noise that occur when an aircraft or missile exceeds the speed barrier. Most standard property policies will cover this cause of loss.
[S063]

Southeastern Underwriters Association (SEUA)

The defendant in U.S. v. S.E.U.A., 322 U.S. 533 (1944), in which the Supreme Court held that insurance is commerce. Also known as the S.E.U.A. Case.

(See Interstate Commerce, McCarran-Ferguson Act, S.E.U.A. Case, and Public Law 15.)
[S163]

SOV (statement of values)

A statement signed by an insured or applicant that attests to the value of real and/or other property to be covered under an insurance policy. Typically used for policies that provide coverage on a blanket basis.
[S064]

Sovereign immunity

In order to act in the best interest of the people represented, at one time governmental authorities were protected from lawsuits or other legal remedy by parties alleging injury or damage as a consequence of the actions or lack of action of the governmental body. This immunity has eroded significantly in the last few years and may continue to deteriorate, thus opening up the possibility of a myriad of lawsuits against governmental bodies.
[S188]

SOX

(See Sarbanes-Oxley Act.)
Special acceptance

A facultative reinsurance treaty provision that, as an exception, permits coverage for a submission that does not qualify for automatic protection.
[S065]

Special automobile policy

A combination private passenger automobile policy designed to provide basic coverage at minimum cost. The lower premium is due to economies in acquisition and handling expenses, as well as to reduced uniform coverage.
Special conditions

(See self-reported.)
[S164]

Special damages

In liability insurance, refers to awards which may fall into either compensatory or punitive. Compensatory consists of either general damages, which include pain and suffering, and special damages, which are out-of–pocket expenses. Punitive (or exemplary) are amounts that are awarded as a form of punishment or to act as an example.
[S066]

Special form

A property coverage form protecting insureds from all causes of physical damage loss unless otherwise limited or excluded.
[S067]

Special hazard

A hazardous risk, or more generally, a risk with manufacturing occupancy.
[S067a]

Special Investigative Unit (SIU)

Special insurance company fraud units created for investigating and reporting fraudulent claims.
[S068]

Special multiperil policy (SMP)

A package policy for commercial accounts containing four principal sections of coverage: property, liability, crime and boiler and machinery. The basic policy contains declarations, general provisions and definitions applicable to these sections. The specific coverage requirements for each section are handled by separate forms. The types of accounts eligible for this policy can be grouped in eight categories: motel/ hotel, apartment house, office, mercantile, service, industrial and processing, institution, and contractors. This policy is rarely used. it has been replaced in most jurisdictions by the commercial package policy (CPP).
Special purpose vehicle

An alternative risk transfer method of raising operating capital by marketing a combination of equity and debt securities. The parties are reimbursed for their investment solely by the performance of the purchased assets.
[S069]

Specific insurance

A single amount of insurance covering a single type of insurable property, e.g., building or contents, used in contrast with blanket insurance. Thus, a policy providing one amount of coverage on building and contents would be blanket insurance, whereas one providing a certain amount on the building and another amount on the contents would be specific insurance.
[S070]

Specific rate

A fire insurance rate which applies to specific insurance.
[S071]

Specific retrocession

Retrocession protecting a particular reinsurance, as opposed to blanket retrocession, which deals with a portfolio of reinsurance.

(See retrocession.)
[S071a]

Specified disease insurance

A health insurance policy designed to provide benefits for the services, expenses and fees for treatment if the covered person(s) contract the disease or diseases specifically addressed by the policy. Common examples are cancer or AIDS.
[S072]

Specified perils

An insurance contract that covers only those causes of loss (otherwise known as perils) that are specifically indicated as being covered.
[S165]

Speculative risk

Any risk or event that includes the possibility of either a gain or a loss, so that a party can speculate (gamble) on the outcome.
[S141]

Spendthrift clause

Pays life insurance settlement benefits to the beneficiary in installments. While the money is with the insurer, creditors cannot attach the proceeds. Once paid out, creditors may attach the benefits.
[S073]

Split limits

A limits concept used in general liability and automobile liability policies whereby separate limits are set for each coverage. The most common example is one limit for bodily injury and another for physical damage, with still another for medical payments.
Spoilage coverage

Insures damage to perishable personal property and stock caused by a change in temperature or humidity resulting from power failure or equipment failure. The coverage may also include damage caused by contamination.
[S074]

Spread loss reinsurance

A type of excess of loss property reinsurance which provides for a periodic adjustment of the reinsurance premium rate based on the reinsured's experience for preceding years (usually three or five) plus a loading for the purpose of compensating the reinsurer for:

its expenses
the possibility of unusual losses
those losses occurring at the end of the period of the treaty, which the reinsurer might not have a chance to recoup if the treaty is not renewed
a catastrophe possibility and
the reinsurer's profit. In casualty reinsurance, adjustments to the above may be required for such other factors as economic and social inflation.
Also known as Carpenter plan.
(See Carpenter plan.)
[S075]

Spread of risk

A property insurance philosophy where the accumulation of property risks in a given area, and subject to the same catastrophic loss such as tornado or major conflagration, are monitored by the insurer to make sure the accumulation is either within the insurer's capacity or has been properly reinsured.
[S076]

Sprinkler head

A valve on an automatic sprinkler system which opens when subject to excessive heat from a fire, permitting water to flow in a circular fashion from overhead pipes, thus localizing the fire.
[S077]

Sprinkler leakage insurance

Insurance against the damage done by the accidental discharge of water from automatic sprinklers and similar fire prevention devices.
SPV

(See special purpose vehicle.)
[S175]

SR-22 Form

Refers to documents used in many states after an individual has been involved in an auto accident without having insurance. The forms must be regularly filed with a state's insurance authorities to prove that a given driver is now carrying insurance or has some other authorized method to prove he or she can meet their financial obligations.
[S176]

SR-26 Form

Refers to documents used in many states after an individual has been involved in an auto accident without having insurance. The forms must be regularly filed with a state's insurance authorities to prove that a given driver is now carrying insurance or has some other authorized method to prove he or she can meet their financial obligations.
[S178]

SR filings

Refers to documents used in many states after an individual has been involved in an auto accident without having insurance. The forms must be regularly filed with a state's insurance authorities to prove that a given driver is now carrying insurance or has some other authorized method to prove he or she can meet their financial obligations.
[S177]

SR forms

Refers to documents used in many states after an individual has been involved in an auto accident without having insurance. The forms must be regularly filed with a state's insurance authorities to prove that a given driver is now carrying insurance or has some other authorized method to prove he or she can meet their financial obligations.
[S189]

SRMC

(See Society of Risk Management Consultants.)
[S166]

Staff underwriter

An underwriter who performs such staff functions as research, rule and form preparation, analyses of problems, interpretation of company rules, and conduct audits.
[S078]

Stamping bureau

An office which checks rates and forms of issued policies for accuracy of rates and rules. Sometimes called audit bureau because the daily report is stamped with a rubber stamp if correctly prepared.
[S079]

Standard form

A form, a policy or other document used to write insurance, which has been adopted and is used by a large number of companies or has been promulgated by a rating bureau or legislature. The use of standard forms does away with much of the need to scrutinize every word of a policy form for meaning, since the standard has been examined and adjudicated by courts.

(See standard policy.)
[S080]

Standard policy

A policy generally in use, and in some lines of insurance, prescribed by law.

(See standard form.)
[S081]

Standard provisions

Those provisions within an insurance contract that use similar wording and contain the same types of terms as do the provisions in contracts of most other insurers of the same type of business or that are mandated in that jurisdiction. For example, cancellation and nonrenewal conditions, other insurance conditions, or duties in the event of loss, and so forth.
[S082]

Standard risk

The type of risk that an insurer defines as average or standard for class as far as size, quality and acceptability. The baseline set by the insurer as the proverbial company normal. Also known as average risk.

(See average risk.)
[S083]

State Association of Insurance Agents

In each state, insurance agents have formed organizations to discuss their problems and promote the best interests of the American Agency System. Together these state associations make up the national Independent Insurance Agents of America or the Professional Insurance Agents. IIAA is mostly stock agents and PIA is mostly mutual, but both support the American Agency System.
[S084]

State funds

An amount of money assessed certain insurers in a given state to reimburse policyholders and claimants of an insolvent insurer in that state. The fund may be created before an insolvency occurs (pre-assessment, as in New York) or afterward (post-assessment), and virtually all states now have such protection. Also called insolvency funds and guaranty associations.
[S179]

State-of-the-art defense

A defense strategy typically used in cases involving product liability. The concept argues that, at the time a loss occurred, the technology that may have prevented the loss did not exist (or was not readily available). Therefore, the loss or damage was an assumption of risk.
[S180]

State responsibility filings

Refers to documents used in many states after an individual has been involved in an auto accident without having insurance. The forms must be regularly filed with a state's insurance authorities to prove that a given driver is now carrying insurance or has some other authorized method to prove he or she can meet their financial obligations.
[S085]

Stated amount

When the value of property, either real or personal, is agreed upon at the issuance of the contract and, therefore, coinsurance and any other valuation clauses will not apply at the time of a loss.
[S086]

Statement of values

A statement signed by an insured or applicant that attests to the value of real and/or other property to be covered under an insurance policy. Typically used for policies that provide coverage on a blanket basis.
[S087]

Statistical agent

An organization authorized by the laws of most states to prepare the statistics required for the administration of rating laws. Company associations compiling statistics in a given state are subject to appointment by its individual commissioner.
[S088]

Statute of limitations

A statute limiting the time within which a legal action may be brought.
[S089]

Statutory accounting principles (SAP)

Those principles required by state law which must be followed by insurance companies in submitting their financial statements to state insurance departments. Such principles differ from generally accepted accounting principles (GAAP) in some important respects. For example, SAP requires that expenses must be recorded immediately and cannot be deferred to track with earned premiums.

(See GAAP--generally accepted accounting principles.)
[S190]

Statutory damages

Damages resulting from causes of actions that are created by laws passed by authorized governmental bodies.
[S194]

Statutory disability benefits insurance

A limited form of longer term disability insurance that is mandated by several states. It provides various levels of coverage for employees who are losing income due to a nonjob-related injury or sickness.
[S143]

Statutory reserve

An insurance company reserve required by state law.
[S090]

Statutory underwriting profit or loss

1) Money earned or lost by an insurer in its underwriting operations, as distinguished from money earned or lost in the investment of assets.

2) Earned premiums less losses, loss adjustment expenses incurred and other underwriting expenses incurred, usually determined monthly for managerial purposes.
[S181]

Stevedore's legal liability

Stevedores unload and load cargoes from ships, railroad cars, trucks, etc. Stevedore's liability is a form of insurance that assists with claims related to their operations, whether they are connected to transportation terminals or do business as independent contractors.
[S091]

Stock

Merchandise for sale or in the process of manufacture, as distinguished from furniture, fixtures or machinery.
[S092]

Stock insurance company

Insurance business transacted by an insurer whose ownership element is divided into shares of stock represented by certificates, as opposed to a mutual insurer which does not have capital stock and whose ownership element is divided among its policyholders. While a stock insurer has both stockholders (its owners) and policyholders (its customers), a mutual insurer has only policyholders (its owners and customers).

(See mutual insurance.)
STOLI

(See Stranger Originated Life Insurance.)
[S093]

Stop loss excess aggregate

A company wishing to protect itself in the event aggregate losses exceed an agreed upon amount of self-retention in any one year may purchase this type of coverage or reinsurance for the excess. This type of approach is most often used in the liability lines.
[S144]

Stop-loss provision

Health insurance policies that have coinsurance provisions require the insured to pay a portion of the loss after the deductible, e.g., 20% while the insurer pays the rest. In a large claim the insured could have a large out-of-pocket expense. The stop loss provisions will state that the insured will not have to pay any more of the loss once his/her out-of-pocket expense (including the deductible or not) has reached a certain limit, say $1,000.
[S094]

Stop-loss reinsurance

A company wishing to protect itself in the event its net loss ratio for a given year rises above a certain percentage may buy reinsurance which pays in excess of that figure up to a higher agreed percentage, beyond which the company is once more liable. In short, a plan which takes the sting out of an above-average net loss ratio.

(See excess of loss reinsurance.)
[S095]

Storekeepers burglary and robbery policy

This form (now obsolete) provided a single limit of insurance for a variety of burglar and robbery coverage. The limits options were low and designed for the small retail store. Money and securities options in Businessowners policies provide more enhanced versions of this coverage.
[S096]

Storekeepers liability policy

A package policy designed for retail store operators, insuring against claims for bodily injury and property damage arising from their business operations. Excludes automobile liability. This policy is now basically obsolete and rarely used, replaced by current versions of the businessowners policy.
[S145]

Straight life annuity

Pays the benefit for the life of the annuitant. No refund or period certain is paid if the annuitant should die even after one payment.
S146]

Straight life income option

A life insurance settlement option where a beneficiary receives periodic payments which end immediately upon the beneficiary's death.
[S147]

Straight life insurance

A cash value insurance policy that requires premium payments for the life of the insured.
[S097]

Stranding

Running aground, such as a vessel may do in shallow water.
Stranger Originated Life Insurance

An evolving term typically references any arrangement for a life insurance contract to benefit a third party who, at the time that coverage is applied for or purchased, does not have an insurable interest in the subject (person) being insured.
[S167]

Strategic Independent Agents Alliance (SIAA)

Founded in 1983, it is a national alliance of independent insurance agencies that operate in regional networks. The networks allow agencies to preserve independent ownership while enjoying economies of scale and shared expenses. Headquarters: Swanzey, NH.
[S167a]

Strategic risk management

Described in a variety of ways, the term it refers to implementing an integrated process for continually assessing risks that are obstacles to an organization's financial and operational goals. Under this concept, risks are viewed in two ways: as threats and as opportunities.
[S097a]

Strict liability

Strict liability is a legal doctrine applying to tort law that basically holds the manufacturer, wholesaler and/or retailers (or in the case of property--the owner) liable for injuries that may be caused by defective or dangerous products or premises conditions. It does not require the injured party to prove negligence. Negligence can be assumed because of the inherent danger of the product, defect or premises condition. Strict liability, however, is not absolute liability.
[S098]

Structured claim settlements

The practice of spreading payment of an obligation over an extended period, instead of paying the obligation in a lump sum.
[S099]

Subagents

Agents who sell insurance through other agents or through general agents.
[S099a]

Subchapter S Corporation

A form of corporate entity where all profits and losses are shared by the stockholders. The stockholders are taxed on an individual basis as opposed to corporate tax.
[S099b]

Subcontract bond

A bond often required by the general contractor of a subcontractor, that guarantees to the general that the subcontractor will fully perform the subcontract in accordance with the terms. It also specified that the subcontractor will pay for certain labor and material incurred during the process of the subcontracted work
[S099c]

Subdivision bond

A bond required of a subdivision guaranteeing to construct or finance improvements such as streets, sidewalks, curbs, gutters, sewers and drainage
[S100]

Subject premium

The generic term to describe the rating base for excess of loss reinsurance:

1) the ceding company's premium income as opposed to premium receipts

2) measured net, meaning after cancellations, refunds and premiums paid for reinsurance protecting the cover being rated

3) gross, meaning before deducting any expenses. Also known as gross net premium income (GNPI).

Note: GNPI may be written premiums (GNWPI) or earned premiums (GNEPI).

(See GNWPI--gross net written premium income.)
Subprime crisis

A problem faced by financial entities that had a substantial position in either making or investing in private mortgage loans to classes of borrowers who represented a high exposure to loan default. The crisis created by widespread default has resulted in an additional, serious liability exposure for directors and officers.
[S101]

Subrogation

In insurance, the substitution of one party (insurer) for another party (insured) to pursue any rights the insured may have against a third party liable for a loss paid by the insurer.
[S101a]

Subrogation release

A release signed by the insured once the insurer has paid the insured for a claim submitted. The release allows the insurer to subrogate the rights of recovery of the insured against the party responsible for the loss.
[S101b]

Subscription policy

A policy shared by or subscribed to by two or more insurers. The amount of each insurer's share must be clearly indicated in the policy.
[S102]

Subsidence

Damage due to land movement, e.g., a house on a hill may slide down the hill due to heavy rains. Not earthquake damage.
[S191]

Subsidiary

In regards to business, refers to an organization that (traditionally) is smaller and either partially or fully owned by another (larger) organization, or a firm, regardless of ownership percentage, whose operations are controlled by another firm. A subsidiary firm's operations often complement that of the parent firm, such as a manufacturer purchasing a supplier or distributor.
[S148]

Substandard premium rate

Higher life insurance premiums charged because of insured health, lifestyle and/or occupation. Often issued by companies that specialize in substandard life insurance.
[S103]

Substandard risks

Risks which do not meet minimum underwriting criteria.
[S104]

Sudden death clause

A provision in some reinsurance treaties permitting or requiring termination of the contract under certain conditions.
[S105]

Sue and labor clause

Language in marine and inland marine policies requiring the policyholder, in event of loss, to take all necessary means to save the property from further loss and recover from others who caused the loss. The insurer agrees to pay the costs, even if they exceed the policy's limit of liability.
[S149]

Suicide clause

Most life insurance policies will not pay the proceeds of the policy but will return premiums paid if the insured should commit suicide within the first two years of the policy period.
[S106]

Suit

A civil proceeding alleging damages for injuries or offenses committed by one party against another.
[S150]

Summary plan description

Required by the federal ERISA act of 1978. Employers must provide pension plan participants with a summary plan description on a periodic basis. The description details basic information about the plan itself, the administrator and certain rights the participant has to benefits.
[S107]

Sunset clause

A clause in a casualty excess of loss reinsurance cover that provides that the reinsurer will respond only to losses reported before some predetermined future date (sunset). The clause is used to limit the reinsurer's exposure to the "long-tail" of liability exposure, particularly in the U.S.
[S108]

Sunset provision

Language in a licensing statute or regulation stating that the licensing authority granted is for a specified period of time, and not until revoked, as is customary.
[S109]

Superfund

A government program under the auspices of the Environmental Protection Agency (EPA), set up to identify toxic and hazardous waste dump sites. Once the sites are identified, an attempt is made to identify the responsible parties, effect the cleanup of the sites, and assess the responsible parties with the costs incurred.
[S110]

Superintendent of insurance

The official of a state charged with the duty of enforcing its insurance laws. Called the superintendent of insurance (in three states) and director of insurance (in eight states). The official is elected in 11 states, appointed by a governor or state agency in 38 states, and is a civil service appointee in Colorado.
[S111]

Superseded suretyship rider

Fidelity losses often occur over a considerable period of time. Renewal or replacement of a fidelity bond includes this clause which states that the new bond pays all losses that would have been recoverable under the previous bond, except that the discovery period under that bond had expired. This provision would apply to any losses which occurred prior to the inception of the current bond.
[S151]

Supplemental benefit rider

In life and health insurance, a rider to the policy that provides additional benefits, e.g., accidental death, weekly income, waiver of premium.
[S152]

Supplemental executive retirement plan (SERP)

A nonqualified (no tax deferrals) supplemental retirement benefit given to one or more executives. Since the plan is not qualified, it does not have to integrate with any other benefits plan or pension plan.
[S153]

Supplemental group life insurance

Usually an optional form of group life insurance (over and above the existing group life plan) that an employee can elect and most probably will have to pay all the premiums for.
[S112]

Supplemental major medical coverage

Supplemental health insurance designed to provide coverage for medical expenses not covered by the primary policy or by Medicare.
[S112a]

Supply bond

A bond between a supplier and purchaser which guarantees the supplier will furnish supplies or materials as contracted. Should the supplier default, the surety will indemnify the purchaser of the supplies against any loss sustained as a result.
[S112b]

Surcharge points

1) When referring to motor vehicle reports (MVRs), it refers to additional rating factors (or points) that insurance companies add to the premiums charged to drivers who accumulate traffic violations or accidents. The surcharges are typically assessed for a defined period (such as 36 months) from the date of the violation or accident.

2) With respect to automated underwriting systems (AUS), it usually refers to deficiency points assessed against a risk being run through the system. When a specified number of points accumulate, the risk either receives a rating surcharge, is declined or triggers a manual review of the account by an actual underwriter.
[S113]

Surety

1) The guarantee given for the fulfillment of an obligation.

2) The person or organization guaranteeing the fulfillment of an obligation.

3) The underwriter who guarantees something under a bond.

(See personal surety.)
[S196]

Surety and Fidelity Association of America (SFAA)

A form and rate-making organization of fidelity and surety bond underwriting companies. The organization also prepares manuals, collects and disseminates statistical data, provides a forum for the discussion of common problems of members, and engages in educational activities. Headquarters: Iselin, NJ.
[S114]

Surety Association of America

(See Surety and Fidelity Association of America.)
[S115]

Surety bond

A written agreement wherein one party (the surety) obligates itself to a second party (the obligee or beneficiary) to answer for the default of a third party (the principal) in failing to perform specified acts within a stated time. Such obligations include payment of debts and responsibility for defaults.
Surety Information Office

A nonprofit organization that operates as an expert resource for information concerning surety bonding in the construction industry (both private and public projects). The SIO is supported by the major surety associations (Surety and Fidelity Association of America and National Association of Surety Bond Producers) since its work directly benefits their members. Headquarters: Washington, D.C.
[S116]

Suretyship

The function of being a surety.
[S116a]

Surface water

Surface water is rain, rain run-off or melting snow that accumulates or pools on top of the ground--not below the surface of the ground--which is temporary in nature, following no definite course and having no substantial or permanent existence. Surface water is considered to be something that is naturally occurring, as in melting snow, versus something that artificially occurs such as when a water tank bursts. Surface water loses its characteristics when it flows into a natural channel, such as a defined river or stream or when it flows into an artificially created system such as a storm drain or sewer. Damage by surface water is usually excluded.
[S117]

Surgeons professional liability insurance

Protects physicians and surgeons against claims for personal injury arising from malpractice, errors or mistakes in rendering professional services. At this time a most expensive coverage due to high jury awards against the medical profession.
[S154]

Surgical schedule

A list of how much a health insurance contract will pay for each type of surgical procedure covered under the plan.
[S118]

Surplus

The remainder after a company's liabilities are deducted from its assets.
[S119]

Surplus line

A line of insurance provided by insurers not licensed in the states where the risks are located and placed under the surplus line laws of the various states. Before such placements can be made through specially licensed surplus line agents and brokers, state laws generally require evidence that placements could not be readily made in licensed insurers. Broadly referred to as being all lines of insurance placed with nonadmitted insurers.

(See excess line.)
[S120]

Surplus lines insurance

Insurance written by insurers not licensed in the states where the risks are located and placed with such insurers under the surplus line laws of the various states. Before such placements can be made through specially licensed surplus line agents and brokers, state laws generally require evidence reported before some predetermined future date ("sunset").
[S121]

Surplus lines tax

The tax levied on a surplus lines placement, payable by the licensed surplus lines producer placing the risk under the law of a particular state, and charged to the insured. Not to be confused with the direct placement tax, which is applicable in approximately half the states in taxing the insured directly for placement of insurance with a nonadmitted insurer where no surplus lines tax is paid.
[S155]

Surplus share

A reinsurance term. With quota share both the ceding company and the reinsurer share the loss on a pro rata basis from dollar one of the loss. With surplus share, a retained limit is introduced. For example, in surplus share, the ceding company will pay the first $100,000 of any loss and the cening company and reinsurer will share above that retained limit to the limit of insurance.
[S122]

Surplus to policyholders

As reported on a statutory basis, the sum of all unassigned surplus of a mutual insurer, or for a stock insurer, the sum of all unassigned surplus and capital.
[S156]

Surrender charge

Found in backloaded life and other policies where expenses are taken out of the contract when surrendered for cash.
[S123]

Survey

The description of a subject of insurance made for the information of the insurer by an inspector or surveyor.
[S124]

Surveyor

One who determines either the condition of insured marine property or the amount of loss or damage in ocean marine practice.
[S125]

Survivorship benefits

Life insurance benefits designated in a policy to be paid to survivors as scheduled in the policy.
[S157]

Survivorship clause

In a life insurance contract, a clause which states that the beneficiary must survive the insured by X number of days for the beneficiary to be paid the proceeds. Otherwise, the benefits will defer to the contingent beneficiary or the estate of the insured if no contingent beneficiary is designated.

(See also simultaneous death act.)
[S197]

Sustainability risk management

A relatively new term. The concept involves a formal approach an entity takes to handling the loss exposure represented by environmental (particularly pollution liability) and social justice (particularly employee issues) risks.
[S184]

SVO

(See Securities Valuation Office.)
[S158]

Symbol

The numerical identification used by private passenger auto insurers to determine the damageability of the vehicle. The symbol combines the cost new of the vehicle with its accident history or expected accident history.
[S126]

Syndicate

In insurance, usually a group of companies or underwriters who join together to insure property.

(See Lloyd's syndicate, marine syndicates, hull syndicate, and pool.)
[S127]

Syndicate policy

A policy issued on behalf of a number of companies which share a risk or a class of risks. It lists the name of the participating companies and the liability assumed by each company, thus replacing a large number of policies, one from each company.
[S185]

System for Electronic Rate and Form Filing

A plan introduced by the National Association of Insurance Commissioners in 2001. It allows insurers to electronically file their requests for rates and forms changes with insurance regulators.