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Term Definition
S&P Standard and Poor's
SALVAGE

Damaged property an insurer takes over to reduce its loss after paying a claim. Insurers receive salvage rights over property on which they have paid claims, such as badly-damaged cars. Insurers that paid claims on cargoes lost at sea now have the right to recover sunken treasures. Salvage charges are the costs associated with recovering that property.

SAP statutory accounting principles
SARA Superfund Amendments and Reauthorization Act
SARBOX, SOx, SOX Sarbanes-Oxley Act of 2002
SAWW statewide average weekly wage
SB Senate Bill
SBLI Savings Bank Life Insurance
SCC segregated cell captive
SCHEDULE A list of individual items or groups of items that are covered under one policy or a listing of specific benefits, charges, credits, assets or other defined items.
SCOH Statistical Coding Occupancy Hazard
SCOPE supervision, construction, occupancy, protection, exposure
SEC Securities and Exchange Commission
SECONDARY MARKET Market for previously issued and outstanding securities.
SECURITIES AND EXCHANGE COMMISSION / SEC

The organization that oversees publicly-held insurance companies. Those companies make periodic financial disclosures to the SEC, including an annual financial statement (or 10K), and a quarterly financial statement (or 10-Q). Companies must also disclose any material events and other information about their stock.

SECURITIES OUTSTANDING Stock held by shareholders.
SECURITIZATION OF INSURANCE RISK

Using the capital markets to expand and diversify the assumption of insurance risk. The issuance of bonds or notes to third-party investors directly or indirectly by an insurance or reinsurance company or a pooling entity as a means of raising money to cover risks. (See Catastrophe bonds)

SELF-INSURANCE

The concept of assuming a financial risk oneself, instead of paying an insurance company to take it on. Every policyholder is a self-insurer in terms of paying a deductible and co-payments. Large firms often self-insure frequent, small losses such as damage to their fleet of vehicles or minor workplace injuries. However, to protect injured employees state laws set out requirements for the assumption of workers compensation programs. Self-insurance also refers to employers who assume all or part of the responsibility for paying the health insurance claims of their employees. Firms that self insure for health claims are exempt from state insurance laws mandating the illnesses that group health insurers must cover.

SEMCI single entry multiple carrier interface
SEP simplified employee pension
SERC State Emergency Response Commission
SERP supplemental extended reporting period; supplementary employee retirement plan
SEVERITY Size of a loss. One of the criteria used in calculating premiums rates.
SEWER BACK-UP COVERAGE An optional part of homeowners insurance that covers sewers.
SF standard fire forms
SFHA special flood hazard area
SFIP standard flood insurance policy
SFP standard fire policy jurisdictions
SFR semi-fire resistive
SGLI Servicemen's Group Life Insurance
SHARED MARKET See Residual market
short rate cancellation

The cancellation by the insured of a policy before its natural expiration; the insurer pays a return premium which is less than the proportionate part that remains unearned. 
Exceptions include: insured going into the military or when insured cancels and reinsures in the same company).

SIC Standard Industry Classification
SINGLE PREMIUM ANNUITY An annuity that is paid in full upon purchase.
SIP State Implementation Plans
SIPC Securities Investor Protection Corporation
SIR self-insured retention; Society of Insurance Research
SITE Society of Insurance Trainers and Educators
SIU special investigative unit
SK storekeepers (liability)
SL sprinkler leakage
SLC special litigation committee
SLR stop-loss reinsurance
SLUSA Securities Litigation Uniform Standards Act
SMP special multi-peril (package policy)
SOA Society of Actuaries
SOFT MARKET

An environment where insurance is plentiful and sold at a lower cost, also known as a buyers market. (See Property/casualty insurance cycle)

SOLVENCY

Insurance companies ability to pay the claims of policyholders. Regulations to promote solvency include minimum capital and surplus requirements, statutory accounting conventions, limits to insurance company investment and corporate activities, financial ratio tests, and financial data disclosure.

SOx, SOX Sarbanes-Oxley Act of 2002
SPAP Special Personal Auto Policy
SPC special purpose company; segregated portfolio company
SPECS specifications
SPREAD OF RISK

The selling of insurance in multiple areas to multiple policyholders to minimize the danger that all policyholders will have losses at the same time. Companies are more likely to insure perils that offer a good spread of risk. Flood insurance is an example of a poor spread of risk because the people most likely to buy it are the people close to rivers and other bodies of water that flood. (See Adverse selection)

SPV special purpose vehicle
SR short rate
SR&CC strikes, riots, and civil commotions
SRA Society for Risk Analysis
SRMC Society of Risk Management Consultants
SSA Social Security Administration
SSAP 62 Statement of Statutory Accounting Principles No. 62, Property and Casualty Reinsurance
SSRS single state registration system
STACKING

Practice that increases the money available to pay auto liability claims. In states where this practice is permitted by law, courts may allow policyholders who have several cars insured under a single policy, or multiple vehicles insured under different policies, to add up the limit of liability available for each vehicle.

STATUTORY ACCOUNTING PRINCIPLES / SAP

More conservative standards than under GAAP accounting rules, they are imposed by state laws that emphasize the present solvency of insurance companies. SAP helps ensure that the company will have sufficient funds readily available to meet all anticipated insurance obligations by recognizing liabilities earlier or at a higher value than GAAP and assets later or at a lower value. For example, SAP requires that selling expenses be recorded immediately rather than amortized over the life of the policy. (See GAAP accounting, Admitted assets)

STD short-term disability
STOCK INSURANCE COMPANY An insurance company owned by its stockholders who share in profits through earnings distributions and increases in stock value.
STRUCTURED SETTLEMENT

Legal agreement to pay a designated person, usually someone who has been injured, a specified sum of money in periodic payments, usually for his or her lifetime, instead of in a single lump sum payment. (See Annuity)

SUBROGATION The legal process by which an insurance company, after paying a loss, seeks to recover the amount of the loss from another party who is legally liable for it.
SUPERFUND

A federal law enacted in 1980 to initiate cleanup of the nations abandoned hazardous waste dump sites and to respond to accidents that release hazardous substances into the environment. The law is officially called the Comprehensive Environmental Response, Compensation, and Liability Act.

SURETY BOND

A contract guaranteeing the performance of a specific obligation. Simply put, it is a three-party agreement under which one party, the surety company, answers to a second party, the owner, creditor or obligee, for a third partys debts, default or nonperformance. Contractors are often required to purchase surety bonds if they are working on public projects. The surety company becomes responsible for carrying out the work or paying for the loss up to the bond penalty if the contractor fails to perform.

SURPLUS

The remainder after an insurers liabilities are subtracted from its assets. The financial cushion that protects policyholders in case of unexpectedly high claims. (See Capital, Risk-based capital)

SURPLUS LINES

Property/casualty insurance coverage that is not available from insurers licensed in the state, called admitted companies, and must be purchased from a non-admitted carrier. Examples include risks of an unusual nature that require greater flexibility in policy terms and conditions than exist in standard forms or where the highest rates allowed by state regulators are considered inadequate by admitted companies. Laws governing surplus lines vary by state.

SURRENDER CHARGE A charge for withdrawals from an annuity contract before a designated surrender charge period, usually from five to seven years.
SWAPS The simultaneous buying, selling or exchange of one security for another among investors to change maturities in a bond portfolio, for example, or because investment goals have changed.

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