Sales Expense Compensation of agents, advertising expense and other costs related to selling insurance policies.
Salvage Property damaged to the extent that it is not economical to perform repairs, taken over by an insurer after it has paid a claim, to reduce its loss by
Schedule A list describing the property or items insured under the policy and the extent to which they are insured.
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 A form of risk financing through which a firm assumes all or a part of its own losses. Self-insurers may purchase insurance to cover excess losses.
Severity The average cost per claim.
Sewer-Drain Back-Up Coverage An optional part of homeowners insurance that covers sewers.
Shared Market See Residual Market.
Soft Market A condition where insurance premiums are lowered and the availability of insurance is high. Opposite of a hard insurance market.
Solicitor A person authorized by an agent to solicit and receive applications for insurance.
Solvency Insurance companies
Special Multi-Peril Policy (SMP) A business policy which combines in one contract the coverages normally purchased under several policies. Many options and endorsements are available to tailor it to the policyholder
Specified Perils See Named Peril.
Speculative Risk A type of risk with three possible outcomes gain, loss or no change.
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.)
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.
Standard Provisions Policy provisions required by law.
Standard Risk A person who according to a company
Statutory Accounting Principles (SAP) Those principles required by statute that must be followed by an insurance company when submitting its financial statements to the various 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 premiums as they are earned and taken into revenue.
Statutory Underwriting Profit or Loss Earnings or losses as shown by an insurer on its Statutory Income Statement (convention blank) as required by state insurance departments. More specifically (1) the profit or loss realized from insurance operations as distinct from that realized from investments; (2) the excess of premiums over losses and expenses (profit), or the excess of losses and expenses over premiums (loss).
Stock Company A company organized and owned by stockholders, as distinguished from the mutual form of company, which is owned by its policyholders.
Stopgap Endorsement Provides employer liability coverage for work-related injury arising out of incidental operations or exposure in the monopolistic fund states.
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 A principle of law incorporated in insurance policies that enables an insurance company, after paying a loss to its insured, to recover the amount of the loss from another who is legally liable for it.
Substandard or Extra Risk An individual who, because of health history or physical limitations, does not measure up to the qualifications of a standard life or health insurance risk.
Superfund A federal law enacted in 1980 to initiate cleanup of the nation
Surety Bond An agreement providing for monetary compensation should there be a failure to perform specified acts within a stated period. The surety company, for example, becomes responsible for fulfillment of a contract if the contractor defaults.
Suretyship Contractual relationship in which one party (surety) guarantees another party (obligee) against the default or misperformance of a third party (principal). (See Fidelity Bond and Surety Bond.)
Surplus Lines A term originating in property/casualty insurance, used to describe any risk or part thereof for which insurance is not available through a company licensed in the applicant
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.
Syndicate A group of insurers or underwriters that join to insure certain property that may be of such value or high hazard or so expensive to underwrite that it can be covered more safely or efficiently on a cooperative basis.
