Dictionary of Insurance Terms -S-

-S-

• Salvage: Recovery made by an
  insurance company by the sale of property which has been
  taken over from the insured as a part of loss settlement.
• Self-Insurance:(1) A program
  for providing group insurance with benefits financed entirely
  through the internal means of the policyholder, in place of
  purchasing coverage from commercial carriers. (2) A form of
  risk financing through which a firm assumes all or a part
  of its own losses.
• Senior Citizen
  Policies: Contracts insuring persons 65 years of age
  or more. In most cases, these policies supplement the
  coverage afforded by the government under the Medicare
  program.
• Service-Type Plans:
  Plans that provide their benefits in the form of services
  rendered rather than cash (for example, Blue Cross and
  Blue Shield).
• Settlement Options: The
  several ways, other than immediate payment in cash, which
  a policyholder or beneficiary may choose to have policy
  benefits paid.
• Short-Term
  Disability Income Insurance: The provision to pay
  benefits to a covered disabled person as long as he/she
  remains disabled up to a specified period not exceeding
  two years.
• Skip person: a beneficiary who
  is at least two generations younger than the person
  making the transfer.
• Social Security Freeze:
  A long- term disability policy provision which
  establishes that the offset from benefits paid by Social
  Security will not be changed regardless of subsequent
  changes in the Social Security law.
• Social Security Option:
  An option under which the employee may elect that monthly
  payments of an annuity before a specified age (62 or 65)
  be increased, and that payments thereafter be decreased
  to produce, as nearly as practical, a level total annual
  annuity to the employee, including Social Security
  benefits when they become due.
• Soft Market: That part of the
  insurance sales cycle in which competition is at a
  maximum as insurance companies use their excess capacity
  to sell more policies at lower prices (see "Hard
  market").
• Special Damages:
  Compensation awarded for actual economic losses, such as
  medical expenses and lost wages. (See general damages)
• Special Risk Insurance:
  Coverage for risks or hazards of a special or unusual
  nature.
• Spouse’s Benefit: Payments
  to the surviving spouse of a deceased employee, usually
  in the form of a series of payments upon meeting certain
  requirements and usually terminating with the survivor’s
  remarriage or death.
• Standard Insurance:
  Insurance written on the basis of regular morbidity
  underwriting assumption used by an insurance company and
  issued at normal rates.
• Standard Markets:
  insurance companies for which the vast majority of people
  qualify
• Standard Provision:

  Those contract provisions generally required by state
  statutes until superseded by the uniform policy
  provision. (2)A set of policy provisions prescribed by former
  laws setting forth certain rights and obligations of both the
  insured and the company under an individual policy of
  health insurance. These were originally introduced in
  1912 and have now been replaced by the Uniform
  Provisions.

• Standard Risk: A person who,
  according to a company’s underwriting standards, is
  entitled to purchase insurance protection without extra
  rating or special restrictions.
• State Disability Plan:
  A plan for accident and sickness, or disability insurance
  required by state legislation of those employers doing
  business in that particular state.
• State Fund: A fund set up by a
  state government to provide a specific line or lines of
  insurance. Some state permit private insurers to compete
  with the state fund.
• State Insurance
  Department: A department of a state government whose
  duty is to regulate the business of insurance and give
  the public information on insurance.
• State-of-the-Art
  Defense: An argument used in product liability cases
  that the technology needed to avoid the loss in a
  particular case did not exist at the time of the
  product’s manufacture
• Statutory Accounting:

  Special accounting practices for insurance companies
  required by state law and designed to provide greater
  protection for the public against potential insolvency of
  these essential institutions.

• Statutory
  Accounting Principles (SAP): Principles required by
  statute which must be followed by an insurance company
  when submitting its financial statements to the various
  state insurance departments. Such principles differ from
  the Generally Accepted Accounting Principles (GAAP).
• Statutory
  Underwriting Profit or Loss: Premiums earned less
  losses and expenses.
• Step-Rate Premium: A
  rating structure in which the premiums increase
  periodically at pre-determined times such as policy years
  or attained ages.
• Step-up in basis:An
  increase in the tax basis of property to the value
  claimed in the taxable estate of a decedent.
• Stock Company: A company
  organized and owned by stockholders, as distinguished
  from the mutual form of company which is owned by its
  policyholders.
• Stock Exchange: An
  organization that provides a facility for buyers and
  sellers of listed securities to come together to make
  grades in those securities.
• Stockholder (or
  shareholder): A person who owns shares of stock in a
  corporation.
• Stock Insurance
  Company: A company in which the legal ownership and
  control is vested in the stockholders.
• Strict Liability:
  Liability for damages even though fault or negligence
  cannot be proven.
• Subrogation: Process by which
  one insurance company seeks reimbursement from another
  company or person for a claim it has already paid.
• Substandard
  (Impaired Risk): A risk that cannot meet the normal
  health requirements of a standard health insurance
  policy. Protection is provided in consideration of a
  waiver, a special policy form, or a higher premium
  charge. Substandard risks may include those persons who
  engage in certain sports and persons who are rated
  because of poor habits or morals.
• Substandard Insurance:
  Insurance issued with an extra premium or special
  restriction to those persons who do not qualify for
  insurance at standard rates.
• Substandard Risk: An
  individual, who, because of health history or physical
  limitations, does not measure up to the qualification of
  a standard risk.
• Surety Bond: An agreement
  providing for monetary compensation in the event of 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.
• Surplus:(1)The net worth of a
  company, i.e. the amount by which assets exceed liabilities.
  Adequate net worth is necessary for the protection of
  policyholders against unforeseen losses. (2)The amount by which
  the value of an insurer’s assets exceeds its liabilities.
• Surplus Lines: (1) A risk or
  a part of a risk for which there is no normal insurance
  market available. (2) Insurance written by non-admitted
  insurance companies.