Glossary
Insurance Terms Glossary
This page provides a glossary of insurance terms and definitions that are commonly used in the insurance business. New terms will be added to the glossary over time.
The definitions in this glossary are developed by the NAIC Research and Actuarial Department staff based on various insurance references. These definitions represent a common or general use of the term. Some words and/or phrases may be defined differently by other entities, or used in a context such that the definition shown may not be applicable.
Terms beginning with S
- Salvage
- – value recoverable after a loss.
- Statutory Accounting Principles (SAP)
- – a set of accounting principles set forth by the National Association of Insurance Commissioners used to prepare statutory financial statements for insurance companies.
- Securitization of Insurance Risk
- – a method for insurance companies to access capital and hedge risks by converting policies into securities that can be sold in financial markets.
- Self-Insurance
- – type of insurance often used for high frequency low severity risks where risk is not transferred to an insurance company but retained and accounted for internally.
- Separate Account
- – segregated funds held and invested independently of other assets by an insurer for the purpose of a group retirement fund.
- Short-term Disability
- – a company standard defining a period of time employees are eligible for short-term disability coverage, typically for 2 years or less.
- Situs of Contract
- – the jurisdiction in which the contract is issued or delivered as stated in the contract.
- Social Insurance
- – compulsory insurance plan administered by a federal or state government agency with the primary emphasis on social adequacy.
- Soft Market
- – a buyer's market characterized by abundant supply of insurance driving premiums down.
- Standard Risk
- – a person who, according to a company's underwriting standards, is considered a normal risk and insurable at standard rates.
- State Of Domicile
- – the state where a company's home office is located.
- Statutory Accounting
- – method of accounting standards and principles used by state regulatory authorities to measure the financial condition of regulated companies and other insurance enterprises.
- Stock Insurance Company
- – business owned by stockholders.
- Stop Loss/Excess Loss
- – individual or group policies providing coverage to a health plan, a self-insured employer plan, or a medical provider providing coverage to insure against the risk that any one claim or an entire plan's losses will exceed a specified dollar amount.
- Structured Settlements
- – periodic fixed payments to a claimant for a determinable period, or for life, for the settlement of a claim.
- Subrogation
- – situation where an insurer, on behalf of the insured, has a legal right to bring a liability suit against a third party who caused losses to the insured.
- Substandard Risk
- – risks deemed undesirable due to medical condition or hazardous occupation requiring the use of a waiver, a special policy form, or a higher premium charge.
- Surety Bond
- – a three-party agreement whereby a guarantor (insurer) assumes an obligation or responsibility to pay a second party (obligee) should the principal debtor (obligor) become in default.
- Surplus
- – insurance term referring to retained earnings.
- Surplus Line
- – specialized property or liability coverage available via nonadmitted insurers where coverage is not available through an admitted insurer.
- Swap
- – an agreement to exchange or net payments as the buyer of an Option, Cap or Floor and to make payments as the seller of a different Option, Cap or Floor.
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