Insurance Information
Earned Premium
That portion of the premium which represents coverage already provided. Each day that an insurance policy is in force represents a day of earned premium.

Economic Loss
The estimated total cost, both insured and uninsured, of mishaps (such as motor vehicle accidents, work accidents, and fires); includes such factors as property damage, funeral expenses, wage loss, insurance administration costs, and medical, hospital and legal costs.

Effective Date
The date in which insurance protection begins under a policy.

Electronic Funds Transfer
A method of collecting policy premium electronically from the policy holder's bank account.

Elements of a Negligent Act
Four elements an injured person must show to prove negligence - existence of a legal duty to use reasonable care, failure to perform that duty, damages or injury to the claimant, and proximate cause relationship between the negligent act and the infliction of damages.

Escheatable
Property that has reverted back to the state when no legal heirs or claimants exist. An example is a customer refund check that is undeliverable or unredeemed.

Estate
The assets and liabilities of a person left at death. Extent and nature of one's interest in land; the assets constituting a descendent's property at the time of death; the assets of a debtor in bankruptcy proceedings.

Estoppel
Legal doctrine that prevents a person from denyng the truth of a previous representation of fact, especially when such representation has been relied on by the one to whom the statement was made.

Exclusion
Specified conditions or circumstances, listed in the policy, for which the policy will not provide benefits.

Exclusive Agent
An agent who is employed by one and only one insurance company and who solicits business exclusively for that company.

Expense Ratio
The ratio of a company's operating expenses to premiums.

Experience
A term used to describe the relationship, usually expressed as a percent or ratio, of premium to claims for a plan, coverage, or benefits for a stated time period.

Experience Letter
Letter requested by an insured that documents their loss history with us.

Extended Coverage Insurance
Protection for the insured against property damage caused by windstorm, hail, smoke, explosion, riot, riot attending a strike, civil commotion, vehicle and aircraft. This is provided in conjunction with the fire insurance policy and the various "package" policies.

External Sources
Third Party providers that have personal data on record such as name and address.

Insurance Information (cont'd)
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- Administered (Trusteed or Directly Invested) Plan
A plan funded through a fiduciary, generally a bank, but sometimes a group of individuals, which directly invests the accumulated funds. Retirement payments are made from the fund as they fall due.

Self-Administration
The procedure where an employer maintains all records regarding the employees covered under a group insurance plan.

Self-Insurance
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.

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.

Separate Account
An asset account established by a life insurance company separate from other funds, used primarily for pension plans and variable life products. This arrangement permits wider latitude in the choice of investments, particularly in equities.

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.

Sickness Insurance
A form of health insurance providing benefits for loss resulting from illness or disease.

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.

Split Funding
The use of two or more funding agencies for the same pension plan. An arrangement whereby a portion of the contributions to the pension plan are paid to a life insurance company and the remainder of the contributions invested through a corporate trustee, primarily in equities.

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 Provisions
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-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

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.

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.

Stock Life Insurance Company
A life insurance company owned by stockholders who elect a board to direct the company's management. Stock companies, in general, issue nonparticipating insurance, but may also issue participating insurance.

Stock Redemption Plan
An entity purchase form of buy-sell agreement within a corporation that involves the corporation buying back shares from a departing owner.

Straight Life Insurance
Whole life insurance on which premiums are payable for life.

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.

Supplementary Contract
An agreement between a life insurance company and a policyholder or beneficiary by which the company retains the cash sum payable under an insurance policy and makes payments in accordance with the settlement option chosen.

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.

Surgical Expense Insurance
Health insurance policies, which provide benefits toward the physician's or surgeon's operating fees. Benefits may consist of scheduled amounts for each surgical procedure.

Surgical Schedule
A list of cash allowances attached to the policy, which are payable for various types of surgery, with a maximum amount based upon the severity of the operation.

Surplus
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.

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.