Glossary

The statute of frauds is a legal rule that requires certain kinds of contracts to be in writing and signed by the parties bound by the contract. The purpose is to prevent fraud and other injury. Examples of contracts to which the statute of fraud applies include contracts for the sale or transfer of real estate, contracts that cannot be performed within a year, and contracts made by executors and administrators.

The statute of limitations is a law prescribing the period within which certain types of causes of action must be brought. This period usually begins to run when the injury or damage occurs. Each state has enacted statutes that prescribe the period within which suits must be filed that vary from claim to claim. In most states, the statutory time within which a plaintiff must file suit on a bodily injury claim based on negligence is 2 years. For malpractice claims, the statute of limitations may be only 1 year. Sometimes, courts may postpone the triggering of a statute of limitation where the plaintiff does not know about the claim. Applying the "discovery rule," some courts hold that statutes of limitations begin running when the plaintiff discovers that they have a claim. Actions for declaratory judgment in an insurance coverage matter are generally held to be governed by the statute of limitations for suits on written contracts, which vary in length from state to state. For example, one state might require claims arising out of breach of contract to be filed within 4 years of the date on which the breach occurs while another may allow a suit to be filed up to 10 years after the breach.

A statute of repose restricts the time in which a claim may be brought against a contractor for damages arising out of defective work in improvements to real property. A statute of repose differs from a statute of limitation in that the time periods specified in statutes of limitations usually do not begin to run until the injury or damage actually occurs, irrespective of when the work was performed or the product was sold. Most states have a statute of repose specific to construction projects, although the laws vary with regard to the limitation periods, what is covered, and whom the statute protects.

Statutory accounting principles are rules for insurance accounting codified by the National Association of Insurance Commissioners or as promulgated by a domicile as rules to be used in reporting an insurer's results to regulators. These rules focus on the balance sheet and solvency analysis, and differ from the generally accepted accounting principles used for other types of businesses. For example, statutory accounting rules do not allow the inclusion of certain nonadmitted assets on the balance sheet, require that certain loss reserves be set by conservative formulas instead of the insurer's estimates, require the insurer to immediately recognize the expenses associated with writing new business instead of amortizing them over the policy period, and do not allow premiums for reinsurance placed with unauthorized reinsurers to be recognized as an asset.

Statutory capital is the amount of capital and/or surplus required in order for an insurance company to obtain and retain a license to do business. It may be stated as a minimum dollar amount or by reference to a solvency ratio or a solvency margin.

Statutory coverages are lines of insurance required by law, such as workers compensation, auto liability, and pollution liability (for underground storage tanks and waste disposal sites).

Statutory inspections in boiler and machinery insurance are the requirement for inspection of pressure vessels as a condition of insurance.

Statutory insurance is insurance that the insured is required to buy under a country, state, or federal law.

Statutory law is that body of law that is enacted by legislative bodies. It is separate and distinct from common law.

A stay of proceedings is a temporary suspension of a legal proceeding by direction of the court, generally related to an appellate or procedural issue.