Glossary

A selling price clause or endorsement values finished goods at their selling price, rather than their actual cash value or replacement cost so as to cover the profit portion of the price in addition to the replacement cost.

Senior Claim Law Associate is a designation offered by the American Educational Institute (AEI). It requires the successful completion of the AEI legal principles self-study program plus three of five other AEI self-study claims law specialist programs: liability, property, workers compensation, fraud, and automobile. Students earn designations for each claims specialist program they complete while working toward the SCLA.

A separate account is a fund held by a life insurance company that is maintained separately from the insurer's general assets. It is generally used for investing pension assets or variable annuity holdings in common stocks. In the event of insolvency of the insurer, separate accounts may be protected from claims by creditors and other insureds.

A series business unit (SBU) is a self-governing and protected company formed under the umbrella of a series limited liability company, currently permitted in Delaware. The SBU is an independent insurance company capable of issuing policies directly or policies fronted by a commercial insurer to the insured company and third parties. Each SBU has a unique business purpose and an independent tax identification number. The SBU's business purpose, taxpayer election, and coverage offerings are specified. Unlike the protected cells or segregated accounts of rent-a-captives, SBUs have greater flexibility offered by self-governance. An SBU is protected from the financial obligations of other SBUs by Delaware statute.

Servicemembers group life insurance refers to a low-cost group life insurance program designed by the Veterans Administration for service members on active duty, ready reservists, members of the National Guard, members of the Commissioned Corps of the National Oceanic and Atmospheric Administration and the Public Health Service, cadets and midshipmen of the four service academies, and members of the Reserve Officer Training Corps. The maximum amount of coverage is $400,000. Coverage is available for traumatic injury protection that provides service members protection against loss due to traumatic injuries and is designed to provide financial assistance to members so their loved ones can be with them during their recovery from their injuries. The coverage ranges from $25,000 to $100,000, depending on the nature of the injury.

Service fulfillment insurance protects against losses arising from the requirement to perform services within a specified time period. It can be sold separately or as part of a product warranty.

A servicing carrier is an insurer that, for a fee, issues and services insurance policies on behalf of all the insurers that are participating in an insurance program or pool. For example, some of the various state Fair Access to Insurance Requirements (FAIR) plans use servicing carriers to issue and service their insurance policies. Servicing carriers may also be used by state workers compensation insurance assigned risks plans, joint underwriting associations, and reinsurance pools.

A servicing contractors rider is an endorsement to the financial institution bond that extends coverage for fraud losses perpetrated by an outside contractor retained to service real property mortgages.

A setoff or offset in reinsurance is an equitable right that allows parties to cancel or offset mutual debts to each other by asserting the amounts owed, subtracting one from the other, and paying only the balance. The right of setoff is readily available in insurance and reinsurance relationships, and, like all rights, it should be carefully planned for and built into the contractual relationship's terms.

Settlement lag is the span of time between the first report of a claim and the date of its ultimate settlement.