Malicious actions not committed by the insured which are aimed at preventing the normal functioning of a service or enterprise or of impeding communications.


See General average sacrifice.

Sailing warranty

There is an implied warranty in a voyage policy on a ship that the ship will sail within a reasonable time after the insurance has been accepted. An express warranty may specify the date by which the ship must sail.

Salary grade scheme

Same as Graded schedule scheme.


The remuneration payable independently of contract to an outside party who takes part in a successful rescue operation to save life or property at sea / Property saved / Rescue of property.

Salvage agreement

An express agreement, of which Lloyd's Form of Salvage Agreement is a standard, entered into by parties to a salvage operation. Agreements are usually on a "no cure-no pay" basis and provide either for payment of a fixed sum or for the sum to be decided by arbitration.

Salvage and Recovery clause

A clause in a marine reinsurance treaty entitling the reinsurer to press for his share of any recovery obtained on the original insurance.

Salvage charges

Charges recoverable under maritime law by a salvor independently of contracts.

Salvage Charges Clause

A clause in a marine insurance hull policy which does not expressly refer to salvage charges. It limits the insured's right to expenses incurred under the Suing and Labouring Clause (q.v.) but gives him additional rights to recover the expenses of an unsuccessful salvage operation.

Salvage corps

Bodies formerly maintained by fire insurance companies to protect property after the occurrence of a loss or when the property is threatened.

Salvage guarantee

An agreement whereby a guarantor agrees to meet a salvage award if the party responsible fails to pay it to the salvor. Such an agreement enables a salvor safely to release the maritime lien to which he is entitled on the salved property.

Salvage loss

Where goods insured under a marine policy are damaged and as a result of the damage are sold short of destination for less than their insured value there is said to be a salvage loss. The insurer must pay the difference between the insured value and the proceeds, after deduction of sale charges and survey fee, of the sale.


One who salves property.


Examining a small portion of a large group in order to draw conclusions about the group. See also Random sampling.


That part of a policy in which the variable details are inserted / Any itemised list, e.g., of premium rates for various trades.

Schedule policy

A policy that enumerates several hazards and the cover given in respect of each.

Schedule rating

Calculating the premium for a risk on the basis of its various features.


A programme for the insurance of a group.

Scheme charge

A fixed charge that may be added to the basic premium for a group insurance.

School fees insurance

Assurance to provide sums for the payment of educational fees, either at the end of a fixed term or on the death of the life assured.


Term used in pleading to indicate that a person had knowledge of a fact, e.g., that a domestic animal had dangerous propensities.


Initialling an agreement.

Seasonal risk

A danger that arises at some particular time of year only / An insurance subject to a danger at some particular time of year only.


The fitness of a vessel to encounter the ordinary perils of a voyage. There is an implied warranty in a voyage policy that the vessel is seaworthy in all respects including its equipment, stores and manning.

Seaworthiness admitted

There is an implied warranty in a marine cargo policy that the ship used for carriage is seaworthy (q.v.), and reasonably fit to carry the cargo to its destination. As the cargo owner can often not control the seaworthiness of a ship, insurers usually include a clause in the policy to modify the implied warranty.

Second leaving

A resubmission to a policy signing office by a broker of documents that have been queried on their first presentation.

Second loss insurance

Insurance that covers only a loss in excess of that covered by a first loss insurance (q.v.).

Second loss policy

Same as Excess of loss policy.

Second mortgage

A loan by way of mortgage on property that is already mortgaged to another person. The first mortgagee's rights have priority over those of a second mortgagee, a second mortgagee's rights over those of a third mortgagee, and so on.

Second surplus treaty

A reinsurance treaty under which the reinsurer accepts an amount of reinsurance for sums over those insured by the original insurer or reinsured under a first surplus treaty (q.v.).

Section 32 buy-out plan

Same as Transfer pension scheme.


Annotation by an insurer on a slip or other document submitted for his information to show that a matter has been brought to his attention.

Select mortality table

A mortality table based on lives that have undergone a previous selection process, e.g., by having been accepted for insurance, and therefore show, during a period known as the select period, the effect of selection.

Select period

A period chosen for the study of lives selected at the outset of the period and included in a mortality table.


The actions of an insurer in choosing what risks to insure and on what terms and in what proportions in order to achieve a balanced portfolio of insurances that benefits from the operation of the law of large numbers.

Selection against the insurer

The observed phenomenon that under-average risks will be proffered more readily for insurance than above-average ones and that when an insured has an option in a policy he will tend to exercise it in the direction that is least favourable to the insurer.

Self retention

The portion of a risk that one keeps for one's own account and does not insure or reinsure.

Self-administered pension scheme

A pension scheme administered by trustees.


The systematic provision of a fund by an organisation which does not effect insurance against a risk but hopes to be able to bear losses arising from the risk with the aid of the fund.

Seller's interest

The insurable interest of a seller, which ceases when the title in property passes to the buyer.

Sentimental loss

The loss of property which has favourable associations (e.g., an engagement ring) may cause suffering disproportionate to the monetary value of the object lost. Conversely property with unfavourable associations (e.g. cargo which, though undamaged, has been involved in a shipwreck) may lose value as a result of such associations. Insurances are considered not to cover sentimental losses.

Separation of assets and liabilities

Legal provision that the assets and liabilities of an insurance company transacting more than one class of insurance (e.g., life and fire) shall be earmarked in separate funds for each class, the assets being held for the benefit of the policyholders in the class and not available to meet liabilities arising in other classes.

Separation procedure

Lloyd's procedure where the premium accounting entry is processed separately from the policy signing procedure.


The "single event pollution trigger insurance clause" whereby liability under an insurance for pollution arises only if the pollution has been triggered by a single identifiable event.

Services rendered policy

A policy insuring suppliers of services in respect of their credit risk.

Settled policy

A policy that forms the subject of a trust.


The settling up of an account or claim / An agreement to resolve a difference of opinion / An instrument by which property is settled on a person or persons / A lateral movement, as opposed to subsidence (q.v.).

Settlement date

The date specified in a market for the periodical settlement of accounts by brokers.

Settlement of Claims Abroad

A scheme whereby a marine insurance may be endorsed to provide for claims to be settled by a settling agent at a named place abroad.

Settlement option

An option in an insurance policy as to the form in which a claim may be settled. Thus, in property insurance, the insurer may commonly choose whether to pay, replace or make good, and in life assurance the assured sometimes has an option between taking the policy proceeds as a lump sum or in the form of an annuity.

Settlement policy

A life policy expressed to be for the benefit of persons other than the life assured, e.g., a policy effected under the Married Women's Property Acts 1870-82 for the benefit of one's spouse or children.

Settlement rate

See Claims settlement rate.

Settling agent

A person authorised by an insurer to pay claims on the insurer's behalf.


One who settles property on another by means of a trust.

Seven day clause

A One disaster or casualty clause (q.v.) providing for its application to a period of seven days.


The capital of a company may be divided into units known as shares in which dealings can take place. If not so divided capital in the form of stock may be dealt with in any amounts.

Share reinsurance

Same as Quota-share reinsurance.

Shareholders' surplus

That portion of the excess of assets over liabilities in an insurance fund to which the shareholders are entitled.


By the Marine Insurance Act 1906, First Schedule, rule 15, "ship" includes the hull, materials and outfit, stores and provisions for the officers and crew, and in the case of vessels engaged in a special trade, the ordinary fittings requisite for the trade, and also, in the case of a steamship, the machinery, boilers and coals and engine stores, if owned by the insured.


A person acting as the agent for a shipowner in arranging charters and the carriage of cargo and passengers.

Shipowner's liability

The liability of a shipowner for injury, loss or damage which may arise in tort or under contract, mostly covered by membership of a Protection and Indemnity club (q.v.).

Shock loss reinsurance

Same as Catastrophe reinsurance.


The process whereby a life assurance company with a proposal for an impaired life approaches a number of reinsurers for competitive quotations.

Short closing

The act of a broker when closing a line, in allotting to an underwriter less than the line he has written, either because more than 100% of the insurance has been subscribed, or because the insurance is for a smaller amount than was expected at the outset. Short closing, unlike overclosing, is permissible.

Short delivery

There is said to be short delivery as opposed to non-delivery, where a bulk cargo when unloaded is deficient compared with its shipped weight, or where part of a package fails to arrive. Cf. Non-delivery (q.v.).

Short form of indemnity

A form of indemnity given by an insurer to a bonding company which has provided security to obtain the release of a vessel arrested by a U.S. court.

Short interest

The part of the subject-matter of a marine insurance that has never been at risk, e.g., the extent to which declarations under a floating policy fall short of the sum insured.

Short period rate

The rate of premium for an insurance of less than one year, often appreciably higher than the annual rate.

Short rate

Same as Short period rate.

Short term

In marine insurance, applied to insurances of less than twelve months.

Short term insurance

Insurance that runs for one year or less, though the insurer may have an option whether to cease writing or to renew it. In marine insurance, an insurance of less than twelve months.

Short term rate

Same as Short period rate.

Short-tail business

Insurances where all claims are expected to be received during, or within a short time after expiry of, the insurance.

Sickness insurance

Insurance against disablement by sickness.

Sickness table

Same as Morbidity table.

Signed line

Same as Closed line.


Same as Signing slip.

Signing A.P.

An endorsement attached to a Lloyd's policy to add a new syndicate to an existing risk.

Signing indication

An indication by an insurance broker of the effect of possible oversubscription on the line to be received by the underwriter.

Signing slip

A broker's slip used for submitting details to Lloyd's Policy Signing Office, It may be the original slip, a certified copy, or a specially initialled slip.

Signing table

The list of subscribing syndicates, lines and references, attached by Lloyd's Policy Signing Office to a Lloyd's policy.

Silent risk

Premises in which no trade is carried an or no machinery is worked for manufacturing purposes.

Simple reversionary bonus

A sum added to the sum assured under a life assurance, payable only when payment of the sum assured falls due and not compounded for the purpose of calculation of bonuses declared subsequently.

Simple risk

A fire insurance, such as that on a private dwelling, that is not complex.

Simultaneous payments clause

A clause in a reinsurance contract to provide that the reinsurer shall pay a claim at the same time as a claim is paid on the original insurance.

Single liability

In the Admiralty Court, where two vessels, A and B, have been in collision and both were partly to blame, so that A is liable to B for part of B's damage and B is liable to A for part of A's damage, the court makes a single award to the party who has a net balance in his favour. Cf. Cross liabilities (1).

Single premium

In life assurance, a single payment for the whole of the cover required however long the cover lasts.

Single premium method

A method of calculating premiums under a pension scheme. Premiums are calculated separately in respect of the benefit earned in each year of membership.

Singleton policy

A combined company policy form issued on behalf of a single insurer.

Sister Ship Clause

A clause in a marine hull policy whereby the insurer agrees that where a ship is in collision with, or receives salvage services from, a ship in the same ownership, the insurer will settle claims for liability or salvage services as though the ships were in separate ownership.

Situation index

An index kept by fire insurers of the location of risks insured.

Sliding scale commission

Commission which rises in accordance with some factor, notably a commission whose rate rises with the profitability of a reinsurance treaty.

Sliding scale treaty

A reinsurance treaty under which the rate of premium in any year is calculated by reference to the claims experience over the previous x years.


A document submitted by a broker to underwriters and containing particulars of a risk proposed for insurance. The underwriter signifies his acceptance by initialling the slip and indicating on it the share of the insurance he will take.

Slip agreement

An agreement expressed by an underwriter on a broker's slip at a date subsequent to the original acceptance of the risk. Cf. Honeycomb slip.

Slip policy

Especially in facultative reinsurance a policy is not issued but reliance is placed on a signing slip. This is treated as the policy. A policy is not issued unless required for legal proceedings.


Lloyd's policy production system whereby policies may be prepared on underwriters' behalf by Lloyd's Policy Signing Office / Small additional or return premiums clause / A clause in a policy providing that small adjustments of premium shall be waived, they being uneconomic to make.

Small Claims and Recoveries Pool Scheme

A scheme in Lloyd's market which provides that small entries for claims or adjusted premiums shall be paid into or out of a pool without being processed in respect of each insurance.

Smoke damage

If caused by fire is covered by a fire or marine insurance. Coverable in U.S. as an additional peril.

Social insurance

A scheme for the payment of benefits by a government or government agency, in respect of contingencies to which people generally are liable (e.g., old age, sickness, accidental injury, death or unemployment), the benefits being payable in whole or in part out of a fund of contributions by insured persons and/or their employers. Membership of the scheme is commonly compulsory.

Social security

The sum of measures taken by a government to protect the individual against shortfalls in income and to provide help at times of special need. One measure commonly employed is social insurance (q.v.).

SOLAS Convention

The International Convention for the Safety of Life at Sea, 1974.

SOLAS Protocol

A draft instrument of 1978 designed to enhance tanker safety for adoption by parties to the SOLAS Convention (q.v.).


A lawyer who prepares deeds, manages cases and acts as advocate in inferior courts / A person authorised by an insurance agent to solicit and receive proposals for insurance (U.S.).


The principle underlying pay-as-you-go pension systems that future contributors will pay what is necessary to meet pensions becoming due.

Solidarity fund

A reserve in an occupational pension fund into which profits (e.g. on withdrawal of a member) are paid so that pensions to other members may be augmented.

Solvency margin

The extent to which the realisable assets of an insurance company exceed its liabilities.

Sonic bangs

Pressure waves projected from the edges of an aircraft that is travelling at supersonic speed. Damage caused thereby is excluded from property insurance policies in the U.K.

Sound value

The value of goods at destination if they had arrived in sound condition.

Sovereign risk

The risk that a foreign state, or a state organisation, may seek to avoid a liability by plea of sovereignty. Also known as state credit risk.

Spare parts clause

A clause in a motor insurance policy limiting the insurer's liability for the cost of spare parts no longer available from the car manufacturer.

Special acceptance

The facultative extension of a reinsurance treaty to a risk not automatically included.

Special bonus

A bonus to life assurance with-profits policyholders that is out of the ordinary course and therefore unlikely to recur.

Special condition of average

Also known as the 75% condition of average. A condition in a fire insurance policy that provides for payment of a loss to be reduced proportionately if the sum insured is less that 75% of the value of the property insured.

Special damages

Compensation at law for specified and proved items of expense.

Special Drawing Right

A unit of value, based on a number of currencies, used to regulate limits of liability under international conventions.

Special peril

A peril customarily insured in conjunction with fire, such as explosion, riot, flood, storm and tempest, earthquake, subsidence, bursting or overflowing of water apparatus.

Special records clause

A clause in a reinsurance treaty providing that if the past experience figures alter materially the reinsurer can ask for a revised rate of premium with retroactive effect.

Special reserve

A fund that an underwriting member of Lloyd's may voluntarily accumulate, in addition to his personal reserve (q.v.), to meet potential liabilities under insurances written for his account.

Special settlement

A procedure available to brokers in the London market whereby signing or accounting procedures are given priority in a policy signing office and claims can be paid in advance of the normal monthly settlement.

Special wording scheme

A scheme operated by Lloyd's Policy Signing Office whereby special wordings agreed by leading underwriters are coded and printed for the use of brokers.


A contract under seal.


A collective term for valuables such as gold or banknotes. See Loss of specie.

Specific exclusion

An exclusion specified in a policy either by way of restricting the cover or of drawing attention to the fact that the policy does not provide the cover referred to.

Specific insurance

Where two insurances cover property and one has a narrower range it is said to be more specific / An insurance covering a particular risk or property or class of property as opposed to one with a wider cover such as a blanket policy.

Specific reinsurance

Facultative reinsurance.


The description in a fire insurance policy of the property insured.

Speculative risk

Risking a sum of money with the chance of gain as well as the chance of loss, e.g., putting risk capital into a business, or wagering.

Spes successionis

The hope or expectation of succeeding to property.

Split annuity

The combination of an annuity certain with a deferred annuity payable after the annuity certain terminates until the death of the annuitant.

Split risk

When parts of the insurance on given subject matter are placed with different insurers it is said to be a split risk. For example, the owner of a fleet of motor vehicles may insure the third party risk with one insurer and the own damage risk with another.

Spontaneous combustion

Combustion that occurs without heat being applied externally, usually through the slow oxidation of a substance which progressively raises its temperature.

Spread commission

Commission on long term insurance where the commission on the initial premium is reduced and that on renewal premiums is increased.

Spread loss reinsurance

A form of excess loss reinsurance under which the premium rate is determined each year by the ceding company's excess losses in x preceding years.

Spread of risk

Arranging one's affairs so that too much of one's fortune is not at stake from a peril at any given time or place.

Spreader clause

A clause in an aviation passenger liability policy which provides that if more than the declared number of passengers is carried in an aircraft the limit of liability per passenger is automatically reduced.

Sprinkler insurance

Insurance against damage to property caused by the leakage of sprinklers.

Stabilisation clause

A clause in a reinsurance treaty providing for automatic adjustments in retentions according to fluctuations in an index of costs or prices.

Stability clause

Same as Stabilisation clause.

Stamp (allocated) capacity

The aggregate of the premium limits of the members of a Lloyd's underwriting syndicate in any given year of account.

Stamp duty

A tax on a formal document such as an insurance policy that may be paid by affixing or impressing a stamp.

Standard construction

A building which conformed to Standard V (now abolished) of the Fire Offices' Committee was said to be of standard construction, as distinct from fireproof, fire-resisting or non-standard construction.

Standard deviation

A statistic summarising the variation in any series of numbers. The root mean square of the deviations of a set of numbers from their arithmetic mean.

Standard fire policy

A fire policy in the standard form devised by the Fire Offices' Committee.

Standard form

A policy in a form generally accepted by insurers in a market, such as the standard form of marine insurance policy.

Standard marine clauses

Same as Institute clauses.

Standard slip

A standardised form of broker's slip used by brokers for placing business with Lloyd's or insurance companies.

Standard turnover

In business interruption insurance the turnover of the insured business for the period during the twelve months before the date of material damage occurring, corresponding to the indemnity period which begins on that date.

Standing charges

Expenses of an enterprise that have to be met even though turnover falls as the result of some misfortune.

Stare decisis

The doctrine that a court, subject to certain exceptions, is bound to follow a precedent set in previously decided cases on the same or closely related points.

State credit risk

Same as Sovereign risk.

Stationary condition

The condition of a group where the number of lives and their age-distribution remain constant, increases in age and exits being exactly balanced by new entrants.

Statistical statement

A standard form used at Lloyd's for the provision of statistical data when a long term reinsurance contract is under negotiation.

Statute of Frauds 1677

An Act that requires a guarantee to answer for the debt, default or miscarriage of another person to be evidenced by a note or memorandum in writing.

Statutory declaration

A declaration made under the Statutory Declarations Act 1835, viz. a written statement of fact signed and solemnly declared to be true before a commissioner of oaths or a magistrate.

Statutory exclusions

Exclusions under a marine insurance policy stated in the Marine Insurance Act 1906, s.55: in particular, that the insurer is not liable for any loss attributable to the wilful misconduct of the insured or (unless the policy otherwise provides) for loss proximately caused by rats or vermin, or injury to machinery not proximately caused by maritime perils.

Statutory interest policy

An industrial life assurance policy on the life of a parent, step-parent or grandparent, permitted up to s30, by the Industrial Assurance and Friendly Societies Acts 1948 and 1958.

Statutory liability

Liability arising by virtue of statutory provisions or a breach of them.

Statutory notice before forfeiture

A notice prescribed by the Industrial Assurance Act 1923 that must be served on an industrial assurance life policyholder in arrears with his premiums before the policy can be forfeited.


A policy condition that does not go to the root of the contract so that a breach of it does not enable the insurer to escape his liability. The insurer's remedy is a suit for damages.


The goods held by a trader for sale / A fund of capital or debt capable of being divided into varying segments ownership of which is evidenced by a stock certificate.

Stock declaration policy

A fire insurance policy on stock, the insured being required to make monthly or quarterly declarations of the amount at risk, the premium being adjusted at the end of the year on the basis of the average of amounts declared.

Stock insurance company

An insurance company with capital in the form of stock, as opposed to a mutual insurance company (U.S.).

Stop loss reinsurance

A form of reinsurance under which the reinsurer pays the ceding company's losses in any year to the extent that they exceed a specified loss ratio or amount, subject as a rule to some specified limit.


Violent wind, usually accompanied by rain or hail or snow; not, therefore, simply a gust of wind or heavy or persistent rain by itself.

Street book

Same as Situation index.

Street works bond

A bond effected in favour of a highway authority to guarantee that the roads which a developer has undertaken to provide will be provided.

Strict liability

Liability imposed by law irrespective of fault on the part of the person made liable, though often subject to certain defences.

Structured settlement

Settlement of a claim for serious bodily injury otherwise than by a once-for-all lump sum, as where a smaller lump sum is supplemented by an annuity.


One whose services are utilised by an agent in the course of the agent's activities on behalf of his principal.

Subject approval no risk

Phrase inserted in initial form (S.A.N.R.) on a slip when the insurer does not know whether the proposer will accept the insurer's terms and requires the proposer's confirmation which must be given without delay if the insurance is to attach.

Subject premium

The premium of a direct insurer on which the premium for reinsurance is calculated.

Subject to average

A provision in a non-marine property insurance that if at the time of a loss the value of the insured property is greater than the sum insured the insurer's liability for the loss will be reduced in proportion to the under-insurance.

Subject to survey

Phrase used to signify provisional acceptance of a fire insurance pending inspection by a fire insurance surveyor whose report will be required to determine the rate and provisos to be offered.

Subjective risk

The uncertainty of an event as perceived by an individual.


A legal summons to appear before a court to give evidence to (subpoena ad testificandum) or to produce a document (subpoena duces tecum).


The right of one such as an insurer, who has indemnified another in respect of a loss, to be put in the place of that other person with regard to all his other means of recouping the loss.

Subrogation clause

A clause in an insurance policy that is a contract of indemnity which sets out the insurer's rights to subrogation (q.v.) and frequently extends the right, e.g., by entitling the insurer to act in the insured's name against a third party even before settling the insured's claim.

Subrogation form

A standard form used in marine insurance by signing which the insured, when a claim has arisen, acknowledges the insurer's right to claim from a third party in the name of the insured.


The extent to which an insurer is liable under a slip or policy signed on behalf of several insurers.

Subscription market

A market where a number of underwriters are available to consider and accept insurances offered by brokers for subscription.


Damage to buildings by subsidence is a peril covered by modern houseowners' policies. Subsidence is strictly a vertical downward movement but has been held to include settlement (a lateral movement).


Term used to describe insurances that have some unfavourable feature making them unacceptable on standard terms for a class.

Substandard life

A life whose health is impaired.


A person granted a ticket of admission to the Room at Lloyd's in order to conduct insurance business on behalf of an underwriting member, annual subscriber or associate, by whom he is employed / An obsolete term for an underwriting agent (q.v.) at Lloyd's.

Substituted annuity

A pension bought with the proceeds of a pension policy on which the open market option (q.v.) has been exercised.

Substituted contracts

When a self-employed pension policy, effected under s.226 of the Finance Act 1956, matures the policyholder may employ the proceeds to effect a policy with another insurance company that offers a better pension than the original company. The contract with the new company is known as a substituted contract.


The replacement of one insurer by another, as where the first ceases to underwrite.

Substitution of policies

By the Industrial Assurance Act 1923, s.25(1) where the owner of an industrial life policy agrees to accept a new policy in substitution for it, then unless the value of the new policy equals or exceeds the surrender value of the old the owner is entitled to the surrender value of the old policy or to an equivalent free policy.

Sudden and unforeseen damage

The wide form of words used in a modern engineering insurance policy to cover damage to the insured plant from both internal and external causes.

Sudden death clause

A clause in a reinsurance treaty providing for its automatic termination in the event of a change in control of the ceding company, its insolvency, etc.

Sue and Labour charges

Under a marine insurance policy the insurer is liable for charges incurred by the insured in seeking to preserve his property from loss or to minimise a loss that would be covered by the policy. The insured is said to sue and labour for the protection of his property.

Suez Canal clause

A clause in a marine hull policy which provides that grounding in the Suez Canal, Panama Canal and other named locations shall not be deemed to be a stranding.

Sufferance bond

A bond given on behalf of the owners of a sufferance wharf (q.v.) as security for the payment of customs duty.

Sufferance wharf

A wharf where the Customs Authorities allow the loading and discharge of dutiable goods.


Selling under the guise of market research.

Suicide clause

A clause in a life policy whereby the assurers may refuse to meet a claim by the estate of the life assured arising out of his death by his own hand within a specified period after effecting the insurance.

Sum insured

The sum expressed in a policy as the amount payable on the occurrence of the event insured against in the case of a benefit policy, or as the maximum of the insurer's liability under a contract of indemnity.

Sums due policy

A credit insurance policy covering sums due for services rendered.

Sunrise cover

Reinsurance for losses which are irrecoverable under an original reinsurance because they are barred by a s unset clause.

Sunset clause

A clause in a reinsurance treaty limiting the time in which a loss must be notified, e.g., to seven years.

Super profit commission

An extra profit commission payable under a property reinsurance treaty over and above the ordinary profit commission.

Superannuation Funds Office

A department of the Inland Revenue responsible for examining pension schemes to see if they can be approved as qualifying for tax relief.


The action of the state in overseeing the operations of insurers.

Supervisory authority

The government department or public authority charged with overseeing the operations of insurers in a country; in the U.K., the Department of Trade.

Supplementary accident insurance

The addition to a life assurance of special benefits in the case of accident.

Supplementary call

See Call.

Supplementary contract

In marine insurance the cover granted under the Sue and Labour clause is deemed by the Marine Insurance Act 1906 (s.78(1)) to be supplementary to the contract of insurance, so that the insured may recover his expenses under the clause even though the insured may have paid a total loss under the main contract. Other cover, such as that given by the Collision clause, is also considered as a supplementary contract.

Supplier default cover

Credit insurance cover against consequential loss arising from the insolvency of a supplier.

Supply bond

A guarantee that materials will be delivered and goods produced at the times required to enable a contract to be fulfilled.



Surety company

Same as Bonding company.


The excess of the assets of an insurance fund over its liabilities on a given date, as actuarially calculated.

Surplus arising valuation

A method of valuing a portfolio of life insurances that takes into account only the surplus that has arisen on policies that have matured or otherwise terminated.

Surplus line

The amount of reinsurance required after the maximum line has been declared on a reinsurance treaty or cover / A risk which a broker is unable to place with insurers in his own state and for which he must therefore seek cover outside the state (U.S.).

Surplus line reinsurance

Reinsurance of a risk in excess of the reinsured's retention, the reinsurer taking a line, or part of a line, of the business equal to the reinsured's retention limit.

Surplus reinsurance

Reinsurance of amounts over a specified amount of insurance, premiums and losses being shared proportionately between insurer and reinsurer.

Surplus treaty

A reinsurance treaty whereby one or more reinsurers agree to accept amounts of reinsurance, called lines, in a certain range of values over a specified amount (line) retained by the original insurer, the losses being shared proportionately by the original insurer and the reinsurer(s).


The giving up of an insurance policy by the insured to the insurer before the insurance has run its full course.

Surrender of bonuses

Under a with-profits life assurance it may be possible to surrender the accrued bonuses while maintaining the policy in force. The discounted value of the bonuses is either paid to the assured or applied to reducing future premiums.

Surrender value

The sum payable by an insurance company upon the surrender of a long-term policy (life or permanent health) before it has run its full course.


An inspection of premises or property proposed for insurance / An inspection of a vessel, aircraft or cargo to ascertain the cause and extent of damage or the condition of insured property.


A person qualified by knowledge and skill to make a report on the condition and value of property and the cause of damage to it.

Surveyor's report

In fire and accident insurance, a report of a survey relating to property or liability offered for insurance, made for the information of an insurer / In marine insurance, a report as to the nature and extent of damage to a vessel or cargo for which a claim has been made, or the condition of a vessel or its cargo.

Survival certificate

A certificate that an annuitant is still living.

Survivorship annuity

An annuity payable during the lifetime of one who has survived another.

Sympathetic damage

Damage to cargo by way of taint or the like arising from the proximity of other cargo.


A group of underwriters on whose behalf insurances are accepted, each underwriter taking a proportion of the insurance for himself, without assuming liability for the proportions taken by the other members of the group.

Syndicate constitution

A document detailing the members of, and their shares in, a Lloyd's underwriting syndicate.

Syndicate List

A list of the syndicates subscribing a Lloyd's policy, showing each syndicate's signed line, pseudonym, syndicate number and reference.

Syndicate Sheet

A large sheet showing the composition of each syndicate at Lloyd's.

Syndicate stamp

Same as Syndicate constitution.

Synopsis sheet

A document used in Lloyd's non-marine claims settlements.

System of check

The precautions taken by an employer to reduce or eliminate the possibility of loss through the dishonesty of an employee