|
This glossary is for non-commercial educational purposes only. The
definition of the
terminology below is only a brief description and should not be considered factual or
the only definition possible. This information is only to help better inform you
of information related to liquidations.
|
|
| Salvage |
| |
The process by which an insurer, after payment of a claim, takes over property to reduce the amount of its loss. For example, a surety may take over the property of a principal to reduce its exposure on a surety bond claim. |
|
| Secured Claim |
| |
Any claim secured by mortgage, trust deed, security agreement, pledge, deposit as security, escrow, or otherwise, but not including special deposit claims or claims against assets. The term also includes claims that have become liens upon specific assets by reason of judicial process. |
|
| Special Deposit Claim |
| |
Any claim secured by a deposit made pursuant to statute for the security or benefit of a limited class or classes of persons, but not including any claim secured by assets. |
|
| Statutory Accounting Practices (SAP) |
| |
The recording of transactions and preparation of financial statements in accordance with the rules and regulations prescribed or permitted by state regulatory authorities. Statutory accounting practices generally reflect the underlying accounting assumption of liquidating rather than remaining a going concern. |
|
| Statutory Surplus |
| |
The excess of an insurer's admitted assets over admitted liabilities as shown on an insurer's financial statements prepared in accordance with statutory accounting practices. |
|
| Subrogation |
| |
The process by which an insurer, after payment of a claim, is able to substitute itself for the insured and assert the rights of an insured to recover from a third party the amount paid. For example, a surety may be subrogated to the rights of an obligee of a surety bond or an automobile insurer may be subrogated to the rights of the insured against a negligent third party who caused the accident and resulting loss. |
|
| Subsidiary |
| |
A company owned by another or parent company. When an insurance company is placed into liquidation, the subsidiary companies are subject to the control of the Liquidator. |
|
| Superintendent of Insurance |
| |
The superintendent of insurance of this state, or, when the context requires, the superintendent or commissioner of insurance, or equivalent official, of another state. |
|
| Surety Bond |
| |
An instrument that guarantees the performance of certain obligations, as well as payments to third parties should there be a failure to perform any specific acts within a stated period. |
|
| Surplus Lines Carrier |
| |
(1) A risk or part of a risk for which there is no normal insurance market available. (2) Insurance written by non-admitted (unlicensed) insurance companies. There is no insurance guaranty association protection for surplus lines policies. |
|
| Surplus Notes |
| |
Capital Contributions made to an insurer in the form of subordinated notes or debentures. |
|
