Glossary

Selection is the process of determining whether to insure a particular entity.

The select mortality table is a life insurance mortality table based only on individuals who have recently purchased life insurance policies.

A self-contained policy consists of a single document that contains all of the insuring agreements between the insurer and the insured.

Self-insurance refers to a system whereby a firm sets aside an amount of its monies to provide for any losses that occur—losses that could ordinarily be covered under an insurance program.

A self-insurance pool is a legal entity regulated by the states that allows unrelated insureds to retain their own risks and collectively purchase claims administration services and excess insurance to meet statutory coverage requirements.

Self-insured retention is a dollar amount specified in a liability insurance policy that must be paid by the insured before the insurance policy will respond to a loss. Under a policy written with an SIR provision, the insured (rather than the insurer) pays the defense and/or indemnity costs associated with a claim until the SIR limit is reached. After that point, the insurer would make any additional payments for defense and indemnity that were covered by the policy. In contrast, under a policy written with a deductible provision, the insurer pays the defense and indemnity costs associated with a claim on the insured's behalf and then seeks reimbursement of the deductible payment from the insured. For example, assume that two policies are identical except for the fact that Policy A is written with a $25,000 deductible, while Policy B contains a $25,000 SIR. Also assume that defense and indemnity payments for a given claim total $100,000. In the event of a claim under Policy A, the insurer would pay the $100,000 in defense and indemnity costs that were incurred. After the claim is concluded, the insurer will bill the insured for the $25,000 in payments made on the insured's behalf. In the event of a claim under Policy B, the insured will pay the first $25,000 of defense/indemnity costs, after which, the insurer will make the additional $75,000 in defense and indemnity payments on the insured's behalf.

A self-insurer's bond is a type of surety bond that provides a promise to pay self-insured losses in case the promisor (self-insurer) is unable to meet its obligations.

Self-procurement taxes are state-imposed premium taxes of up to 4 percent on premiums paid to most captives.

Self rating refers to prospective or retrospective rating whereby the rate depends on the experience of the insured.

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.