South Carolina Code of Regulations › Chapter 69 - DEPARTMENT OF INSURANCE › Section 69-3 - Definitions

Current through Register Vol. 48, No. 6, June 28, 2024
1. Except as may be
		  otherwise set forth by the Statutes of this State, the following words and
		  phrases, whenever and wherever they appear in matters under the cognizance of
		  this Commission, shall have the meaning ascribed herein:
Accepting insurer--The Company that agrees to insure the
			 risk.
Acquisition cost--That portion of premium, or part of a rate,
			 representing the costs of securing lines of insurance.
Adjustor--A person who determines the extent of insured losses
			 and assists in settling, or attempts to settle claims, usually representing the
			 insurer.
Admitted assets--Those assets of an insurer which conform to the
			 regulations of the South Carolina Insurance Commission.
Advisory organization--An organization that formulates policy and
			 principles without the authority to apply them.
Affiliate--A corporation of which a majority of the capital stock
			 is owned or controlled by any or all of the stockholders, directors or officers
			 of another corporation, who also own or control a majority of the stock of such
			 other corporation.
Agent--As defined in Section
			 38-43-10
			 of the S. C. Code of Laws, 1976.
Alien insurer--An insurer formed under the laws of a country
			 other than the United States of America, its States, Commonwealths, Territories
			 or insular possessions.
All risks--A term commonly used in insurance to denote the
			 coverage of damage or loss of property from all hazards except depreciation,
			 deterioration and wear and tear.
Ancillary state--Any state other than a domiciliary state.
Appraisal--Estimate of value made by qualified, impartial and
			 disinterested persons, duly appointed for such purpose.
Articles--Articles of incorporation and all amendments
			 thereto.
Assessment--An apportionment or call made on the entire
			 membership of a mutual company or association for definite contributions or
			 payment of money on account of losses sustained by particular members.
Assigned risk--The protection of a specific insurance risk that
			 has been directed to a given insurer by qualified authority.
Assuming insurer--The company, party to a reinsurance
			 transaction, which assumes insurance, annuity and endowment risks.
Authorized insurer--An insurer duly licensed to do business in
			 this State.
Average rate--A composite unit measuring the various perils of
			 more than a single subject of insurance and usually at separate locations,
			 expressed in dollars and cents per $100.00 of protection.
Basic rate--The foundation unit expressed in monetary amounts to
			 which fractional amounts are added to accurately develop the correct final rate
			 for the insurance exposure.
Blanket coverage--Insurance which contemplates that the risk is
			 shifting, fluctuating or varying, and which covers a class of property or
			 persons rather than any particular thing or persons.
Board of directors--Synonymous with board of trustees, and means
			 the body having power and responsibility for the management and control of a
			 corporation, fraternal benefit association or other association, by whatever
			 name called, and the advisory body having similar powers in reference to a
			 reciprocal insurer or Lloyds underwriters.
Broker--As defined in Section
			 38-45-10,
			 S. C. Code of Laws, 1976.
Brokerage--Any arrangement or agreement whereby any agent can be
			 held to be the agent of the insured and not of the insurer, or whereby an agent
			 is permitted to solicit or place any class of insurance other than those
			 authorized to be issued in South Carolina by such agent's insurer.
Bureau--An organization designed to render specific services in
			 regard to insurance.
Capital--The aggregate amount paid in on the shares of capital
			 stock of a corporation issued and outstanding, and equal to the par or declared
			 value of the stock issued.
Capital stock--The aggregate amount of the par or declared value
			 of all shares of capital stock.
Ceding company--The Company, party to a reinsurance transaction,
			 whose insurance, annuity and endowment risks or obligations are assumed.
Certificate of insurance--A memorandum copy, complete or
			 abbreviated, of an insurance contract.
Charter--The basic instrument, by whatever name called,
			 prescribing the powers, purposes and organization of a corporation.
Chief Insurance Commissioner--The chief officer of the Insurance
			 Department, appointed by the Insurance Commission.
Co-insurance--A stipulation or requirement that the insured
			 undertakes to be his own insurer to the extent that he fails to maintain
			 insurance of a given percentage of the value of the property against loss or
			 damage.
Commission--That part of the premium paid to the agent as
			 compensation for his services.
Corporation--Except as otherwise indicated, "corporation" means a
			 corporation formed or existing under the laws of this State.
Debit--A defined geographical area assigned to a particular
			 agent, usually for the writing of industrial insurance.
Debit agent--One who collects weekly, bi-weekly or monthly
			 premiums from a number of policyholders, generally small policies, in a
			 designated territory, and generally industrial insurance.
Decreasing interest insurance--Same as decreasing balance
			 insurance. Insurance written on a risk, generally in connection with a loan,
			 wherein the coverage decreases commensurate with the decrease of
			 obligation.
Department--The Insurance Department of this State; also, the
			 Insurance Commission of this State.
Deputy--The first, or other deputy chief insurance commissioner
			 of this State, so appointed by the Chief Insurance Commissioner.
Deviation--A departure, either in rate or coverage, from the
			 prevailing standards.
Dividends--The excess of premiums collected, over costs of
			 insurance, returned or credited to the policyholder.
Domestic insurer--An insurer formed under the laws of this
			 State.
Domiciliary state--The State in which an insurer is incorporated
			 or organized, or in the case of an insurer incorporated or organized in a
			 foreign country, the State in which such insurer, having become authorized to
			 do business in such State, has designated as its domiciliary State and/or State
			 of entry into the United States.
Earned premium--That portion of the gross premium absorbed, at a
			 given time, by costs of administration, risk, and profit.
Fire insurance and Allied lines--Insurance providing indemnity to
			 the insured in case of loss or damage occasioned by fire and such other forms
			 of property insurance as are undertaken by fire insurance companies in addition
			 to marine and inland marine insurance.
Foreign domesticated insurer--A foreign insurer licensed to do
			 business in this State.
Foreign insurer--An insurer, not an alien insurer, formed under
			 laws other than the laws of this State.
Fraternal Benefit Association--As defined in Section 38-37-10, S.
			 C. Code of Laws, 1976.
General Assets--All property, real, personal, or otherwise, not
			 specifically mortgaged, pledged, deposited, or otherwise encumbered for the
			 security or benefit of specified persons or a limited class or classes of
			 persons and as to such specifically encumbered property the term includes such
			 property or its proceeds in excess of the amount necessary to discharge the sum
			 or sums secured thereby. Assets held in trust and assets held on deposit for
			 the security or benefit of all policyholders, or all policyholders and
			 creditors in the United States, shall be deemed general assets.
Gross Premium--The whole amount of the money consideration, given
			 at fixed intervals during the lifetime of a policy of insurance, in exchange
			 for the insurance set forth in the policy.
Group Insurance--A form of personal insurance which is issued to
			 members of an organized body qualified, and not specifically prohibited, to be
			 an insured, in which individual insurances are placed upon the persons of each
			 member of that group, but in which the group acts as an entity in the payment
			 of premiums, inception of the contract, and the like.
Holding company--Has the same meaning as parent corporation. (See
			 "subsidiary".)
Incorporator--A person, natural or corporate, who signs the
			 articles of incorporation.
Insurance--A contract whereby one undertakes to indemnify another
			 or pay a specified amount upon determinable contingencies.
a. Accident Insurance--Insurance against loss
		  or damage due to unexpected injury to the person insured and resulting in
		  disability or death.
b. Casualty
		  Insurance--Those forms of indemnity providing for payment for loss or damage,
		  resulting from accidental or some unanticipated contingency, except fire and
		  the elements.
c. Credit
		  Insurance--An indemnity to merchants or traders against the insolvency of
		  customers to whom they extend credit and under the Small Loan Act, various
		  insurances on the lives, property and health of borrowers to the extent of the
		  amount loaned and unrepaid.
d.
		  Fidelity Insurance--Insurance against loss from the want of honesty, integrity
		  or fidelity of employees or others in a position of trust.
e. Fire Insurance--A contract of indemnity
		  against loss by fire and lightning.
f. Group Insurance--See specific
		  heading.
g. Health Insurance--A
		  contract of indemnity against expense and loss of time resulting from
		  disease.
h. Industrial Insurance--A
		  plan of insurance under which policies of insurance are issued in consideration
		  of weekly, bi-weekly or monthly payments.
i. Inland Marine Insurance--A contract of
		  indemnity against loss suffered in connection with inland land or water
		  transportation or with communications equipment.
j. Liability Insurance--Insurance against
		  loss or liability on account of bodily or property injury sustained by
		  others.
k. Life Insurance--A
		  contract whereby in consideration of the payment of premiums the insurer
		  engages to pay a certain sum upon the death of the insured.
l. Marine Insurance--A contract of indemnity
		  against loss from marine perils.
m.
		  Reciprocal Insurance--See specific heading.
n. Surety Insurance--An insurance contract
		  whereby one, for a consideration, agrees to indemnify another against losses
		  arising from the want of integrity, fidelity or solvency of employees and
		  persons holding positions of trust, or against insolvency of losses from
		  nonpayments of notes and other evidence of indebtedness, or against other
		  breaches of contract. As generally used, this insurance is synonymous with
		  guaranty insurance.
Insurance rate--The mathematical figure per $100 of insurance
			 which determines the premium.
Insurer--Any legal entity, engaged or attempting to engage in the
			 business of making insurance or surety contracts.
Level insurance--Insurance in which the amount of insurance
			 benefit does not decrease during its term.
License--A certificate of authority, issued by a qualified public
			 agency, to act within prescribed limits.
Lien-endorsement coverage--An endorsement added to an automobile
			 physical damage policy indemnifying a lending agency against loss resulting
			 from prior existing liens.
Lodge--As set forth in Section 38-37-20, S. C. Code of Laws,
			 1976.
Member--One who holds a contract of insurance or is insured in an
			 insurance company other than a stock corporation.
Minimum surplus--The minimum amount by which the admitted assets
			 of an insurer, over and above the capital stock, must exceed its liabilities,
			 in order to be licensed to do business in this State.
Multiple line insurance--A policy of insurance insuring more than
			 one class of risk.
Net premium--That portion of the gross premium remaining after
			 adjustments of debits, credits and dividends.
Non-Recording insurance--An insurance contract protecting a
			 lender from loss occasioned by his failure to record a mortgage given as
			 security for the loan made.
Officer--Any person charged with active management and control,
			 in an executive capacity, of the affairs of a corporation.
Parent corporation--See "subsidiary".
Person--Any legal entity.
Policy--A contract of insurance.
Policyholder--Holder of a contract of insurance.
Preferred claim--Any claim with respect to which the law of a
			 State or of the United States accords priority of payment from the general
			 assets of the insurer.
Premium--Money or any other thing of value paid or given in
			 consideration of a contract of insurance.
Premium reserves--A fund set aside for the payment of future
			 benefits under a policy.
Reciprocal insurance exchange--A group or association of persons
			 cooperating through an attorney-in-fact for the purpose of insuring themselves
			 and each other.
Reinsurance--The assumption of a portion of the risk on a policy
			 by another insurer.
Renewal license--A license which becomes effective immediately
			 following the termination of a license previously issued and in force, and
			 which differs from such previous license only in respect to the date of
			 expiration.
Return premium--Return to the policyholder of the unearned
			 portion of a premium upon cancellation, or adjustment in rate, of a
			 policy.
Shareholder--A holder of record of shares of stock in a
			 corporation.
Short rate--A penalty rate, using percentages slightly higher
			 than would result from pro-rata calculations.
Single interest insurance--Insurance in which the benefit amount
			 decreases during its term in accordance with predetermined scale.
Specific insurance--A contract of insurance which definitively
			 describes the thing insured and the amount of insurance applying
			 thereto.
Subsidiary--A corporation of which the majority of the capital
			 stock is owned or controlled by another corporation, called the "parent
			 corporation".
Surplus to policyholders--The excess of total admitted assets
			 over the liabilities of an insurer which shall be the sum of all capital and
			 surplus accounts minus any impairment thereof.
Unauthorized insurer--Any insurer not authorized to do business
			 in this State.
Unearned premium--That portion of the gross premium, at a given
			 time, that is unearned or unexhausted by the earned premium.
Unearned premium reserve--Funds, equal to the unearned premium,
			 set aside for contingencies.