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Suitability

(FSA Conduct of Business Rule 5.3). This builds on know your customer. The provider or independent intermediary must take reasonable steps to recommend an investment suitable for the customer. This applies when advising private customers, managing occupational schemes or stakeholder schemes, or promoting personal pensions schemes to groups of employees. The suitability requirements are especially stringent for packaged policies to private customers. Most suitability requirements call for a formal suitability letter to the customer explaining the reason for the recommendation. The letter must summarise the main consequences and any possible disadvantages of the transaction.

Sum insured

UK: The amount specified as the maximum amount that the insurer will pay under the policy. The limit is normally set by the insured and should set the full value at risk or, in some household policies, the full value of replacement, otherwise average may apply. The sum insured is normally used as the basis for calculating the premium.
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UK: the sum expressed in a policy as the amount payable on the occurrence of the contingency insured against, or as the maximum amount of the insurer’s liability under a contract of indemnity.
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This is 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.

Summarized cost rate

Ratio of the present value of expenditures to the present value of the taxable payroll for the years in a given period. In this context the expenditures are on an incurred basis and exclude costs for those uninsured persons for whom payments are reimbursed from the general fund of the U.S. Treasury and for voluntary enrollees, who pay a premium in order to be enrolled. The summarized cost rate includes the cost of reaching and maintaining a target trust fund level known as a contingency fund ratio . Because a trust fund level of about 1 year’s expenditures is considered to be an adequate reserve for unforeseen contingencies, the targeted contingency fund ratio used in determining summarized cost rates is 100% of annual expenditures. Accordingly, the summarized cost rate is equal to the ratio of (1) the sum of the present value of the outgo during the period, plus the present value of the targeted ending trust fund level, plus the beginning trust fund level, to (2) the present value of the taxable payroll during the period.

Summarized income rate

Ratio of (1) the present value of the tax revenues incurred during a given period (from both payroll taxes and taxation of Old Age, Survivors, and Disability Insurance [OASDI] Program benefits), to (2) the present value of the taxable payroll for the years in the period.

Summary health information

Under the Health Insurance Portability and Accountability Act (HIPAA), data that may be individually identifiable health information and summarizes the claims history, claims expenses, or types of claims experienced by individuals for whom a plan sponsor has provided health benefits under a group health plan.

Summary judgment

When one party to a lawsuit requests that the judge enter a judgment without a trial because there is no genuine issue of material fact to be decided by a jury, because the evidence of the case is legally insufficient for a reasonable juror to find for the party that is not moving for summary judgment. For example An insured sues her homeowner’s insurer for denying a claim. The insured presents her evidence on why the insurer was wrong to deny the claim the insurer presents evidence on why it should not have to pay the claim. The insurer moves for “summary judgment.” Now, the judge has to decide whether, considering all of the evidence that has been presented, a jury could reasonably decide that the insured was right and give a verdict in the insured’s favor. If the answer is no, then the insurer’s motion will be granted and the trial is over. If the answer is yes, then the insurer’s motion will be denied and the trial will continue.