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Solicitor

A licensed employee of a fire and casualty agent or broker who may act for the agent or broker in some circumstances.
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A person appointed by an agent to seek out and receive applications for new insureds as a representative of the agent. A solicitor must be licensed but does not hold the power to issue coverage.
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An employee of an insurance agent or agency who is empowered to sell insurance on behalf of a licensed agent, generally using only those insurers that the agency represents. A solicitor usually does not have binding authority, and the business that is generated by a solicitor usually is owned by the agent, not the solicitor.
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An individual appointed and authorized by an agent to solicit and receive application for insurance as his representative. Solicitors are not usually given the power to bind coverage but are required to be licensed.

Solvency

MEDICAL, US: Ability of an individual or organization to pay all legal debts.
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UK: An insurer is solvent for regulatory purposes when its assets exceed its liabilities by the required minimum margin. The FSA prescribes methods for the valuation of assets and liabilities for the purpose of showing regulatory solvency. The actual solvency margin is the excess of assets over liabilities. See FREE ASSETS; SOLVENCY I; SOLVENCY II.
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Having sufficient assets – capital, surplus, reserves – and being able to satisfy financial requirements – investments, annual reports, examinations – to be eligible to transact insurance business and meet liabilities.
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Insurers must have sufficient assets (capital, surplus, reserves) in order to satisfy statutory financial requirements (investments, annual reports, examinations) and to meet liabilities.
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The ability of an insurer to cover their liabilities and meet the financial requirements of doing insurance business.

Solvency Clause

A clause that may be included in a non-proportional reinsurance treaty, providing for the indexation of monetary limits (i.e., excess point and/or the upper limit) in line with a specified index of inflation.

Solvency II

An initiative of the E.U. to undertake a “fundamental review of the capital adequacy regime for the European insurance industry.” It aims to establish a revised set of EU-wide capital requirements and risk management standards that will replace the current solvency requirements. The Solvency II Directive is intended to become effective on January 1, 2016.
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UK: Ongoing review of solvency regulation that appears likely to lead to the implementation of a risk-based capital model for solvency purposes in the EC in the next few years.

Solvency Margin

Solvency margin simply indicates how solvent an insurance company is, or how prepared it is to meet unforeseen exigencies. As per IRDA Rules all the general insurance companies and health standalone insurance companies need to maintain solvency margins. The required solvency margin shall be the highest of (a) Rupees five hundred million (Rupees one billion in case of a re-insurer), or (b) a sum equivalent to twenty per cent of net premium income, or (c) a sum equivalent to thirty per cent of net incurred claims whichever shall be highest. This shall be subject to credit for re-insurance for computing net premiums and net incurred claims being actual – but a percentage, determined by the regulations, not exceeding fifty per cent. An insurer who fails to maintain the required solvency margin will be deemed to be insolvent and may be wound up by the court.
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UK: the excess of an insurance company’s assets over its liabilities, both being valued in accordance with the relevant regulatory legislation (see also minimum solvency margin).
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UK: See: margin of solvency; required minimum margin solvency test.

Solvency ratio

A statutory ratio test, which is usually net written premiums divided by capital and surplus.
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Solvency ratio means the ratio of the amount of Available Solvency Margin to the amount of required solvency margin. “Available Solvency Margin” means the excess of value of assets over the value of the liabilities and other liabilities of policyholders’ fund and shareholders’ funds. The “Required Solvency Margin” is based on mathematical reserves and sum at risk, and the assets of the policyholder funds. The numerator of the ratio represents the items such as (i) Capital or funds (ii) Various reserves that include price fluctuation reserve (iii) A portion of unrealized profits obtained from real estate and stocks

Solvency test

1. The test to show that the insurer or underwriter is complying with FSA solvency requirements by comparing the available solvency margin with the required minimum margin. 2. Actuarial calculation to determine whether an occupational pension scheme’s assets are sufficient to pay the benefits to members.

Sonic Band Hazard

The supersonic aircraft Concorde travelling at a speed of 1800 mph (2,900 km/h) presents the “sonic bang” hazard; i.e., the damage to property on the ground when the aircraft crosses the sound barrier (e., splintering of glass window panes).