Final answer:
Vernix caseosa is the oily white substance on the skin that is a sign of prematurity.
Step-by-step explanation:
The oily white substance on the skin that is a sign of prematurity is vernix caseosa. Vernix caseosa is a thick waxy coating that develops on the fetus's skin to protect it from becoming chapped or irritated by amniotic fluid. It is commonly found on the skin of premature infants.