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B-SHARE VARIABLE ANNUITY |
A form of variable annuity
contract with no initial sales charge but if the
contract is cancelled the holder pays deferred sales
charges (usually from 5 to 7 percent the first year,
declining to zero after from 5 to 7 years). The most
common form of annuity contract.
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BALANCE SHEET |
Provides a snapshot of a company’s
financial condition at one point in time. It shows
assets, including investments and reinsurance, and
liabilities, such as loss reserves to pay claims in the
future, as of a certain date. It also states a company’s
equity, known as policyholder surplus. Changes in that
surplus are one indicator of an insurer’s financial
standing.
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BANK HOLDING COMPANY |
A company that owns or controls
one or more banks. The Federal Reserve has
responsibility for regulating and supervising bank
holding company activities, such as approving
acquisitions and mergers and inspecting the operations
of such companies. This authority applies even though a
bank owned by a holding company may be under the primary
supervision of the Comptroller of the Currency or the
FDIC.
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BASIS POINT |
0.01 percent of the yield of a
mortgage, bond or note. The smallest measure used.
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BEACH AND WINDSTORM PLANS |
State-sponsored insurance pools
that sell property coverage for the peril of windstorm
to people unable to buy it in the voluntary market
because of their high exposure to risk. Seven states
(AL, FL, LA, MS, NC, SC, TX) offer these plans to cover
residential and commercial properties against hurricanes
and other windstorms. Georgia and New York provide this
kind of coverage for windstorm and hail in certain
coastal communities through other property pools.
Insurance companies that sell property insurance in the
state are required to participate in these plans.
Insurers share in profits and losses. (See
Fair access to insurance requirements plans / FAIR plans;
Residual market)
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BINDER |
Temporary authorization of
coverage issued prior to the actual insurance policy.
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BLANKET INSURANCE |
Coverage for more than one type of
property at one location or one type of property at more
than one location. Example: chain stores.
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BODILY INJURY LIABILITY
COVERAGE |
Portion of an auto insurance
policy that covers injuries the policyholder causes to
someone else.
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BOILER AND MACHINERY INSURANCE |
Often called Equipment Breakdown,
or Systems Breakdown insurance. Commercial insurance
that covers damage caused by the malfunction or
breakdown of boilers, and a vast array of other
equipment including air conditioners, heating,
electrical, telephone, and computer systems.
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BOND |
A security that obligates the
issuer to pay interest at specified intervals and to
repay the principal amount of the loan at maturity. In
insurance, a form of suretyship. Bonds of various types
guarantee a payment or a reimbursement for financial
losses resulting from dishonesty, failure to perform and
other acts.
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BOND RATING |
An evaluation of a bond’s
financial strength, conducted by such major ratings
agencies as Standard & Poor’s and Moody’s Investors
Service.
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BOOK OF BUSINESS |
Total amount of insurance on an
insurer's books at a particular point in time.
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BROKER |
An intermediary between a customer
and an insurance company. Brokers typically search the
market for coverage appropriate to their clients. They
work on commission and usually sell commercial, not
personal, insurance. In life insurance, agents must be
licensed as securities brokers/dealers to sell variable
annuities, which are similar to stock market-based
investments.
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BURGLARY AND THEFT INSURANCE |
Insurance for the loss of property
due to burglary, robbery or larceny. It is provided in a
standard homeowners policy and in a business multiple
peril policy.
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BUSINESS INCOME INSURANCE (also
known as BUSINESS INTERRUPTION INSURANCE) |
Commercial coverage that
reimburses a business owner for lost profits and
continuing fixed expenses during the time that a
business must stay closed while the premises are being
restored because of physical damage from a covered
peril, such as a fire. Business interruption insurance
also may cover financial losses that may occur if civil
authorities limit access to an area after a disaster and
their actions prevent customers from reaching the
business premises. Depending on the policy, civil
authorities coverage may start after a waiting period
and last for two or more weeks.
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BUSINESSOWNERS POLICY / BOP |
A policy that combines property,
liability and business interruption coverages for small-
to medium-sized businesses. Coverage is generally
cheaper than if purchased through separate insurance
policies.
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