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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 |
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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.
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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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