GLOSSARY

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.

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.

BASIS POINT 0.01 percent of the yield of a mortgage, bond or note. The smallest measure used.

BCEG CLASS Building Code Effectiveness Grading. The BCEG scale is a Florida statute designed to evaluate a community's building code and the enforcement of that code. All Florida communities are required to adopt the statute and you may receive a credit based on your community's grade. Each community receives a grade of 1-10, with a 1 being the best. Refer to your policy documents for your community's grade. For questions regarding your community's grade, you should contact your community's Building Department.

BENEFICIARY The person or legal entity the owner of an insurance policy names to receive the policy benefit if the event insured against occurs.

BINDER Temporary authorization of coverage issued prior to the actual insurance policy.

BOOK OF BUSINESS Total amount of insurance on an insurer’s books at a particular point in time.

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 and/or personal insurance. In life insurance, agents must be licensed as securities brokers/dealers to see variable annuities, which are similar to stock market-based investments.

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.