Definition and meaning of BALANCE SHEET :

BALANCE SHEET: Provides a snapshot of a companyÕs 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 companyÕs equity, known as policyholder surplus. Changes in that surplus are one indicator of an insurerÕs financial standing.

(Source: Insurance Information Institute )

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Definition and meaning of B-SHARE VARIABLE ANNUITY :

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.

(Source: Insurance Information Institute )

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Definition and meaning of BANK HOLDING COMPANY :

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.

(Source: Insurance Information Institute )

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Definition and meaning of BASIS POINT :

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

(Source: Insurance Information Institute )

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Definition and meaning of BEACH AND WINDSTORM PLANS :

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)

(Source: Insurance Information Institute )

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Definition and meaning of ANNUITY PURCHASE RATE :

ANNUITY PURCHASE RATE: The cost of an annuity based on such factors as the age and gender of the contract owner.

(Source: Insurance Information Institute )

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Definition and meaning of ANNUITY PROSPECTUS :

ANNUITY PROSPECTUS: Legal document providing detailed information about variable annuity contracts. Must be offered to each prospective buyer.

(Source: Insurance Information Institute )

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Definition and meaning of ALTERNATIVE MARKETS :

ALTERNATIVE MARKETS: Nontraditional mechanisms used to finance risk. This includes captives, which are insurers owned by one or more non-insurers to provide owners with coverage. Risk-retention groups, formed by members of similar professions or businesses to obtain liability insurance and selfinsurance, are also included.

(Source: Insurance Information Institute )

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Definition and meaning of ALTERNATIVE DISPUTE RESOLUTION / ADR :

ALTERNATIVE DISPUTE RESOLUTION / ADR: An alternative to going to court to settle disputes. Methods include arbitration, where disputing parties agree to be bound to the decision of an independent third party, and mediation, where a third party tries to arrange a settlement between the two sides.

(Source: Insurance Information Institute )

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Definition and meaning of ANNUAL ANNUITY CONTRACT FEE :

ANNUAL ANNUITY CONTRACT FEE: Covers the cost of administering an annuity contract.

(Source: Insurance Information Institute )

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Definition and meaning of ANNUAL STATEMENT :

ANNUAL STATEMENT: Summary of an insurerÕs or reinsurerÕs financial operations for a particular year, including a balance sheet. It is filed with the state insurance department of each jurisdiction in which the company is licensed to conduct business.

(Source: Insurance Information Institute )

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Definition and meaning of ANNUITANT :

ANNUITANT: The person who receives the income from an annuity contract. Usually the owner of the contract or his or her spouse.

(Source: Insurance Information Institute )

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Definition and meaning of ALLIED LINES :

ALLIED LINES: Property insurance that is usually bought in conjunction with fire insurance; it includes wind, water damage and vandalism coverage.

(Source: Insurance Information Institute )

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Definition and meaning of ALIEN INSURANCE COMPANY :

ALIEN INSURANCE COMPANY: An insurance company incorporated under the laws of a foreign country, as opposed to a ÒforeignÓ insurance company which does business in states outside its own.

(Source: Insurance Information Institute )

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Definition and meaning of AFTERMARKET PARTS :

AFTERMARKET PARTS: See Crash parts; Generic auto parts

(Source: Insurance Information Institute )

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Definition and meaning of AFFINITY SALES :

AFFINITY SALES: Selling insurance through groups such as professional and business associations.

(Source: Insurance Information Institute )

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Definition and meaning of AGENCY COMPANIES :

AGENCY COMPANIES: Companies that market and sell products via independent agents.

(Source: Insurance Information Institute )

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Definition and meaning of AGENT :

AGENT: Insurance is sold by two types of agents: independent agents, who are self-employed, represent several insurance companies and are paid on commission; and exclusive or captive agents, who represent only one insurance company and are either salaried or work on commission. Insurance companies that use exclusive or captive agents are called direct writers.

(Source: Insurance Information Institute )

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Definition and meaning of ALEATORY CONTRACT :

ALEATORY CONTRACT*: A contract in which one party provides something of value to another party in exchange for a conditional promise, which is a promise that the other party will perform a stated act upon the occurrence of an uncertain event. Insurance contracts are aleatory because the policyowner pays premiums to the insurer, and in return the insurer promises to pay benefits if the event insured against occurs. Contrast with commutative contract.

(Source: Insurance Information Institute )

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Definition and meaning of ANNUITIZATION :

ANNUITIZATION: The conversion of the account balance of a deferred annuity contract to income payments.

(Source: Insurance Information Institute )

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Definition and meaning of ANNUITY :

ANNUITY: A life insurance product that pays periodic income benefits for a specific period of time or over the course of the annuitantÕs lifetime. There are two basic types of annuities: deferred and immediate. Deferred annuities allow assets to grow tax-deferred over time before being converted to payments to the annuitant. Immediate annuities allow payments to begin within about a year of purchase.

(Source: Insurance Information Institute )

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Definition and meaning of ANNUITY DEATH BENEFITS :

ANNUITY DEATH BENEFITS: The guarantee that if an annuity contract owner dies before annuitization (the switchover from the savings to the payment phase) the beneficiary will receive the value of the annuity that is due.

(Source: Insurance Information Institute )

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