Glossary

GLOSSARY - LETTER B


Basic Limit

Usually refers to Liability policies and indicates the lowest amount for which a policy can be written. This amount is either prescribed by law or company policy.


Basic Premium

A fixed cost charged in a retrospective rating plan. It is a percentage of the standard premium and is designed to give the insurer the money needed for administrative expenses and the agent's commission plus an insurance charge.


Basic Rate

The manual rate from which discounts are taken or to which charges are added to reflect the individual circumstances of a risk.


Benefits

Financial reimbursement and other services provided insureds by insurers under the terms of an insurance contract. An example would be the benefits listed under a Life or Health Insurance policy or benefits as prescribed by a Workers Compensation law.


Binder

An agreement executed by an agent or insurer (usually the latter) putting insurance into force before the contract has been written or the premium paid. This term is not usually used in Life Insurance.


Book of Business

A total of all insurance accounts written by a company or agent. It may be treated in different ways. For example: an insurer's book of automobile business, or an agent's overall book of business, or an agent's book of business with each insurer.


Book Value

Refers to the value of assets as shown in the official accounting records of the company.


Borderline Risk

An insurance prospect of doubtful quality from an underwriting point of view.


Broker

One who represents an insured in the solicitation, negotiation or procurement of contracts of insurance, and who may render services incidental to those functions. By law the broker may also be an agent of the insurer for certain purposes such as delivery of the policy or collection of the premium.


Broker of Record

A broker who has been designated to handle certain insurance contracts for the policyholder.


Brokerage

The fee or commission received by a broker. Insurance placed by brokers contrasted with that placed by agents.


Brokerage Business

Business offered to an insurer by a broker. This is sometimes called excess or surplus business.


Burning Ratio

The ratio of losses suffered to the amount of insurance in effect.


Business Associate

An entity which, on behalf of a covered entity, performs or assists in the performance of a function or activity involving the use or disclosure of individually identifiable health information, or provides legal, actuarial, accounting, data aggregation, management, administrative, accreditation, or financial services for the Group Health Plan.