B

Baby Boom Generation, or Baby Boomers. The large group of 76 million Americans born between 1946 and 1964.

Bad Faith Claim. A claim based upon wrongful conduct, usually asserted by an insured against an insurer. Such claims may give rise to punitive damages far in excess of the actual damages suffered by the claimant.

Bail Bond. A form of surety bond furnished by a person seeking release from incarceration. The bail bond guarantees the person's appearance in court and is forfeited if this obligation is breached.

Bank. Within the context of reinsurance, this term is used to refer to the profits earned by a reinsurer during the life of a program. For example, if a reinsurer providing catastrophe reinsurance has earned $100,000 in premiums and incurred no losses, there would exist a $100,000 bank.

Bank Investment Contract (BIC). A form of GIC issued only by a bank, these are the primary noninsurance competition for GICs, and are particularly popular for maturities of less than three years.

Basic Limits. The minimum limits of liability that may be purchased by an insured.

"Bed Pan" Mutuals. Small mutual insurance companies, usually operating within a single geographic region, that underwrite medical malpractice insurance.

Beneficiary. The person named in an insurance policy as the recipient of the proceeds of the policy. Also refers to any person eligible as either a subscriber or a dependent for a managed care service in accordance with a contract.

Best Ratings. Ratings issued by A. M. Best Company, Inc., a company that publishes reports on the financial condition and history of individual insurers and provides ratings on most of the insurers doing business in the United States. See Chapter 13.

BIC. See Bank Investment Contract.

Bid Bond. An instrument provided by the surety guaranteeing that the surety will deliver a contract performance bond if a contractor's bid is accepted.

Binder. Temporary authorization of coverage issued prior to the issuance of an insurance policy.

Blank. See Annual Statement.

Blanket Contract. A health insurance contract that provides coverage on a group basis, e.g., employees within a business organization.

Blanket Coverage. A form of insurance that covers multiple items of property.

Blue Book. See Annual Statement.

Blue Cross/Blue Shield Plans. Nonprofit prepayment plans that provide health insurance coverage for hospital and physicians' services.

Bodily Injury (BI) Liability Insurance. A form of insurance that provides protection against losses resulting from the imposition of a liability claim against an insured for bodily injury to a third party. Bodily injury can include losses of a purely economic nature, such as loss of wages.

Boiler and Machinery Insurance. A form of insurance that protects an insured from losses resulting from damage to boilers and other machinery.

Bond. See Surety Bond.

Bonding Company. An insurer authorized to issue surety bonds.

Book. Refers to an insurer's in-force business.

BOP. See Business Owners Policy.

Bordereau. A detailed list of premiums and claims prepared periodically by cedants for reinsurers to advise them of risks accepted and claims incurred.

Bornhuetter-Ferguson Method. A reserving technique used by actuaries for estimating a property-casualty insurer's loss liability.

Broad Form. A package policy that covers additional perils beyond those in a basic package policy. See Package Policy.

Broker. An intermediary who represents the insured in its dealings with an insurer and/or shops for coverage on behalf of the insured. Also, organizations that sell Lloyd's policies to insureds.

Builders Risk. A form of insurance that indemnifies an insured for damage to a building under construction.

Bulk Reinsurance. See Portfolio Transfer.

Bundled Arrangement. A defined contribution plan approach in which a single provider handles all aspects of record-keeping, administration and investments for a plan sponsor. Often, the arrangement will be "pseudo-bundled," offering the services of a record-keeper/administrator and a number of fund managers that have entered into strategic alliances that allow others to offer their products.

Business Interruption Insurance. A form of insurance that reimburses a business owner for lost profits and certain other losses.

Business Judgment Rule. A legal doctrine that protects directors and officers of a corporation from personal liability for losses arising from a prudent, good faith decision.

Business Life Insurance. See Key Man Life Insurance.

Business Owners Policy (BOP). A package policy designed to meet the insurance requirements of small- to medium-sized businesses.