insurance-1s

History of insurance

noreply@blogger.com (ndo) — Wed, 08 Dec 2010 02:41:00 +0000

In some sense we can say that insurance appears simultaneously with the appearance of human society. We know of two types of economies in human societies: money economies (with markets, money, financial instruments and so on) and non-money or natural economies (without money, markets, financial instruments and so on). The second type is a more ancient form than the first. In such an economy and community, we can see insurance in the form of people helping each other. For example, if a house burns down, the members of the community help build a new one. Should the same thing happen to one's neighbour, the other neighbours must help. Otherwise, neighbours will not receive help in the future. This type of insurance has survived to the present day in some countries where modern money economy with its financial instruments is not widespread.

Turning to insurance in the modern sense (i.e., insurance in a modern money economy, in which insurance is part of the financial sphere), early methods of transferring or distributing risk were practised by Chinese and Babylonian traders as long ago as the 3rd and 2nd millennia BC, respectively.[13] Chinese merchants travelling treacherous river rapids would redistribute their wares across many vessels to limit the loss due to any single vessel's capsizing. The Babylonians developed a system which was recorded in the famous Code of Hammurabi, c. 1750 BC, and practised by early Mediterranean sailing merchants. If a merchant received a loan to fund his shipment, he would pay the lender an additional sum in exchange for the lender's guarantee to cancel the loan should the shipment be stolen or lost at sea.

Achaemenian monarchs of Ancient Persia were the first to insure their people and made it official by registering the insuring process in governmental notary offices. The insurance tradition was performed each year in Norouz (beginning of the Iranian New Year); the heads of different ethnic groups as well as others willing to take part, presented gifts to the monarch. The most important gift was presented during a special ceremony. When a gift was worth more than 10,000 Derrik (Achaemenian gold coin) the issue was registered in a special office. This was advantageous to those who presented such special gifts. For others, the presents were fairly assessed by the confidants of the court. Then the assessment was registered in special offices.

The purpose of registering was that whenever the person who presented the gift registered by the court was in trouble, the monarch and the court would help him. Jahez, a historian and writer, writes in one of his books on ancient Iran: "[W]henever the owner of the present is in trouble or wants to construct a building, set up a feast, have his children married, etc. the one in charge of this in the court would check the registration. If the registered amount exceeded 10,000 Derrik, he or she would receive an amount of twice as much."[14]

A thousand years later, the inhabitants of Rhodes invented the concept of the general average. Merchants whose goods were being shipped together would pay a proportionally divided premium which would be used to reimburse any merchant whose goods were deliberately jettisoned in order to lighten the ship and save it from total loss.

The Greeks and Romans introduced the origins of health and life insurance c. 600 AD when they organized guilds called "benevolent societies" which cared for the families and paid funeral expenses of members upon death. Guilds in the Middle Ages served a similar purpose. The Talmud deals with several aspects of insuring goods. Before insurance was established in the late 17th century, "friendly societies" existed in England, in which people donated amounts of money to a general sum that could be used for emergencies.

Separate insurance contracts (i.e., insurance policies not bundled with loans or other kinds of contracts) were invented in Genoa in the 14th century, as were insurance pools backed by pledges of landed estates. These new insurance contracts allowed insurance to be separated from investment, a separation of roles that first proved useful in marine insurance. Insurance became far more sophisticated in post-Renaissance Europe, and specialized varieties developed.

Some forms of insurance had developed in London by the early decades of the 17th century. For example, the will of the English colonist Robert Hayman mentions two "policies of insurance" taken out with the diocesan Chancellor of London, Arthur Duck. Of the value of £100 each, one relates to the safe arrival of Hayman's ship in Guyana and the other is in regard to "one hundred pounds assured by the said Doctor Arthur Ducke on my life". Hayman's will was signed and sealed on 17 November 1628 but not proved until 1633.[15] Toward the end of the seventeenth century, London's growing importance as a centre for trade increased demand for marine insurance. In the late 1680s, Edward Lloyd opened a coffee house that became a popular haunt of ship owners, merchants, and ships' captains, and thereby a reliable source of the latest shipping news. It became the meeting place for parties wishing to insure cargoes and ships, and those willing to underwrite such ventures. Today, Lloyd's of London remains the leading market (note that it is an insurance market rather than a company) for marine and other specialist types of insurance, but it operates rather differently than the more familiar kinds of insurance. Insurance as we know it today can be traced to the Great Fire of London, which in 1666 devoured more than 13,000 houses. The devastating effects of the fire converted the development of insurance "from a matter of convenience into one of urgency, a change of opinion reflected in Sir Christopher Wren's inclusion of a site for 'the Insurance Office' in his new plan for London in 1667."[16] A number of attempted fire insurance schemes came to nothing, but in 1681 Nicholas Barbon, and eleven associates, established England's first fire insurance company, the 'Insurance Office for Houses', at the back of the Royal Exchange. Initially, 5,000 homes were insured by Barbon's Insurance Office.[17]

The first insurance company in the United States underwrote fire insurance and was formed in Charles Town (modern-day Charleston), South Carolina, in 1732. Benjamin Franklin helped to popularize and make standard the practice of insurance, particularly against fire in the form of perpetual insurance. In 1752, he founded the Philadelphia Contributionship for the Insurance of Houses from Loss by Fire. Franklin's company was the first to make contributions toward fire prevention. Not only did his company warn against certain fire hazards, it refused to insure certain buildings where the risk of fire was too great, such as all wooden houses. In the United States, regulation of the insurance industry is highly Balkanized, with primary responsibility assumed by individual state insurance departments. Whereas insurance markets have become centralized nationally and internationally, state insurance commissioners operate individually, though at times in concert through a national insurance commissioners' organization. In recent years, some have called for a dual state and federal regulatory system (commonly referred to as the Optional federal charter (OFC)) for insurance similar to that which oversees state banks and national banks.

source: http://en.wikipedia.org/wiki/Insurance

Finding the Best Life Insurance Quote

noreply@blogger.com (ndo) — Mon, 06 Dec 2010 14:56:00 +0000

Life insurance is an important guarantee of our life; with this kind of insurance we will be able to arrange our future better. We never know what will happen in ten or twenty years later, we can be in the hospital or something bad happen while driving our car. That’s a good idea when you want to follow yourself to life insurance company, so compare life insurance quotes first to get the best one. This step can be done by using online feature.

Best insurance agent--ever.

noreply@blogger.com (ndo) — Mon, 06 Dec 2010 14:54:00 +0000

Recently, I had to make an insurance claim, and our agent, Perry Olson, did an exceptional job of dealing with some sticky issues of customer service (problems with a third-party appraiser). We've had some good insurance agents before, but I have never seen customer service like Perry's. He's wonderful!

Joan Aragone: Be careful of direct mailings

noreply@blogger.com (ndo) — Mon, 07 Jun 2010 14:28:00 +0000

It's nice to be popular. Or is it?

I recently received at my home an innocuous-looking postcard mailing — one of those tear-off-and-mail-the-attached-card formats — announcing itself as an update on California long-term care.

Printed in black and white with a prepaid postage return, it looked official, as though the state were sending me information I needed to know.

An anonymous message — no name or government agency was identified — said that new legislation would limit my access to government-paid long-term care. Thus, I needed to provide long-term care insurance for myself. For more information, all I had to do was provide my signature and phone number and birth dates for myself and my spouse...

Mercury News: Joan Aragone: Be careful of direct mailings

A look at how people pay for retirement

noreply@blogger.com (ndo) — Fri, 04 Jun 2010 11:44:00 +0000

Retirement planning isn't about "the number," but the numbers -- your assets, liabilities, expenses, and income. The more you know about those numbers, the more likely your retirement plan will become a reality instead of a pipe dream.

And a new report will help you get a better handle on at least one of those numbers: income. The average retiree depends on four sources of income in retirement, according to the latest study from the Employee Benefit Research Institute...

MarketWatch: A look at how people pay for retirement

I-Team: Annuity Lawsuit Update (Video)

noreply@blogger.com (ndo) — Fri, 04 Jun 2010 11:43:00 +0000

A judge has dismissed some claims against a Cranston lawyer involved in a controversial annuities program...

Turn to 10: I-Team: Annuity Lawsuit Update (Video)

New York Eyes Annuity Withdrawal Disclosures

noreply@blogger.com (ndo) — Fri, 04 Jun 2010 11:42:00 +0000

The New York State Insurance Department is drafting advice that would encourage annuity sellers to warn consumers about the dangers of taking early excess withdrawals.

Insurers that are selling annuities with guaranteed minimum withdrawal benefit features should provide disclosure “in the sales presentation before the contract is issued and again at the time an excess withdrawal is requested,” Michael Maffei, chief of the New York department’s Life Bureau, writes in a draft circular letter posted on the department’s website...

National Underwriter: New York Eyes Annuity Withdrawal Disclosures

Franklin investor William Spencer pleads guilty in Ponzi scheme

noreply@blogger.com (ndo) — Thu, 03 Jun 2010 11:51:00 +0000

The former Franklin investment advisor accused of mail and wire fraud in connection with an alleged $1.5 million “Ponzi” scheme is awaiting sentencing after pleading guilty in federal court.

William W. Spencer, 68, entered his guilty plea May 28 before Judge William Haynes, according to court documents. The U.S. Attorney’s office for Middle Tennessee initially charged Spencer in April with six counts of mail fraud and five counts of wire fraud, alleging that from 1997 to 2009 he borrowed or solicited nearly $1.9 million from about 100 friends, clients and investors...

Nashville BizJournals: Franklin investor William Spencer pleads guilty in Ponzi scheme

Judge Lets Claims Stand in Annuity Case

noreply@blogger.com (ndo) — Thu, 03 Jun 2010 11:47:00 +0000

A federal judge in Rhode Island let stand some civil legal claims by two insurance companies against an estate-planning attorney and others who used newspaper ads to recruit dozens of terminally ill people for purchases of variable annuities.

The judge, in U.S. District Court in Providence, R.I., in a Wednesday ruling let stand fraud, conspiracy and other claims against the estate-planning attorney, Joseph Caramadre, and others involved in the alleged scheme. But he dismissed other claims, ruling the insurers couldn't void the annuity contracts...

WSJ: Judge Lets Claims Stand in Annuity Case

Live long and prosper with annuities

noreply@blogger.com (ndo) — Thu, 03 Jun 2010 11:44:00 +0000

With the right genes, longevity insurance a plus

Among the many risks retirees face is living too long and outliving their money.

Of course, the first part is a risk many would welcome. It beats the alternative.

Fortunately, there is a solution in longevity insurance, better known as annuities or life annuities. These are contractual arrangements between an "annuitant" -- yourself -- and a life insurance company. In exchange for a chunk of capital paid to the insurer, a life annuity guarantees you payments for life -- even if you live to be 120 or more...

Montreal Gazette: Live long and prosper with annuities

We Need A Fiduciary Standard For All

noreply@blogger.com (ndo) — Wed, 02 Jun 2010 11:51:00 +0000

Brokers and registered investment advisors don't treat their clients the same way. Investors should end "buyer beware."

All advisors should be held to the same code of conduct. Most investors assume that they can trust their financial advisors to act in their best interest. What they don't know is that some advisors are legally required to act for them while others are not. The financial reform act is giving us the first chance since 1940 to plug this loophole and make all advisors act according to the fiduciary standard...

Forbes:

DOL should not regulate generally accepted investment theories, employer groups say

noreply@blogger.com (ndo) — Wed, 02 Jun 2010 11:49:00 +0000

Employer groups, responding to the Labor Department's proposed investment advice regulations on May 5, 2010, said that the DOL should not attempt to regulate what constitutes "generally accepted investment theories."

In the proposed investment advice rules, which were issued in March 2010, the DOL made a request for public comment on the conditions applicable to investment advice arrangements that use computer models. Specifically, the DOL sought comments on whether final regulations should: require (or proscribe) the use of specified investment theories and practices; specify minimum standards (e.g., minimum number of years of experience) for historical data that is taken into account in determining a model's expectation for the future performance of asset classes and specific investment alternatives; or expressly designate the criteria that are appropriate and objective bases for asset allocation...

CCH: DOL should not regulate generally accepted investment theories, employer groups say

Advisors Expanding Retirement Income Offerings, Survey Finds

noreply@blogger.com (ndo) — Wed, 02 Jun 2010 11:45:00 +0000

Polarized attitudes toward annuities remain; more focus on risk

A new survey further confirms the growth opportunity for advisors from focusing on retirement income products and strategies. However, the report also notes heightened concern among brokers and RIAs with managing investment risk for investors.

The Continued Evolution of Retirement Income Delivery: An Analysis of Leading Practices in Advisor Support was released Tuesday, June 1, from consulting and research firms GDC Research and Practical Perspectives. It finds that 63% of advisors have experienced net growth in the past year in serving retirement income clients. Advisors are also finding baby boomer clients receptive to consolidating relationships. Moreover,while 91% of advisors believe they have the abilities to effectively serve new retirees, practitioners across channels are increasingly wary of how to manage investment risk for retirement income clients...

Investment Advisor: Advisors Expanding Retirement Income Offerings, Survey Finds

Living And Death Benefit Riders: How Do They Work

noreply@blogger.com (ndo) — Wed, 02 Jun 2010 11:44:00 +0000

The annuity contracts that were first offered by insurance carriers over a century ago were relatively simple instruments. They were designed to insure the risk of superannuation, or outliving one's income, and provided a guaranteed income stream to annuitants in return for either a lump-sum or periodic investment. But annuity contracts have become increasingly complex over the years...

SF Gate: Living And Death Benefit Riders: How Do They Work

Answers on Credit Ratings Are Long Overdue

noreply@blogger.com (ndo) — Tue, 01 Jun 2010 14:37:00 +0000

Raise your hand if you can explain why anyone still believes in credit ratings.

One of the enduring questions of the financial crisis is how the credit ratings establishment got so much so wrong for so very long. How could century-old institutions like the Moody’s Investors Service give their triple-A blessings to subprime junk?

It is time — in fact, past time — for Washington to get some answers. Because despite talk of a shake-up, the companies that dominate the ratings business hope to avoid the radical overhaul their critics are calling for...

Yahoo! Finance: Answers on Credit Ratings Are Long Overdue

Northwestern Mutual's next CEO gets it

noreply@blogger.com (ndo) — Tue, 01 Jun 2010 12:12:00 +0000

Schlifske's mandate: Keep doing the right thing, don't mess with success

With the company he's poised to run already financially sound and top-rated in its industry, John E. Schlifske knows there's no need to come in and shake things up.

"I view my emergence as the new CEO as just another chapter in the same book," said Schlifske, who officially was elected last week to succeed Edward J. Zore as chief executive of Northwestern Mutual Life Insurance Co. on July 1...

JS Online: Northwestern Mutual's next CEO gets it

Pension funds bet on death through life settlements

noreply@blogger.com (ndo) — Tue, 01 Jun 2010 12:11:00 +0000

Allegheny and Westmoreland counties are trying to reduce their pension funds' exposure to the volatile stock market through a relatively new type of investment based on life insurance policies.

The two governments' modest investments in life settlements -- buying and selling the rights to the death benefits paid by life insurance policies covering wealthy individuals -- is not common in the pension fund world, where real estate, hedge funds, private equity and other alternative investments have been mainstays for years...

Post-Gazette: Pension funds bet on death through life settlements

Planners claim small victory in financial-reform legislation

noreply@blogger.com (ndo) — Tue, 01 Jun 2010 11:38:00 +0000

GAO planning study would bring recognition on Hill, they say

A small provision buried in both the House and Senate versions of financial-reform legislation is being hailed by some as a modest but important step for the financial planning industry.

That provision calls for the Government Accountability Office, the investigative arm of Congress, to conduct a study on the oversight of financial planning. Although many planning advocates are pushing for regulation of their profession, the call for a study — and recognition on Capitol Hill that would go with it — is viewed by many as a step in the right direction...

Investment News: Planners claim small victory in financial-reform legislation

Insurance: Comparing long-term care features in life policies

noreply@blogger.com (ndo) — Fri, 28 May 2010 12:07:00 +0000

Question: I am a man in my mid-sixties. You recently have been discussing a life-insurance policy that has a long-term-care feature. My agent has given me two different proposals illustrating this type of policy. What is the difference and which is better? ...

Cincinnati: Insurance: Comparing long-term care features in life policies

Show Me the Money

noreply@blogger.com (ndo) — Fri, 28 May 2010 12:02:00 +0000

Nielsen Financial uncovers what different kinds of wealthy clients typically buy and need.

All advisors want to work with wealthy clients, but targeting them is a challenge because every other advisor is pitching for the same business. Winners in this space go into a meeting with a high-net-worth prospect knowing roughly what kinds of services that prospect is likely to buy.

Like what you see? Click here to sign up for our daily newsletter to get the latest on advisor market trends, investment management, retirement planning, practice management, technology, compliance and new product development.

To take some of the guesswork out of it, research firm Nielsen Financial analyzed the investment trends of the wealthy and found that rich people fall into different brackets based on their interests and geography. Nielsen tracks as many as 15 unique customer segments, but there are at least four that advisors should be aware of in prospecting and expanding their business relationship with clients. For example, if you have a client who fits a described demographic, but only has a fraction of his money in annuities that the average suggests, perhaps it's time to dig deeper into the client's needs...

Bank Investment Consultant: Show Me the Money

A New Dynamic

noreply@blogger.com (ndo) — Fri, 28 May 2010 11:59:00 +0000

Variable annuity sales fell in 2009 as incentives to stay put in existing contracts choked off exchange growth.

New variable annuity sales rose 2.6% in the fourth quarter of 2009, although they were down 3.8% from the previous fourth quarter. Year-over-year, new sales plummeted almost 19%, from $151.6 billion in 2008 to $123.1 billion in 2009. That's the lowest annual new sales figure since 2002, when sales reached $112.4 billion after bottoming out at just over $107 billion in 2001...

Financial Planning: A New Dynamic

Annuities After the Deluge

noreply@blogger.com (ndo) — Fri, 28 May 2010 11:45:00 +0000

Insurers are simplifying variable annuities to reduce risk and cut costs, but most investors still want living benefits.

Annuities saw the best of times (for clients) and the worst of times (for insurers) when the safety features kicked in during 2008. Insurers convinced they sold their guarantees too cheaply have rushed to repair the damage.

Like what you see? Click here to sign up for our daily newsletter to get the latest on advisor market trends, investment management, retirement planning, practice management, technology, compliance and new product development.

They are doing this in two ways. Some are stripping back the fancy features that proliferated in the past by offering simpler, cheaper products that carry less risk for insurers. Others continue to offer fancy bells and whistles, but at a slightly higher price...

Bank Investment Consultant: Annuities After the Deluge

Cash refund for life insurance

noreply@blogger.com (ndo) — Thu, 27 May 2010 12:47:00 +0000

A new cash refund option will be made available through Symetra Life Insurance for its income annuity products, according to the insurer.

With the cash refund option, once the annuity owner dies, the beneficiary is able to get one lump sum that is equivalent to the unrecovered purchase payment, Symetra said. The annuity will be paid out no matter what the circumstance may be, ensuring a certain monetary amount...

US Insurance Online: Cash refund for life insurance

Couple charged with life insurance fraud

noreply@blogger.com (ndo) — Thu, 27 May 2010 12:34:00 +0000

A Florida couple have been charged with an insurance swindle involving the burial of a man they knew under a false name.

Laura Freed, 43, and Michael Petro, 40, were arrested Sunday, the Orlando Sentinel reported. They have been released on $125,000 bail.

Investigators say Freed and Petro took out an insurance policy on the life of Racko Petro in 1998. In 2005, Billy Urich, 59, was admitted to Heart of Florida Regional Medical Center as the 34-year-old Racko and died there of kidney failure...

UPI: Couple charged with life insurance fraud

Fed Is Confident of AIG Payback, but Skeptics Remain

noreply@blogger.com (ndo) — Thu, 27 May 2010 12:32:00 +0000

Federal overseers of American International Group Inc. and its chief executive sought to convince a skeptical congressional panel that the U.S. would recoup the record sum extended in the AIG bailout.

Federal Reserve officials said they are increasingly confident the government-controlled insurer will repay what it owes the central bank, but their Treasury Department counterparts appeared less certain...

WSJ: Fed Is Confident of AIG Payback, but Skeptics Remain