INSURANCE

CONTENTS
Risk
Law of Large Numbers
Common Loss Exposures
Types of Perils
Factors of Insurability
Types of Insurance
Life Insurance
o How uc! Life Insurance "o I Nee#$
o How %re Premiums &et$
o %nnuities
Healt! Insurance
"isability Insurance
%uto Insurance
Homeowners Insurance
Types 'f Insurance Companies
Insurance Regulation
Reinsurance
INSURANCE
Insurance !as a long !istory(
T!e first report regar#ing insurance #ates back )*** years ago in +abylonia,
w!en a man-s !ome was #estroye#, !is neig!bours woul# be re.uire# to offer
t!eir labour free of c!arge, to !elp !im rebuil# !is !ouse(
Early C!inese tra#ers, sailing t!e #angerous /angt0e ri1er, #e1ise# a met!o# of
re#ucing loss to a single tra#er instea# of carrying all !is cargo in !is own boat,
woul# place a portion of !is goo#s on ot!er boats in !is group( T!is way, w!en
one boat was lost, no one tra#er was wipe# out( T!ese are simple #e1ices to
re#uce t!e impact of a #isaster upon any in#i1i#ual by collecti1ely transferring t!e
risk to a larger group(
Insurance works on t!e concept of risk s!aring( Insurance re#uces t!e effect of
risk of an unaffor#able magnitu#e by s!ifting t!e risk to an insurance carrier(
Risk
Risk is the state of uncertainty about the actual outcome of a decision or
process in which each possible outcome and its probability is known. Risk can
also be #efine# as c!ance of loss or a con#ition in w!ic! a possibility of loss
exists(
Risks are of #ifferent types an# not all risks can be insure#( 2enerally, risks are
seen as falling into one of two classes 3 pure an# speculati1e( /our companies
e.uipment, goo#s may be #amage# or #estroye# by fire, lig!tning, win#storm,
explosion, riot, t!eft or robbery( T!ese risks are pure risks an# t!ey are insurable(
&peculati1e risks, also referre# as #ynamic risks, are in!erent in business( T!e
possibility of loss arising out of business #ecisions is known as speculati1e or
#ynamic risk( T!is type of risk is not insurable(
Face# wit! a risky worl#, most people wis! to re#uce t!e effect of t!at risk by
insuring( T!e take life insurance co1er, protect against acci#ents wit! auto
insurance, take safeguar#s in t!e e1ent falling ill wit! !ealt! insurance an# t!e
like( T!e insurer collects a payment from t!e insure#, w!ic! co1ers t!e cost of
risk, w!ic! is t!en poole# into a fun# t!at is use# by t!e insurer to co1er t!e loss
w!en it occurs( T!e c!arge on t!e insure# is calle# t!e premium an# t!e loss
payout by t!e insurer is referre# to as in#emnity( T!e ratio of amounts of loss
co1ere# to premium collecte# is calle# t!e loss ratio(
T!e maximum t!e insurance will pay as compensation is calle# t!e co1er(
T!e insurance company uses t!e principle of pooling t!e risk of a large number
of in#i1i#uals in or#er to pro1i#e insurance co1er in a cost effecti1e manner(
Law of Large Numbers
%ll forms of insurance sprea# risk o1er large numbers( T!e rates for co1ering
any !a0ar# are set base# on t!e fre.uency of occurrence of t!e particular !a0ar#
being insure#( T!e larger t!e number of expose# in#i1i#uals in t!e pool of
insurance for a particular !a0ar#, t!e greater is t!e accuracy of estimate#
probability of occurrence(
T!is is known as t!e law of large numbers w!ic! !as been illustrate# wit! an
numerical example below4
5 of !ouses 6*,***
a1g( 1alue eac! 78*,***
Total property 1alue 9 9 78** million
pre#icte# losses 9 6(:; of 1alue 9 76< million
Pre#icte# Loss per !ouse 9 76,<**
Rate per 76** of 1alue 9 76(:*
Insurance Premium =
Cost of losses 9 76(:*
%#min( Costs *():
Reser1es for unexpecte# losses *(6*
Rate per 76** 1alue $2!"
%rnol# !as a country !ouse in a colony in Flori#a( T!e place is 1isite# by
!urricanes( =it!out insurance, !e runs t!e risk of losing on an a1erage of
78*,***, t!e cost of !is !ouse, in t!e e1ent of #e1astation by t!e !urricane(
Howe1er, t!is outsi#e c!ance, t!e possibility exists( His cost of risk is 78*,***(
%lternati1ely, if t!e resi#ents of t!e colony #eci#e to contribute a certain sum
eac! year, t!eir in#i1i#ual loss can be minimise#(
T!e probability of #e1astation by t!e !urricane !as been pre#icte# to be *(*6:(
T!e a1erage loss to t!e community woul# be 76< million t!at is 6(: percent of t!e
total 1alue of all t!e !ouses or 76(: per 76** of 1alue( T!is is not t!e only cost
t!at !as to be c!arge# from t!e resi#ents( T!e a#ministrati1e costs !a1e to be
a##e#( T!is makes t!e total c!arge e.ui1alent to 7 <(*: per 76** 1alue of !ouse(
+y in1ol1ing a large number, t!e cost per !ea# of t!e calamity !as been re#uce#
#rastically( %rnol# as t!e promoter of t!e insurance concept in t!e colony, collects
7<(*: per 76** 1alue from eac! of t!e resi#ents, t!ereby all are co1ere#( %rnol#
pays 76>)* per annum for a co1er of 78****(
T!is is !ow t!e process of Insurance works(
#A$AR%S
con&ribu&e &o
Loss
Cause
'robabi(i&) of (oss
Lea*s &o
Ob+ec&i,e Uncer&ain&) Sub+ec&i,e
&erme* as
RIS-
In regar* &o
LOSS
*ri,es &o
INSURANCE
Common Loss E.'osures
E/POSURE #A$AR%0
PERIL
POSSI1LE LOSS
"isability Income, ser1ices,
extra expenses
Personal Person "eat! Income, ser1ices,
extra expenses
'l# age Income, ser1ices,
extra expenses
Property +uil#ings, e.uipment "amage or
#estruction
%sset, re1enue,
extra expense
T!eft
%uto %sset "amage, T!eft,
Lawsuit
%sset, extra
expense
Persons In?ury, "eat! Income, extra
expense
T)'es of Peri(s
Insurab(e %ifficu(& &o Insure
Na&ura( Peri(s
&torms, Lig!tning, Fire, Heart %ttacks Floo#, Eart!.uake, Frost, Epi#emic
#uman Peri(s
&ickness, T!eft, @an#alism, Fire =ar, Ci1il Anrest
Life E.'ec&anc) C2ar&
For in#i1i#uals t!e principal of insurance works base# on life expectancy(
Current
%ge
:*; =ill Li1e
To
ale Female
>* 8: 8B
>: 8> B*
C* 8C B*
C: 8B B6
8* B6 BD
8: BD B)
3ac&ors of Insurabi(i&)
Not all factors can be insure#( T!ese are some of t!e factors
t!at make a risk insurable
6( ust be large number of people wit! similar potential for loss(
<( Loss must be #efinite(
D( Loss must be acci#ental(
)( Loss must cause financial bur#en(
:( Loss must be calculable(
>( Insurance must be affor#able(
T)'es of Insurance
T!ere are many types of insuranceE t!e following are t!e common insurance
sc!emes(
F Life Insurance
F Healt! an# "isability Insurance
F Home 'wner Insurance
F %uto Insurance
F 't!er Insurance
Life insurance co1ers t!e risk of financial loss #ue to unexpecte# #eat! or t!e
risk t!at t!e person may outli1e !is financial resources(
#ea(&2 an* %isabi(i&) insurance co1ers risk of financial loss #ue to illness,
in?ury, or me#ical bills(
#omeowners insurance co1ers many types of insurance t!at !an#le #amage or
loss of property( It inclu#es !ome, businesses, electronic e.uipment, furniture,
?ewellery, etc(
Au&omobi(e Insurance co1ers risk of financial loss to acci#ents resulting in
property #amage an# serious in?uries to self an# ot!ers(
Liabi(i&) Insurance /ou are liable w!en you are legally boun#
to make goo# on a loss or #amage t!at
occurs in an interaction(
O&2er Liabi(i&) Insurance co1ers all ot!er types of insurable losses not inclu#e#
abo1e, like property insurance, animals, ?ewellery, electronics, !ouse!ol# articles,
liability insurance etc( Liability insurance co1ers losses #ue to bo#ily in?ury,
personal in?ury an# property #amage w!ere you are legally boun# to make goo#
any loss or #amage t!at may occur in an interaction( "ifferent types of liability
insurance are En1ironmental liability, Pro#uct liability, Professional liability,
Employment practices liability, Crop Insurance, Floo#, Nuclear liability, weat!er
etc(
LI3E INSURANCE
Life insurance is a crucial step in planning for you
an# your family-s future( It can fulfil promises an#
obligations to your family if you are no longer li1ing(
Life insurance is financial protection for your family,
estate, or business against your premature #eat!(
How muc! life insurance to carry will 1ary at
#ifferent times t!roug!out your life( It is base# on
t!e probable life expectations for groups of people( +ecause people !a1e many
#ifferent nee#s, t!ere are many types of life insurance plans(
Ron an# Geff own a !ome in t!e city toget!er(
T!ey also own a 1acation !ome in t!e mountains( T!e mortgage on t!e city
!ouse is 7<**,*** an# t!e 1acation !ome is 76**,***( Toget!er t!ey can affor#
bot! mortgage payments, but if somet!ing s!oul# !appen to one of t!em t!e
sur1i1or coul# not affor# to make bot! payments( T!ey eac! take out an
insurance policy for 7D**,*** so t!at t!e sur1i1or can use t!e fun#s to pay off
t!e mortgages( Ron an# Geff coul# opt for more insurance(
T!ere are 1arious forms of life insurance( T!e most important classification is
Term Insurance an# =!ole Life Insurance( T!e =!ole Life Insurance !as
1ariants suc! as Ani1ersal Life Insurance, @ariable Life Insurance etc(
Term Life Insurance4 is generally t!e most affor#able an# least complicate#
type of life insurance( Term policies pro1i#e life insurance only for a limite# perio#
of time, or a Hterm,H an# premium payments for t!e co1erage you c!oose may
remain constant or increase gra#ually t!roug!out t!at perio#( =!en a term en#s,
you may con1ert it to w!ole life insurance, e1en if your !ealt! !as ma#e it
impossible to ot!erwise obtain ot!er co1erage( &usan an# 2eorge after t!eir first
c!il# Goey was born #eci#e to take a term insurance for <* years t!at will mature
to 7<:,*** an# ensure t!at Goey will go to college if !e #eci#es(
Term insurance #oes not inclu#e t!e sa1ings features of w!oleIpermanent
insurance( T!is type of insurance is especially useful for young, growing families
wit! limite# incomes an# !ig! insurance nee#s, as well as for circumstances
w!ere a nee# will #ecline o1er time, suc! as paying for e#ucation or a !ome
mortgage(
Permanen& or 52o(e Life Insurance4 is #esigne# to be in effect for t!e entire
life span of t!e insure# person( T!e Insurance Company will pay benefits to t!e
beneficiary in t!e e1ent of premature #eat!( /ou get t!is money back eit!er by
surren#ering t!e policy or by borrowing against it(
Teri is t!e sole brea#winner for !er !ouse!ol#, earning 76**,*** per year( Her
partner Clara maintains t!e !ouse an# organi0es all social acti1ities Clara
recei1es a small income from a trust fun# establis!e# by !er gran#fat!er( Teri is
concerne# t!at if anyt!ing s!oul# !appen to !er, Clara woul# not be able to
maintain !er lifestyle(
Teri an# Jara consult a financial planner( %fter taking into account Clara assets,
liabilities, in1estments, age, an# trust income, it is #etermine# t!at t!e amount of
cas! nee#e# to replace TeriKs lost income stream for ClaraKs life is 7C:*,***(
T!ey coul# also opt for setting up a trust or ot!er form of financial planning for
Clara from t!e insurance policy( T!e take a w!ole life policy for t!at amount(
Uni,ersa( Life Insurance4 is a 1ariation of =!ole Life( It was #e1elope# in t!e
6BC*s, w!en insurance in#ustry regulations c!ange# so t!at companies coul# be
more competiti1e wit! ot!er financial ser1ices in#ustries( =it! Ani1ersal Life
Insurance, t!e in1estment portion of your premium goes into money market fun#s
rat!er t!an long3term securities( In a##ition, unlike t!e cas! 1alue portion of a
=!ole Life policy, t!e cas! 1alue portion of a Ani1ersal Life policy grows at a
1ariable rate( If Teri an# Jara want to take a c!ance a try to earn a !ig!er sum,
t!ey coul# opt for an Ani1ersal Life insurance( If t!ey are lucky an# t!e
in1estments are successful, t!ey will recei1e a larger sum( Ne1ert!eless, t!ere is
risk in1ol1e# an# t!ey coul# loose a bit of t!eir insurance co1er if t!e in1estments
are not successful(
6ariab(e Life Insurance4 allows a portion of t!e insure# premiums to be in1este#
accor#ing to t!e policy!ol#erKs wis!es( &ince Clara follows t!e stock market
regularly, for w!ic! s!e !as time, w!en Teri is away at work, t!ey #eci#e to take
t!e 1ariable life insurance option as Clara can use !er spare time to suggest t!e
in1estments to be ma#e wit! in1estable portion of t!e premium(
%s wit! =!ole Life Insurance an# Ani1ersal Life Insurance, t!e cas! portion of
t!e insure# policy will 1ary( =it! =!ole Life an# Ani1ersal Life, t!e insurance
company is taking t!e risk( =it! @ariable Life, t!e risk is transferre# to t!e
insure#(
If you are a conser1ati1e in1estor an# !a1e trouble sa1ing, tra#itional w!ole life
makes sense( If you nee# premium flexibility especially in t!e early years of t!e
policy, uni1ersal life is for you( oreo1er, if you consi#er yourself a
knowle#geable an# risk3accepting in1estor, c!eck out 1ariable life( It may well be
t!at you cannot affor# all t!e permanent insurance you !a1e #eci#e# you nee#,
so consi#er a combination term3plus3permanent policy(
52en is Term &2e rig2& c2oice7
If t!e low #ollar outlay is your main concern, an# your insurance nee# is for a
perio# of <* years or less, term may !a1e an a#1antage( If your nee# for
co1erage will last beyon# <* years, a low cost Ani1ersal Life or =!ole Life policy
may be more effecti1e( &!oul# your life insurance nee#s c!ange, many term
policies carry a con1ersion pri1ilege t!at will allow you to co1ert your term
co1erage to permanent Ani1ersal Life or a =!ole Life policy wit!out a me#ical
examination( It is important to c!eck t!e con1ersion pri1ileges of t!e term policy
before you make your purc!ase(
In*i,i*ua( an* 8rou' Insurance
"a1i# an# Erica !a1e been toget!er for t!ree years( T!eir combine# !ouse!ol#
income is ?ust un#er 7>*,***( "a1i# is employe# at a computer company w!ere
!is employer offers a basic 7<*,*** in life insurance to all employees, inclu#ing
t!eir #omestic partners( Erica works in retail an# #oesn-t !a1e any benefits of
!er own 3 t!ey s!are t!roug! "a1i#-s employer( T!ey manage fine in t!e city on
t!eir combine# incomes but s!oul# eit!er one of t!em peris!, t!at small amount
of life insurance co1erage woul#nKt be enoug! to keep t!em in t!e city(
"a1i# an# Erica s!oul# consi#er any life insurance benefit co1erage from your
employer as supplementary an# plan by #oing t!e researc! an# !a1ing a
consultation for more insurance co1er
Furt!er, t!e insurance plans can be groupe# into in#i1i#ual an# group policies( In
in#i1i#ual policies are sol# #irectly to one person( T!e purc!aser of t!e policy
t!en c!ooses !is or !er beneficiary( 2roup policies sol# to groups of people often
consisting of employees in a company an# t!ey are all co1ere# un#er a single
master policy( Eac! group member !as t!e same amount of co1erage an# eac!
group member names t!eir own beneficiary( In all employerIemployee group life
policies, t!e employer pays a portion of t!e premium for t!e entire group(
#ow 9uc2 Life Insurance *o I Nee*7
T!e starting point for an effecti1e life insurance plan is to i#entify w!et!er a risk
exists an# to #efine t!e financial impact of a premature #eat!( &e1eral met!o#s
are use# to .uantify t!is amount(
:i; A Sim'(e Ru(e of T2umb
T!e amount of life insurance can be calculate# as a multiple of your annual
salary or earnings( Fi1e to ten times earning is t!e simplest rule of t!umb(
Howe1er, it may not allow you to a##ress all of your in#i1i#ual financial goals(
T!at woul# mean a person making 7:*,*** a year s!oul# !a1e anyw!ere from
7<:*,*** wort! of co1erage to 7:**,*** or more(
:ii; Income Re'(acemen&
T!is met!o# focuses on t!e replacement of some percentage of salary or
earnings for a specifie# perio#( T!e 1alue of t!e income replacement can be
calculate# an# compare# to t!e assets you currently !a1e( %ny #ifference
between nee#s an# resources can be fun#e# wit! life insurance(
:iii; 3inancia( Nee*s
T!is met!o# focuses on t!e expecte# financial nee#s, inclu#ing4
Family income nee#s(
Emergency fun#s(
Estate settlement an# a#ministration costs(
Family e#ucational costs(
Paying off #ebts(
&ur1i1or retirement nee#s(
To #etermine your financial re.uirements, start by looking at your capital nee#s
an# #i1i#e your insurance nee# by its use( If you nee# 7>*,*** for college an#
your youngest c!il# will gra#uate in t!ree years, you nee# 7>*,*** of term
insurance as a s!ort3term !e#ge against your #eat!, t!us HinsuringH t!at your
c!il# can finis! !is or !er e#ucation( eanw!ile, if your estate will owe 7:**,***
in taxes at your #eat!, you probably nee# permanent insurance because no one
knows w!en t!ey are going to #ieL
'nce you figure out your term or permanent nee#s Mor combination t!ereofN you
are face# wit! t!e !appy task of c!oosing w!ic! type of term or permanent
insurance makes most sense for you(
Take t!e time to get professional assistance an# #ig into !ow Life Insurance can
make it easier for t!e people t!at you care for(
#ow are 'remiums se&7
&e1eral factors contribute to t!e price of your premiums( T!ese inclu#e4
Risk4
How !ig! risk a client are you$ T!e !ig!er t!e probability t!at you will file a claim,
t!e !ig!er your premiums will be( Goan is C: years ol# in goo# !ealt!( "espite
t!is !er !ealt! insurance premium is !ig! as s!e runs a !ig! risk of falling ill an#
claiming insurance( Hence, !er premium is base# on t!e probability of falling ill(
Liabi(i&)4
"r( Frau#, a surgeon, takes out a big malpractice insurance as !e anticipates a
big claim by !is patients in case !e makes a mistake w!ile performing surgery(
T!e potential payout t!at t!e insurance company is expose# to will also affect
your premiums( &imilarly, if your !ome contains many 1aluables or if you !a1e an
expensi1e car, t!en you-ll !a1e !ig!er premiums( T!e larger t!e potential loss,
t!e larger t!e premiums will be(
%e*uc&ib(es4
&ometimes, as wit! life insurance, insurance companies are re.uire# to co1er
t!e entire loss( In ot!er cases, policies may !a1e #e#uctibles( % #e#uctible is t!e
amount you pay for a co1ere# loss before t!e insurance company begins picking
up t!e bill( T!e !ig!er your #e#uctible, t!e lower your premiums will be(
E.'erience4
T!e better t!e company-s track recor#, generally t!e more reasonable your
premiums will be(
Insurance Ra&ings
T!ere are se1eral in#epen#ent companies t!at pro1i#e ratings on t!e financial
stability of insurance companies( T!ese ratings will !elp you #etermine t!e
likeli!oo# your insurance pro1i#er will be sol1ent( /ou must perio#ically re1iew
t!e ratings as some ba#ly manage# companies coul# become insol1ent( &ome of
t!e ma?or rating agencies are4
&tan#ar# O Poor-s M&OPN
oo#y-s In1estors &er1ices
%(( +est
"uff O P!elps
=eiss Researc!
Insurance is no& an in,es&men& &oo(
Life insurance s!oul# ne1er be purc!ase# solely as an in1estment( %fter all,
some of your premiums are being use# to buy t!e #eat!3benefit co1erage
an# to co1er ot!er expenses( Life insurance s!oul# not be purc!ase# on
c!il#ren as a way to sa1e for college, an# make sure you an# your spouse
!a1e all t!e co1erage you nee# on yoursel1es before you buy any on a
c!il#(
ANNUITIES
52a& is Annui&)7
In a##ition to all of t!e #ifferent life insurance policies out t!ere, life insurance
companies also sell annuities( Anlike life insurance policies, w!ic! pay
beneficiaries a lump sum w!en you #ie, annuities pay a regular stream of income
w!ile you li1e, usually after you retire( %n annuity is a contract in w!ic! an
in#i1i#ual agrees to pay premiums to an insurance company an# recei1es, in
exc!ange, a regular stream of income payments from t!e issuer(
T!e fact t!at Ronal# !a# a #ifficult c!il#!oo# was fres! in !is min#( He was a late
c!il# an# !is parents !a# retire# by t!e time !e was in !ig! sc!ool( His fat!er
was not able to support !is stu#ies at College, since !is meagre sa1ings #i# not
permit !im to sent little Ronal to College( Ronal# #i# not want t!e same t!ing to
!appen to !imself an# !is c!il#ren( He contacte# an insurance company an#
foun# out !ow muc! !e woul# !a1e to sa1e eac! mont! to get !imself an annuity
of 7:,*** per mont! after t!e age of >* for t!e rest of !is life(
%nnuities are a type of protection people can in1est in to pro1i#e protection for
t!emsel1es an# t!eir family against t!e risk of outli1ing one-s financial resources(
%n annuity is any series of payments ma#e at regular inter1als in t!e form
premium( T!e benefits pro1i#e# by a life insurance company are calle# a life
annuity(
1enefi&s of Annui&)
Ta.<%eferra(4 T!e interest, #i1i#en#s an# capital gains are tax3#eferre# until you
start recei1ing t!e annuity(
8uaran&ee* %ea&2 1enefi&4 2enerally, annuities also offer a #eat! benefit( =!ile
t!e types of #eat! benefits #iffer between pro#ucts, all of t!em allow you to pass
t!e annuity procee#s #irectly to a name# beneficiary, a1oi#ing t!e #elay an#
expense of probate(
Life&ime Income4 If you #eci#e to take an income stream from your annuity, you
can c!oose from a 1ariety of annuity payout options, inclu#ing payouts
guarantee# for t!e #uration of your life( T!e Life %nnuity option #oes not inclu#e
a #eat! benefit(
#ow an Annui&) 5orks
T!e life of your annuity can be broken #own into two p!ases4 accumulation an#
annuiti0ation( "uring t!e accumulation p!ase, Ronal# contributes mont!ly w!ic!
is pai# back to !im #uring t!e annuitisation stage(
Accumu(a&ion P2ase4 "uring t!is p!ase, collections an# earnings t!ereof
accumulate tax3#eferre#(
Annui&i=a&ion4 In t!is p!ase, you c!oose an annuity payout option an# begin
recei1ing income( Typical annuity payment options inclu#e payouts for one-s
lifetime, or for a specifie# number of years( 'nce t!e payout option !as been
c!osen, it cannot be c!ange#, nor can premium be a##e# after t!is point(
Annui&ies are con&rac&s
ore specificallyE t!ey are contracts t!at you enter into wit! t!e insurance company(
Here is !ow it works4
T!e customer pays t!e insurance company a fixe# sum of money(
T!e insurance company t!en in1ests t!e sum t!e customer pai#(
In return, t!e customer collects income eit!er starting imme#iately or sometime
in t!e future(
T!e interest gaine# from t!is in1estment is tax3free until #istribution payments begin(
"epen#ing upon in1estment goals an# nee# for income, in1estors can c!oose an
imme#iate annuity or #eferre# annuity(
Imme*ia&e ,s %eferre*
F If you start to recei1e payments rig!t away, you-1e entere# into w!at-s
calle# an Himme#iate annuity(H
F If your payments #on-t begin until sometime in t!e future, you-1e entere#
into w!at-s calle# a H#eferre# annuity(H
%nnuities can be furt!er categori0e# into fixe# an# 1ariable annuity, #epen#ing
!ow your premium is in1este#(
3i.e* annui&)
Fixe# annuities are t!e more conser1ati1e( Fixe# annuities pro1i#e you wit! a
yearly fixe# return t!at is #epen#ent on t!e insurer-s current in1estment portfolio(
Here is !ow it works4
/our insurance company in1ests your premium in bon#s an# mortgages(
Companies announce t!e fixe# return in t!e beginning of eac! year,
base# on t!eir in1estment results(
6ariab(e annui&)
@ariable annuities can offer !ig!er return t!an fixe#3#ollar annuities, but also
!a1e potentially greater risk( It is up to t!e policy!ol#er to c!oose to in1est !is
premium in stock, bon#, or money market portfolios( T!e policy!ol#er may
allocate !is fun#s any way !e likes to an# may transfer t!ose #ollars as market
con#itions c!ange(
Pa)<ou& o'&ion c2oices
T!ere are .uite a few c!oices an# not all companies !a1e t!e same pay3out
options, but t!is list is fairly compre!ensi1e(
Life %nnuity P In life annuity, w!en you #ecease, all annuity payments stop( If
t!ere is any remaining balance in your account, t!e insurance company
keeps it( Howe1er, if you outli1e your balance, t!e insurance company keeps
paying you until you #ie(
Perio# Certain %nnuity 3 Here you c!oose a specific lengt! of time for t!e
#istribution of your mont!ly income payments( T!e s!orter t!e contract
perio#, t!e !ig!er t!e mont!ly income( 'nce t!e contract perio# !as en#e#
t!e account will be at 0ero( T!e typical perio# certain options are : years, 6*
years an# <* years(
Life %nnuity wit! Perio# Certain 3 T!e company will pay you an income for as
long as you li1e, but if you #ie before t!e perio# certain t!at you c!oose, t!e
income will be pai# to a sur1i1or you #esignate until t!e en# of t!at perio#(
For example4 Gackson is C: years ol# an# is a wi#ower, !owe1er, !e !as a
#aug!ter( Gackson opte# for Life %nnuity wit! a <* year Perio# Certain( He
starte# to recei1e payments in 6BB:, !e passe# away in <**6, six years into
!is annuiti0ation( His #aug!ter will recei1e t!e payments for 6) more years(
Goint an# &ur1i1or %nnuity 3 T!e company will pay an income to you #uring your
life, an# after your #eat!, t!e company will pay a percentage of t!at income M:*;
or C:;, for exampleN to a sur1i1or t!at you !a1e #esignate# at t!e time of
purc!ase(
#EALT# INSURANCE
Healt! insurance !as become a 1ital component to
e1eryone-s financial planning( "ue to t!e cost of
!ealt! care, !ealt! insurance !as become a
necessary, alt!oug! not a man#atory purc!ase(
Healt! insurance is confusing( =it! to#ay-s rising
!ealt! care costs, it-s important t!at you !a1e a
basic un#erstan#ing of your options an# !ow t!ey
can protect your !ealt! as well as your family-s
!ealt!(
People are #eman#ing less restrictions an# more control o1er t!eir !ealt!care,
e1en if t!e premiums are a little more expensi1e t!an H'-s(
Roger &mit! !a# !eart #isease in t!e familyE !is fat!er an# mot!er !a# #ie# of it(
He contacte# a consultant w!o explaine# t!e 1arious types of !ealt! insurance
sc!emes(
Tra*i&iona( 3ee<3or<Ser,ice In*emni&) P(ans
Fee3for3ser1ice in#emnity plan benefits are pai# base# on t!e usual, reasonable,
an#Ior customary rates for ser1ices pro1i#e#( In#emnity plans are generally
#i1i#e# into two parts
1asic '(ans 33 +asic plans co1er your #octors- bills, #rugs, outpatient
surgeries, an# ot!er me#ical expenses up to a specifie# amount( T!ey
can be offere# by your employer or t!roug! an outsi#e insurance
company( Roger coul# go in for a basic plan if !is employer was not
alrea#y pro1i#ing !im wit! it(
9a+or me*ica( '(ans 33 a?or me#ical plans co1er exten#e# !ospital
1isits an# ot!er ma?or me#ical proce#ures( T!ese plans typically pay t!e
total cost of a semi3pri1ate !ospital room for a certain time 3 typically 6<*
#ays( %fter t!is time passes, t!e plan will usually co1er eig!ty percent of
your bills( Expenses co1ere# usually inclu#e room an# boar#, nursing
care, me#ical #e1ices, in patient tests, an# #rugs( T!ere is usually a
lifetime or annual limit of 7<:*,*** 3 76,***,***( T!is was t!e appropriate
type of insurance for Roger &mit!, as !e feare# !e coul# suffer ma?or
!ospitalisation costs in t!e future(
9anage* Care
anage# care plans are among t!e fastest growing options in t!e !ealt!
insurance uni1erse to#ay( T!ese plans generally re.uire t!at you use #octors or
!ospitals t!at are part of t!e pro1i#er network( /ou !a1e no #e#uctibles or co3
insurance, but you may be c!arge# a small co3payment fee for certain ser1ices(
An#er t!e typical plan, you will select a primary care p!ysician w!o t!en
coor#inates your care, referring you to a specialist w!en necessary(
T!ere are four plans you will most likely encounter4
#ea(&2 9ain&enance Organi=a&ion :#9O;4
H's offer full me#ical ser1ices for a flat annual fee( T!ese plans offer Anlimite#
access to participating p!ysicians- ser1ices eit!er locally or elsew!ere an#
Prescription #rugs are inclu#e# in co1erage((
Preferre* Pro,i*er Organi=a&ion :PPO;4
% PP' operates muc! t!e same as #oes an H', allowing for access wit!in a
HnetworkH of in#epen#ent pro1i#ers an#Ior facilities( Eac! 1isit or proce#ure
carries a fee for t!e ser1ice pro1i#e#(
Poin& of Ser,ice :POS;
Point of ser1ice plans are somew!at of a !ybri#( %n H' can inclu#e a point3of3
ser1ice option to allow 1isits outsi#e t!e H' network( &imilarly, it can inclu#e
network pri1ileges an# t!e re#uction in costs associate# wit! manage# care
plans(
Pro,i*er S'onsore* Organi=a&ion :PSO;
Lastly, a P&' also operates muc! t!e same as an H' #oes, except rat!er t!an
being manage# by an insurance company, t!e participating p!ysicians are
manage# by organi0ations of me#ical pro1i#ers t!emsel1es(
Congressiona( Omnibus 1u*ge& Reconci(ia&ion Ac& :CO1RA;
If you lea1e your ?ob, you can keep your pre1ious ?ob-s insurance for 68 mont!s,
as long as you pay your premiums at your ol# corporation-s rate(
#os'i&a( In*emni&) P(ans
T!ese plans are #esigne# to !elp co1er t!e costs of a !ospital stay(
9e*icare
e#icare pro1i#es !ealt! insurance benefits for t!ose persons o1er sixty3fi1e
years of age( T!e program co1ers part of your expenses for s!ort term acute
me#ical problems !ospitali0ation, surgery, !ome !ealt!care if it is at a
reasonable cost(
9e*icai*
e#icai# is fe#eral3an# state3fun#e# assistance offere# to t!ose w!o are near
t!e po1erty le1el an# !a1e no ot!er means to pay for t!eir care(
Long Term Care
Long Term Care Insurance !as become a popular 1e!icle to !elp ease t!e
potential financial bur#en t!at can occur if long term nursing !ome, !ome !ealt!,
custo#ial, or assiste# care are nee#e#( T!ese kin#s of policies are #esigne# to
!elp take care of t!ose w!o can no longer care for t!emsel1es, an# co1er a wi#e
range of ser1ices from nursing !omes to in3!ome care(
%ISA1ILIT> INSURANCE
T!e Healt! Insurance %ssociation of %merica !as estimate# t!at %mericans w!o
are forty years ol#, !a1e a nineteen percent c!ance of suffering from at least one
#isability t!at will keep t!em out of work for at least ninety #ays, an# t!e
percentage increases wit! age( "isability insurance can replace your income an#
pro1i#e for you an# your family w!en you cannot(
T)'es of *isabi(i&) insurance
T!ere are se1eral sources an# types of #isability insurance4
In*i,i*ua( (ong &erm *isabi(i&) insurance
8rou' *isabi(i&) insurance
T!ere are basically two kin#s, s!ort term an# long term of group #isability
insurance #epen#ing on t!e employer-s c!oice(
S'ecia(i=e* *isabi(i&) insurance
&peciali0e# #isability insurance comes in two main forms(
6( Cre#it #isability insurance 33 Cre#it #isability insurance co1ers loan
payments if you become #isable#(
<( ortgage #isability insurance 33 ortgage #isability insurance co1ers your
!ome payments if you become #isable#(
AUTO INSURANCE
=!ile #ri1ing your car, you cause# an acci#ent t!at resulte# in property #amage
an# serious in?uries to yourself an# ot!ers( "o you !a1e t!e rig!t co1erage an#
limits t!at can eliminate or substantially re#uce t!e risk of losing your life
sa1ings$
If you own a 1e!icle, un#erstan#ing auto insurance is a must an# auto insurance
is man#atory(
It fall into two broa# categories w!en it come to t!e types of auto insurance
co1erage man#ate# by state law4
No<fau(& insurance
No3fault simply #oes away wit! t!e concept of one party or t!e ot!er being at
fault( If you are insure# in a no3fault state an# !a1e an acci#ent, you #on-t go
after t!e ot!er #ri1er( Instea#, you contact your own insurer an# file a claim( /our
insurance policy guarantees you imme#iate compensation for #amages, me#ical
expenses, lost wages, etc(
3au(& Insurance
Fault states or states wit! financial responsibility laws, w!ile #o not man#ate auto
insurance, !a1e Hfinancial responsibility lawsH t!at re.uire all #ri1ers to be able to
pay for any #amage or in?ury t!ey may cause( Howe1er, carrying liability
insurance is t!e best way for you to meet your state-s financial responsibility
re.uirements(
T!e cost of auto insurance an# co1erage 1aries #epen#ing on t!e place of li1ing,
age, #ri1ing recor#, sex, type of car, si0e of #e#uctible(
T2ere are *ifferen& &)'es of au&o insurance
? 8enera( Liabi(i&)
2eneral liability co1ers #amage you may cause to ot!er people-s property
MProperty #amage liabilityN an# in?uries to t!e people t!emsel1es Mbo#ily in?ury
liabilityN( If you were #ri1ing negligently at t!e time of t!e acci#ent, you are
normally responsible for paying for t!e #amages, if &2e s&a&e )ou (i,e in
assigns fau(& for acci*en&s
2 Co((ision
Collision insurance will reimburse costs relate# to repairing #amages to your car
#ue to an acci#ent(
@ Com're2ensi,e
Compre!ensi1e insurance pays for #amages cause# by e1ents ot!er t!an
collision( T!ese may inclu#e natural #isasters, t!eft, explosions an# riots(
A 9e*ica( Pa)men&s or Persona( In+ur) Pro&ec&ion :PIP;
e#ical payments insurance, usually in t!e range of 7:,*** to 76*,***, co1ers
me#ical expenses for in?uries( T!is co1erage guarantees imme#iate me#ical
payments for you, your passengers, an# ot!er parties, regar#less of w!o is at
fault( PIP can also co1er lost wages, an# t!e cost of replacing ser1ices normally
performe# by someone in?ure# in t!e auto acci#ent( T!is is man#atory in some
states, optional in ot!ers(
" Uninsure* 9o&oris&
Aninsure# motorist an# un#erinsure# motorist co1erage protects you if you are
in?ure# in an acci#ent wit! ot!ers w!o t!emsel1es carry insufficient or no liability
insurance(
#O9EO5NERS INSURANCE
ost people, w!en aske# w!at t!ere most
1aluable asset is, reply it-s t!eir !ome(
For t!is reason, protecting your !ome s!oul# be
top priority(
Insurance is complicate#( %s a responsible
person you !a1e a responsibility to un#erstan# 2ow your !omeowners insurance
policy protects your biggest in1estment(
/ou !a1e two consi#erations w!en it comes to insurance an# !urricanes( T!e
first is to re1iew your co1erage before trouble strikesE t!e secon# is knowing w!at
to #o afterwar# if trouble #oes strike( T!ere are se1eral t!ings you s!oul# #o now
to protect your !ome an# property from t!e financial impact of !urricanes( To
begin wit!4
ake a list of all furnis!ings an# 1aluables( % p!otograp!ic or 1i#eotape
recor# is a goo# i#ea( Jeep t!e list an# p!oto recor#s in a safe #eposit box or
somew!ere else safe away from your !ome(
Jeep auto an# !omeowner policy numbers an# agents- p!one numbers in a
safe place as well(
Next, make a complete an# t!oroug! re1iew of all your insurance policies(
T!e following is a list of important #isaster3relate# co1erage consi#erations t!at
will !elp you e1aluate t!e a#e.uacy of your policy4
ake sure your insurance is a#e.uate( T!e cost to rebuil# your !ome as
estimate# by an in#epen#ent contractor 3materials, labor, profit an# o1er!ea#
3#etermines t!e proper amount of insurance you s!oul# carry(
ake sure your personal property insurance is a#e.uate an# t!at it settles
personal property claims at replacement cost(
Jnow t!e #ifference between replacement cost an# actual cas! 1alue basis(
Replacement cost means t!e insurer will pay t!e full cost to repair or replace
your !ouse wit! new materials of t!e same type, kin# an# .uality of t!ose
#amage# or lost( % six3panel woo# #oor gets replace# wit! a six3panel woo#
#oor(
%ctual cas! 1alue means t!e insurer coul# pay less( T!e insurer is allowe# to
#epreciate t!e cost of a six3panel woo# #oor base# on t!e age an# con#ition of
your original #oor(
2uarantee# replacement cost co1erage will pay t!e full cost to rebuil# your
!ome e1en if t!e reconstruction cost excee#s t!e policy limit( If you are insure#
for 7:*,*** an# it costs 7>*,*** to replace your !ome, t!e insurer will pay t!e
7>*,***(
=ater t!at comes from t!e sky is co1ere# by most !omeowners- insurance
policies( =ater t!at comes from street floo#ingE creek, ri1er or stream floo#ingE
storm surgesE an# ot!er rising water is not( /ou nee# a separate policy un#er t!e
National Floo# Insurance Program t!at your insurance agent can tell you about(
Co1erage #oes not begin until D* #ays after you get t!e policy, so get it before
t!e rainy season(
/our policy mig!t not co1er losses from win# #amage( C!eck your policy for
all win# #amage pro1isions an# #e#uctions =in# losses are settle# on an actual
cas! 1alue basis(
Increase# construction costs cause# by c!anges in local buil#ing co#es are
not co1ere#( If you li1e in an ol#er !ome, c!eck wit! a buil#ing contractor to see
w!at a##itional costs #ue to c!anges in t!e buil#ing co#es coul# be in1ol1e# in
replacing your !ome( T!ere are at least ten #ifferent types of insurance polices
t!at can protect your !ome ( ( ( "o you know if you !a1e t!e rig!t policy(
E1ery insurance policy !as 1ariables, like #e#uctibles, cas! 1alue 1s(
replacement cost, sc!e#uling re.uirements like ?ewelry, furs, special collections,
golf clubs etc(
Homeowners insurance pro1i#es a broa# array of personal insurance co1erage,
for owners of !omes an# renters( Homeowners are known as a HpackageH policy,
because it inclu#es bot! protections for your property, as well as liability( T!e
property co1ers your structures an# possessions an# t!e liability component
co1ers w!at you are legally obligate# to pay to anot!er person for actions cause#
by you, your family, or your property( T!is Liability also exten#s to me#ical
payments to ot!ers for in?uries cause# by you or your family( For instance if you
2erman &!eppar# gets irritate# an# bites your little #aug!ter t!e !ome owner
insurance can co1er it( +ut if i# bites a stranger you !a1e to rake separate liability
insurance for it(
/our personal liability policy co1ers you if you use part of your !ome as an office,
sc!ool, garage or stu#io, but only for t!ings t!at woul# !a1e !appene# w!et!er
or not you worke# at !ome( If t!e acci#ent or in?ury is #irectly tie# to t!e type of
work youKre #oing, itKs not co1ere#(
/ou teac! woo#working in your basement workroom an# c!arge a fee for t!e
lessons( If one of your stu#ents slips on your kitc!en floor, youKre co1ere#(
=!y$ +ecause t!e in?ury isnKt connecte# to your classes( He coul# !a1e slippe#
e1en if !e was a guest( If t!e same stu#ent is in?ure# w!ile operating a power
saw in class, youKre not co1ere#( T!e in?ury in t!is case was a #irect result of
lessons Eyou c!arge# for P a #irect result of your business(
/ouKre also co1ere# against liability in1ol1ing someone youK1e !ire# to work in or
aroun# your !ome if t!at person is in?ure# on t!e ?ob(
/ou !ire a contractor to put an a##ition on your !ome( =!ile !is workers are
busy working on t!e roof, it collapses( 'ne worker is in?ure# an# sues you for
7:*,***( If a court fin#s t!at youKre liable for t!ose #amages, your personal
liability policy pays t!e entire 7:*,***(
&%PLE
I % "welling 76**,***
+ 't!er &tructures 6* ; of %
C Personal Property :* ; of %
" Loss of Ase <* ; of %
II E Personal Liability 76**,***
F e#ical Payments
to 't!ers 76,***
&oftware professional, &us!ma &rini1asan, from In#ia, is relocate# in t!e A& in
a new ?ob wit! a large software company( His salary permits !er to buy a !ouse
on mortgage( To protect !er !ar# earne# in1estment, s!e nee#s to know t!e
1arious types of !omeowner insurance an# t!eir features, w!ic! !as been
summarise# in t!e &li#e below4
Homeowners insurance is known by H' #esignations( T!e salient features of
t!ese #esignations are s!ow in t!e table(
H'36, referre# to as basic form, is 1ery ol# an# not muc! in 1ogue( It co1ers 66
basic risks i(e( fire or lig!tning, explosion, riot, aircraft, 1e!icles, smoke,
1an#alism, win#storm or !ail, t!eft, #amage by glass or safety glass an# 1olcanic
eruption(
H'3< is name# peril insurance, inclu#es six more risks t!an H'36, co1ers
against #angers name# in t!e contract( T!ey are falling ob?ects, weig!t of ice,
snow or sleet, t!ree categories of water relate# #amage from !ome utilities an#
electrical surge #amage(
H'3D policies is calle# %ll3risk Insurance, pro1i#es exten#e# co1erage an#
co1ers t!e 6C stan#ar# perils plus any ot!er peril not co1ere# in t!e policy except
for eart!.uakes an# floo#s, war an# nuclear acci#ent( T!is is t!e most commonly
purc!ase# !ome insurance an# is t!e minimum for t!ose w!o purc!ase new
!omes(
H'3) is renters policy an# co1ers personal property ot!er t!an #wellings only
un#er t!e 6C stan#ar# perils( It is for tenants an# apartment #wellers(
H'3: is special form, an# is t!e top of t!e line an# costs about 6:; more t!an
t!e H'3D( It bun#les up all t!e extra type of ri#ers t!at mig!t be a1ailable wit!
ot!er policies3 suc! as inclu#e# co1erage for ?ewellery, furs, etc( +y bun#ling all
t!e extras in one policy, it in1ariably en#s up consi#erably c!eaper t!an buying a
less expensi1e policy an# a##ing on all t!e upgra#es(
H'3> co1ers con#ominium an# co3op owners but ?ust for personal property an#
only un#er t!e 6C perils(
H'38 is primarily for ol#er !omes of special arc!itecture an# co1ers for t!e 66
perils mentione# in H'36( It pays for actual repairs3not rebuil#ing costs(
T!ere are generally six types of co1erage suffixe# wit! alp!abets % to F( % typical
!omeowners policy MH'3D an# H'3:N !as t!e following co1erage structure
inclu#e# automatically( T!is !as been illustrate# wit! a !ouse t!at costs
7<**,***(
Co,erage Insures )our4 %escri'&ion @alue of co1erage
Co1erage A %we((ing 0 #ouse
T!is is t!e limit of insurance on
t!e actual #welling( Not
applicable for tenants MH'3)N
72!!B!!!
Co1erage 1 O&2er S&ruc&ures
For s!e#s, barns, #etac!e#
garages, in3groun# swimming
pools, etc(
72!B!!! Musually 6*;
of co1erage %
amountN
Co1erage C
Persona(
Pro'er&)
Property not part of t!e
structure4 e(g( furniture,
clot!es, appliances, etc
7?!!B!!! Musually
:*;, occasionally
C*; of Co1erage %
amountN
Co1erage % Loss of Use
For your li1ing expeses o1er
an# abo1e your normal li1ing
expenses, if you !ome is ma#e
unin!abitable Mby insure# loss
suc! as a fireN(
7A!B!!! Musually <*;
of co1erage %
amountN
Co1erage E Persona( Liabi(i&)
if you get sue#, bo#ily in?ury O
property #amage, non3auto
relate#(
7"!!B!!! common,
but limits of 76**,***
an# 7D**,*** also
a1ailable
Co1erage 3
9e*ica(
Pa)men&s
Payable to in?ure# guest,
wit!out regar# to your liability
or negligence(
7?B!!! common, but
!ig!er limits M<,*** 3
:,*** N are also
a1ailable
Good Will Payments. In certain situations where you or your family damages someone
elses property, but arent legally liable, you can ask your homeowners insurer to make a
good will payment to the owner of the property. It pays eerything up to !"## for each
accident or incident. $his coerage doesnt apply if the property owner has full insurance
coerage for the damage to his or her own property or to damage caused by a motor
ehicle. %&cept, it will pay any applicable deductible up to !"## that the property owner
must pay before the property owners coerage applies.
'our fie(year(old son, who may be too young to be responsible for what he does,
damages a neighbors aluable painting which isnt insured. It will cost !)## to repair.
In this case it will pay up to !"## to repair or replace the painting, at their option.
Personal liability insurance e&cluded from coerage the liability of any person who
intentionally causes personal in*ury or property damage, including se&ual or physical
abuse. %en if the property damages or personal in*ury is more than was intended, it
wont be coered because it is the result of an intentional act. It will, howeer, coer the
legal liability of you and any family member resident in your household for the
intentional acts of a person age +, years or younger.
T>PES O3 INSURANCE CO9PANIES
T!e #ifferent types of insurance companies selling insurance are
C 9u&ua( Com'anies
C S&ock Com'anies
utual insurance companies are cooperati1es owne# by t!eir policy!ol#ers(
Policy!ol#ers !a1e #ual relations!ip wit! t!e company as customers an# as
owners( T!ese are non3profit organi0ations( Profits are #istribute# to t!e
policy!ol#ers as policy #i1i#en#( T!e largest among t!em are Pru#ential an#
&tate Farm utual(
&tock Companies are incorporate# companies, w!ic! sell insurance( Like any
ot!er company, t!ey are liste# in recognise# stock exc!anges( Typically, t!ey #o
not gi1e #i1i#en#s to t!e policy!ol#ers(
INSURANCE RE8ULATION
Insurance regulation !as been concei1e# to promote an# protect t!e publicKs
welfare by Public Law 6: t!at gi1es t!e power to t!e states to regulate insurance(
T!e reasons for Insurance Regulation are to ensure4
F
Insurer &ol1ency
F Ane.ual Jnowle#ge an# +argaining Power
F Problem of Pricing
F Promotion of &ocial 2oals
Insurer &ol1ency
Insurer &ol1ency
is meant to ensure t!at t!e insurance company remain sol1ent an# #eli1er t!e
insurance in future w!ic! t!e consumer cannot not e1aluate an# monitor(
T!e insurer s!oul# not go bankrupt as it coul# create serious problems to t!e
insure# w!ose number are large an# t!e impact can be .uite significant( T!ese
companies are 1ulnerable as t!ey in1est a substantial amount of sa1ings(
Ane.ual Jnowle#ge an# +argaining Power
"ue to t!e imbalance in competition in t!e insurance market an# t!e complexities
of contracts, it is #ifficult for consumer to e1aluate t!e insurance policy so a
public regulator is nee#e#(
Problem of Pricing
'pen competition on prices #oes not to work in an insurance market because
prices set before costs are known( Consumers cannot ?u#ge t!e a#e.uacy of
pricesE !ence regulation is re.uire# to safeguar# t!eir interest(
Eac! state !as its own insurance co#e( New /ork !as t!e %ppleton Rule w!ic!
implies t!at any company #oing business in N/ must meet N/ stan#ar#s
anyw!ere t!ey #o business(
T!e National %ssociation of Insurance Commissioners MN%ICN promotes
consistency, prepares mo#el bills an# legislation an# un#ertake researc! in
special problems(
REINSURANCE
$he mechanism by which one insurance company contractually passes a proportion of
insured risks to another insurance company, the reinsurer is called reinsurance. Insurers
re#uce t!eir exposure to risk by insuring t!emsel1es against claims( $he company
transferring the risk is called the -ceding company-. the company receiing the risk is
called the -assuming company- or -reinsurer.-
/ome of the important insurance companies carrying out reinsurance business in the 0/
are1
2 3llian4 5ife Insurance 6ompany
2 %mployers 7einsurance 6orporation
2 I8G 7einsurance
2 5loyd9s 3merica, 5td.
2 5ondon 7einsurance Group
2 :urich 7einsurance ;8orth 3merica<, Inc.