Insurance Loans: GROUP INSURANCE

RISK ASSESSMENT AND CLASSIFICATION

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The Life and health
insurer assesses the risk based on the factors such as a build habits, family
history, occupations and medical history. Sometimes the insurer asks for
medical reports such as a ECG, urine tests for better assessments  of risk. Properly assessed risks will then be
classifieds  into homogeneous groups for
uniform spreading of risk. The process of risk classifications  has three objective: protection of financial
soundness:.  Adverse selection.  Fairness.  </div>
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PROTECTION OF FINANCIAL SOUNDNESS: 
The risk classification  ensures
that premiums reflect the true level of risk and are adequate  to enable the insurer to meet is its  contractual 
obligations to its policy holders. 
More detailed  information on risk  characteristics enable the insurer to
arrive  at a more precise premium.
Inadequate  premiums will lead to
insolvency of the insurer.  So detailed
information on risk  characteristics  of proposer will protect both the insurer and
the insured.  Genetic tests provide
additional and useful information  on the
life expectancy.</div>
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ADVERSE SELECTION: 
Adverse selection is nothing but voluntary entry of a policy holder into
a classified  group by the suppression of
material information. with an intension to get advantage of that group with
respect of the level of risk. The underwriting tries to avoid  this adverse selection by scrutiny of the
risk characteristics  of proposer. In the
absence of complete medical information the insurer is likely to put such an individual
in an inappropriately  low premium  class. This result in subsidization  of a substandard  life by other better lives. If this encourage
a good  number of insured towards
suppressing the information, then  it
will jeopardize the financial viability of the insurer.  The absence of a strong  risk classifications  process will have many result.  The premium of healthy  people will increase, perhaps uncontrollably
to compensate for the claims of unhealthy people. Thus, detailed medical  information including genetic tests
information will help  an insurer in
better and accurate assessments  of risk
and avoid adverse selection. </div>
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FAIRNESS:  Another
objective is to treat all existing policy holder and the new policy holders
fairly. To achieve this objective insurance company must set premiums  at a level consistent with the risk
represented by the each proposed insured. Proper and fair discrimination  can be done through precise estimation of
future lifetime and taking decisions regarding whether ti issue coverage and if
so the premium rate. Unfair discrimination will occur  when no sound actuarial justifications or
reasonably anticipated claims 
experiences can justify  the
manner in which risks are classifieds is kept 
or when an underwriting mis classifies a risk because a relevant piece
of information is kept out of 
consideration.  The above three
objective of risk classifications clearly indicate that an  insurer requires detailed information of risk
under consideration. No the question arises 
whether the detailed information includes the existing routine lab
reports like ECG and MRI scan or advanced genetic tests. It is not easy to
distinguish between genetic and non-genetic diseases. </div>
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The task force on Genetic
Information  and Insurance of the
NIH-DOE, working group (US) of ethical, legal and social implications of human
genome research  delivered  a report on genetic information and health
insurance. This report  stated: As a
practical matter it will become increasingly difficult  to deal with genetic information as a special
and separate from other forms of health related information because  diseases are increasingly  understood as having both genetic  and environment components”.  There is no uniform organizations of genetic
tests and what constitutes genetic information. Different  organizations have defined genetic
information indifferent ways. </div>
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RISK ASSESSMENT AND CLASSIFICATION

The Life and health insurer assesses the risk based on the factors such as a build habits, family history, occupations and medical history...

EXPECTED ACTION OF LIFE INSURANCE COMPANIES

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A total 85%
of the public opined that sharing genetic information  would result into refusal to issue policies
or charging higher premium by life insurance companies  26.7% 
said that companies would agree to sell the policy at the regular price
and only 19.5% said that genetic information 
would result in the issuance of a policy at a lower price.  CONSUMER’S 
INSURANCE PURCHASING BEHAVIOR: 
The knowledge  of any increased
risk my tempt  the persons to hide the
information  and geta a into a life
insurance coverage which is technically know as adverse selection. When asked
about this   issue the respondents    overwhelmingly expected  consumer to withhold  unfavorable results of a genetic test from a
the life insurers. </div>
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  They were more
closely  divided on the issue of whether
it would be  the wrong to do so, with
results  varying in whether the questions
was asked in the affirmative of negative. 
OPINIONS ON POSSIBLE REGULATIONS: 
A lot of discussion was taking place 
in development markets like US on regulations life insurance companies
from obtaining  genetic information  through regulations.   The options available are whether  to acquire genetic information  either from an applicant’s  medical record  or can ask proposer to undergo genetic tests.
Around 61% respondents said that the life insurance companies should be not be
permitted to use  either  of the options . 53% opined that company
should be able to us use genetic information 
from existing medical records., but they should not be allowed to
require  to applicants to take a genetic
test. Only 15.4% agreed with the statements that companies  should be allowed to require  all applicants to take a genetic test.  Public concerns about genetic discrimination
relative  to other issue: 83.1% of
respondents considered  genetic
discrimination  as a  major concern. But in relation to other
concerns like cloning, the economy  the
environments access to health care. taxes and 
terrorism the genetic discrimination   has been rated lowest.  However 
most of the respondents opined that there is a need for insurance. They
felt that every one has a right to it. Around 70% felt there  that every one needs life insurance. Thus
there are diverse  opinions ,
concerns   and a attitudes  towards applying genetic information  for underwriting  by the insurers. </div>
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CURRENT REGULATORY
ENVIRONMENT:  After a lot of a
deliberations by various  committees and
association of the insurers, moratorium was imposed in UK on insurance  industry on the use of predictive genetic
test. This was introduced  in 1998 for
three years. In 2001, it was reviewed 
and the government  decided to
continue  with moratorium for another 5
years. According to this, the UK 
insurers will continue not to require  any genetic test results in respect of
applications for life insurance 
products  with sums assured
results in respect of applications  for
life insurance products with the sum assured of less than 500,000 critical
illness insurance  with sums assured of less
than  300,000 with corresponding  annual illness insurance  with 
sums assured of less with corresponding 
annual amounts for income protections coverage . Initially during the
period 1997-2001, the insurer were less successful in deploying argument  in favor on their  right to use genetic test. Finally the
insurer’s   arguments of right  to use 
genetic  to  protect themselves  against the exercise  of an options by policy holders  was successful  and that the allowed the insurers to use
genetic tests information for very large 
sums assured. In the United States 
also public concerns on genetic tests have led to enactment of laws  prohibiting genetic discrimination in health
insurance.  </div>
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Though the definition  of genetic information varies from one country to another and
according to the applicability of law they reflect   a general consensus  that individual who are asymptomatic  should be at a be excluded from the
opportunities  to purchase health
insurance because of genetically increased from the opportunities to purchase
health  insurance because of genetically
increased risk of illness. In the light of the public concerns their attitudes
and the insurer’s  concerns , it is
better to set out general  principles to
be advanced by the policies. The general principles  that can be adopted are:  1.  Do
not discourage at-risk individual from under going genetic testing.  2. Do not coerce individual into a under
going genetic testing.  3.  Do not promote harmful  social consequences  4. 
Make life and a health insurance 
coverage available  at
affordable  rates.  5. 
Promote actuarially   sound
underwriting  and assure the public  that underwriting and pricing decision are
fair.  6. 
Do not promote or enable   adverse
selection.  7. Minimize regulatory complexity.  8. 
Anticipate scientific developments . 
9. Develop recommendations that are a 
politically feasible.</div>
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EXPECTED ACTION OF LIFE INSURANCE COMPANIES

A total 85% of the public opined that sharing genetic information would result into refusal to issue policies or charging higher premium ...

DETERIORATION OF STOCK INSURANCE (DOS) REFRIGERATION PLANT INSURANCE

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This insurance was introduced 
to meet the requirements of the those who wanted to insure themselves
against  deterioration of goods they are
stored in cold storage which might  arise
due to a breakdown of refrigerating 
machinery. The event resulting  in
deterioration of stock in the cold storage must always been be an  indemnified breakdown of machinery loss of or
damage to refrigerating  equipment  which is covered under machinery breakdown
insurance policy. Deterioration  of stock
in cold storage insurance is a 
therefore. regarded a as a 
completed  to the cover provided
by the machinery breakdown insurance and a DOS policy  can only be taken out in the connection with
a  MB (machinery Breakdown). cover. The
policy includes deterioration  damage due
to the refrigerants escaping  or leaking
as a  consequences  of an indemnifiable machinery  breakdown. 
SCOPE OF COVER:  This policy is a
follow-up cover to machinery breakdown insurance  and may only be taken up out in a
connection  with the latter. A claim can
only arise when the insured refrigeration 
plant suffers some unforeseen 
material  damages
indemnifiable  under the deterioration of
the insured stock due to a risk of fall in 
cooling temperature., or  B the
unforeseen and sudden escape of refrigerants 
into the cold storage rooms the value of the refrigerant  itself is not covered under DOS insurance or
directly  resulting from any
indemnifiable  material damages to the
refrigeration plant. Damage due to a rise in the temperature or leakage to the
of refrigerant  resulting  from the causes is not covered by the
insurance .<br />
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SPECIAL PROVISION;  In view
of the nature of stocks, scope of cover afforded and chances of potential  losses: 
there are specific conditions  and
provisions contained in the policy. They are: (1). There should be in force an
insurance  in respect of breakdown  of the machinery. a precondition as a to a
liability  in respect of an accident is
that a payments in respects of an accident of such machinery should  have been made or liability  admitted. The non payments  due to the operations of an excess under the
machinery policy will not affect liability for stock.  (2). The stocks claimed for should  have been in the said that plant which  should be under constant  supervision 
of competent who can prevent and set right  accidents. 
(3). The insured should maintain records in chambers as to quality
quantity and value besides periodical readings of temperature the declarations
of the risk should be also be furnished 
periodically  to the company.  (4). The plant  shall be prepared for such tests and
examinations as required by the statutory authority or the insurer at the
insured’s  own expenses by the statutory  authority or the insurer at the
insured’s  own expenses.  </div>
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SUM INSURED: 
The sum insured under this policy specified in schedule II.  (1). shall be value of the stocks  obtained by multiplying full storage
capacity  of the storage for annual
policies.  (2), value of the stocks
obtained by the multiplying  full
storage  capacity of the maximum number
of chambers  that are likely to be used
during the entire period for policies 
issued for periods less then 12 months. By the average  price of the potatoes at the time fo the  loading 
as determined by the insured with the concurrence  of the company at the time this
insurance  has come into effect. The
price shall include  the storage charges
for the whole  season. For the purpose,
full storage capacity of the cold storage , chamber shall be determined on the
basic  that 10 quintals of potatoes can
be stored for 100 cubic feet or space 
inside  the chamber </div>
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DETERIORATION OF STOCK INSURANCE (DOS) REFRIGERATION PLANT INSURANCE

This insurance was introduced to meet the requirements of the those who wanted to insure themselves against deterioration of goods they ...

Insurance Loans

RISK ASSESSMENT AND CLASSIFICATION

EXPECTED ACTION OF LIFE INSURANCE COMPANIES

DETERIORATION OF STOCK INSURANCE (DOS) REFRIGERATION PLANT INSURANCE

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