History Of Insurance

Category: Finance, Insurance.

finally, you' re going to get all the information about all types of insurance. How long has it been since you' ve looking for this information?

Great! Well, not a problem. Also at this article you will know every thing about History of insurance. Here are the 1st article that will help you to understand the define of insurance in law and economics. Insurance. -Insurance, in law and economics, is a form of risk management primarily used to hedge against the risk of a contingent loss. -Insurance is defined as the equitable transfer of the risk of a potential loss, from one entity to another, in exchange for a premium. -Insurer, is the company, in economics that sells the insurance. -Insurance rate is a factor used to determine the amount, to be charged, called the premium for a certain amount of insurance coverage. -Risk management, the practice of appraising and controlling risk, has evolved as a discrete field of study and practice. In some sense we can say that insurance appears simultaneously with the appearance of human society. History of insurance.

We know of two types of economies in human societies: 1- Money economies( with markets, financial instruments and, money so on) and non- money or natural economies( without money, financial instruments and, markets so on) . 2- The second type is a more ancient form than the first. For example, if a house burns down, the members of the community help build a new one. In such an economy and community, we can see insurance in the form of people helping each other. Should the same thing happen to one's neighbor, the other neighbors must help. This type of insurance has survived to the present day in some countries where modern money economy with its financial instruments is not widespread. Otherwise, neighbors will not receive help in the future.

For example countries in the territory of the former Soviet Union) . -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 practiced by Chinese and Babylonian traders as long ago as the 3rd and 2nd millennia BC, respectively. -Chinese merchants traveling treacherous river rapids would redistribute their wares across many vessels to limit the loss due to any single vessel's capsizing. The most important gift was presented during a special ceremony. The Babylonians developed a system which was recorded in the famous Code of Hammurabi, c. 1750 BC, and practiced 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. -Achaemenian monarchs 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. When a gift was worth more than 10, 000 Derrik( Achaemenian gold coin weighing 35- 42) the issue was registered in a special office. For others, the presents were fairly assessed by the confidants of the court. This was advantageous to those who presented such special gifts. 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.

If the registered amount exceeded 10, he or she, 000 Derrik would receive an amount of twice as much. " -A thousand years later, the inhabitants of Rhodes invented the concept of the' general average' . Jahez, a historian and writer, writes in one of his books on ancient Iran: " Whenever 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. Merchants whose goods were being shipped together would pay a proportionally divided premium which would be used to reimburse any merchant whose goods were jettisoned during storm or sink age. -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. The Talmud deals with several aspects of insuring goods. Guilds in the Middle Ages served a similar purpose. 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.

Edward Lloyd opened a coffee house that became a popular haunt of ship owners, and ships, merchants' captains, and thereby a reliable source of the latest shipping news. 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. -Toward the end of the seventeenth century, London's growing importance as a center for trade increased demand for marine insurance. -In the late 1680s, Mr. 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 not an insurance company) for marine and other specialist types of insurance, but it works 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 13, 200 houses. 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. In the aftermath of this disaster, Nicholas Barbon opened an office to insure buildings. -In 1680, he established England's first fire insurance company, "The Fire Office, " to insure brick and frame homes. -The first insurance company in the United States underwrote fire insurance and was formed in Charles Town( modern- day Charleston) , South Carolina, in 173- 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 Contribution ship for the Insurance of Houses from Loss by Fire. -Franklin's company was the first to make contributions toward fire prevention. 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. END> >>>

In recent years, some have called for a dual state and federal regulatory system for insurance similar to that which oversees state banks and national banks. -In the state of New York, which has unique laws in keeping with its stature as a global business center, former New York Attorney General Eliot Spitzer was in a unique position to grapple with major national insurance brokerages. -Spitzer alleged that Marsh& McLennan steered business to insurance carriers based on the amount of contingent commissions that could be extracted from carriers, rather than basing decisions on whether carriers had the best deals for clients. -Several of the largest commercial insurance brokerages have since stopped accepting contingent commissions and have adopted new business models.