Flood insurance denotes the specific insurance coverage against property loss from flooding. To determine risk factors for specific properties, insurers will refer to topographical maps that denote lowlands and floodways that are susceptible to flooding. Nationwide, only 20% of American homes at risk for floods are covered by flood insurance. Most private insurers do not insure against the peril of flood due to the prevalence of adverse selection, the purchase of insurance by persons most affected by the specific peril of flood. In traditional insurance, insurers use the economic law of large numbers to charge a small fee to large numbers of people in order to pay the claims of the small numbers of claimants who have suffered a loss. In flood insurance, the numbers of claimants is larger than the available number of persons interested in protecting their property from the peril, which means that most private insurers view the probability of generating a profit from providing flood insurance as being remote.
However, there are insurers such as PURE, Chubb, AIG/Chartis, Fireman's Fund that do provide written primary flood insurance for high value homes and The Natural Catastrophe Insurance Program underwritten by Certain Underwriters at Lloyd's which provides private primary flood insurance on both low value and high value buildings. In certain flood-prone areas, the federal government requires flood insurance to secure mortgage loans backed by federal agencies such as the FHA and VA. However, the program has never worked as insurance, because of adverse selection, it has never priced people out of living in risky areas by charging an appropriate premium, too few places are included in the must-insure category, premiums are artificially low." The lack of flood insurance can be detrimental to many homeowners who may discover only after the damage has been done that their standard insurance policies do not cover flooding. Flooding is defined by the National Flood Insurance Program as a general and temporary condition of partial or complete inundation of two or more acres of dry land area or two or more properties from: Overflow of inland waters and rapid accumulation or runoff of surface waters from any source, mudflows.
This can be brought on by landslides, earthquakes, or other natural disasters that influence flooding, but while a homeowner may, for example, have earthquake coverage, that coverage may not cover floods as a result of earthquakes. Few insurers in the US provide private market flood insurance coverage due to the hazard of flood being confined to a few areas; as a result, it is an unacceptable risk due to the inability to spread the risk to a wide enough population in order to absorb the potential catastrophic nature of the hazard. In response to this, the federal government created the National Flood Insurance Program in 1968; the National Association of Insurance Commissioners found that 33 percent of U. S. heads of household still hold the false belief that flood damage is covered by a standard homeowners policy. FEMA states that 50% of low flood zone risk borrowers think they are ineligible and cannot buy flood insurance. Anyone residing in a community participating in the NFIP can buy flood insurance renters.
However, unless one lives in a designated floodplain and is required under the terms of a mortgage to purchase flood insurance, flood insurance does not go into effect until 30 days after the policy is first purchased. Individuals who are eligible and who have mortgages on their homes are required by law to purchase a separate flood insurance policy through a private primary flood insurance company or through an insurance company that acts as a distributor for the National Flood Insurance Program. Flood insurance may be available for residents of 19,000 communities nationwide through the NFIP. Flood insurance may be available through private primary flood insurance carriers in any of the 19,000 communities participating in the NFIP as well as other communities that are not participating in the NFIP. In March 2016, TypTap Insurance became the first private market, admitted carrier in the state of Florida to offer non NFIP flood coverage to policyholders. After 2017 Hurricane Harvey, estimates of houses covered by flood insurance in the Texas resulting in over $30bn in property losses with only 40% of homes covered by flood insurance.
The British insurers require from clients living in Flood Risk Areas to flood-proof their homes or face much higher premiums and excesses. Due to the rarity of flooding in Canada, it was the only Group of Eight member state not to offer some form of flood insurance. In reaction to the 2013 Alberta floods, flood water protection offerings have been introduced as overland water protection or overland flood insurance
Chartered Insurance Institute
The Chartered Insurance Institute is a professional body for the insurance sector. The CII's purpose, as set out in its 1912 royal charter, is to'Secure and justify the confidence of the public' in its members and the insurance sector as a whole, it aims to do this through setting standards of integrity, technical competence and business capability. In February 2016 Sian Fisher joined the Chartered Insurance Institute as CEO, taking over Sandy Scott's 9 year tenure. In November 2016, she launched a Strategic Manifesto outlining a 5-year plan, the foundation of which remains to fulfil the Charter's purpose of building trust in insurance and its practice; the change programme is driven by four key core strategic themes The first Insurance Institute was established in Manchester on 14 March 1873 with the aim of providing an environment for the social exchange of knowledge and ideas on the subject of insurance, with a particular focus on fire insurance, given the number of textile manufacturers in the city.
The Insurance Institute of Manchester had a selective membership policy and required members to hold senior positions within the industry, which led to the creation of a Junior Insurance Institute in 1883 to provide education to those new to insurance. The second local institute to be formed was the Insurance and Actuarial Society of Glasgow founded in 1881, which held education as its main focus. Following that the institutes of Ireland, Birmingham, Bristol, Newcastle upon Tyne and Nottingham, were formed, though with varying names, e.g. Insurance Social and Musical Society of Bristol. There was a growing interest in the idea of a central institute which would bolster the work and profile of the existing institutes, so in March 1897 a conference of representatives from the 10 institutes was held in Manchester, it was decided that they should form an association called The Federation of Insurance Institutes of Great Britain and Ireland. At this conference it was proposed that an annual journal of papers on insurance should be produced, that the institutes should jointly offer examinations and certificates, that an insurance clerks’ orphanage should be established.
The responsibility for the Journal was assumed by the Birmingham and Glasgow institutes, while the Yorkshire institute and the Manchester association prepared the educational programme, proposing that the Federation should act only as an examining body while local institutes undertook the teaching. The Insurance Clerks’ Orphanage was established as an independent organisation in 1902, operating out of the offices of the London Salvage Corps. At the 1906 conference of the Federation it was decided that a royal charter should be sought and that the London Institute should act as a headquarters. In 1908, as a step towards gaining the charter, a constitution was agreed between the institutes and the name was changed to The Insurance Institute of Great Britain and Ireland; the royal charter was granted in 1912 and the Insurance Institute of Great Britain and Ireland became the Chartered Insurance Institute. At this time there were 21 local institutes in Great Britain and Ireland and 4 affiliated institutes from within the British Empire.
The Royal Charter incorporating the Chartered Insurance Institute was granted on 17 January 1912 by His Majesty King George the Fifth. Each royal charter, granted is unique in format and content as it is drawn up and contains the Bye-laws deemed relevant by the body to be incorporated. A new Supplemental Charter, replacing all former versions of the Charter, was granted by Queen Elizabeth the Second on 27 January 1987. Article 3 of the CII’s current Charter identifies the six "objects and purposes for which the Institute is constituted": To promote efficiency and improvement in the practice of insurance among persons engaged or employed in that activity, whether Members of the Institute or not, to render the conduct of such business more effective and professional, to secure and justify the confidence of the public and employers by the conduct of reliable tests of the competence of persons engaged or employed in insurance and the provisions of reliable assurances of their trustworthiness and to provide and maintain a central organisation for those purposes.
To seek to improve the professional status of Fellows and Associates and to promote the interests and advancement of the Members in general. As a chartered body, the Chartered Insurance Institute has the right to grant specific chartered titles. CII members must first request the grant for a new title at a general meeting of the membership; this is followed by a petition to the Privy Council. If the Privy Council deem the petition agreeable, a minister signs an order allowing the CII to incorporate the right to grant and award the new title; the change is duly inserted into the Institute’s Bye-laws. The CII has five chartered titles which may be conferred upon individuals in the profession depending upon their specialisation: Chartered Insurance Broker Chartered Insurer Chartere
Earthquake insurance is a form of property insurance that pays the policyholder in the event of an earthquake that causes damage to the property. Most ordinary homeowners insurance policies do not cover earthquake damage. Most earthquake insurance policies feature a high deductible, which makes this type of insurance useful if the entire home is destroyed, but not useful if the home is damaged. Rates depend on the probability of an earthquake loss. Rates may be cheaper for homes made of wood, which withstand earthquakes better than homes made of brick. In the past, earthquake loss was assessed using a collection of mass inventory data and was based on experts' opinions. Today it is estimated using a Damage Ratio, a ratio of the earthquake damage money amount to the total value of a building. Another method is the use of a computerized procedure for loss estimation; as with flood insurance or insurance on damage from a hurricane or other large-scale disasters, insurance companies must be careful when assigning this type of insurance, because an earthquake strong enough to destroy one home will destroy dozens of homes in the same area.
If one company has written insurance policies on a large number of homes in a particular city a devastating earthquake will drain all the company's resources. Insurance companies devote much effort toward risk management to avoid such cases. In the United States, insurance companies stop selling coverage for a few weeks after a sizeable earthquake has occurred; this is because damaging aftershocks can occur after the initial quake, it may be foreshock. Although aftershocks are smaller in magnitude, they deviate from the original epicenter. If an aftershock is closer to a populated area, it can cause much more damage than the initial quake. One such example is the 2011 Christchurch earthquake in New Zealand which killed 185 people following a much larger and more distant quake with no fatalities at all. Earthquake insurance has become a political issue in California, whose residents purchase more earthquake insurance than residents of any other state in the U. S. After the 1994 Northridge earthquake, nearly all insurance companies stopped writing homeowners' insurance policies altogether in the state, because under California law, companies offering homeowners' insurance must offer earthquake insurance.
The legislature created a "mini policy" that could be sold by any insurer to comply with the mandatory offer law: only earthquake loss due to structural damage need be covered, with a 15% deductible. Claims on personal property losses and "loss of use" are limited; the legislature created a quasi-public agency called the CEA California Earthquake Authority. Membership in the CEA by insurers is voluntary and member companies satisfy the mandatory offer law by selling the CEA mini policy. Premiums are paid to the insurer, pooled in the CEA to cover claims from homeowners with a CEA policy from member insurers; the state of California states that it does not back up CEA earthquake insurance, in the event that claims from a major earthquake were to drain all CEA funds, nor will it cover claims from non-CEA insurers if they were to become insolvent due to earthquake losses. There are 4,000 recorded earthquakes in Canada each year. Earthquake damage is not covered by a standard home insurance policy.
In the next 50 years, there is a 30% chance of a significant earthquake in British Columbia. The government of Japan created the "Japanese Earthquake Reinsurance" scheme in 1966, the scheme has been revised several times since. Homeowners may buy earthquake insurance from an insurance company as an optional rider to a fire insurance policy. Insurers enrolled in the JER scheme who have to pay earthquake claims to homeowners share the risk among themselves and the government, through the JER; the government pays a much larger proportion of the claims if a single earthquake causes aggregate damage of over about 1 trillion yen. The maximum payout in a single year to all JER insurance claim. New Zealand's Earthquake Commission is a Government-owned Crown entity which provides primary natural disaster insurance to the owners of residential properties in New Zealand. In addition to its insurance role, EQC undertakes research and provides training and information on disaster recovery. EQC was established in 1945 as the Earthquake and War Damage Commission, as part of the New Zealand Government, was intended to provide coverage for earthquakes as well as war damage.
Coverage was extended from earthquake and war damage to include other natural disasters such as natural landslips, volcanic eruptions, hydrothermal activity, tsunamis, with coverage for war damage being removed. For residential land and flood damage is covered. Cover extends over fire damage caused by any of these natural disasters. Earthquake insurance is compulsory. Earthquake Commission Earthquake engineering Earthquake simulation Seismic retrofit
Vehicle insurance is insurance for cars, trucks and other road vehicles. Its primary use is to provide financial protection against physical damage or bodily injury resulting from traffic collisions and against liability that could arise from incidents in a vehicle. Vehicle insurance may additionally offer financial protection against theft of the vehicle, against damage to the vehicle sustained from events other than traffic collisions, such as keying, weather or natural disasters, damage sustained by colliding with stationary objects; the specific terms of vehicle insurance vary with legal regulations in each region. Widespread use of the motor car began after the First World War in urban areas. Cars were fast and dangerous by that stage, yet there was still no compulsory form of car insurance anywhere in the world; this meant that injured victims would get any compensation in an accident, drivers faced considerable costs for damage to their car and property. A compulsory car insurance scheme was first introduced in the United Kingdom with the Road Traffic Act 1930.
This ensured that all vehicle owners and drivers had to be insured for their liability for injury or death to third parties whilst their vehicle was being used on a public road. Germany enacted similar legislation in 1939 called the "Act on the Implementation of Compulsory Insurance for Motor Vehicle Owners." In many jurisdictions, it is compulsory to have vehicle insurance before using or keeping a motor vehicle on public roads. Most jurisdictions relate insurance to the driver. Several jurisdictions have experimented with a "pay-as-you-drive" insurance plan which utilizes either a tracking device in the vehicle or vehicle diagnostics; this would address issues of uninsured motorists by providing additional options and charge based on the miles driven, which could theoretically increase the efficiency of the insurance, through streamlined collection. In Australia, every state has its own Compulsory Third Party insurance scheme. CTP covers only personal injury liability in a vehicle accident.
Comprehensive and Third Party Property Damage, with or without Fire and Theft insurance, are sold separately. Comprehensive insurance covers damages to the insured vehicle and property. Third Party Property Damage insurance covers damage to third-party property and vehicles, but not the insured vehicle. Third Party Property Damage with Fire and Theft insurance covers the insured vehicle against fire and theft as well as third-party property and vehicles. CTP insurance is paid as part of vehicle registration, it covers the vehicle owner and any person who drives the vehicle against claims for liability for death or injury to people caused by the fault of the vehicle owner or driver. CTP may include any kind of physical harm, bodily injuries and may cover the cost of all reasonable medical treatment for injuries received in the accident, loss of wages, cost of care services and, in some cases, compensation for pain and suffering; each state in Australia has a different scheme. Third Party property insurance or Comprehensive insurance covers the third party with the repairing cost of the vehicle, any property damage or medication expenses as a result of an accident by the insured.
They are not to be confused with Compulsory Third Party. In New South Wales, each vehicle must be insured, it is called a'greenslip,' because of its colour. There are six licensed CTP insurers in New South Wales. Suncorp holds licences for GIO and AAMI and Allianz holds Allianz and CIC Allianz licences; the remaining two licences are held by NRMA Insurance. APIA and Shannons and InsureMyRide insurance supply CTP insurance licensed by GIO. A provided scheme applies in the Australian Capital Territory through AAMI, APIA, GIO and NRMA. Vehicle owners pay for CTP as part of their vehicle registration. In Queensland, CTP is included in the registration fee for a vehicle. There is a choice of private insurer - Allianz, QBE, RACQ and Suncorp and price is government controlled. In South Australia, since July 2016, CTP is no longer provided by the Motor Accident Commission; the government has now licensed four private insurers - AAMI, Allianz, QBE and SGIC, to offer CTP insurance SA. The scheme allocates one provider for 3 years as part of vehicle registration.
After July 2019, vehicle owners can choose a different CTP insurer and new insurers may enter the market. There are three states. In Victoria, the Transport Accident Commission provides CTP through a levy in the vehicle registration fee, known as the TAC charge. A similar scheme exists in Tasmania through the Motor Accidents Insurance Board. A similar scheme applies in Western Australia, through the Insurance Commission of Western Australia. For all types of motor insurance policies, the limit of liability has been fixed by the law; the limits are too small to compensate. The limits as set by the Motor Vehicle Act of Bangladesh, are $240 for bodily injury; the limits are under review by the governmental bodies. Several Canadian provinces provide a public auto insurance system while in the rest of the country insurance is provided privately. Basic auto insurance is mandatory throughout Canada with each province's government determining which benefits are included as minimum required auto insurance cov
Insurance in the United States
Insurance in the United States refers to the market for risk in the United States, the world's largest insurance market by premium volume. Of the $4.640 trillion of gross premiums written worldwide in 2013, $1.274 trillion were written in the United States. Insurance is a contract in which the insurer agrees to compensate or indemnify another party for specified loss or damage to a specified thing from certain perils or risks in exchange for a fee. For example, a property insurance company may agree to bear the risk that a particular piece of property may suffer a specific type or types of damage or loss during a certain period of time in exchange for a fee from the policyholder who would otherwise be responsible for that damage or loss; that agreement takes the form of an insurance policy. The first insurance company in the United States underwrote fire insurance and was formed in Charleston, South Carolina, in 1735. In 1752, Benjamin Franklin helped form a mutual insurance company called the Philadelphia Contributionship, the nation's oldest insurance carrier still in operation.
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; the first stock insurance company formed in the United States was the Insurance Company of North America in 1792. Massachusetts enacted the first state law requiring insurance companies to maintain adequate reserves in 1837. Formal regulation of the insurance industry began in earnest when the first state commissioner of insurance was appointed in New Hampshire in 1851. In 1859, the State of New York appointed its own commissioner of insurance and created a state insurance department to move towards more comprehensive regulation of insurance at the state level. Insurance and the insurance industry has grown and developed ever since. Insurance companies were, in large part, prohibited from writing more than one line of insurance until laws began to permit multi-line charters in the 1950s.
From an industry dominated by small, single-line mutual companies and member societies, the business of insurance has grown towards multi-line, multi-state and multi-national insurance conglomerates and holding companies. The insurance industry in the United States was regulated exclusively by the individual state governments; the first state commissioner of insurance was appointed in New Hampshire in 1851 and the state-based insurance regulatory system grew as as the insurance industry itself. Prior to this period, insurance was regulated by corporate charter, state statutory law and de facto regulation by the courts in judicial decisions. Under the state-based insurance regulation system, each state operates independently to regulate their own insurance markets through a state department of insurance or division of insurance. Stretching back as far as the Paul v. Virginia case in 1869, challenges to the state-based insurance regulatory system have risen from various groups, both within and without the insurance industry.
The state regulatory system has been described as cumbersome, redundant and costly. The United States Supreme Court found in the 1944 case of United States v. South-Eastern Underwriters Association that the business of insurance was subject to federal regulation under the Commerce Clause of the U. S. Constitution; the United States Congress, responded immediately with the McCarran-Ferguson Act in 1945. The McCarran-Ferguson Act provides that the regulation of the business of insurance by the state governments is in the public interest. Further, the Act states that no federal law should be construed to invalidate, impair or supersede any law enacted by any state government for the purpose of regulating the business of insurance, unless the federal law relates to the business of insurance. A wave of insurance company insolvencies in the 1980s sparked a renewed interest in federal insurance regulation, including new legislation for a dual state and federal system of insurance solvency regulation.
In response, the National Association of Insurance Commissioners adopted several model reforms for state insurance regulation, including risk-based capital requirements, financial regulation accreditation standards and an initiative to codify accounting principles. As more and more states enacted versions of these model reforms into law, the pressure for federal reform of insurance regulation waned. However, there are still significant differences between states in their systems of insurance regulation, the cost of compliance with those systems is borne by insureds in the form of higher premiums. McKinsey & Company estimated in 2009 that the U. S. insurance industry incurs about $13 billion annually in unnecessary regulatory costs under the state-based regulatory system. The NAIC acts as a forum for the creation of model regulations; each state decides whether to pass each NAIC model law or regulation, each state may make changes in the enactment process, but the models are albeit somewhat irregularly, adopted.
The NAIC acts at the national level to advance laws and policies supported by state insurance regulators. NAIC model acts and regulations provide some degree of uniformity between states, but these models do not have the force of law and have no effect unless they are adopted by a state, they are, used as guides by most states, some states adopt them with little or no change. There is a long-running debate within and
Aviation insurance is insurance coverage geared to the operation of aircraft and the risks involved in aviation. Aviation insurance policies are distinctly different from those for other areas of transportation and tend to incorporate aviation terminology, as well as terminology and clauses specific to aviation insurance. Aviation Insurance was first introduced in the early years of the 20th century; the first-ever aviation insurance policy was written by Lloyd's of London in 1911. The company stopped writing aviation policies in 1912 after bad weather at an air meet caused crashes, losses, on those first policies; the first aviation policies were underwritten by the marine insurance underwriting community. The first specialist aviation insurers emerged in 1924. In 1929, the Warsaw Convention was signed; the convention was an agreement to establish terms and limitations of liability for carriage by air. Realising that there should be a specialist industry sector, the International Union of Marine Insurance first set up an aviation committee and in 1933 created the International Union of Aviation Insurers, made up of eight European aviation insurance companies and pools.
The London insurance market is still the largest single centre for aviation insurance. The market is made up of the traditional Lloyd's of London syndicates and numerous other traditional insurance markets. Throughout the rest of the world there are national markets established in various countries, each dependent on the aviation activity within each country; the United States has a large percentage of the world's general aviation fleet and has a large established market. According to the 2014 report from GAMA, there are 362,000 general aviation aircraft worldwide, 199,000 are based in the United States. No single insurer has the resources to retain a risk the size of a major airline, or a substantial proportion of such a risk; the catastrophic nature of aviation insurance can be measured in the number of losses that have cost insurers hundreds of millions of dollars. Most airlines arrange "fleet policies" to cover all aircraft they operate. Insurance fraud were the motives for suicidal passengers to crash Pacific Air Lines Flight 773, Continental Airlines Flight 11 and National Airlines Flight 2511.
Aviation insurance is divided into several types of insurance coverage available. This coverage referred to as third party liability covers aircraft owners for damage that their aircraft does to third party property, such as houses, crops, airport facilities and other aircraft struck in a collision, it does not provide coverage for damage to the insured aircraft itself or coverage for passengers injured on the insured aircraft. After an accident an insurance company will compensate victims for their losses, but if a settlement can not be reached the case is taken to court to decide liability and the amount of damages. Public liability insurance is mandatory in most countries and is purchased in specified total amounts per incident, such as $1,000,000 or $5,000,000. Passenger liability protects passengers riding in the accident aircraft who are killed. In many countries this coverage is mandatory only for large aircraft. Coverage is sold on a "per-seat" basis, with a specified limit for each passenger seat.
CSL coverage combines public liability and passenger liability coverage into a single coverage with a single overall limit per accident. This type of coverage provides more flexibility in paying claims for liability if passengers are injured, but little damage is done to third party property on the ground; this provides coverage for the insured aircraft against damage when it is on the ground and not in motion. This would provide protection for the aircraft for such events as fire, vandalism, mudslides, animal damage, wind or hailstorms, hangar collapse or for uninsured vehicles or aircraft striking the aircraft; the amount of coverage may be a blue book value or an agreed value, set when the policy was purchased. The use of the insurance term "hull" to refer to the insured aircraft betrays the origins of aviation insurance in marine insurance. Most hull insurance includes a deductible to discourage nuisance claims; this coverage is similar to ground risk hull insurance not in motion, but provides coverage while the aircraft is taxiing, but not while taking off or landing.
Coverage ceases at the start of the take-off roll and is in force only once the aircraft has completed its subsequent landing. Due to disputes between aircraft owners and insurance companies about whether the accident aircraft was taxiing or attempting to take-off, this type of coverage has been discontinued by many insurance companies. In-flight coverage protects an insured aircraft against damage during all phases of flight and ground operation, including while parked or stored, it is more expensive than not-in-motion coverage, since most aircraft are damaged while in motion
Life insurance is a contract between an insurance policy holder and an insurer or assurer, where the insurer promises to pay a designated beneficiary a sum of money in exchange for a premium, upon the death of an insured person. Depending on the contract, other events such as terminal illness or critical illness can trigger payment; the policy holder pays a premium, either or as one lump sum. Other expenses, such as funeral expenses, can be included in the benefits. Life policies are legal contracts and the terms of the contract describe the limitations of the insured events. Specific exclusions are written into the contract to limit the liability of the insurer. Modern life insurance bears some similarity to the asset management industry and life insurers have diversified their products into retirement products such as annuities. Life-based contracts tend to fall into two major categories: Protection policies – designed to provide a benefit a lump sum payment, in the event of a specified occurrence.
A common form—more common in years past—of a protection policy design is term insurance. Investment policies – the main objective of these policies is to facilitate the growth of capital by regular or single premiums. Common forms are whole life, universal life, variable life policies. An early form of life insurance dates to Ancient Rome; the first company to offer life insurance in modern times was the Amicable Society for a Perpetual Assurance Office, founded in London in 1706 by William Talbot and Sir Thomas Allen. Each member made an annual payment per share on one to three shares with consideration to age of the members being twelve to fifty-five. At the end of the year a portion of the "amicable contribution" was divided among the wives and children of deceased members, in proportion to the number of shares the heirs owned; the Amicable Society started with 2000 members. The first life table was written by Edmund Halley in 1693, but it was only in the 1750s that the necessary mathematical and statistical tools were in place for the development of modern life insurance.
James Dodson, a mathematician and actuary, tried to establish a new company aimed at offsetting the risks of long term life assurance policies, after being refused admission to the Amicable Life Assurance Society because of his advanced age. He was unsuccessful in his attempts at procuring a charter from the government, his disciple, Edward Rowe Mores, was able to establish the Society for Equitable Assurances on Lives and Survivorship in 1762. It was the world's first mutual insurer and it pioneered age based premiums based on mortality rate laying "the framework for scientific insurance practice and development" and "the basis of modern life assurance upon which all life assurance schemes were subsequently based". Mores gave the name actuary to the chief official—the earliest known reference to the position as a business concern; the first modern actuary was William Morgan, who served from 1775 to 1830. In 1776 the Society carried out the first actuarial valuation of liabilities and subsequently distributed the first reversionary bonus and interim bonus among its members.
It used regular valuations to balance competing interests. The Society sought to treat its members equitably and the Directors tried to ensure that policyholders received a fair return on their investments. Premiums were regulated according to age, anybody could be admitted regardless of their state of health and other circumstances; the sale of life insurance in the U. S. began in the 1760s. The Presbyterian Synods in Philadelphia and New York City created the Corporation for Relief of Poor and Distressed Widows and Children of Presbyterian Ministers in 1759. Between 1787 and 1837 more than two dozen life insurance companies were started, but fewer than half a dozen survived. In the 1870s, military officers banded together to found both the Army and the Navy Mutual Aid Association, inspired by the plight of widows and orphans left stranded in the West after the Battle of the Little Big Horn, of the families of U. S. sailors. The person responsible for making payments for a policy is the policy owner, while the insured is the person whose death will trigger payment of the death benefit.
The owner and insured may not be the same person. For example, if Joe buys a policy on his own life, he is both the insured, but if Jane, his wife, buys a policy on Joe's life, she is the owner and he is the insured. The policy owner is the guarantor and he will be the person to pay for the policy; the insured is a participant in the contract, but not a party to it. The beneficiary receives policy proceeds upon the insured person's death; the owner designates the beneficiary. The owner can change the beneficiary. If a policy has an irrevocable beneficiary, any beneficiary changes, policy assignments, or cash value borrowing would require the agreement of the original beneficiary. In cases where the policy owner is not the insured, insurance companies have sought to limit policy purchases to those with an insurable interest in the CQV. For life insurance policies, close family members and business partners will be found to have an insurable interest; the insurable interest requirement demon