...faced by insurance companies is whether they should sacrifice the benefit of the minority in order to achieve the best possible outcome for the majority. The moral principle of utilitarianism may provide justification for why insurer chooses to charge different premiums for Aboriginal people. However, those who believe more in deontology will argue that the maximum benefit achieved for everyone under the utilitarianism ethical theory is produced at an unjust cost (Santa Clara University 2014). Reasons and benefits of discrimination based on Aboriginal status While the general public views premium discrimination is an inequitable practice conducted by the insurance company, actuaries often see the meaning of equality in a different way. Actuarial equality is established on the basis of risk and fairness. The main...
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...-The property and life insurance underwriter is usually considered the gatekeeper for their insurance company. They make sure that new and existing insured’s meet the insurance company's eligibility requirements. Their ability to assess risk, properly price coverage, and weed out ineligible applications is central to an insurance company's ability to thrive. Underwriters work for insurance companies and are typically located at the company's headquarters or a regional branch office. Underwriting is typically a desk job with a standard 40-hour work week, although overtime may be required as determined by each underwriting project. Evening and weekend hours are not uncommon. The median salary for underwriters is $52,350 with the highest 10% earning more than $92,340. The underwriter's job is one that is both meticulous and highly-specialized. Most insurance companies prefer applicant’s who have at least two or more years of related experience in the insurance field. The applicant should hold either a CPCU, CLU, or ARM certifications. Another asset to the applicant is a four-year degree in either business, insurance, or related fields. Working with computers and technology is a vital part of underwriting. Computer software systems are used to analyze and rate insurance applications, make recommendations based on risk and adjust premium rates according to this risk. -Actuaries are statisticians who use their skills to develop pricing models for various insurance risks. ...
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...Carol R. Blaine Kent State University Mission / Purpose The Salem Campus of Kent State University recognizes the dignity and worth of all human beings, believes post-secondary education should be available to all who can benefit from it, and accepts responsibility for offering educational programs and supportive services responsive to the needs of its community. Consistent with this responsibility, the mission of the Insurance Studies degree program is to prepare individuals for productive and progressively successful employment in the insurance industry, one of the Ohio's top employers at nearly 200,000 jobs statewide. Goals and Student Learning Outcomes/Objectives, with Any Associations and Related Measures, Targets, Findings, and Action Plans G 1:Prepare Individuals for Career Success in Insurance Industry Prepare traditional and non-traditional students to enter the insurance business world with: • the knowledge and understanding gained through a broad-based liberal arts education, • the specific knowledge and skill sets associated with a thorough understanding of risk management and insurance, and • true respect for the role these disciplines play within our economic system. SLO 1:Achieve Liberal Arts, Risk Management and Insurance Comprehension Both in terms of liberal arts competencies, such as writing, mathematics, science, and communication, and business-specific knowledge, such as management, finance and operations, ensure program...
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...Edited by Foxit Reader Copyright(C) by Foxit Software Company,2005-2007 For Evaluation Only. Fisher College of Business Working Paper Series Charles A. Dice Center for Research in Financial Economics Risk Management Failures: What Are They and When Do They Happen? René M. Stulz, Department of Finance, The Ohio State University, NBER, and ECGI Dice Center WP 2008-18 Fisher College of Business WP 2008-03-017 October 2008 This paper can be downloaded without charge from: http://www.ssrn.com/abstract=1278073 An index to the working paper in the Fisher College of Business Working Paper Series is located at: http://www.ssrn.com/link/Fisher-College-of-Business.html fisher.osu.edu Risk management failures: What are they and when do they happen? René Stulz* October 2008 Abstract A large loss is not evidence of a risk management failure because a large loss can happen even if risk management is flawless. I provide a typology of risk management failures and show how various types of risk management failures occur. Because of the limitations of past data in assessing the probability and the implications of a financial crisis, I conclude that financial institutions should use scenarios for credible financial crisis threats even if they perceive the probability of such events to be extremely small. * Reese Chair of Banking and Monetary Economics, Fisher College of Business, Ohio State University, NBER, and ECGI. I am grateful for assistance from Jérôme...
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...Total Plan Risk: Integrating Assets into a Consistent Risk Framework Dan diBartolomeo Northfield Information Services, Inc. FactSet PMW Conference, Atlanta , November 2002 Do We Want to Measure Risk or Manage It? § Measuring risk is an exercise in forecasting § Managing risk requires decision making § Managing risk well requires rational decision making based on an understanding of utility theory What Risks are of Concern to Us? § Asset/liability mismatch risks § Asset class volatility § Style and active management risks How about Multiple Portfolios? § The firm-wide (plan-wide) risk problem w Multiple portfolios with multiple benchmarks w Across countries, across asset classes w Mixture of liquid, and illiquid assets, derivatives w Need to integrate liabilities Approach Number #1 § Build factor risk model for each portfolio separately and aggregate the risks § Arises from the existing stock of models § Advantage is that you are probably using the same models at the portfolio level so you have internal consistency § Problems w Not intuitive, as you can’t add exposures w Lots of factors may lead to covariance matrix which is not positive definite w Use high frequency data or an EM algorithm w Inclusion of liabilities or illiquid assets Approach #2 § Proxy each asset class with indices and then use full covariance. Adapted from trading desk systems § Advantage is simplicity. Works well for asset classes where instruments within the class are homogeneous...
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...Reserve Bank of India Occasional Papers Vol. 25, No. 1, 2 and 3, Summer, Monsoon and Winter 2004 Liquidity Adjustment in Value at Risk (VaR) Model: Evidence from the Indian Debt Market Sunando Roy* Conventional Value at Risk models are severely constrained while dealing with liquidity risk. This inevitably leads to an underestimation of overall risk and consequently misapplication of capital for the safety of financial institutions. Standard Value at Risk (VaR) model assumes that any quantity of securities can be traded without influencing market prices. In reality, most markets are less than perfectly liquid and many securities cannot be traded with ease in markets. This is especially true for emerging market economies where the process of financial sector reform and deepening is currently taking place. Despite episodic evidences of liquidity crisis in the Indian financial markets, risks associated with market illiquidity have not been effectively incorporated into the VaR models. In the face of sudden and persisting off-market prices of some of the securities in their portfolio, the Indian financial organizations often find it difficult to offload these securities without booking significant trading losses. As a consequence, several securities exhibit very low levels of turnover in the secondary segment of the debt market. Also, in most cases, measures of market risk fail to capture the costs of carrying illiquid assets in their portfolio. This becomes a constraining factor...
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...you will be working for 'the big bad insurance company' no matter how ethical your employer is. Your friends and family will complain to you about any and every insurance situation they encounter. You will have the pleasure of dealing with people who appear to sincerely believe that members of the insurance industry have the ability to grow money on trees and get a sick and twisted pleasure out of keeping that secret from the rest of society, and denying claims for no good reason. People hate insurance companies more than they hate lawyers!!! Do not underestimate the difficulty of exams. People who majored in math routinely fail the first exam multiple times. If you are not a good test taker you are going to struggle mightily with the actuarial exams. The earlier exams are multiple choice (do not make the mistake of thinking that 'multiple choice' = 'easy') and more mathematical/financial in nature. The later exams are very different: written answer exams dealing with lots of regulations and syllabi that sometimes cover as much as 2,800 pages of reading material - with less than 6 months to prepare. That said, people pass exams all the time - more and more every year in fact. The work can be rewarding. You are helping to develop/maintain a product that will help people when they need help the most - at the worst moment(s) of their lives. You will...
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...Drawal of foreign exchange for ceratin categories of transactions included in three schedules as following : 1. Schedule I : expressively prohibited activities for foreign exchange transactions 2. Schedule II : activities for which approval from concerned department or ministry of government of india is required 3. Schedule III : activities for which prior approval of reserve bank of india is required for remittance exceeding the specific limits. Note : drawal of forex also includes use of ICC, IDC , ATM cards Purpose and code | Description | Limits | Documents required | Travel for medical treatment – S0304 | Foreign exchange medical treatment abroad . a person who has fallen sick after proceeding abroad may also be released forex. | USD 100000 If amount is exceeding , estimate from the doctor in india or hospital /doctor abroad is required to be submitted | Self declaration (application cum declaration form A-2 ) | Business travel S0301 | Attending a conference or specialized training or for maintenance expenses of a patient going abroad for medical treatment or check up abroad or for accompanying as attendant to a paient going abroad | | | Travel for pilgrimage S0303 | | | | Travel for education S0305 | | | | Other travel including holy trips and payment for settling international credit card transactions S0306 | | | | Life insurance premium except term insurance S0601 | | | | Other general insurance premium including reinsurance...
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...The insurance segment of the bank also expose to certain risks. Furthermore, the risks exposed are more unique and difficult to manage as the industry does not have many players and facilities needed. Below are the risks that associate with the insurance segment to Maybank. 1) Capital and solvency With the current world economy situation, Maybank is exposed to short and long term prudential risks. The premium from its customer needs to be place and investment in certain product that meet the investment time horizon. The macroeconomic changes affected insurers in different ways. Its can see that where the life sector’s capital levels came under pressure and the non-life sector, where reserve releases continued to support results, cushioning the impact of investment and underwriting losses. The bank will also expose to new requirement policies impose by the regulator that can affect its investment activities. 2) Life insurance segment In the life sector, the greatest challenges have been for those most exposed to falls in asset values, widening bond spreads and low interest rates. Even though the issues are always highlighted, but still a careful attention is needed for capital management and planning that eyeing on the downturn in the economy. For example monitoring the solvency position, exercise care in the valuation of assets and liabilities with they are appropriately matched by duration. Others that is needed to be highlighted is the guarantees and options must...
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...financing. For example, the Andrew hurricane resulted in a large loss for the whole insurance industry; especially it had very deep and harmful influence on USAA Company. In order to understand its exposure to catastrophe losses, insurance companies use models to quantify losses and help them to determine their financial requirements and policies. The USAA had engaged AIR to help them. The cost of protection was determined by rate on line (ROL). In order to decrease the catastrophe loss, in traditionally, insurance companies chose to reinsure themselves against the loss. The reinsurance has different layers of protection, and the source of reinsurance had private and public types. The price of reinsurance is determined by ROL and actuarial probability, but the capacity of reinsurance industry cannot meet insurance companies’ demand because of several reasons....
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...INTRODUCTION INSURANCE SECTOR IN INDIA The Insurance sector in India governed by Insurance Act, 1938, the Life Insurance Corporation Act, 1956 and General Insurance Business (Nationalisation) Act, 1972, Insurance Regulatory and Development Authority (IRDA) Act, 1999 and other related Acts. With such a large population and the untapped market area of this population Insurance happens to be a very big opportunity in India. Today it stands as a business growing at the rate of 15-20 per cent annually. Together with banking services, it adds about 7 per cent to the country's GDP .In spite of all this growth the statistics of the penetration of the insurance in the country is very poor. Nearly 80% of Indian populations are without Life insurance cover and the Health insurance. This is an indicator that growth potential for the insurance sector is immense in India. It was due to this immense growth that the regulations were introduced in the insurance sector and in continuation "Malhotra Committee" was constituted by the government in 1993 to examine the various aspects of the industry. The key element of the reform process was Participation of overseas insurance companies with 26% capital. Creating a more efficient and competitive financial system suitable for the requirements of the economy was the main idea behind this reform. Since then the insurance industry has gone through many sea changes .The competition LIC started facing from these companies were threatening to the...
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...EC 223 Economics of the Canadian Banking and Financial System Instructor: Sharif F. Khan Department of Economics Wilfrid Laurier University Fall 2010 Suggested Solutions to Assignment 4 (Optional) Total Marks: 135 Read each part of the question very carefully. Show all the steps of your calculations to get full marks. B1. [5 marks] Which should have the highest risk premium on its interest rates, a corporate bond with an S&P BBB rating or a corporate bond with a C rating? Why? The bond with a C rating should have a higher interest rate because it has a higher default risk, which reduces its demand and raises its interest rate relative to that on the BBB bond. B2. [5 marks] Risk premiums on corporate bonds are usually anti-cyclical; that is, they decrease during business cycle expansions and increase during recessions. Why is this so? Explain. During business cycle booms, fewer corporations go bankrupt and there is less default risk on corporate bonds, which lowers their risk premium. Similarly, during recessions, default risk on corporate bonds increases and their risk premium increases. The risk premium on corporate bonds is thus anti-cyclical, rising during recessions and falling during booms. B3. [5 marks] Using economic analysis predict what will happen to interest rates on a corporation’s bonds if the federal guarantees today that it will pay creditors if the corporation goes bankrupt in the future. What will happen to the interest rates on Canada...
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...Business Analysis and Valuation: Lecture 1 Assessment: * Group Assessment 20% * Team Project 25% * Presentation 5% * Exam 50% * Spark Assessment 0% 4 pieces of assignment that makes up 20% of the assessment. * 1. The time value of money * Fisher (1930): a dollar today is worth more than a dollar tomorrow * 2. Diversification * Markowitz (1952) and Sharpe (1964): if an investor wants to maximum returns with least risk, diversification is the answer * Tells us how assets are priced * 3. Arbitrage * Modigliani and Miller (1958): if two assets give the same cash flow, they should have the same price * Law of one price Investing techniques : * Intuitive investing * Rely on intuition and hunches: no analysis * Self deception; ignores ability to check intuition * Passive investing * Accept market price as value: no analysis * Price is what you pay, value is what you get Fundamental investing: challenge market prices * Active investing Activism requires analysis: an opportunity to find mispriced investments * Defensive investing Prudence requires analysis: a defense against paying the wrong price (or selling at the wrong price) * Beta technologies: * Calculates risk measures: Betas * Calculates the normal return for risk * Ignores any arbitrage opportunities Example: Capital Asset Pricing Model (CAPM); Fama and...
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...Ramifications Participation Contracts Stientje Charette HCR/230 4/26/14 Myrnell Martin Ramifications Participation Contracts Participation contracts can represent financial opportunities in many ways for providers as these contracts define what the providers’ responsibilities are within the medical relationship. Though one may argue that providers can only benefit from participation contracts when the insurer does not require write offs however, there are other financial opportunities such as increased revenue through advertisement and a gain of new patients associated with the insurers. When a provider is associated with a certain plan, this association can is made known through television commercials, radio announcements, and word of mouth regarding the practice’s participation list, which can increase the provider’s revenue and number of patients. Though there are several financial opportunities available for provider who chooses to participate with certain insurers, the providers are also at risk of losing money or settling for less revenue because the insurers will more likely than not pay less than the provider’s scheduled fees. Prior to joining any plan a provider has the choice to review several plans before making a decision. This allows the provider to choose a plan that meets his or her practice and financial needs. As with any arrangement there are positive and negative ramifications associated with it and discounted fee-for-service arrangements are no different...
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...Scheme of Insurance Ombudsman – a protection to Policy holders Subject: Fundamentals Of Insurance Submitted to: Mr. Rammohan Professor Masters in law of financial Services and capital markets Submitted by: K.Samhitha Roll no-FS10-017 Ist year,Ist semester Masters in law of financial Services and capital markets NALSAR University of law Institute of Insurance & Risk Management Table of contents 1) Introduction ...
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