...WORKING OF DISTRIBUTION CHANNELS BROKERS Insurance brokers act as an intermediary between clients and insurance companies. Clients may be either individuals or commercial businesses and organisations. They use their in-depth knowledge of risks and the insurance market to find and arrange suitable insurance policies and arrange cover. They act in the interest of their clients and offer products from more than one insurer to ensure that their clients get the best deal. Retail insurance brokers usually arrange insurance policies for individuals or companies and deal directly with them. Policies range from motor, house, travel or pet cover for individuals or property to employer's liability and public and product liability insurance. Commercial insurance brokers deal with high value and more complex insurance cover in areas such as marine, aviation, oil and gas and financial risks. AGENTS Insurance agents, who may be referred to as insurance sales agents, help clients choose insurance policies that suit their needs. Clients include individuals and families as well as businesses. Captive agents work for an insurance company, and only sell that company's products. They are one ones who connect with the customers emotionally. They are a good mediator between the insurer and the insured. They tell about the latest taste of the consumer in the market to the company. They generally work under (DO) development officer, who works under sales manager. There are many agents under one DO....
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.................... 1-2 2. The Functions and Responsibilities of Monetary and Non-Monetary Institutions ............................................................................................. 1-6 3. The Functions and Responsibilities of Non-Bank Financial Intermediaries...................................................................................... 1-16 4. Other Institutions / Bodies.................................................................. 1-30 5. Summary and Conclusion .................................................................. 1-34 Practice Questions ...................................................................................... 1-35 Learning Objectives What you should achieve after completing this chapter: • Understand the importance of the Malaysian financial system; • Be able to apply the relevant statutory and regulatory provisions governing the Malaysian banking system; • Appreciate the functions and responsibilities of monetary and non-monetary institutions, together with non-bank financial intermediaries; • Gain knowledge of the role of Bank Negara Malaysia; and • Understand the scope of the regulatory framework within the Malaysian financial system. © Institut Bank-Bank Malaysia 1-2 CCP-FSPC The Malaysian Financial System 1. 1.1 The Banking System Brief history of the Malaysian financial system 1.1.1 Evolution Trade has been central to the evolution of the financial system. Therefore, it is good to examine when...
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...overseeing reforms in Pakistan Customs. The project was initiated in February 2002. Since its inception CARE has carried out research and development work to enhance the efficiency of the department. Cost and Freight (CFR) for Import Export Pakistan Cost and Freight (CFR) means that the seller pays for transportation to the Port of Loading (POL), loading and freight . The buyer pays for the insurance and transportation of the goods from the Port of Discharge (POD) to his factory . The passing of risk occurs when the goods pass the ship ’s rail at the port of shipment which means that this term cannot be used for airfreight or land transport and also is inappropriate for most containerised sea shipments. Cost, Insurance and Freight (CIF) for Import Export Pakistan Cost, Insurance and Freight (CIF) is a common term in a sales contract that may be encountered in international trading when ocean transport is used. When a price is quoted CIF, it means that the selling price includes the cost of the goods, the freight or transport costs and also the cost of marine insurance. Carriage and Insurance Paid To (CIP) for Import Export Pakistan The passing of risk occurs when the goods have been delivered into the custody of the first carrier. This means that the...
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...What are Banks? Banks are the largest lending institutions through out the globe; the basic purpose of banks is to secure money of the people/organizations and to lend the money to the people/organizations as a creditor/lender. When they start returning money back to the bank either at once or in portions take interest on it. This interest is the prime source of the banks profit; interest is also known as “Usury”. The History of Banks The history of banks is old, but it is not exactly in that form which today we have, as we developed the way of banking and other related features are also changed. Initially people store money in the royal palaces and temples, at that time there were no concept of money they secure their grains and other commodities into it, the reason behind this they feel that these places are very secure and the chance of robbery or theft is very less as compare to secure in there own houses. Banking Today Today banks are playing very essential role in our country economy as well as in global economy; they are giving loans to the organization and individuals, trying to make humans life easier and developed. Without bank we cannot even think to live, for example how do you feel if someone says that I have one million or ten million dollar save in my cupboard locker, obviously you can laugh over the person wisdom? Now banks are providing greater facilities and constantly improving their standards day by day, Stronger security, locker facilities (where...
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...Deposit-taking institutions that accept and manage deposits and make loans, including banks, building societies, credit unions, trust companies, and mortgage loan companies; • Insurance companies and pension funds; • Brokers, underwriters and investment funds. Functions of a Financial Institution: The functions of Financial Institutions are: • Financial institutions provide service as intermediaries of the capital and debt markets. • They are responsible for transferring funds from investors to companies in need of those funds. • Financial institutions facilitate the flow of money through the economy. To do so, savings a risk brought to provide funds for loans. Such is the primary means for depository institutions to develop revenue. Should the yield curve become inverse, firms in this arena will offer additional fee-generating services including securities underwriting, and pre. Regulation Structures of Financial Institutions: Financial institutions in most countries operate in a heavily regulated environment as they are critical parts of countries' economies. Regulation structures differ in each country, but typically involve prudential regulation as well as consumer protection and market stability. Some countries have one consolidated agency that regulates all financial institutions while other have separate agencies for different types of institutions such as banks, insurance companies and brokers....
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...“Now that’s Progressive.” Progressive insurance is a company that provides insurance for cars, motorcycles, boats, commercial vehicles, RVs and home insurance through select companies. According to Progressive.com, Progressive insurance has been around since 1937 when Peter Lewis started the first drive-in claims insurance office. Today Progressive has grown to 25,000 employees in more than 450 offices throughout the United States. However, one iconic employee has revolutionized the way we look at insurance and her name is Flo. When Progressive customers see Flo, they look at her fun, delightful personality and make a connection that buying Progressive insurance can be an easy and fun thing to do. When looking at this Progressive insurance...
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...THE UNIVERSITY OF NOTTINGHAM Centre for Risk & Insurance Studies Privatization of the Insurance Market in India: From the British Raj to Monopoly Raj to Swaraj Tapen Sinha CRIS Discussion Paper Series – 2002.X Privatization of the Insurance Market in India: From the British Raj to Monopoly Raj to Swaraj by Tapen Sinha, Ph.D. ING Comercial America Chair Professor Instituto Tecnológico Autónomo de México Mexico City, Mexico and Professor, School of Business University of Nottingham, UK tapen@itam.mx, tapen@nottingham.ac.uk Abstract We examine the institution of insurance in India. Over the past century, Indian insurance industry has gone through big changes. It started as a fully private system with no restriction on foreign participation. After the independence, the industry went to the other extreme. It became a state-owned monopoly. In 1991, when rapid changes took place in many parts of the Indian economy, nothing happened to the institutional structure of insurance: it remained a monopoly. Only in 1999, a new legislation came into effect signaling a change in the insurance industry structure. We examine what might happen in the future when the domestic private insurance companies are allowed to compete with some foreign participation. Because of the time dependence of insurance contracts, it is highly unlikely that these erstwhile monopolies are going to disappear. Acknowledgement: I would like to thank Rebecca Benedict and Samik Dasgupta for their input in...
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...PRIVATE SECTOR DEVELOPMENT UNIT South Asia Region Document of the World Bank TABLE OF CONTENTS EXECUTIVE SUMMARY I. INTRODUCTION 2 India’s Rural Finance Landscape 4 What are the financial needs of the rural poor? 4 Rural finance service providers 5 II. ACCESS TO RURAL FINANCE IN INDIA: THE EVIDENCE 8 Supply Side Indicators of Access to Finance 8 Access to Rural Finance: Evidence from the Demand Side 12 Access to savings/deposit accounts 14 Payments Services – Limited use, high cash economy 15 Access to Credit 15 Access to Insurance 17 The Importance of Informal Finance 17 III. WHAT CONSTRAINS ACCESS TO FINANCE FOR INDIA’S RURAL POOR? 19 Why Banks Are Reluctant To Lend to Rural Clients 19 Lack of credit information. 20 The tyranny of collateral 20 Weak legal framework and enforcement issues. 21 Government policy 21 Why Do Small, Rural Borrowers Find Rural Banks Unattractive? 26 Absence of flexible products and services 26 Transactions costs 26 Collateral 27 IV. RECENT EFFORTS IN INDIA TO IMPROVE RURAL ACCESS TO FINANCE: THE ROLE OF FORMAL—INFORMAL LINKAGES AND NEW PRODUCTS 28 SHG-bank Linkage Approach: Linking Commercial Banks to Grassroots Borrowers 28 How Effective Has SHG Bank Linkage Been in Targeting the Poor? 30 Impact on vulnerability of poor households 32 Some Lessons from SHG Bank Linkage 33 Key concerns: Limited outreach and scale of lending and issues...
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...institutions are the major sources of providing loans and other credit facilities to the clients. Apart from the banking financial institutions, there are a number of specialized financial institutions in India that have been incorporated for a definite purpose. These institutions include the insurance companies, the housing finance companies, mutual funds, merchant banks, credit reporting and debt collection companies and many more. Apart from these, there are several other financial institutions that are existing in the country. These are the stock brokers and sub-brokers, portfolio managers, investment advisors, underwriters, foreign institutional investors and many more. They are divided in two categories. The first type refers to the regulatory institutions and the second type refers to the intermediaries. * The regulators are assigned with the job of governing all the divisions of the Indian financial system. These regulatory institutions are responsible for maintaining the transparency and the national interest in the operations of the institutions under their supervision. The regulatory bodies of the financial institutions in India are as follows: 1. Reserve Bank of India (RBI) 2. Securities and Exchange Board of India (SEBI)...
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...THE UNIVERSITY OF NOTTINGHAM Centre for Risk & Insurance Studies Privatization of the Insurance Market in India: From the British Raj to Monopoly Raj to Swaraj Tapen Sinha CRIS Discussion Paper Series – 2002.X Privatization of the Insurance Market in India: From the British Raj to Monopoly Raj to Swaraj by Tapen Sinha, Ph.D. ING Comercial America Chair Professor Instituto Tecnológico Autónomo de México Mexico City, Mexico and Professor, School of Business University of Nottingham, UK tapen@itam.mx, tapen@nottingham.ac.uk Abstract We examine the institution of insurance in India. Over the past century, Indian insurance industry has gone through big changes. It started as a fully private system with no restriction on foreign participation. After the independence, the industry went to the other extreme. It became a state-owned monopoly. In 1991, when rapid changes took place in many parts of the Indian economy, nothing happened to the institutional structure of insurance: it remained a monopoly. Only in 1999, a new legislation came into effect signaling a change in the insurance industry structure. We examine what might happen in the future when the domestic private insurance companies are allowed to compete with some foreign participation. Because of the time dependence of insurance contracts, it is highly unlikely that these erstwhile monopolies are going to disappear. Acknowledgement: I would like to thank Rebecca Benedict and Samik Dasgupta...
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...THE UNIVERSITY OF NOTTINGHAM Centre for Risk & Insurance Studies Privatization of the Insurance Market in India: From the British Raj to Monopoly Raj to Swaraj Tapen Sinha CRIS Discussion Paper Series – 2002.X Privatization of the Insurance Market in India: From the British Raj to Monopoly Raj to Swaraj by Tapen Sinha, Ph.D. ING Comercial America Chair Professor Instituto Tecnológico Autónomo de México Mexico City, Mexico and Professor, School of Business University of Nottingham, UK tapen@itam.mx, tapen@nottingham.ac.uk Abstract We examine the institution of insurance in India. Over the past century, Indian insurance industry has gone through big changes. It started as a fully private system with no restriction on foreign participation. After the independence, the industry went to the other extreme. It became a state-owned monopoly. In 1991, when rapid changes took place in many parts of the Indian economy, nothing happened to the institutional structure of insurance: it remained a monopoly. Only in 1999, a new legislation came into effect signaling a change in the insurance industry structure. We examine what might happen in the future when the domestic private insurance companies are allowed to compete with some foreign participation. Because of the time dependence of insurance contracts, it is highly unlikely that these erstwhile monopolies are going to disappear. Acknowledgement: I would like to thank Rebecca Benedict and Samik Dasgupta for their input in this article...
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...what should be done to minimize the risk of repetition if not of identical events then at least of something similar? To say that these questions remain to be satisfactorily answered is not the same as saying that there has been a shortage of attempts. Standard operating procedure starts by rounding up the usual suspects: unethical mortgage brokers, greedy bankers, naïve homeowners, and illinformed investors. Lists focusing less on individuals than mechanisms emphasize agency problems between brokers and banks, the originate-and-distribute model, excessive leverage and short-term funding, the perverse incentives created by executive compensation practices, conflicts of interest within the rating agencies, and permissive monetary policies. These long lists of causes lead to correspondingly long lists of reforms: regulate mortgage brokers, rating agencies, and executive compensation; force banks to keep a participation in any securities they originate; require banks to hold more capital; and revisit whether monetary policy should respond to credit booms and asset bubbles. This of course is only a very incomplete summary of a vast and rapidly-growing literature. The limitations of this standard operating procedure will be apparent. However successful it is at pinpointing the immediate causes of the crisis, it fails to identify the deeper conditions that allowed those...
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...laws to protect the information. To understand the full reasoning behind the need for this act we can look at what happened during the great depression. At that time, there were banks participating in brokerage and investment services without any oversight or regulation. When the Great Depression happened the impact it had on society, individuals, families, the economy, and the nation itself was of significant magnitude. Many people, companies, and businessmen lost everything they owned, their lives savings gone forever; banks closed and went bankrupt. Some men took their own lives over the monumental financial loss. In 1933 Congress passed the Glass-Steagall Act that prohibited commercial banks from taking these additional risks with security transactions. This helped protect people who kept their lives savings and earnings with the bank. Decades later while struggling during economic turns, financial leaders believed that if businesses could collaborate it would give them profitable divisions during downturns’ and therefore escape major losses and closures. “The Financial Services Modernization Act of 1999, also known as the Gramm-Leach-Bililey Act (GLBA), removed some of the last restrictions of the Glass-Steagall Act of 1933.” Helping deregulate the financial industry allowed companies to combine their operations and devote their resources in each other’s businesses. By doing it this way they are competitive and it increases...
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...Investment banks provide advice on mergers and acquisitions and are involved in financing industrial corporations through buying shares and selling them in relatively small lots to investors. In the Bangladesh context, merchant banking includes all institutions that combine the functions of both development banking and investment banking. The securities and exchange commission, based on SRO No. 59 of 24 April 1996, and a decision taken by it on 17 August 1997, invited letters of intent from 14 institutions for registration of merchant banks. Prior to this decision, 7 institutions submitted such letters of intent and SEC gave registration to a total of 19.Investment banking companies in Bangladesh are of two types: open-ended and closed-ended. The open-ended ones, generally referred to as mutual funds, repurchase shares in any quantity as and when holders offer them for sales. Thus, the amount of shares of the open-ended investment companies in market changes continually in response to public demand. Closed-ended investment companies sell only a specific number of ownership shares. An investor wanting to acquire shares of a closed-ended investment company must find another investor who wishes to sell. Investment companies do not take part in the transaction. In addition to selling equity shares, closed-ended companies issue a variety of debt and equity securities including preferred stock, regular and convertible bonds, and stock warrants for raising funds.Investment banks act as intermediaries...
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...TABLE OF CONTENTS CHAPTERS CHAPTER 1 – Abstract 3 CHAPTER 2 – Introduction 4 CHAPTER 3 – Body Paragraphs 4 CHAPTER 4 – Discussion 5 CHAPTER 5 – Conclusion 8 REFERENCES 8 Sub-Prime Mortgage Crisis: What Went Wrong? Abstract: The crisis of subprime mortgages has become a huge problem in the U.S. financial industry in the last few years and has affected the global financial market too. The smaller mortgage companies fell one by one until Bear Stearns also fell; then the “Titanic” of the mortgage world – Lehman Brothers – also fell. The ripple effect of the fall of Lehman Brothers coupled with the near death of AIG, nearly crashed the financial market and sent shock waves through the global markets. The effect of the crisis is still being felt in the housing market with no clear resolution in sight. This essay emphasizes the caution of this crisis to our economy. I. Introduction The mortgage crisis in 2008 didn’t have to happen but it did. Why did it happen? At a first glance, it seems it came out of nowhere but a deeper analysis shows that a series of events such as the explosion of sub-prime mortgages on the market and the easy accessibility of credit set the stage for the meltdown. II. Body Paragraphs A. In 2000 when President Clinton was in office, he signed the Commodity Futures Modernization Act which led to the unregulated trading of the Credit Default Swaps (CDS). B. Sub-prime originators invented the mortgage to sell...
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