...been several cases where the regulator has fined UK insurers for mis-selling insurance policies. Explain why such mis-selling has taken place. Will the new rule that insurers cannot pay commission on the sale of life insurance policies providing investment benefits mean that such policies will no longer be mis-sold?” For decades the insurance industry has had several issues regarding the mis-selling of insurance policies. “Mis-selling is the sale of unsuitable products resulting in customers being left in a disadvantageous position”(Wyman, 2011, P.4), and aptly stated by the Financial Conduct Authority (FCA) “financial services must be sold to you in a manner that is “fair, clear and not misleading” (www.moneyadviceservice.org.uk). There are numerous examples of mis-selling scandals such as endowment mortgages and Payment Protection Insurance (PPI) to name a select few, which shall be analysed throughout. Further to this, the reasons as to why mis-selling occurred in the first place will be discussed as well as whether, due to new legislation regarding the prohibition of commission payment, these policies will continue to be mis-sold. In the views of the economist Friedrich Hayek, due to complex taxes and the use of jargon that is alien to investors, there will always be asymmetric information and thus never a perfect market and thus resulting in the occurrence of mis-selling (Adams, 2005. P.207). Mis-selling has proved costly for UK insurers, brokers and banks, which has further...
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...3rd Prize Winner – Shri Raghav Jain, Birla Institute of Management Technology Mis-selling in Insurance and how to prevent it 1. Mis-selling at a glance By definition, mis-selling means selling a product by giving a wrong picture of a product, it may include, giving wrong information, giving unrealistic information, not giving full information about the product. You must have heard an insured, saying – but this was not I asked for. And, your agent accusing, but then I did mentioned all the details upfront, didn’t I? Insurance is a business of selling commitments and here is a case where this was broken. Unfortunately the product was mis-sold. Mis-selling is not unique to insurance and happens in various lines of businesses (loans, credit cards, investment products, pharmacy, hospitality etc.), but Insurance being an intangible service – the principle of Caveat emptor prevails in insurance. Often, the intermediary does not fully explain the policy details to the customer. Or the buyer (insured) is in a hurry and doesn't care to check the fine print. There have been cases reported where the agent deliberately misguided the buyer. Discussing an example of mis-selling: A person aged 54, having a handsome amount of savings with him and having no dependents (no kids and wife has passed away a few years ago), has no need of a term insurance (death benefit) but the agent may sell him this policy. A common practice that is seen in this regard is where the agent sells the policy promising...
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...3rd Prize Winner – Shri Raghav Jain, Birla Institute of Management Technology Mis-selling in Insurance and how to prevent it 1. Mis-selling at a glance By definition, mis-selling means selling a product by giving a wrong picture of a product, it may include, giving wrong information, giving unrealistic information, not giving full information about the product. You must have heard an insured, saying – but this was not I asked for. And, your agent accusing, but then I did mentioned all the details upfront, didn’t I? Insurance is a business of selling commitments and here is a case where this was broken. Unfortunately the product was mis-sold. Mis-selling is not unique to insurance and happens in various lines of businesses (loans, credit cards, investment products, pharmacy, hospitality etc.), but Insurance being an intangible service – the principle of Caveat emptor prevails in insurance. Often, the intermediary does not fully explain the policy details to the customer. Or the buyer (insured) is in a hurry and doesn't care to check the fine print. There have been cases reported where the agent deliberately misguided the buyer. Discussing an example of mis-selling: A person aged 54, having a handsome amount of savings with him and having no dependents (no kids and wife has passed away a few years ago), has no need of a term insurance (death benefit) but the agent may sell him this policy. A common practice that is seen in this regard is where the agent sells the policy promising...
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...main business model has also diversified from simple distribution agreement to joint ventures and integrated financial services provisions. There is no doubt that bancassurance has been a great success in Asia over the past decade. However, from the perspective of an industry practitioner, I would like to draw on three important yet inter-related issues regarding the future of bancassurance. First, the economics of bancassurance to insurance companies.Second, the prospects of non-life distribution through banks.Third, the role bancassurance in closing the region's protection gap. Let me cover the first issue. In many markets, particularly emerging Asian markets like China and India, insurers have successfully leveraged of bancassurance to maintain or expand their market share in the early phase of market liberalization and deregulation. It is, on the other hand, well-known that insurers complaint all the time about the high distribution commission associated with bank channels. There are other constraints like higher lapse ratio and difficulties in selling complicated (higher-margin) products. As a result, we are already see in some cases insurers reverting to focus on traditional agents. In any case, we observed that insurers in many regional markets are shifting their focus from market share to profitability. This could bode unfavourably to bancassurance given its high commission, lower retention rate, and lower profit margin. The second issue I want to cover is non-life...
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...portfolio. In case of non-discretionary services, the RBI allows banks to work through a separately identifiable department or division (SIDD) or a subsidiary. Such a subsidiary or SIDD would require to be registered with market regulator Securities and Exchange Board of India (SEBI) and comply with SEBI guidelines on providing these services, including the code of conduct, if any. There should be an arm’s length relationship between the bank and the subsidiary if the latter is offering wealth management services, the central bank said. RBI has also stated that bank employees involved in marketing or sales of third-party products should not be given any direct incentives in cash or non-cash form linked to their performance to avoid mis-selling of products. While the new regulations, along with a complaint redressal mechanism, will...
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...PEPSI COLA [pic] Introduction: Pepsi Cola started in the January 1898, from a small Drug store in the city of North Carolina. The owner of the Drug store, Mr. Caleb Bradham, prepared a drink, which the customers called "the Bred Drink". Bred registered this drink with the name of Pepsi Cola in 1903. Then he started his own production at Marco level and established his own company. The business expanded and this drink got fame time. In 1909 this company reached to 24 states of America with more than 250 dealers. The very first packing of Pepsi was in 16.5 ounce. In 1932 Pepsi cola has introduced its new packing in 12 ounce. In 1950 Pepsi Cola has started its new Advertising Campaign with the name of "Refresh without Filling". It also changed the chemical formula and decreased its sweetness and calories. With the efforts of the Sales & Marketing Department, Pepsi got so much fame that it established new plants at a rate of thirty per annum. In 1985 the design of the bottle has been changed after 20 years. And a new and attractive packaging has been offered with two new flavor i.e., Teem & Mirinda. Today Pepsi is available in more than 160 countries of the world including Soviet Union & China. HISTORY OF PEPSI COLA: 2001 Pepsi puts "a little twist on a great thing," introducing lemon-flavored Pepsi Twist and Diet Pepsi Twist. The product launch marks the return to lemon-flavored...
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...Affordable Care Act, the insurance companies can no longer drop the coverage if one becomes sick, bill individual into bankruptcy because of an annual or lifetime limit, and they will not be able to discriminate against anyone with a pre existing condition. Most of the Medicare and Medicaid community suffers do to the imbalance in our healthcare system this situation affects the quality of care and places a financial strain on the government, individuals and families, employers and employees, and public and private providers. Most of the Medicare beneficiaries have to enroll in the MA program to help them to succeed and receive the adequate treatments without MA to help the disadvantaged seniors on the island, Puerto Rico's elderly citizens will be forced to turn to Mi Salud in larger numbers. Although Mi Salud is scheduled to receive an average of $690 million annually during the next five years, the widening deficit in MA funding is likely to create a net negative impact on federal funding for healthcare in Puerto Rico. The Health care Policies and Issues Ethical concerns and issues The Affordable Care Act (ACA) policies are intended to give patients more access to health care without any restrictions as in the past that were imposed by the Health Care Industry and at a reasonable cost capping the administrative costs to the industry to no more than 20% of what the insurance costs. These restrictions were based on how much a person paid for health insurance, the...
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...Starbucks Brian Duffey 12/9/2012 MIS 642 Starbucks is a very well known company nowadays. They are very popular and not only bring coffee to people with a plethora of locations, but also have been able to create atmospheres at each location where people can go to get work done, unwind, and even socialize. However, this was not always the case. Back in 1971, Starbucks first opened its doors in the state of Seattle. At this time, they were simply a basic coffeehouse with no intention of turning into a powerful chain. However, eleven years later, Howard Schultz took over as director of retail operations, which is when the expansion first began in the form of selling coffee directly to restaurants and espresso bars. Shortly after this, Starbucks began testing a coffeehouse culture as seen in Milan. This was a success and helped to spur the beginning of Starbucks explosion, first expanding into Chicago and Vancouver, with a total of nearly eighteen thousand stores as of this previous summer. While Starbucks began as a simple place to get coffee, nowadays it is anything but. Stores now offer free Wi-Fi for its customers, and the menu ranges far beyond simple coffee from juices and solid meals, to CDs and other goods that a coffeehouse wouldn’t necessarily be expected to sell. Yet, it all works and has come to be known as synonymous with Starbucks brand and image. When Starbucks first began, there wasn’t much need for business intelligence. Other than attracting...
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...Wei Kevin Luk Kevin.luk@stmartin.edu AIG’s “LOSs Reserve” accounting Scandal 2005 AIG’s “LOSs Reserve” accounting Scandal 2005 Introduction AIG, American International Group Inc., is one of the top multinational insurance corporations. AIG, with asset of 556 billion, provides insurance service for more than 150 different countries and it has over 630, 000 employees over the world. Even though AIG is such a giant corporation, it has encountered financial problems in the early 2000s. Under financial pressure and a lack of internal control, AIG have committed frauds resulting in several scandals. One of the accounting scandals was disclosed during 2005 which involved a material mis-statement due to false transactions during 2000. This scandal set to prelude leading the downfall of AIG in 2008. In this paper, I will analyze the cause, the transactions and finally effects of the scandal. The Accounting Scandal The Players The CEO of AIG was Maurice “Hank” Greenberg. Greenberg joined AIG in 1962 and led AIG for thirty eight years until his retirement in March 2005. Greenberg was not only the CEO, but also the chairman of the board of AIG. AIG also have several subsidiaries, which include National Union Fire Insurance Company of Pittsburgh (NUFIC) and Hartford Steam Boiler Inspection (HSB). Their financial information are consolidated in AIG’s financial statements. The scandal also involves another corporation General Re Corporation. General Re is...
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...Considerations: consumer responses to benefits, usage occasions and brands * target markets-pg.6- the part of the qualified available market the company decides to pursue * * Customer satisfaction- a person's feelings of pleasure of disappointment that result from comparing a product's perceived performance to expectations. …Consumer value triad: quality, service, price * * Company orientation: pg. 8-10- * Production-consumers prefer products that are widely available and inexpensive * Product-consumers favor products offering the most quality, performance, or innovative features. Downfall= “better-mousetrap” fallacy * Selling- if left alone, ppl wont buy enough of the organizations products, so the organization must undertake an aggressive selling effort. Ex: unsought goods-insurance, cemetery plots * Marketing- consumer oriented, sense and respond. Find the right products for your customers. * Holistic marketing: pg.10-12 based on the development, design, and implementation of marketing programs, processes, and activities that recognize their breadth and interdependencies. * Internal marketing-is the task of hiring, training, and motivating able employees who want to serve customers well * Integrated- occurs when the marketer devises marketing activities and assembles marketing program to create, communicate, and deliver value for consumers such that "the whole is greater than the sum of its parts." Using...
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... Sammy Osei MPA/Healthcare Management Health Improvement and Cost Reduction Plan (HICREP) 2 INTRODUCTION Medicare, an entitlement program that provides healthcare benefits to seniors over 65 years old, patients with disability and those suffering from end stage renal diseases, contributes enormously to the rising cost of care in the United States. Key cost drivers within Medicare are the leading chronic diseases and its risk factors. This program plan institutes preventative educational and training programs to help minimize and alleviate ailments associated with major chronic diseases and its risk factors. The plan identifies demographic groups affected by leading chronic diseases, specifies target stakeholders, and justifies how their contribution impacts the program. This plan outlines program case statement detailing the mission, goals, objectives, organizational history and structure as well as plans devised for fundraising. The plan does a thorough problem analysis to identify unmet needs necessitating this intervention plan. This P Plan presents a financial statement that describes the tax status of the P-Plan and reports a year’s budget estimate with relevant financial policies that justifies and strategically integrates budget with objectives, goals and mission to ensure fiscal accountability and responsibility. A human resource structure is illustrated in this P-Plan detailing list of positions and job descriptions with corresponding conflict of interest methodologies...
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...to produce, how much to produce and how to distribute what has been produced determine the type of economic system that particular country practises. 1. MARKET ECONOMY (also called FREE ENTERPRISE ECONOMIES or CAPITALIST ECONOMY) 2. CENTRALLY – PLANNED or CONTROLLED ECONOMY 3. MIXED ECONOMY 1. MARKET ECONOMY in comparison to 2. PLANNED ECONOMY e.g. USA, Japan Private firms or individuals own means of production. They make choices about: o What to produce o How to produce o For whom to produce - What to produce is answered by consumers according their demand for goods & services - How to produce is answered by the businessmen. They will choose the production method, which reduces their costs to reach the higher profit. - For whom to produce – firms produce goods & services which consumers are willing and able to buy. Role of government 1. To pass laws to protect businessmen & consumers 2. To issue money 3. To provide certain services – police 4. To prevent firms from dominating The market and to restrict the power Of trade unions 5. Repair and maintain state properties Advantages: Goods and services go where they are most in demand and free market responds quickly to people’s wants + wide variety of G&S No need for and overriding authority to determine allocation of goods&services Producers and consumers are free to make changes to suit their aims Competition and the opportunity to make large profits, greater efficiency, innovation Disadvantages: It mis-allocates resources(to...
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...and actual demand c. The difference between the standard forecast demand and the evaluated forecast demand d. Ratio of standard forecast demand and the evaluated forecast demand 4. For forecasting the analyzers plot the demand data on a time scale, study the plot and then look for the consistent patterns. Now what does the high noise mean to these patterns a. Many of the point lie away from the pattern b. Most of the points lie close to the pattern c. All the points lie on the pattern d. None 5. Payback period is a. The length of time after which the production starts b. The length of time after which the selling starts c. The length of time required to recover the investment d. The length of time for which firm bears replacement of the good. 6. Salvage value is the income from a. Selling an asset b. Buying an asset c. Bargaining in selling d. Price raised stock 7. On total factor basis ‘Productivity’ is given by x/y, where ‘y’ is a. Labor + Capital +Materials b. Labor + Capital + Materials + Energy c. Capital d. Capital + Materials 8. Economic efficiency is given by a. Input /output b. Input /100 c. (Output-input)/input d. Output /input 9. This implies an effective management that ensures an...
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...MIS 671 CASE STUDY 2 AN INFORMATION SYSTEM SECURITY BREACH AT FIRST FREEDOM CREDIT UNION Introduction The case is about an information system security breach at First Freedom Credit Union, a financial institution in the Southern part of the United States. First Choice Credit Union (FFCU has seven branches located throughout the metropolitan area. One branch is located at the FFFCU headquarters. Most employees at the FFCU has at least 5 years of service. The credit card information of 200,000 members has been stolen. This is highly sensitive information and it puts the members at critical risk. The security breach might cause loss of finances and other disturbances. Frank Sanders, the CEO of FFCU called a conference with all the executives of the FFCU. The nature of the conference was to discuss a security breach. A security breach that affected card member credit card numbers and personal information. Frank was uncertain if the breach had affected all members’ information or a portion. However, Frank was aware that fraudulent activity had already taken place on some accounts. Due to the fraudulent activity that had transpired Frank had canceled all current credit cards and was sending out replacement cards. Jaime O’ Dell, the chief information officer (CIO) was appalled because nothing had ever happened like this since his tenure with the company. Jaime felt the firewall being used was the top of the line, virus protested was updated daily and an intrusion detection...
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...Business Plan 1-Up Pub 3614 Washtenaw Avenue Ann Arbor, MI 48104 Telephone: (724)555-1234 Fax: (724)555-5678 Presentation Date: December 15, 2014 Presented To: Frank Jefferies – Chief Loan Officer DFCU Financial 400 Town Center Drive Dearborn, MI 48126 Contents Executive Summary 3 Mission Statement 5 Company Description 5 Market Plan for 1-Up Pub 7 Products and Services 7 Market Analysis 7 The Competition 8 Target Market and Customer Profile 8 Pricing of Products and Services 9 Sales Promotions and Advertising 10 Selling Approach and Distribution Channels 10 Financial Plan 11 Operating Plan 12 Management Team 12 Organizational Chart 12 Facilities and Improvements 13 Employee Needs 14 Recruitment Strategy 15 Risk Management Plan 15 Appendix A - References 17 Appendix B – Opening Day Balance Sheet 18 Appendix C – First Year’s Expenses 20 Appendix D – Pricing 22 Executive Summary After a long, hard day at work most people have only what to relax and unwind. For some people this includes getting a drink, watch a sporting event on television, or perhaps play a game with friends. What if you could go to one place to do any of these things? Look no further than 1-Up Pub; a combination gaming center, pub, and coffee shop. Grab a drink, grab a game, and make some friends, or you can just relax and watch a local sporting event on one of our flat screen televisions. 1-Up Pub is a unique destination like none that have...
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