Insurance and Risk Companies and individuals purchase I

Insurance is a successful business because it allows insured parties to pool the risk that any one of them faces and thus pay a smaller amount to cover that risk (Shuker 7A). Insurance providers estimate the potential risk of a proposed policy and spread that risk among all of the insured parties. The lower the risk and amount insured, the lower the premium. Similarly, the greater the number of insured parties, the lower the premiums that each pays. In this way, automobile insurance is less for an older mid-priced car than for a new expensive car. Business insurance

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his conflict, and the problem of which rules apply to what companies, can create more problems than are solved, according to many in the insurance industry. Even some in the banking industry have expressed doubt that this is a long-term strategy for success (Lonkevich 4). This is not to say that all insurance companies favor greater regulation of the industry. Indeed, some favor deregulation of the industry to provide them with greater market opportunities. These companies typically support the formation of a selfregulatory organization based on the National Association of Securities Dealers as a model. This organization would be subject to limited oversight by a federal agency and would serve as a licensing and information processing group. Companies also see some benefit to deregulating commercial insurance, with an emphasis on having the federal government providing oversight of the process (Lonkevich 4). In 1996, efforts to provide a comprehensive natural disaster insurance bill failed as Congress was unable to agree on key provisions for reform. In 1995, efforts were made to create a federal Natural Disaster Insurance Corporation which would have provided primary insurance and reinsurance coverage, but the plan was a
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Approximate Word count = 3444
Approximate Pages = 14 (250 words per page)

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