However, perhaps the most interesting fact about Lloyds of London is that it is not an insurer nor does it issue policies. Rather, Lloyds of London is an association of members who write insurance for their own accounts. The New York Stock Exchange bears the same relationship to stock purchases as Lloyds bears to the purchase of insurance.
Like the New York Stock Exchange, Lloyds provides quarters for its members as well as procedures for business transactions. Though neither organization engages in trade, each provide payday online loan Indiana facilities and rules that govern how its members will pursue trade. In addition, Lloyds maintains worldwide underwriting information and a complete record of losses. It also aids in loss settlements and supervises salvage and repairs throughout the world.
At Lloyds, an insurance transaction begins when a proposal is placed before the underwriting members, or their agents, by a licensed broker. The broker prepares the policy and submits it to the Policy Signing Office where the policy is examined. If the policy conforms to agreed-upon rules, it is submitted to the underwriters. Those underwriters who wish to participate in the policy affix their signatures or underwrite the risk. American Lloyds associations operate under the same principles and methods as Lloyds of London.
Insurers Financial Status
Changing economic conditions and highly publicized failures of financial institutions (from savings and loan companies to insurance companies) have focused much attention on the financial status of private insurers. Independent rating services provide ratings consumers can use to measure the status of an insurance company and compare it to others.
The two most popular rating services are A.M. Best Company and Standard and Poors. The A.M. Best Company looks at profitability, leverage, and liquidity and assigns ratings from A++ (Superior) to C (Fair) and below. Standard and Poors focuses on the claims paying ability of an insurer and offers ratings from AAA (Superior) to D (Insurers placed under an order of liquidation).
In most cases, insurance companies pay a fee to be rated by a rating service. Other rating services include Moodys Investors Service (measuring financial strength), and Duff and Phelps (measuring claims paying ability and managerial soundness). In addition to private rating services the National Association of Insurance Commissioners measures company performance and prepares analytical reports as part of the Insurance Regulatory Information System (IRIS). Agents have access to IRIS ratios, which serve as indicators of a companys financial condition in various areas.
Life Insurance Policy Provisions
It may surprise people that many insurance agents have never read the required policy provisions that are contained in every policy that they sell.
It is important that you realize that policy provisions are in fact contractual provisions and govern what the policyowner can and cannot do with the policy you have sold them.
Ownership Clause
The owner of a life insurance policy can be the applicant, the insured, or the beneficiary. In most cases, the applicant and insured are the same person.
Under the ownership clause, the policyowner possesses all contractual rights in the policy while the insured is still alive. These rights include the selection of a settlement option, naming and changing the beneficiary designation, election of dividend options, and other rights. These contractual rights typically can be exercised without the beneficiarys consent.
In addition, the ownership clause provides for a change in ownership. The policyowner can designate a new owner by filling out an appropriate form with the company. The insurer may require that the life insurance policy be endorsed to show the name of the new owner.
