Insurance Plans: Regulation and Changes in the Legislation (Coursework Sample)

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Question 1
Regulation and changes in the legislation
Legislation adds to the burden of responsibility that insurance companies have to deal with. The firms factor in the effect of existing or new legislations when setting the amounts that their clients have to pay in terms of premiums (Torry 6). When such laws are reenacted, the firms review and adjust their premium rates accordingly.
Trends in claims
The patterns of claims in terms of numbers and frequency affect the insurance companies’ perspective when considering premiums (Torry 8). Such patterns may be affected by climatic changes, change in consumer behavior and inflation of claims.
Austerity and Recession
A difficult economic environment means fewer resources at people’s disposal (Torry 10). The result may be social unrest, less training, repair, and maintenance. Such events have a direct bearing on the determination of insurance premiums by the insurance companies.
Financial
Investment returns made on money from premiums fluctuates depending on the prevailing interest rates in the economy (Torry 12). The higher the interest rates, the higher the figures set by the insurance firms.
Question 2
Insurance use a number of data sets to set insurance policy premiums for their clients. One of them is bank statements that show the client’s financial transactions especially in the case of a business. A second data set type is the forecasting estimates. Another type of data set is research data available from third parties regarding trends in particular segments of the market that are a target of the underwriters. Another source of information is the credit history of the clients mostly obtained from the credit referencing bureau.
Question 3
In the absence of...