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Insurance term paper

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"Virtually all insurance companies in the United States are incorporated business entities that possess the distinctive "corporate" attribute of limited liability. Originally, under British and American law a corporation or "limited liability company" could be created only by a special act of the parliament or legislature, which granted to the company a legal "personality" separate from that of its shareholder " owners, so that the debts and other obligations of the company were solely its own, and not enforceable against the shareholders. This status was embodied in a "charter" which became the legal document underlying the corporation's existence. Nowadays legislative charters are rare, and private citizens can create corporations with limited liability, for the purpose of engaging in almost any lawful business enterprise, simply by following the incorporation procedure and filing requirements contained in the general corporation law of a given state. Ordinarily that procedure consists of filing articles of incorporation with the Secretary of State, and paying a nominal incorporation tax or fee, such as $100. There is usually no discretion on the part of the Secretary of State to deny or withhold the corporate status, unless it appears that the corporation is being formed for some purpose other than a "lawful business," or that the corporate name is misleading, or too similar to that of another corporation already in existence. There are generally no requirements as to the amount or kinds of assets or capital the new corporation must have or maintain, and no restrictions on who can be shareholders, directors, or officers. By contrast, an insurance company cannot ordinarily be formed or organized in any meaningful way under a general corporation law."
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"The employers who developed unemployment insurance plans were also sensitive to the apparently increasing gap between society's haves and have-nots - in particular, the growing impersonalization of employer-employee relations. They sought, in addition to steady production, increased earnings, a stable labor force, and the open shop, to create a renewed sense of community, they said, in order to counteract the process of social fragmentation that seemed to accompany the rise of big business. This explains in part their opposition to financiers, bankers, and absentee executives who, they believed, had been responsible for the separation of ownership from management and of management from production. It also accounts for their emphasis on stock distribution to their employees, profit sharing, and other measures to give management and employees a continuing interest in the operation of the firm. And though they seldom attempted to devise a program of social change, or even carefully spelled out their thoughts on unemployment, their vision of a stable industrial society appeared piecemeal in their statements of the 1920's, and later in the early Depression years formed the basis for a more ambitious program with the same ultimate purpose - a productive, smoothly operating economy. The statistics of the company plans do not suggest the extent of the problems encountered during the Depression by the firms which had adopted them. An authoritative survey of 1932 reported that "even in cases where comparatively restricted benefits are paid... the depression has put such a strain on the funds that in most instances they have been maintained only with the greatest difficulty."
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"Los Angeles insurance status was predicted by experience with an earthquake, perceived risk, and the presence of children under age 18 in the household. In San Bernardino, the model included perceived risk and income level. Overall, the variables that most consistently discriminated between the insured and the uninsured were perceived risk, and income or home value. Those who perceive themselves to be at greater risk are more likely to purchase earthquake insurance. In addition, those with higher levels of income or higher home values are also more likely to purchase insurance. Variables that consistently do not enter into the logistic regression equations and do not distinguish the insured from the uninsured are levels of objective risk (distance from an active surface fault trace or location within a Special Studies Zone), recent experience with an earthquake (personal acquaintance with a person whose property has been damaged by an earthquake or personal experience with a frightening earthquake within the past two years), as well as certain demographic variables (gender, percentage of equity in the home, presence of persons over age 65 in the household, or ethnicity). These equations are comparable to those calculated for the 1990 respondents. The variable that most consistently discriminated the insured from the uninsured respondents in 1993 was perceived risk, although other variables were statistically significant in individual cases (damage from the Loma Prieta earthquake in Contra Costa County, and home value and age of respondent in Los Angeles County)."
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