Non - Banking Financial

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The req. of Tech. structure & info. security systems for hosting providers

Insurance’s importance is reflected in the services it delivers to countries, individuals, and economic and commercial establishments. The key benefits of insurance are:

• Insurance provides security and peace of mind by assuaging anxiety and fear that we, as individuals and capital owners, may harbor. Its existence acts as a guarantee for securing claims (cash compensation) for damages resulting from the realization of certain risks.

• It allows individuals and families to restore the financial position they have prior to the occurrence of loss, thus maintaining the same living standards without seeking help from a third party.

• Compensation provides enterprises with the means to continue their business, and, consequently, keep jobs for their staff, and go on providing commodities for consumers, thus ensuring economic stability for both individuals and enterprises.
• The insurance industry is deemed a source of finance for investment projects as insurance companies invest premiums until needed in the future. Undoubtedly, these investments play a pivotal role in economic growth and financing socio-economic development plans.

• Insurance is considered the basis of commercial credit as it provides insurance for credit, which promotes expansion in borrowing and installment-based sales. And it ensures that borrowers and sellers get their rights in full in case the debtor or the purchaser dies. It also guarantees for the debtor payment of his remaining debt if he dies before completing payment, which relieves his heirs from the debt payment burden.

• Insurance contributes to developing the means of protection and prevention for the purpose of reducing the frequency rate of incident occurrence or downsizing expected loss. Insurance companies conduct research and studies and engage safety specialists for introducing and developing such means and putting forward recommendations for alleviating damages.

• Insurance premiums are a significant part of international trade transactions, taking the shape of invisible imports and exports that many countries depend on as part of their exports. Moreover, they generate huge amounts of money for countries in the form of insurance and reinsurance premiums.

• Insurance provides great services difficult to do without, such as professional liability coverage for physicians, consultants etc.

Mistakes you may make when dealing with insurance companies

1. Not checking if the company, its branch, or the insurance broker you deal with has an operating licence from the Financial Regulatory Authority (FRA) to conduct the business.
Consequent risk
Exposure to fraudulent business schemes by companies which are not subject to the Authority’s supervision, thus leading to the loss of your money without compensation.
Proper action
Make sure the company or its branch has an operating licence from the Authority. You can do this by:
• Contacting FRA by dialing 19053.
• Requesting company officials to have a look at the licence and get a copy thereof.
• Accessing the website of the Authority (www.fra.gov.eg). 

2. Not reading the policy’s articles well before signing.
Consequent risk
The client will not know his rights vis-à-vis the company as well as his obligations, which may arise disputes with the company.
Proper action
You have to read the policy’s articles well to know your rights and obligations vis-à-vis the company.

3. Lack of accuracy and credibility of information provided by the client when filling in the insurance applications as related to the insured object, potential risks involved in insurance of properties and liabilities.
Consequent risk
Inaccurate assessment of the volume of covered risks, and failure to determine a proper price for the value of risk and, consequently, lack of true coverage of risks that the client needs insurance coverage for.
Proper action
When filling in the insurance application, you must provide information and data about the insured object in a fully accurate and honest manner so that you can get an insurance coverage which is sufficient and true for the insurance object.

4. Failure to fill in correct data in the statements signed by clients about their health conditions under life insurance.
Consequent risk

As a result, insurance companies will refuse to pay insurance amounts set out in policies after realization of risks, thus giving rise to numerous problems.
Proper action
Full, bona fide cooperation when giving data about your health condition and signing acknowledgements submitted to you to guarantee your insurance rights.

5. A client wishes to reduce insurance prices against rise in volume and nature of risks he may be exposed to.
Consequent risk

Insurance companies would not abide by the proper price against the insured high risks, thus creating a harmful competition in the insurance market.
Proper action
When you select an insurance company, make sure your selection criterion is based on the insurance service delivered by the insurance company, from the time the policy is issued all the way to the disbursement of the insurance amount.

6. Failure to pay insurance premiums for polices at agreed upon times.
Consequent risk

The decline of collected premiums, increase of allocations for doubtful premiums, and lack of liquidity with insurance companies, thus leading to refusal to pay compensation when accidents occur to clients.
Proper action
Make sure you pay insurance premiums in a timely manner so that you may not be penalized with cancellation of the policy or loss of your insurance rights.

7. Clients pay premiums after realization of risk and claim for compensation.
Consequent risk

The insurance company would refuse to pay compensation.
Proper action
Make sure you pay your insurance premiums when they fall due and get documentation evidencing their payment at the specified dates.

8. Lack of credibility of clients when they describe an accident in the notifications they submit to the insurance companies, fearing that they may be held responsible or the companies would refuse to pay compensation.
Consequent risk

Contradiction of information provided by clients, accident notifications and health documents stated in the police reports, experts’ report, and others, thus wasting away the amount of compensation for clients according to the terms and conditions of policies.
Proper action
You should know that your compliance with the principle of bona fide provision of correct data is an ongoing obligation right from the start of insurance and upon realization of risk, which is a guarantee for your insurance rights.

9. Failure to abide by the terms and conditions of policies as regards preservation of the insured object or taking necessary precautions to reduce losses when accidents occur, and notifying the insurance companies at the time specified in the policy.
Consequent risk

Companies would refuse to pay compensation when an accident occurs or reduce the amount of compensation in a way incommensurate with the losses estimated by clients.
Proper action
Make sure you perform your obligations as set out in the policy at the specified time and notify the insurance company of any changes that occur to the thing which is the object of insurance so as to be sure your insurance rights are preserved.

10. Trying to make some money out of insurance companies by extreme exaggeration in the amounts of repairs or replacement of the thing which is the object of insurance.
Consequent risk
- Processing compensation takes a long period of time and/ or the client’s claim gets rejected on grounds of the policy’s terms and conditions.
- The client loses credibility regarding documentation they submit to insurance companies to settle compensation.
- The client (the insured) will be at risk of fraud and misrepresentation of the data and information provided in accordance with the terms and conditions of the policies, resulting in refusal to pay compensation for the accident.
Proper action
Make sure you act credibly when dealing with the insurance company. In other words, do not provide invalid data or documents, or exaggerate some of their data regarding settlement of the compensation so as not to waste away your insurance rights. Keep all documents evidencing payment.