Sildenafil citrate, sold as Viagra, Revatio and under various other trade names, is a drug used to treat erectile dysfunction and pulmonary arterial hypertension (PAH). It was developed and is being marketed by the pharmaceutical company Pfizer. It acts by inhibiting cGMP specific phosphodiesterase type 5, an enzyme that regulates blood flow in the penis. Since becoming available in 1998, sildenafil has been the prime treatment for erectile dysfunction; its primary competitors on the market are tadalafil (Cialis) and vardenafil (Levitra).

History

Sildenafil (compound UK-92,480) was synthesized by a group of pharmaceutical chemists working at Pfizer’s Sandwich, Kent, research facility in England. It was initially studied for use in hypertension (high blood pressure) and angina pectoris (a symptom of ischaemic heart disease). The first clinical trials were conducted in Morriston Hospital in Swansea.^[1] Phase I clinical trials under the direction of Ian Osterloh suggested that the drug had little effect on angina, but that it could induce marked penile erections.^[2][3] Pfizer therefore decided to market it for erectile dysfunction, rather than for angina. The drug was patented in 1996, approved for use in erectile dysfunction by the US Food and Drug Administration on March 27, 1998, becoming the first oral treatment approved to treat erectile dysfunction in the United States, and offered for sale in the United States later that year.^[4] It soon became a great success: annual sales of Viagra in the period 1999–2001 exceeded $1 billion.^{[citation needed]}

The British press portrayed Peter Dunn and Albert Wood as the inventors of the drug, a claim which Pfizer disputes.^[5] Their names are on the manufacturing patent application drug, but Pfizer claims this is only for convenience.^{[citation needed]}

Even though sildenafil is available only by prescription from a doctor, it was advertised directly to consumers on U.S. TV (famously being endorsed by former United States Senator Bob Dole and soccer star Pelé). Numerous sites on the Internet offer Viagra for sale after an “online consultation”, often a simple web questionnaire.^{[citation needed]} The “Viagra” name has become so well known that many fake aphrodisiacs now call themselves “herbal Viagra” or are presented as blue tablets imitating the shape and colour of Pfizer’s product. Viagra is also informally known as “Vitamin V”, “the Blue Pill”, as well as various other nicknames.^[6]

In 2000, Viagra sales accounted for 92 percent of the global market for prescribed erectile dysfunction pills.^[7] By 2007, Viagra’s global share had plunged to about 50 percent^[8] due to several factors, including the entry of Cialis and Levitra, along with several other counterfeits and clones, and reports of vision loss in people taking PDE5 inhibitors.^[9][10]

In February 2007, it was announced that Boots the Chemist would trial over the counter sales of Viagra in stores in Manchester, England. Men aged between 30 and 65 would be eligible to buy four tablets after a consultation with a pharmacist.^[11]

Pfizer’s worldwide patents on sildenafil citrate will expire in 2011–2013. The UK patent held by Pfizer on the use of PDE5 inhibitors (see below) as treatment of impotence was invalidated in 2000 because of obviousness; this decision was upheld on appeal in 2002.^[12][13]

Mechanism of action

The mechanism of action of Sildenafil citrate involves the release of nitric oxide (NO) in the corpus cavernosum of the penis. NO binds to the receptors of the enzyme guanylate cyclase which results in increased levels of cyclic guanosine monophosphate (cGMP), leading to smooth muscle relaxation (vasodilation) of the intimal cushions of the helicine arteries, resulting in increased inflow of blood and an erection.^[14]

Sildenafil is a potent and selective inhibitor of cGMP specific phosphodiesterase type 5 (PDE5) which is responsible for degradation of cGMP in the corpus cavernosum. The molecular structure of sildenafil is similar to that of cGMP and acts as a competitive binding agent of PDE5 in the corpus cavernosum, resulting in more cGMP and better erections.^[14] Without sexual stimulation, and therefore lack of activation of the NO/cGMP system, sildenafil should not cause an erection. Other drugs that operate by the same mechanism include tadalafil (Cialis) and vardenafil (Levitra).

Sildenafil is metabolised by liver enzymes and excreted by both the liver and kidneys. If taken with a high-fat meal, absorption is reduced; the time taken to reach the maximum plasma concentration increases by around one hour, and the maximum concentration itself is decreased by nearly one-third.^[15]

Uses

Sexual dysfunction

The primary indication of sildenafil is treatment of erectile dysfunction (inability to sustain a satisfactory erection to complete intercourse). It use is now standard treatment for erectile dysfunction in all settings, including diabetes.^[16]

People on antidepressants may experience sexual dysfunction, either as a result of their illness or as a result of their treatment. A 2003 study showed that sildenafil improved sexual function in men in this situation.^[17] Following up to earlier reports from 1999,^[18] the same researchers found that sildenafil was able to improve sexual function in female patients on antidepressants as well.^[19]

Pulmonary hypertension

As well as erectile dysfunction, sildenafil citrate is also effective in the rare disease pulmonary arterial hypertension (PAH). It relaxes the arterial wall, leading to decreased pulmonary arterial resistance and pressure. This in turn reduces the workload of the right ventricle of the heart and improves symptoms of right-sided heart failure. Because PDE-5 is primarily distributed within the arterial wall smooth muscle of the lungs and penis, sildenafil acts selectively in both these areas without inducing vasodilation in other areas of the body. Pfizer submitted an additional registration for sildenafil to the FDA, and sildenafil was approved for this indication in June 2005. The preparation is named Revatio, to avoid confusion with Viagra, and the 20 milligram tablets are white and round. Sildenafil joins bosentan and prostacyclin-based therapies for this condition.^[20]

Altitude sickness

Sildenafil has been shown to be useful for the prevention and treatment of High altitude pulmonary edema associated with altitude sickness such as that suffered by mountain climbers.^[21][22] While this effect has only recently been discovered, sildenafil is already becoming an accepted treatment for this condition, particularly in situations where the standard treatment of rapid descent has been delayed for some reason.^[23]

Use in sports

Professional sports players have been using drugs such as Viagra thinking that the opening of their blood vessels will enrich their muscles, therefore enhancing their performance.^[24]

Non-medical use

Recreational use

Viagra’s popularity with young adults has increased over the years.^[25] It is sometimes used recreationally, though this use is somewhat pointless in young, healthy men, as they receive no benefit from the drug.^[25] Some users mix Viagra with methylenedioxymethamphetamine (MDMA, ecstasy) or other stimulants in an attempt to compensate for the side effect common to many amphetamines of erectile dysfunction, a combination known as “sextasy“, “rockin’ and rollin’”, or ‘trail mix’.” Mixing with amyl nitrite is particularly dangerous, and is potentially fatal.^[25]

Prevention of plant wilting

A low-concentration solution of sildenafil in water significantly prolongs the time before cut flowers wilt; one experiment showed a doubling in time from one week to two weeks. The mechanism of action is similar to that in humans: nitric oxide leads to the production of cGMP whose degradation by PDE5 is inhibited by sildenafil.^[26]

Jet lag research

The 2007 Ig Nobel Prize in Aviation went to Patricia V. Agostino, Santiago A. Plano and Diego A. Golombek of Universidad Nacional de Quilmes, Argentina, for their discovery that Viagra aids jet lag recovery in hamsters.^[27] Their research was published in the Proceedings of the National Academy of Sciences.^[28]

Dosage

Viagra

Viagra pills are blue and diamond-shaped with the words “Pfizer” engraved on one side, and “VGR xx” (where xx stands for “25″, “50″ or “100″, the dose of that pill in milligrams) engraved on the other. The dose of sildenafil for erectile dysfunction is 25 mg to 100 mg taken not more than once per day between 30 minutes and 4 hours prior to sexual intercourse.

The dosage for pulmonary arterial hypertension (Revatio) is one 20 mg tablet three times a day. Revatio pills are white, round, film-coated tablets imprinted with “RVT 20″ embossed on one side.^[29]

Contraindications

Contraindications include:^{[citation needed]}

• When taking nitric oxide donors, organic nitrites and nitrates, such as glyceryl trinitrate (nitroglycerin), sodium nitroprusside, amyl nitrite (“poppers”)^[30]
• In men for whom sexual intercourse is inadvisable due to cardiovascular risk factors
• Severe hepatic impairment (decreased liver function)
• Severe impairment in renal function
• Hypotension (low blood pressure)
• Recent stroke or heart attack
• Hereditary degenerative retinal disorders (including genetic disorders of retinal phosphodiesterases)

Side effects

In clinical trials, the most common adverse effects of sildenafil use included headache, flushing, dyspepsia, nasal congestion and impaired vision, including photophobia and blurred vision.^[31] Some sildenafil users have complained of seeing everything tinted blue (cyanopsia).^[32] Some complained of blurriness and loss of peripheral vision. In July 2005, the U.S. Food and Drug Administration found that sildenafil could lead to vision impairment in rare cases^[33] and a number of studies have linked sildenafil use with nonarteritic anterior ischemic optic neuropathy.^{[34][35][36][37][38][39]}

Rare but serious adverse effects found through postmarketing surveillance include priapism, severe hypotension, myocardial infarction (heart attack), ventricular arrhythmias, stroke, increased intraocular pressure and sudden hearing loss.^[31] As a result of these postmarketing reports, in October 2007, the FDA announced that the labeling for all PDE5 inhibitors, including sildenafil, required a more prominent warning of the potential risk of sudden hearing loss.^[40]

Interactions

Care should be exercised by patients who are also taking protease inhibitors for the treatment of HIV. Protease inhibitors inhibit the metabolism of sildenafil, effectively multiplying the plasma levels of sildenafil, increasing the incidence and severity of side-effects. It is recommended that patients using protease inhibitors limit their use of sildenafil to no more than one 25 mg dose every 48 hours.^{[citation needed]}

Concomitant use of sildenafil and an alpha blocker may lead to low blood pressure, but this effect does not occur if they are taken at least four hours apart.^[41]

Chemical synthesis

The preparation steps for synthesis of Viagra (sildenafil citrate) are as follows:^[42]

1. Methylation of 3-propylpyrazole-5-carboxylic acid ethyl ester with hot dimethyl sulfate.
2. Hydrolysis with aqueous NaOH to free acid.
3. Nitration with oleum/fuming nitric acid.
4. Carboxamide formation with refluxing thionyl chloride/NH₄OH.
5. Reduction of nitro group to amino.
6. Acylation with 2-ethoxybenzoyl chloride.
7. Cyclization.
8. Sulfonation to the chlorosulfonyl derivative.
9. Condensation with 1-methylpiperazine.

thanks to wikipedia.org

An attorney at law (or attorney-at-law) in the United States is a practitioner in a court of law who is legally qualified to prosecute and defend actions in such court on the retainer of clients. Alternative terms include counselor (or counsellor-at-law), and lawyer.^[1]

The U.S. legal system has a united legal profession, which means that it does not draw a distinction between lawyers who plead in court and those who do not. Many other common law jurisdictions, as well as some civil law jurisdictions, do draw such a distinction: for example, the division of solicitor and barrister (advocate) found in the United Kingdom, and the division of advocate and civil law notary in Italy and France. An additional factor which differentiates the American legal system from other countries is that there is no delegation of routine work to notaries public or their civil law equivalent.

Attorneys may use the post-nominal Esq., the abbreviated form of the word Esquire.

[edit] The job of an attorney

Once admitted to practice by the highest court of a state (a function sometimes administered by the state’s bar association), an American attorney may file legal pleadings and argue cases in any state court (federal courts usually require separate admission), provide legal advice to clients, and draft important legal documents such as wills, trusts, deeds, and contracts.

In some states, real estate closings may be performed only by attorneys, even though the attorney’s role in a closing may involve primarily notarization of documents and disbursement of settlement funds through an escrow account.

Practicing law includes interviewing a client to identify the legal question, analyzing the question, researching relevant law, devising legal solutions to problems, and executing such solutions through specific tasks such as drafting a contract or filing a motion with a court.

Most academic legal training is directed to identifying legal issues, researching facts and law, and arguing both the facts and law in favor of either side in any case.

For several years, law schools have sent through far more students than new job openings have become available. This leads to attorneys (once they pass the bar) seeking work in other occupations, either by choice or by the lack of employment opportunities. This has led to a market in legal temps or contract attorneys, where attorneys spend a certain period of time working on tasks such as discovery for a case.

[edit] Media images

Contrary to the media image of attorneys, a great deal of litigation and regulatory legal work is spent conducting research in a law library or in an electronic database like Westlaw, LexisNexis, or Bloomberg L.P. Many attorneys also spend a large portion of their working time drafting documents, such as legal briefs, contracts, wills and trusts. Few television programs and movies accurately portray the hours conducting research, often surrounded by a pile of books or printouts, or drafting documents which form the core of the occupational life of many attorneys.

One occasional exception is the television program Law & Order, which sometimes shows the main characters researching at a computer late into the night (always using Westlaw, due to a contract between Westlaw and the show’s producers). Some episodes also show lawyers keeping a small rack of clothes in their office for those times when research lasts all night and the character does not have time to go home to change.

Another notable portrayal of the profession was the series Murder One which featured a group of lawyers as central characters. The Practice did as well, but its accuracy may be questionable.^{[citation needed]}

Movies and television also generally show attorneys focused on a single case. Most litigators have many cases in progress at any given time. Each case has deadlines that must be carefully monitored and court dates which one must not forget. Because they often balance many cases at once, attorneys that litigate often have difficult working lives when important documents must be drafted or other work must be performed on different cases at one time.^{[citation needed]}

In litigation, attorneys spend much time discovering the facts of the case to develop a “theory of the case” that integrates facts and law in a way most favorable to their client. Many attorneys believe^{[weasel words]} that the discovery process has reduced the number of civil cases that actually go to trial since the discovery process often allows for a clear evaluation of the merits of each side’s position.

Some attorneys are not trial lawyers. Non-trial attorneys are sometimes called transactional lawyers or corporate lawyers. Transactional or corporate attorneys specialize in activities that seldom involve them in litigation, such as writing legal opinion letters, drafting wills or trust documents, advising clients, structuring business transactions, negotiating and drafting contracts, developing tax strategies, or preparing and prosecuting filings with government agencies such as the Internal Revenue Service, the Securities and Exchange Commission, or the Patent and Trademark Office.

[edit] Specialization

The neutrality of this section is disputed. Please see the discussion on the talk page. Please do not remove this message until the dispute is resolved. (December 2007)

Many American attorneys limit their practices to specialized fields of law. Often dichotomies are drawn between different types of attorneys, but these are neither fixed nor formal lines. Examples include:

• Outside counsel (law firms) v. in-house counsel (corporate legal department)
• Plaintiff v. Defense Attorneys (some attorneys do both plaintiff and defense work, others only handle certain types of cases, like personal injury, business, etc.)
• Transactional (or “office practice”) attorneys (who negotiate and draft documents and advise clients, rarely going to court) v. litigators (who advise clients in the context of legal disputes both in and out of court, including lawsuits, arbitrations and negotiated settlements)
• Trial attorneys (who argue the facts, such as the late Johnnie Cochran) v. appellate attorneys (who argue the law, such as David Boies)

Despite these descriptions, most states forbid or discourage claims of specialization in particular areas of law unless the attorney has been certified by his or her state bar[1] or state board of legal specialization. Other states allow indirect indications of specialization (in the form of advertisement language such as “our practice is limited to . . .”) but require that the lawyer state that he or she is not certified by a state board of legal specialization in the advertised practice area. Patent attorneys are allowed to advertise their specialization in all jurisdictions, since registration for patent law is administered by the United States Patent and Trademark Office (USPTO) instead of a state-level body.

Some states grant formal certifications recognizing specialties. In California, for example, bar certification is offered in family law, appellate practice, criminal law, bankruptcy, estate planning, immigration, taxation and workers’ compensation. Any attorney meeting the bar requirements in one of these fields may represent himself as a specialist. Similarly, Texas formally grants certification of specialization in the following fields: administrative law; business bankruptcy law; civil appellate law; civil trial law; consumer bankruptcy law; consumer law; commercial law; criminal law; estate planning and probate law; family law; health law; immigration and nationality law; juvenile law; labor and employment law; oil, gas and mineral law; personal injury; trial law; real estate law; tax law; and workers’ compensation law.[2]

The vast majority of lawyers practicing in a particular field may typically not be certified as specialists in that field (and state board certification is not generally required to practice law in any field). For example, the State Bar of Texas (as of mid 2006) reported 77,056 persons licensed as attorneys in that state (excluding inactive members of the Bar)^[2], while the Texas Board of Legal Specialization reported, at about the same time, only 8,303 Texas attorneys who were board certified in any specialty.[3] Indeed, of the 8,303 certified specialists in Texas, the highest number of attorneys certified in one specific field at that time was 1,775 (in personal injury trial law). Despite the relative large number of lawyers that presumably would handle divorce, adoption and child custody matters, Texas reported that of 77,056 attorneys, only 697 in the entire state were certified in family law (which is, arguably, the applicable specialty).

Specialization in patent law is administered by the Office of Enrollment and Discipline of the USPTO, which imposes stringent requirements for applicants to become registered as patent attorneys or patent agents.

About half of American attorneys work solo or in small firms^{[citation needed]}. See law firm. There are also many mid-size firms, with anywhere from 50 to 200 attorneys, and since the 1970s, some law firms have merged to form giant firms with 1,000 attorneys or more. Whether a law firm is large or small is also a relative concept depending on the size of the community served. A law firm with six attorneys in a small community may be considered a large firm for that area. Because of conflict of interest rules, the maximum size of a law firm is dependent upon the size of the population it serves. Conflict of interest rules prevent one attorney in a law firm from, for example, representing a client in litigation that has an adverse interest to the interests of another client represented by a different attorney in the same law firm.

[edit] Control of cases

An American attorney licensed in each applicable court may in a few cases control and argue his or her case at each level of the judiciary through its entire life cycle. A notable example of this is the Brown v. Board of Education litigation, where the same trial team handled the case from start to finish at the U.S. Supreme Court. However, cases which advance to the appellate level, particularly to the U.S. Supreme Court, are often re-assigned to experienced appellate practitioners or firms.

[edit] Education and training

Almost all U.S. jurisdictions require successful completion of a bar exam to be licensed as an attorney. All but a few of those states which require a bar exam also require the applicant to have taken a degree in professional law from an accredited law school. Most require it to be an American professional doctorate in law. A few states accept foreign law degrees. In addition to this formal education, attorneys in most jurisdictions must complete regular Continuing Legal Education (CLE) requirements.

The State of Washington has a separate Law Clerk program under Rule Six of the Washington Court Admission to Practice Rules. A college graduate of good moral character may be accepted into the four-year Rule Six Law Clerk program, obtain employment in a law firm or with a judge for at least 30 hours a week, and study a proscribed Course of Study under a tutor. After successful completion of the Rule Six Law Clerk program, a law clerk may take the Washington State Bar Exam and, upon passing, will be admitted as an attorney into the Washington State Bar Association.

The degree earned by prospective attorneys in the United States is generally a Juris Doctor (J.D.), or Doctor of Jurisprudence. Historically, law was an undergraduate subject in the United States, as it still is in most other Anglophone countries, for which the LL.B. (Bachelor of Laws) or other undergraduate degree is conferred. This undergraduate degree was followed by the LL.M. or Master of Laws and, where the LL.B. is still awarded, the highest degree is often still the LL.D. or Doctor of Laws. In the United States, however, the LL.B. was elevated to the graduate school curriculum starting in 1896 (Harvard), as a second bachelor’s degree. Then, starting in 1902 in the University of Chicago, it was replaced by the professional doctorate in law, known generally as a “J.D.,” or “D.Jur.” when the degree is conferred in English. By 1971, all ABA-accredited American law schools had replaced the bachelor of laws with the professional doctorate in law.

The master of laws continues to be offered in the United States, sometimes as a type of specialist post-doctoral degree and sometimes as a legal master’s degree in U.S. law for non-U.S. educated attorneys with the bachelor of laws or other non-U.S. law degree. Many non-U.S. lawyers who have an bachelor of laws or other non-U.S. law degree come to study in the United States to obtain an master of laws degree in comparative law, in order to familiarize themselves with U.S. common law, and to enable themselves to take the bar exam in New York or California, both of which allow foreign attorneys with such degrees to take the exam. Some of these lawyers end up practicing law in the U.S., while many of them return to their home countries and use their U.S. master of laws and bar admission as a gateway to advising international clients. Among U.S. lawyers, the most common use of the master of laws degree currently is to acquire an advanced level of expertise in a specific legal discipline, such as tax law. American law schools are very slowly beginning to address the situation of advanced academic law degrees by creating explicitly post-doctoral degrees, like the S.J.D. or J.S.D. (Scientiae Juris Doctor or Doctor of the Science of Law).

The Paul M. Hebert Law Center at Louisiana State University in the U.S. now offers a joint J.D. (Juris Doctor) and B.C.L. (Bachelor of Civil Law) over seven semesters (instead of its previous 6-semester program for the J.D. alone) in recognition of the increased Louisiana civil law component of the new program.

The highest law degree obtainable in the United States is the S.J.D., or Scientum Juris Doctor, literally “doctor of juridical science”. This degree is also known by the abbreviation J.S.D. at some U.S. schools, e.g. NYU Law School and Columbia Law School. The degree should not be confused with the “doctor of laws” degree, or LL.D., which is usually, but not always, awarded for honorary purposes.

The S.J.D. or J.S.D. degree is very rarely awarded, and is generally only sought by attorneys holding exceptional credentials and a desire to enter legal academia. The degree is generally only offered at the very top law schools, which typically accept only 4 or 5 students into their program each year. Admission is limited to those who have achieved their J.D. and LL.M. degrees with distinction. Successful applicants usually have already published significant scholarly legal articles in their proposed area of study, and many have legal teaching experience prior to entering the program.

[edit] Law students in court

Some courts allow law students to act as “certified student attorneys” after the satisfactory completion of their first year of law school and the completion of particular second- and third-year courses with subjects such as evidence. Many states allow students to argue in front of a court as a certified legal intern (CLI), provided they meet certain prerequisites, such as having completed at least half of their law education, having taken or be taking the law school’s ethics class, and being under the supervision of a qualified and licensed attorney.

This concept was somewhat misrepresented in the movie Legally Blonde, where the protagonist Elle argues before a jury. Although Elle was under the supervision of an attorney, no state would allow a student still completing the first year of law to argue a case in court. However, it is reminiscent of “teen court” programs that are expanding around the USA. In these programs, it is not law students, but high school students, who argue cases before a judge and sit on juries to decide penalties to impose upon other high school students who have agreed to be tried by the teen court in exchange for bypassing the regular court and having no criminal record created in the process, even if they are found responsible for a crime by the teen court. The punishment often includes community service, including sitting on juries in upcoming cases.

Additionally, most states have rules allowing law students in their third and final year to practice on a limited basis while under the direct supervision of a licensed attorney. These laws vary state to state. While many states are very strict, some states like Kansas provide opportunities for law students to argue cases before juries.

[edit] Illinois: The 711 license

In Illinois, a student currently in good standing who has earned credits that represent at least three-fifths of the credits required for graduation may be eligible for a 711 license (based on Illinois Supreme Court Rule 711). A 711 license allows a student to: (1) Counsel clients, negotiate in the settlement of claims, and engage in the preparation and drafting of legal instruments. (2) Appear in the trial courts and administrative tribunals subject to the following qualifications: (i) Appearances, pleadings, motions, and other documents to be filed with the court may be prepared by the student or graduate and may be signed by him with the accompanying designation “Senior Law Student” or “Law Graduate” and must also be signed by the supervising member of the bar. (ii) In criminal cases, in which the penalty may be imprisonment, in proceedings challenging sentences of imprisonment, and in civil or criminal contempt proceedings, the student or graduate may participate in pretrial, trial, and post trial proceedings as an assistant of the supervising member of the bar, who shall be present and responsible for the conduct of the proceedings. (iii) In all other civil and criminal cases, the student or graduate may conduct all pretrial, trial, and post trial proceedings, and the supervising member of the bar need not be present. (3) The student may prepare briefs, excerpts from the record, abstracts, and other documents filed in courts of review of the State, which may set forth the name of the student or graduate with the accompanying designation “Senior Law Student” or “Law Graduate” and must be filed in the name of the supervising member of the bar.

A graduate who has completed the Juris Doctor may qualify for a 711 license if the graduate (1) has not yet had an opportunity to take the first Bar examination scheduled after graduation; (2) has taken the Bar exam but has not received the results; or (3) has taken and passed the Bar examination but has not yet been sworn in as a member of the Illinois bar.

A 711 license is not available for a student working for a private law firm. The license is available for work with (1) a legal aid bureau, legal assistance program, organization or clinic chartered by the State of Illinois or approved by a law school approved by the American Bar Association, (2) the Office of the Public Defender, or (3) a law office of the State or any of its subdivisions.

[edit] Unlicensed practice of law

Some states provide criminal penalties for falsely holding oneself out to the public as a lawyer, and the unauthorized practice of law by a non-lawyer.

A person who has a professional law degree but is not admitted to a state bar is not a lawyer, and cannot legally engage in the practice of law. In most states, even the practice of law by an “out-of-state” lawyer is considered the unauthorized practice of law within that state. Exceptions are sometimes made when the out-of-state lawyer is permitted temporarily to practice within the state pro hac vice or in some cases as in-house counsel for corporations.

In addition, a few areas of law, such as patent law, are mandated by the U.S. Constitution to be strictly under federal jurisdiction. In this case, state courts and bar associations are not allowed to restrict the practice of that field of law, and a patent attorney may freely advise clients as to patent matters anywhere in the jurisdiction of the United States, without regard to state court or bar association rules. Furthermore, prior to November 15, 1938, individuals could become registered as “patent attorneys” with the PTO without ever passing a state bar exam or going to law school. That status was grandfathered for patent attorneys registered prior to that date. This represents a holdover to the traditional meaning of the term “attorney” as “agent” or “attorney-in-fact”. There are still some living patent attorneys who became registered as patent attorneys before that date, as far back as 1934. Today, a non-lawyer who takes and passes the patent bar would be considered a patent agent.

In some jurisdictions, the definition of the practice of law is quite strict. Persons have been successfully prosecuted for publishing do-it-yourself will forms and for representing special education children in federal proceedings as specifically allowed by federal law.

Paradoxically, some jurisdictions will allow a non-attorney to sit as a judge, usually in lower courts or in hearings by governmental agencies, even though a non-attorney may not practice before these same courts. Similarly, in a jurisdiction where a judge is elected by the people, the judge often does not need to be licensed to practice law or trained in any particular way. Likewise, the U.S. Constitution does not provide any such requirement for a U.S. Supreme Court justice or other federal judge, although no non-lawyer has ever been appointed as a federal judge.

[edit] American attorneys’ attire

Unlike their counterparts in other common law jurisdictions, American attorneys are not required to wear wigs, robes or any other items of court dress when they appear in court. They are usually expected to wear contemporary business suits. At the extreme, judges in the United States and Canada have occasionally been reported to order that a lawyer not wearing conventional business attire is in contempt of court and must return at a later date in proper attire – and to issue the lawyer a fine as if the lawyer had failed to show up for the hearing.^{[citation needed]}

The one exception is the United States Solicitor General, who traditionally argues before the U.S. Supreme Court in 19th-century attire, including a “morning coat” with tails.

[edit] Alternatives to the practice of law

Because an accredited legal education generally provides a strong understanding of not only the substance of the law, but also an advanced analytical approach to the use and ramifications of the law, many professions, other than the practice of law, promote or require those with legal educations. As a result of overcrowding in the legal profession, the desire to achieve better work-life balance, and disenchantment with the legal profession, many attorneys are leaving the Bar to pursue these other professions that take advantage of the attorney’s legal education. In some instances, graduates of law school who either cannot be admitted or who decide not to bother to be admitted to a state bar, enter these various professions.

Alternative careers that seek legally educated employees include:

• Work with the government as a policy analyst or a legislative drafter (the latter is sometimes classified as a ‘policy analyst’ and sometimes as a ‘lawyer’);
• Work for a publisher of a legal information publication;
• Work in banking, finance, real estate, insurance;
• Work in law enforcement.

In these fields, law degrees are useful (and sometimes mandatory, such as in the case of policy analysts and legislative drafters) qualifications for a job.

thanks to wikipedia.org

Of all the precious metals, gold is the most popular as an investment. Investors generally buy gold as a hedge or safe haven against any economic, political, social, or currency-based crises. These crises include investment market declines, inflation, war, and social unrest. Investors also buy gold during times of a bull market to gain financially.

[edit] Gold price

Gold price in US Dollars 1968 — 2008.

Throughout history gold has often been used as money and, instead of quoting the gold price, all other commodities were measured in gold. After World War II a gold standard was established following the 1946 Bretton Woods conference, fixing the gold price at $35 per troy ounce.

The system held up until 1971 Nixon Shock, when the US stopped the direct convertibility of the United States dollar to gold. Since 1968 the usual benchmark for the price of gold is known as the London Gold Fixing, a twice-daily (telephone) meeting of representatives from five bullion-trading firms. Furthermore, there is active gold trading based on the intra-day spot price, derived from gold-trading markets around the world as they open and close throughout the day. The following table sets forth the gold price versus various assets and key statistics:

In March 2008 the gold price reached above $1000^[6], reaching an all-time nominal high of $1002.80 which, in real terms was still well below the $850 peak in 1980. It then fell, going as low as $709.50 in November, then resumed its upward trend, temporarily breaking the $1000 barrier again in late February 2009.

[edit] Factors influencing the gold price

Today, like all investments and commodities, the price of gold is ultimately driven by supply and demand. Unlike most other commodities, the hoarding and disposal plays a much bigger role in affecting the price, because most of the gold ever mined still exists and is potentially able to come on to the market for the right price.^[7][8] Given the huge quantity of stored gold, compared to the annual production, the price of gold is mainly affected by changes in sentiment, rather than changes in annual production.^[9] According to the World Gold Council, annual mine production of gold over the last few years has been close to 2,500 tonnes.^[10] About 2,000 tonnes goes into jewelry or industrial/dental production, and around 500 tonnes goes to retail investors and exchange traded gold funds.^[10] This translates to an annual demand for gold to be 1000 tonnes in excess over mine production which has come from central bank sales and other disposal.^[10]

Central banks and the International Monetary Fund play an important role in the gold price. At the end of 2004 central banks and official organizations held 19 percent of all above-ground gold as official gold reserves^[11]. The Washington Agreement on Gold (WAG), which dates from September 1999, limits gold sales by its members (Europe, United States, Japan, Australia, Bank for International Settlements and the International Monetary Fund) to less than 400 tonnes a year^[12]. European central banks, such as the Bank of England and Swiss National Bank, have been key sellers of gold over this period^[13]. Although central banks do not generally announce gold purchases in advance, some, such as Russia, have expressed interest in growing their gold reserves again as of late 2005^[14]. In early 2006, China, which only holds 1.3% of its reserves in gold^[15], announced that it was looking for ways to improve the returns on its official reserves. Some bulls hope that this signals that China might reposition more of its holdings into gold in line with other Central Banks.^[16]

A 500,000,000,000 (500 billion) Yugoslavia dinar banknote circa 1993, the largest nominal value ever officially printed in Yugoslavia, the final result of hyperinflation. Photo courtesy of National Bank of Serbia.

Bank failures

When dollars were fully convertible into gold, both were regarded as money. However, most people preferred to carry around paper banknotes rather than the somewhat heavier and less divisible gold coins. If people feared their bank would fail, a bank run might have been the result. This is what happened in the USA during the Great Depression of the 1930s, leading President Roosevelt to impose a national emergency and to outlaw the hoarding of gold by US citizens.^[17] known as Executive Order 6102 which has since been ended.

Low or negative real interest rates

If the return on bonds, equities and real estate is not adequately compensating for risk and inflation then the demand for gold and other alternative investments such as commodities increases. An example of this is the period of Stagflation that occurred during the 1970s and which led to an economic bubble forming in precious metals.^[18][19]

War, invasion, looting, crisis

In times of national crisis, people fear that their assets may be seized and that the currency may become worthless. They see gold as a solid asset which will always buy food or transportation. Thus in times of great uncertainty, particularly when war is feared, the demand for gold rises.^[20][21]

The Gold Anti-Trust Action Committee

Organized in January 1999 to advocate and undertake litigation against illegal collusion to control the price and supply of gold and related financial securities.^[22] They argue that there could be no US gold in the Fort Knox.^[23]

[edit] Reasons investors buy gold

Investors generally buy gold for two main reasons: to financially gain from increasing gold prices, and/or as a hedge or safe haven against any economic, political, social or currency-based crises.

[edit] Methods of investing in gold

Investment in gold can be done directly through bullion or coin ownership, or indirectly through gold exchange-traded funds, certificates, accounts, spread betting, derivatives or shares.

[edit] Investment strategies

[edit] Fundamental analysis

One troy ounce along with the certificate

Investors using fundamental analysis analyze the macroeconomic situation, which includes international economic indicators, such as GDP growth rates, inflation, interest rates, productivity and energy prices. They would also analyze the yearly global gold supply versus demand. Over 2005 the World Gold Council estimated yearly global gold supply to be 3,859 tonnes and demand to be 3,754 tonnes, giving a surplus of 105 tonnes.^[24] While gold production is unlikely to change in the near future, supply and demand due to private ownership is highly liquid and subject to rapid changes. This makes gold very different from almost every other commodity.^[7][8]

[edit] Gold versus stocks

Dow/Gold Ratio 1968-2008

The performance of gold bullion is often compared to stocks. They are fundamentally different asset classes. Gold is regarded by some as a store of value (without growth) whereas stocks are regarded as a return on value (i.e. growth due to anticipated real price increase plus dividends). Stocks and bonds perform best in a stable political climate with strong property rights and little turmoil. The attached graph shows the value of Dow Jones Industrial Average divided by the price of an ounce of gold. Since 1800, stocks have consistently gained value in comparison to gold due in part to the stability of the American political system.^[25] This appreciation has been cyclical with long periods of stock outperformance followed by long periods of gold outperformance. The Dow Industrials bottomed out a ratio of 1:1 with gold during 1980 (the end of the 1970s bear market) and proceeded to post gains throughout the 1980s and 1990s. The ratio peaked on January 14, 2000 a value of 41.3 and has fallen sharply since.

In November 2005, Rick Munarriz of Motley Fool.com posed the question of which represented a better investment: a share of Google or an ounce of gold. The specific comparison between these two very different investments seems to have captured the imagination of many in the investment community and is serving to crystallize the broader debate.^[26][27] At the time of writing, a share of Google’s stock and an ounce of gold were both near $700. On January 4, 2008 23:58 New York Time, it was reported that an ounce of gold outpaced the share price of Google by 30.77%, with gold closing at $859.19 per ounce and a share of Google closing at $657 on U.S. market exchanges. On January 24 2008, the gold price broke the $900 mark per ounce for the first time. The price of gold topped $1,000 an ounce for the first time ever on March 13, 2008 amid recession fears in the United States.^[28] Google closed 2008 at $307.65 while gold closed the year at $866.

[edit] Technical analysis

As with stocks, gold investors may base their investment decision partly on, or solely on, technical analysis. Typically, this involves analyzing chart patterns, moving averages, market trends and/or the economic cycle in order to speculate on the future price.

[edit] Using leverage

Bullish investors may choose to leverage their position by borrowing money against their existing gold assets and then purchasing more gold on account with the loaned funds. This technique is referred to as a carry trade. Leverage is also an integral part of buying gold derivatives and unhedged gold mining company shares (see gold mining companies). Leverage via carry trades or derivatives may increase investment gains but also increases risk, as if the gold price decreases, the investor may be subject to a margin call.

In 2008, ETF Securities launched ETFS Leveraged Gold (LSE: LBUL) which is designed to change each day by twice the daily percentage change in the DJ-AIG Gold Sub-Index (before fees and adjustments). Therefore if the DJ-AIG Gold Sub-Index rises (or falls) by 1% in one day, then ETFS Leveraged Gold will rise (or fall) by 2%.

[edit] Bulls versus bears

Since April 2001 the gold price^[29] has more than tripled in value against the US dollar, prompting speculation that the long secular bear market (or the Great Commodities Depression) has ended and a bull market has returned^[30]. A World Gold Council report released on February 18, 2009 showed physical gold demand rose sharply in the second half of 2008. Identifiable investment demand for gold, which includes ETFs (exchange-traded funds), bars, and coins, was up 64 percent in 2008 over the year before.^[31]

In the last century, major economic crises (such as the Great Depression, World War II, the first and second oil crisis) lowered the Dow/Gold ratio, an indicator of how bad a recession is and whether the outlook is deteriorating or improving, to a value well below 4. The ratio fell on February 18, 2009 to below 8. ^[32] During these difficult times, investors tried to preserve their assets by investing in precious metals, most notably gold and silver.

thanks to wikipedia.org

A Gold exchange-traded fund (or GETF) is a special type of exchange-traded fund (ETF) that tracks the price of gold. Gold exchange-traded funds are traded on the major stock exchanges including Zurich, Mumbai, London, Paris and New York.

[edit] History

The idea of a gold ETF was first officially conceptualised by Benchmark Asset Management Company in India when they filed a proposal with the SEBI in May 2002. However it did not receive regulatory approval and was only launched later in March 2007.^[1] The first gold exchange-traded fund actually launched was in March 2003 on the Australian Stock Exchange under Gold Bullion Securities (ticker symbol “GOLD”). Gold Bullion Securities (GBS) are fully backed by gold which is both deposited and insured. GBS was launched to give financial institutions and private investors the ability to own gold and gain exposure to the price, without the inconvenience of storing physical bars or opening a futures trading account.

[edit] Fees

Typically a commission of 0.4% is charged for trading in gold ETFs and an annual storage fee is charged. U.S. based transactions are a notable exception, where most brokers charge only a small fraction of this commission rate. The annual expenses of the fund such as storage, insurance, and management fees are charged by selling a small amount of gold represented by each certificate, so the amount of gold in each certificate will gradually decline over time. In some countries, gold ETFs represent a way to avoid the sales tax or the VAT which would apply to physical gold coins and bars.

In the United States sales of a gold ETF are treated as sales of the underlying commodity and thus are taxed at the 28% capital gains rate rather than the 15% long-term capital gains rate for non-collectibles.^[2]

[edit] Funds

[edit] Exchange Traded Gold

Following the launch of Gold Bullion Securities on 28 March 2003 in Australia, a number of associated GETFs were soon launched on other stock exchanges. These GETFs are grouped under the name Exchange Traded Gold.^[3]

Exchange Traded Gold is listed under:

In Europe:

• ETFS Physical Gold (previously named Gold Bullion Securities) (ASX: GOLD)
• ETF Securities Gold Bullion Securities (LSE: GBS and Euronext: GBS) (previously marketed by Lyxor)

In the United States:

• SPDR Gold Trust (formerly streetTRACKS Gold Shares) (NYSE: GLD, SGX:GLD 10US$, TYO: 1326 and SEHK: 2840)
• New Gold Issuer (JSE: GLD)

Exchange Traded Gold is sponsored by the World Gold Council, and as of August 2007 held 627.92 tonnes of gold in storage.^[3] SPDR Gold Trust marketed by State Street Global Markets LLC, an affiliate of State Street Global Advisors, accounts for over 80 percent of this gold. As of 2008, SPDR Gold Trust is the largest and most liquid GETF on the market.

[edit] ETFS Physical Gold

In September 2006 ETF Securities launched ETFS Gold (LSE: BULL) which tracks the DJ-AIG Gold Sub-Index, and later in April 2007 ETFS Physical Gold (LSE: PHAU) which is backed by allocated gold bullion.

ETF Securities’ physical gold ETCs – ETFS Physical Gold (PHAU) and Gold Bullion Securities (GBS) – are all backed by “allocated” gold bars – uniquely identifiable bars which carry no bank credit risk. The precious metal bars are held in trust in London by the Custodian HSBC Bank USA N.A., the world’s leading Custodian for ETCs. The metal held with the Custodian must conform to the rules for Good Delivery of the London Bullion Market Association (LBMA). Securities are only issued once metal is confirmed as being deposited into the Company’s bullion account with the Custodian. Consistent with allocated gold, no precious metal is borrowed, loaned out nor does it earn any income.

As of Jan 09 ETFS Securities is the largest gold ETF provider in europe.

[edit] iShares COMEX Gold Trust

The iShares COMEX Gold Trust was launched by iShares on 21 January 2005 and is listed on the New York Stock Exchange (NYSE: IAU) and Toronto Stock Exchange (TSX: IGT). As of November 21, 2007 the fund held 54.14 tonnes of gold in storage.^[4]

[edit] ZKB Gold ETF

The ZKB Gold ETF was launched on 15 March 2006 by Zürcher Kantonalbank and is listed in Switzerland under the symbol ZGLD. Shares are sold in 1 kg gold units, with a minimum purchase of one unit. As of August 2007, ZKB Gold ETF held 22.0 tonnes of gold in storage.

[edit] Central Fund of Canada

The Central Fund of Canada (TSX: CEF.A and NYSE: CEF) is a closed-end fund headquartered in Calgary, Alberta, Canada, mandated to keep the bulk of their net assets in a mixture of gold and silver with a small percentage of cash. The custodian of the gold and silver assets is the main Calgary branch of CIBC. As of March 2008, the Central Fund of Canada held 28.48 tonnes of gold and 1423.66 tonnes of silver in storage.

[edit] Central Gold Trust

The Central Gold Trust (TSX: GTU.UN, TSX: GTU.U and NYSE: GTU) is a closed-end fund operated by many of the same individuals, and employing many of the same practices, as the Central Fund of Canada. Unlike its sister fund, however, the Central Gold Trust is mandated to keep the bulk of its assets in gold, and does not hold silver. As of March 2008, the Central Gold Trust held 5.21 tons of gold in storage.

[edit] Gold Benchmark Exchange Traded Scheme

On 19 March 2007 Benchmark Asset Management Company, a Mumbai-based mutual fund house, launched Gold BeES (NSE: GOLDBEES) on the National Stock Exchange of India. Shares are sold in approximately 1 gram gold units.

[edit] UTI Gold Exchange Traded Fund

On 17 April 2007 UTI Mutual Fund listed Gold Exchange Traded Fund (NSE: GOLDSHARE) on the National Stock Exchange of India. The objective of UTI Gold Exchange Traded Fund is to endeavor to provide returns that, before expenses, closely track the performance and yield of Gold. Every unit of UTI Gold Exchange Traded Fund approximately represents one gram of pure gold. Units allotted under the scheme will be credited to investors’ demat accounts.

[edit] Gold-Price-Linked Exchange Traded Fund

On 10 August 2007, Gold-Price-Linked Exchange Traded Fund (code “1328″) listed on the Osaka Securities Exchange, Japan. Shares are sold in 1 gram gold units, with a minimum purchase of ten units. This GETF is not backed by physical gold but by special bonds traded in London which are linked to the gold price.

[edit] PowerShares DB Gold ETF and ETNs (PowerShares/Deutsche Bank)

Tracks the performance of certain index moves inside the Deutsche Bank Liquid Commodity Index – Optimum Yield Gold [1]. ETNs are exchange-traded notes, which differ from exchange-traded funds (ETFs).

• DB Gold (NYSE: DGL) (gold ETF)
• DB Gold Double Long (NYSE: DGP) (long leveraged gold ETN)
• DB Gold Short (NYSE: DGZ) (short gold ETN)
• DB Gold Double Short (NYSE: DZZ) (short leveraged gold ETN)

thanks to wikipedia.org

Vehicle insurance (also known as auto insurance, car insurance, or motor insurance) is insurance purchased for cars, trucks, and other vehicles. Its primary use is to provide protection against losses incurred as a result of traffic accidents and against liability that could be incurred in an accident.

[edit] Public policy

In many jurisdictions it is compulsory to have vehicle insurance before using or keeping a motor vehicle on public roads. Most jurisdictions relate insurance to both the car and the driver, however the degree of each varies greatly.

A 1994 study by Jeremy Jackson and Roger Blackman^[1] showed, consistent with the risk homeostasis theory, that increased accident costs caused large and significant reductions in accident frequencies.

[edit] Australia

In South Australia, Third Party Personal insurance from the Motor Accident Commission is included in the licence registration fee for people over 16. A similar scheme applies in Western Australia.

In Victoria, Third Party Personal insurance from the Transport Accident Commission is similarly included, through a levy, in the vehicle registration fee.

In New South Wales, Compulsory Third Party Insurance (commonly known as CTP Insurance) is a mandatory requirement and each individual car must be insured or the vehicle will not be considered legal. Therefore, a motorist cannot drive the vehicle until it is insured. A ‘Green Slip,’^{[citation needed]} another name CTP Insurance is commonly known by due to the colour of the pages the form is printed on, must be obtained through one of the seven main insurers in New South Wales.

[edit] Canada

Several Canadian provinces (British Columbia, Saskatchewan, Manitoba and Quebec) provide a public auto insurance system while in the rest of the country insurance is provided privately. Basic auto insurance is mandatory throughout Canada with each province’s government determining which benefits are included as minimum required auto insurance coverage and which benefits are options available for those seeking additional coverage. Accident benefits coverage is mandatory everywhere except for Newfoundland and Labrador. All provinces in Canada have some form of no-fault insurance available to accident victims. The difference from province to province is the extent to which tort or no-fault is emphasized.^[2] Typically, coverage against loss of or damage to the driver’s own vehicle is optional – one notable exception to this is in Saskatchewan, where SGI provides collision coverage (less than a $700 deductible, such as a collision damage waiver) as part of its basic insurance policy. In Saskatchewan, residents have the option to have their auto insurance through a tort system but less than 0.5% of the population have taken this option.^[2]

[edit] Ireland

The Road Traffic Act, 1933 requires all drivers of mechanically propelled vehicles in public places to have at least third-party insurance, or to have obtained exemption – generally by depositing a (large) sum of money with the High Court as a guarantee against claims. In 1933 this figure was set at £15,000. The Road Traffic Act, 1961 [1] (which is currently in force) repealed the 1933 act but replaced these sections with functionally identical sections.

From 1968, those making deposits require the consent of the Minister for Transport to do so, with the sum specified by the Minister.

Those not exempted from obtaining insurance must obtain a certificate of insurance from their insurance provider, and display a portion of this (an insurance disc) on their vehicles windscreen (if fitted). The certificate in full must be presented to a police station within ten days if requested by an officer. Proof of having insurance or an exemption must also be provided to pay for your motor tax.

Those injured or suffering property damage/loss due to uninsured drivers can claim against the Motor Insurance Bureau of Ireland’s uninsured drivers fund, as can those injured (but not those suffering damage or loss) from hit and run offences.

[edit] South Africa

South Africa allocates a percentage of the money from gasoline into the Road Accidents Fund, which goes towards compensating third parties in accidents.^[3]

[edit] United Kingdom

In 1930, the UK government introduced a law that required every person who used a vehicle on the road to have at least third party personal injury insurance. Today UK law is defined by The Road Traffic Act 1988, which was last modified in 1991. The act requires that motorists either be insured, have a security, or have made a specified deposit (£500,000 as of 1991) with the Accountant General of the Supreme Court, against their liability for injuries to others (including passengers) and for damage to other persons’ property resulting from use of a vehicle on a public road or in other public places.

The minimum level of insurance cover commonly available and which satisfies the requirement of the act is called third party only insurance. The level of cover provided by Third party only insurance is basic but does exceed the requirements of the act.

Road Traffic Act Only Insurance is not the same as Third Party Only Insurance and is not often sold. It provides the very minimum cover to satisfy the requirements of the act. For example Road Traffic Act Only Insurance has a limit of £250,000 for damage to third party property and does not cover emergency treatment fees. Third party insurance has a far greater limit for third party property damage and will cover emergency treatment fees.

It is an offence to drive a car, or allow others to drive it, without at least third party insurance whilst on the public highway (or public place Section 143(1)(a) RTA 1988 as amended 1991); however, no such legislation applies on private land.

Vehicles which are exempted by the act, from the requirement to be covered, include those owned by certain councils and local authorities, national park authorities, education authorities, police authorities, fire authorities, heath service bodies and security services.

The insurance certificate or cover note issued by the insurance company constitutes legal evidence that the vehicle specified on the document is insured. The law says that an authorised person, such as the police, may require a driver to produce an insurance certificate for inspection. If the driver cannot show the document immediately on request, then the driver will usually be issued a HORT/1 with seven days, as of midnight of the date of issue, to take a valid insurance certificate (and usually other driving documents as well) to a police station of the driver’s choice. Failure to produce an insurance certificate is an offence.

If a vehicle has been substantially modified, the modifications must be notified to the insurer, otherwise the policy becomes invalid. In the case of a police check finding that the modifications have not been notified to the insurance companies, the driver would be prosecuted for the disclosed offence^[4].

Insurance is more expensive in Northern Ireland than in other parts of the UK.^{[vague][citation needed]}

Most motorists in the UK are required to prominently display a vehicle licence (tax disc) on their vehicle when it is kept or driven on public roads. This helps to ensure that most people have adequate insurance on their vehicles because an insurance certificate must be produced when a disc is purchased.

The Motor Insurers Bureau compensates the victims of road accidents caused by uninsured and untraced motorists. It also operates the Motor Insurance Database, which contains details of every insured vehicle in the country.

[edit] United States

In the United States, auto insurance covering liability for injuries and property damage done to others is compulsory in most states, though enforcement of the requirement varies from state to state. The state of New Hampshire, for example, does not require motorists to carry liability insurance (the ballpark model), while in Virginia residents must pay the state a $500 annual fee per vehicle if they choose not to buy liability insurance.^[5] Penalties for not purchasing auto insurance vary by state, but often involve a substantial fine, license and/or registration suspension or revocation, as well as possible jail time in some states. Usually, the minimum required by law is third party insurance to protect third parties against the financial consequences of loss, damage or injury caused by a vehicle.

Some states, such as North Carolina, require that a driver hold liability insurance before a license can be issued.

Arizona Department of Transportation Research Project Manager John Semmens has recommended that car insurers issue license plates, and that they be held responsible for the full cost of injuries and property damages caused by their licensees under the Disneyland model. Plates would expire at the end of the insurance coverage period, and licensees would need to return their plates to their insurance office to receive a refund on their premiums. Vehicles driving without insurance would thus be easy to spot because they would not have license plates, or the plates would be past the marked expiration date.^[6]

[edit] Coverage levels

Vehicle insurance can cover some or all of the following items:

• The insured party
• The insured vehicle
• Third parties (car and people)
• In some States coverage for injuries to persons riding in the insured vehicle is available without regard to fault in the auto accident (No Fault Auto Insurance)

Different policies specify the circumstances under which each item is covered. For example, a vehicle can be insured against theft, fire damage, or accident damage independently.

[edit] Excess

An excess payment, also known as a deductible, is the fixed contribution you must pay each time your car is repaired through your car insurance policy. Normally the payment is made directly to the accident repair “garage” (The term “garage” refers to an establishment where vehicles are serviced and repaired) when you collect the car. If one’s car is declared to be a “write off” or “total loss”(“write off” is commonly used in motor insurance to describe a vehicle the worth of which is less than the cost of repair), the insurance company will deduct the excess agreed on the policy from the settlement payment it makes to you.

If the accident was the other driver’s fault, and this is accepted by the third party’s insurer, you’ll be able to reclaim your excess payment from the other person’s insurance company.

[edit] Compulsory excess

A compulsory excess is the minimum excess payment your insurer will accept on your insurance policy. Minimum excesses vary according to your personal details, driving record and insurance company.

[edit] Voluntary excess

In order to reduce your insurance premium, you may offer to pay a higher excess than the compulsory excess demanded by your insurance company. Your voluntary excess is the extra amount over and above the compulsory excess that you agree to pay in the event of a claim on the policy. As a bigger excess reduces the financial risk carried by your insurer, your insurer is able to offer you a significantly lower premium.

[edit] Basis of premium charges

Depending on the jurisdiction, the insurance premium can be either mandated by the government or determined by the insurance company in accordance to a framework of regulations set by the government. Often, the insurer will have more freedom to set the price on physical damage coverages than on mandatory liability coverages.

When the premium is not mandated by the government, it is usually derived from the calculations of an actuary based on statistical data. The premium can vary depending on many factors that are believed to have an impact on the expected cost of future claims.^[7] Those factors can include the car characteristics, the coverage selected (deductible, limit, covered perils), the profile of the driver (age, gender, driving history) and the usage of the car (commute to work or not, predicted annual distance driven).^[8]

[edit] Gender

Men average more miles driven per year than women do, and consequently have a proportionally higher accident involvement at all ages. Insurance companies cite women’s lower accident involvement in keeping the youth surcharge lower for young women drivers than for their male counterparts, but adult rates are generally unisex. Reference to the lower rate for young women as “the women’s discount” has caused confusion that was evident in news reports on a recently defeated EC proposal to make it illegal to consider gender in assessing insurance premiums.^[9] Ending the discount would have made no difference to most women’s premiums.^{[citation needed]}

[edit] Age

Teenage drivers who have no driving record will have higher car insurance premiums. However, young drivers are often offered discounts if they undertake further driver training on recognised courses, such as the Pass Plus scheme in the UK. In the U.S. many insurers offer a good grade discount to students with a good academic record and resident student discounts to those who live away from home. Generally insurance premiums tend to become lower at the age of 25. Senior drivers are often eligible for retirement discounts reflecting lower average miles driven by this age group.

[edit] Marital Status

Drivers who are unmarried are often charged higher insurance premiums as opposed to married drivers.

[edit] Vehicle Classification

Owners of sports cars, muscle cars, some sport utility vehicles, and motorcycles would have higher insurance premiums as opposed to compact cars, midsized cars, or luxury cars. However, in the case of motorcycles, the chance of causing extensive damage to other vehicles is relatively low (as opposed to damage to oneself) and thus liability insurance premiums are often lower.

[edit] Distance

Some car insurance plans do not differentiate in regard to how much the car is used. However, methods of differentiation would include:

[edit] Reasonable estimation

Several car insurance plans rely on a reasonable estimation of the average annual distance expected to be driven which is provided by the insured. This discount benefits drivers who drive their cars infrequently but has no actuarial value since it is unverified.

[edit] Odometer-based systems

Cents Per Mile Now^[10](1986) advocates classified odometer-mile rates. After the company’s risk factors have been applied and the customer has accepted the per-mile rate offered, customers buy prepaid miles of insurance protection as needed, like buying gallons of gasoline. Insurance automatically ends when the odometer limit (recorded on the car’s insurance ID card) is reached unless more miles are bought. Customers keep track of miles on their own odometer to know when to buy more. The company does no after-the-fact billing of the customer, and the customer doesn’t have to estimate a “future annual mileage” figure for the company to obtain a discount. In the event of a traffic stop, an officer could easily verify that the insurance is current by comparing the figure on the insurance card to that on the odometer.

Critics point out the possibility of cheating the system by odometer tampering. Although the newer electronic odometers are difficult to roll back, they can still be defeated by disconnecting the odometer wires and reconnecting them later. However, as the Cents Per Mile Now website points out:

As a practical matter, resetting odometers requires equipment plus expertise that makes stealing insurance risky and uneconomical. For example, in order to steal 20,000 miles (32,000 km) of continuous protection while paying for only the 2,000 miles (3,200 km) from 35,000 miles (56,000 km) to 37,000 miles (60,000 km) on the odometer, the resetting would have to be done at least nine times to keep the odometer reading within the narrow 2,000-mile (3,200 km) covered range. There are also powerful legal deterrents to this way of stealing insurance protection. Odometers have always served as the measuring device for resale value, rental and leasing charges, warranty limits, mechanical breakdown insurance, and cents-per-mile tax deductions or reimbursements for business or government travel. Odometer tampering—detected during claim processing—voids the insurance and, under decades-old state and federal law, is punishable by heavy fines and jail.

Under the cents-per-mile system, rewards for driving less are delivered automatically without need for administratively cumbersome and costly GPS technology. Uniform per-mile exposure measurement for the first time provides the basis for statistically valid rate classes. Insurer premium income automatically keeps pace with increases or decreases in driving activity, cutting back on resulting insurer demand for rate increases and preventing today’s windfalls to insurers when decreased driving activity lowers costs but not premiums.

[edit] GPS-based system

In 1998, Progressive Insurance started a pilot program in Texas in which drivers received a discount for installing a GPS-based device that tracked their driving behavior and reported the results via cellular phone to the company.^[11] Policyholders were reportedly more upset about having to pay for the expensive device than they were over privacy concerns.^[12] The program was discontinued in 2000.

[edit] OBDII-based system

In 2008, The Progressive Corporation launched MyRate to give drivers a customized insurance rate based on how, how much, and when their car is driven. MyRate is currently available in Alabama, Kentucky, Louisiana, Michigan, Minnesota, Maryland, New Jersey and Oregon. Driving data is transmitted to the company using an on-board telematic device. The device connects to a car’s OnBoard Diagnostic (OBD-II) port (all automobiles built after 1996 have an OBD-II.) and transmits speed, time of day and number of miles the car is driven. There is no GPS in the MyRate device, so no location information is collected. Cars that are driven less often, in less risky ways and at less risky times of day can receive large discounts. Progressive has received patents on its methods and systems of implementing usage-based insurance and has licensed these methods and systems to other companies. Progressive has service marks pending on the terms Pay As You Drive and Pay How You Drive.

[edit] Auto insurance in the United States

[edit] Coverage available

The consumer may be protected with different coverage types depending on what coverage the insured purchases. Some states require that motorists carry liability insurance coverage to ensure that its drivers can cover the cost of damages to people or property in the event of an automobile accident. Some states, such as Wisconsin, have more flexible “proof of financial responsibility” requirements.^[13]

In the United States, liability insurance covers claims against the policy holder and generally, any other operator of the insured vehicles, provided they do not live at the same address as the policy holder, and are not specifically excluded on the policy. In the case of those living at the same address, they must specifically be covered on the policy. Thus it is necessary, for example, when a family member comes of driving age they must be added to the policy. Liability insurance sometimes does not protect the policy holder if they operate any vehicles other than their own. When you drive a vehicle owned by another party, you are covered under that party’s policy. Non-owners policies may be offered that would cover an insured on any vehicle they drive. This coverage is available only to those who do not own their own vehicle and is sometimes required by the government for drivers who have previously been found at fault in an accident. Non-owners policies are also known as Named Operator Policies. The policies are useful for people whose drivers license has been suspended and they have to have insurance for their licensed to be reinstated.

Generally, liability coverage extends when you rent a car. Comprehensive policies (“full coverage”) usually also apply to the rental vehicle, although this should be verified beforehand. Full coverage premiums are based on, among other factors, the value of the insured’s vehicle. This coverage, however, cannot apply to rental cars because the insurance company does not want to assume responsibility for a claim greater than the value of the insured’s vehicle, assuming that a rental car may be worth more than the insured’s vehicle. Most rental car companies offer insurance to cover damage to the rental vehicle. These policies may be unnecessary for many customers as credit card companies, such as Visa and MasterCard, now provide supplemental collision damage coverage to rental cars if the transaction is processed using one of their cards. These benefits are restrictive in terms of the types of vehicles covered.^[14]

[edit] Liability

Liability coverage is offered for bodily injury (BI) or property damage (PD) for which the insured driver is deemed responsible. The amount of coverage provided (a fixed dollar amount) will vary from jurisdiction to jurisdiction. Whatever the minimum, the insured can usually increase the coverage (prior to a loss) for an additional charge.

An example of Property Damage is where an insured driver (or 1st party) drives into a telephone pole and damages the pole, liability coverage pays for the damage to the pole. In this example, the drivers insured may also become liable for other expenses related to damaging the telephone pole, such as loss of service claims (by the telephone company), depending on the jurisdiction. An example of Bodily Injury is where an insured driver causes bodily harm to a third party and the insured driver is deemed responsible for the injuries. However, in some jurisdictions, the third party would first exhaust coverage for accident benefits through their own insurer (assuming they have one) and/or would have to meet a legal definition of severe impairment to have the right to claim (or sue) under the insured driver’s (or 1st Party’s) policy.

In some jurisdictions: Liability coverage is available either as a combined single limit policy, or as a split limit policy:

[edit] Combined single limit

A combined single limit combines property damage liability coverage and bodily injury coverage under one single combined limit. For example, an insured driver with a combine single liability limit strikes another vehicle and injures the driver and the passenger. Payments for the damages to the other driver’s car, as well as payments for injury claims for the driver and passenger, would be paid out under this same coverage.

[edit] Split limits

A split limit liability coverage policy splits the coverages into property damage coverage and bodily injury coverage. In the example given above, payments for the other driver’s vehicle would be paid out under property damage coverage, and payments for the injuries would be paid out under bodily injury coverage.

Bodily injury liability coverage is also usually split as well into a maximum payment per person and a maximum payment per accident.

In the state of Oklahoma, you must carry at least state minimum liability limits of $25,000/50,000/25,000. If an insured driver hits a car full of people and is found by the insurance company to be liable, the insurance company will pay $25,000 of one persons medical bills but will not exceed 50,000 for other people injured in the accident. The insurance company will pay property damage not to exceed 25,000 in repairs to the vehicle that the insured hit.

In the state of Indiana, the minimum liability limits are $25,000/$50,000/$10,000 so, there is a greater property damage exposure for only carrying the minimum limits.

[edit] Full Coverage

Full coverage is the name commonly referred to as Comprehensive and Collision. Insurers generally do not use this term because it implies broader coverage than actually exists.

[edit] Collision

Collision coverage provides coverage for an insured’s vehicle that is involved in an accident, subject to a deductible. This coverage is designed to provide payments to repair the damaged vehicle, or payment of the cash value of the vehicle if it is not repairable. Collision coverage is optional, however if you plan on financing a car or taking a car loan, the lender will usually insist you carry collision for the finance term or until your car is paid off. Collision Damage Waiver (CDW) or Loss Damage Waiver (LDW) is the term used by rental car companies for collision coverage.

[edit] Comprehensive

Comprehensive (a.k.a. – Other Than Collision) coverage provides coverage, subject to a deductible, for an insured’s vehicle that is damaged by incidents that are not considered Collisions. For example, fire, theft (or attempted theft), vandalism, weather, or impacts with animals are types of Comprehensive losses.

[edit] Uninsured/underinsured coverage

Underinsured coverage, also known as UM/UIM, provides coverage if an at-fault party either does not have insurance, or does not have enough insurance. In effect, your insurance company pays your medical bills, then would subrogate from the at fault party.

In the United States, the definition of an uninsured/underinsured motorist, and corresponding coverages, are set by state laws.

[edit] Loss of use

Loss of use coverage, also known as rental coverage, provides reimbursement for rental expenses associated with having an insured vehicle repaired due to a covered loss.

[edit] Loan/lease payoff

Loan/lease payoff coverage, also known as GAP coverage or GAP insurance,^[15][16] was established in the early 1980s to provide protection to consumers based upon buying and market trends.

Due to the sharp decline in value immediately following purchase, there is generally a period in which the amount owed on the car loan exceeds the value of the vehicle, which is called “upside-down” or negative equity. Thus, if the vehicle is damaged beyond economical repair at this point, the owner will still owe potentially thousands of dollars on the loan. The escalating price of cars, longer-term auto loans, and the increasing popularity of leasing gave birth to GAP protection. GAP waivers provide protection for consumers when a “gap” exists between the actual value of their vehicle and the amount of money owed to the bank or leasing company. In many instances, this insurance will also pay the deductible on the primary insurance policy. These policies are often offered at the auto dealership as a comparatively low cost add on that can be put into the car loan which provides coverage for the duration of the loan.

Consumers should be aware that a few states, including New York, require lenders of leased cars to include GAP insurance within the cost of the lease itself. This means that the monthly price quoted by the dealer must include GAP insurance, whether it is delineated or not. Nevertheless, unscrupulous dealers sometimes prey on unsuspecting individuals by offering them GAP insurance at an additional price, on top of the monthly payment, without mentioning the State’s requirements.

In addition, some vendors and insurance companies offer what is called “Total Loss Coverage.” This is similar to ordinary GAP insurance but differs in that instead of paying off the negative equity on a vehicle that is a total loss, the policy provides a certain amount, usually up to $5000, toward the purchase or lease of a new vehicle. Thus, to some extent the distinction makes no difference, i.e., in either case the owner receives a certain sum of money. However, in choosing which type of policy to purchase, the owner should consider whether, in case of a total loss, it is more advantageous for him or her to have the policy pay off the negative equity or provide a down payment on a new vehicle.

For example, assuming a total loss of a vehicle valued at $15,000, but on which the owner owes $20,000, is the “gap” of $5000. If the owner has traditional GAP coverage, the “gap” will be wiped out and he or she may purchase or lease another vehicle or choose not to. If the owner has “Total Loss Coverage,” he or she will have to personally cover the “gap” of $5000, and then receive $5000 toward the purchase or lease of a new vehicle, thereby either reducing monthly payments, in the case of financing or leasing, or the total purchase price in the case of outright purchasing. So the decision on which type of policy to purchase will, in most instances, be informed by whether the owner can pay off the negative equity in case of a total loss and/or whether he or she will definitively purchase a replacement vehicle.

[edit] Towing

Car towing coverage is also known as Roadside Assistance coverage. Traditionally, automobile insurance companies have agreed to only pay for the cost of a tow that is related to an accident that is covered under the automobile policy of insurance. This had left a gap in coverage for tows that are related to mechanical breakdowns, flat tires and gas outages. To fill that void, insurance companies started to offer the car towing coverage, which pays for non-accident related tows.

[edit] Personal Property

Personal items in a vehicle that are damaged due to an accident would not be a covered under the auto policy. Any type of property that is not attached to the vehicle should be claimed under a homeowners or renters policy.

thanks to wikipedia.org

Mesothelioma is a form of cancer that is almost always caused by previous exposure to asbestos. In this disease, malignant cells develop in the mesothelium, a protective lining that covers most of the body’s internal organs. Its most common site is the pleura (outer lining of the lungs and internal chest wall), but it may also occur in the peritoneum (the lining of the abdominal cavity), the heart,^[1] the pericardium (a sac that surrounds the heart) or tunica vaginalis.

Most people who develop mesothelioma have worked on jobs where they inhaled asbestos particles, or they have been exposed to asbestos dust and fiber in other ways. Washing the clothes of a family member who worked with asbestos can also put a person at risk for developing mesothelioma.^[2] Unlike lung cancer, there is no association between mesothelioma and smoking.^[3] Compensation via asbestos funds or lawsuits is an important issue in mesothelioma (see asbestos and the law).

The symptoms of mesothelioma include shortness of breath due to pleural effusion (fluid between the lung and the chest wall) or chest wall pain, and general symptoms such as weight loss. The diagnosis may be suspected with chest X-ray and CT scan, and is confirmed with a biopsy (tissue sample) and microscopic examination. A thoracoscopy (inserting a tube with a camera into the chest) can be used to take biopsies. It allows the introduction of substances such as talc to obliterate the pleural space (called pleurodesis), which prevents more fluid from accumulating and pressing on the lung. Despite treatment with chemotherapy, radiation therapy or sometimes surgery, the disease carries a poor prognosis. Research about screening tests for the early detection of mesothelioma is ongoing.

[edit] Signs and symptoms

Symptoms of mesothelioma may not appear until 20 to 50 years after exposure to asbestos. Shortness of breath, cough, and pain in the chest due to an accumulation of fluid in the pleural space are often symptoms of pleural mesothelioma.

Symptoms of peritoneal mesothelioma include weight loss and cachexia, abdominal swelling and pain due to ascites (a buildup of fluid in the abdominal cavity). Other symptoms of peritoneal mesothelioma may include bowel obstruction, blood clotting abnormalities, anemia, and fever. If the cancer has spread beyond the mesothelium to other parts of the body, symptoms may include pain, trouble swallowing, or swelling of the neck or face.

These symptoms may be caused by mesothelioma or by other, less serious conditions.

Mesothelioma that affects the pleura can cause these signs and symptoms:

• chest wall pain
• pleural effusion, or fluid surrounding the lung
• shortness of breath
• fatigue or anemia
• wheezing, hoarseness, or cough
• blood in the sputum (fluid) coughed up (hemoptysis)

In severe cases, the person may have many tumor masses. The individual may develop a pneumothorax, or collapse of the lung. The disease may metastasize, or spread, to other parts of the body.

Tumors that affect the abdominal cavity often do not cause symptoms until they are at a late stage. Symptoms include:

• abdominal pain
• ascites, or an abnormal buildup of fluid in the abdomen
• a mass in the abdomen
• problems with bowel function
• weight loss

In severe cases of the disease, the following signs and symptoms may be present:

• blood clots in the veins, which may cause thrombophlebitis
• disseminated intravascular coagulation, a disorder causing severe bleeding in many body organs
• jaundice, or yellowing of the eyes and skin
• low blood sugar level
• pleural effusion
• pulmonary emboli, or blood clots in the arteries of the lungs
• severe ascites

A mesothelioma does not usually spread to the bone, brain, or adrenal glands. Pleural tumors are usually found only on one side of the lungs.

[edit] Diagnosis

CT scan of a patient with mesothelioma, coronal section (the section follows the plane the divides the body in a front and a back half). The mesothelioma is indicated by yellow arrows, the central pleural effusion (fluid collection) is marked with a yellow star. Red numbers: (1) right lung, (2) spine, (3) left lung, (4) ribs, (5) descending part of the aorta, (6) spleen, (7) left kidney, (8) right kidney, (9) liver.

Diagnosing mesothelioma is often difficult, because the symptoms are similar to those of a number of other conditions. Diagnosis begins with a review of the patient’s medical history. A history of exposure to asbestos may increase clinical suspicion for mesothelioma. A physical examination is performed, followed by chest X-ray and often lung function tests. The X-ray may reveal pleural thickening commonly seen after asbestos exposure and increases suspicion of mesothelioma. A CT (or CAT) scan or an MRI is usually performed. If a large amount of fluid is present, abnormal cells may be detected by cytology if this fluid is aspirated with a syringe. For pleural fluid this is done by a pleural tap or chest drain, in ascites with an paracentesis or ascitic drain and in a pericardial effusion with pericardiocentesis. While absence of malignant cells on cytology does not completely exclude mesothelioma, it makes it much more unlikely, especially if an alternative diagnosis can be made (e.g. tuberculosis, heart failure).

If cytology is positive or a plaque is regarded as suspicious, a biopsy is needed to confirm a diagnosis of mesothelioma. A doctor removes a sample of tissue for examination under a microscope by a pathologist. A biopsy may be done in different ways, depending on where the abnormal area is located. If the cancer is in the chest, the doctor may perform a thoracoscopy. In this procedure, the doctor makes a small cut through the chest wall and puts a thin, lighted tube called a thoracoscope into the chest between two ribs. Thoracoscopy allows the doctor to look inside the chest and obtain tissue samples.

If the cancer is in the abdomen, the doctor may perform a laparoscopy. To obtain tissue for examination, the doctor makes a small incision in the abdomen and inserts a special instrument into the abdominal cavity. If these procedures do not yield enough tissue, more extensive diagnostic surgery may be necessary.

[edit] Screening

There is no universally agreed protocol for screening people who have been exposed to asbestos. Screening tests might diagnose mesothelioma earlier than conventional methods thus improving the survival prospects for patients. The serum osteopontin level might be useful in screening asbestos-exposed people for mesothelioma. The level of soluble mesothelin-related protein is elevated in the serum of about 75% of patients at diagnosis and it has been suggested that it may be useful for screening.^[4] Doctors have begun testing the Mesomark assay which measures levels of soluble mesothelin-related proteins (SMRPs) released by diseased mesothelioma cells.^[5]

[edit] Staging

Please help improve this section by expanding it. Further information might be found on the talk page. (November 2008)

Mesothelioma is described as localized if the cancer is found only on the membrane surface where it originated. It is classified as advanced if it has spread beyond the original membrane surface to other parts of the body, such as the lymph nodes, lungs, chest wall, or abdominal organs.

[edit] Pathophysiology

The mesothelium consists of a single layer of flattened to cuboidal cells forming the epithelial lining of the serous cavities of the body including the peritoneal, pericardial and pleural cavities. Deposition of asbestos fibres in the parenchyma of the lung may result in the penetration of the visceral pleura from where the fibre can then be carried to the pleural surface, thus leading to the development of malignant mesothelial plaques. The processes leading to the development of peritoneal mesothelioma remain unresolved, although it has been proposed that asbestos fibres from the lung are transported to the abdomen and associated organs via the lymphatic system. Additionally, asbestos fibres may be deposited in the gut after ingestion of sputum contaminated with asbestos fibres.

Pleural contamination with asbestos or other mineral fibres has been shown to cause cancer. Long thin asbestos fibers (blue asbestos, amphibole fibers) are more potent carcinogens than “feathery fibers” (chrysotile or white asbestos fibers).^[6] However, there is now evidence that smaller particles may be more dangerous than the larger fibers.[1][2] They remain suspended in the air where they can be inhaled, and may penetrate more easily and deeper into the lungs. “We probably will find out a lot more about the health aspects of asbestos from [the World Trade Center attack], unfortunately,” said Dr. Alan Fein, chief of pulmonary and critical-care medicine at North Shore-Long Island Jewish Health System. Dr. Fein has treated several patients for “World Trade Center syndrome” or respiratory ailments from brief exposures of only a day or two near the collapsed buildings.[3]

Mesothelioma development in rats has been demonstrated following intra-pleural inoculation of phosphorylated chrysotile fibres. It has been suggested that in humans, transport of fibres to the pleura is critical to the pathogenesis of mesothelioma. This is supported by the observed recruitment of significant numbers of macrophages and other cells of the immune system to localised lesions of accumulated asbestos fibres in the pleural and peritoneal cavities of rats. These lesions continued to attract and accumulate macrophages as the disease progressed, and cellular changes within the lesion culminated in a morphologically malignant tumour.

Experimental evidence suggests that asbestos acts as a complete carcinogen with the development of mesothelioma occurring in sequential stages of initiation and promotion. The molecular mechanisms underlying the malignant transformation of normal mesothelial cells by asbestos fibres remain unclear despite the demonstration of its oncogenic capabilities. However, complete in vitro transformation of normal human mesothelial cells to malignant phenotype following exposure to asbestos fibres has not yet been achieved. In general, asbestos fibres are thought to act through direct physical interactions with the cells of the mesothelium in conjunction with indirect effects following interaction with inflammatory cells such as macrophages.

Analysis of the interactions between asbestos fibres and DNA has shown that phagocytosed fibres are able to make contact with chromosomes, often adhering to the chromatin fibres or becoming entangled within the chromosome. This contact between the asbestos fibre and the chromosomes or structural proteins of the spindle apparatus can induce complex abnormalities. The most common abnormality is monosomy of chromosome 22. Other frequent abnormalities include structural rearrangement of 1p, 3p, 9p and 6q chromosome arms.

Common gene abnormalities in mesothelioma cell lines include deletion of the tumor suppressor genes:

• Neurofibromatosis type 2 at 22q12
• P16^INK4A
• P14^ARF

Asbestos has also been shown to mediate the entry of foreign DNA into target cells. Incorporation of this foreign DNA may lead to mutations and oncogenesis by several possible mechanisms:

• Inactivation of tumor suppressor genes
• Activation of oncogenes
• Activation of proto-oncogenes due to incorporation of foreign DNA containing a promoter region
• Activation of DNA repair enzymes, which may be prone to error
• Activation of telomerase
• Prevention of apoptosis

Asbestos fibers have been shown to alter the function and secretory properties of macrophages, ultimately creating conditions which favour the development of mesothelioma. Following asbestos phagocytosis, macrophages generate increased amounts of hydroxyl radicals, which are normal by-products of cellular anaerobic metabolism. However, these free radicals are also known clastogenic and membrane-active agents thought to promote asbestos carcinogenicity. These oxidants can participate in the oncogenic process by directly and indirectly interacting with DNA, modifying membrane-associated cellular events, including oncogene activation and perturbation of cellular antioxidant defences.

Asbestos also may possess immunosuppressive properties. For example, chrysotile fibres have been shown to depress the in vitro proliferation of phytohemagglutinin-stimulated peripheral blood lymphocytes, suppress natural killer cell lysis and significantly reduce lymphokine-activated killer cell viability and recovery. Furthermore, genetic alterations in asbestos-activated macrophages may result in the release of potent mesothelial cell mitogens such as platelet-derived growth factor (PDGF) and transforming growth factor-β (TGF-β) which in turn, may induce the chronic stimulation and proliferation of mesothelial cells after injury by asbestos fibres.

[edit] Epidemiology

[edit] Incidence

Although reported incidence rates have increased in the past 20 years, mesothelioma is still a relatively rare cancer. The incidence rate is approximately one per 1,000,000. The highest incidence is found in Britain, Australia and Belgium: 30 per 1,000,000 per year.^[7] For comparison, populations with high levels of smoking can have a lung cancer incidence of over 1,000 per 1,000,000. Incidence of malignant mesothelioma currently ranges from about 7 to 40 per 1,000,000 in industrialized Western nations, depending on the amount of asbestos exposure of the populations during the past several decades.^[8] It has been estimated that incidence may have peaked at 15 per 1,000,000 in the United States in 2004. Incidence is expected to continue increasing in other parts of the world. Mesothelioma occurs more often in men than in women and risk increases with age, but this disease can appear in either men or women at any age. Approximately one fifth to one third of all mesotheliomas are peritoneal.

Between 1940 and 1979, approximately 27.5 million people were occupationally exposed to asbestos in the United States [4]. Between 1973 and 1984, there has been a threefold increase in the diagnosis of pleural mesothelioma in Caucasian males. From 1980 to the late 1990s, the death rate from mesothelioma in the USA increased from 2,000 per year to 3,000, with men four times more likely to acquire it than women. These rates may not be accurate, since it is possible that many cases of mesothelioma are misdiagnosed as adenocarcinoma of the lung, which is difficult to differentiate from mesothelioma.

[edit] Risk factors

Working with asbestos is the major risk factor for mesothelioma.^[9] Mesothelioma is now known to occur in those who are genetically pre-disposed to it. A history of asbestos exposure exists in almost all cases. However, mesothelioma has been reported in some individuals without any known exposure to asbestos. In rare cases, mesothelioma has also been associated with irradiation, intrapleural thorium dioxide (Thorotrast), and inhalation of other fibrous silicates, such as erionite.

Asbestos is the name of a group of minerals that occur naturally as masses of strong, flexible fibers that can be separated into thin threads and woven. Asbestos has been widely used in many industrial products, including cement, brake linings, roof shingles, flooring products, textiles, and insulation. If tiny asbestos particles float in the air, especially during the manufacturing process, they may be inhaled or swallowed, and can cause serious health problems. In addition to mesothelioma, exposure to asbestos increases the risk of lung cancer, asbestosis (a noncancerous, chronic lung ailment), and other cancers, such as those of the larynx and kidney.

The combination of smoking and asbestos exposure significantly increases a person’s risk of developing cancer of the airways (lung cancer, bronchial carcinoma). The Kent brand of cigarettes used asbestos in its filters for the first few years of production in the 1950s and some cases of mesothelioma have resulted. Smoking modern cigarettes does not appear to increase the risk of mesothelioma.

Some studies suggest that simian virus 40 (SV40) may act as a cofactor in the development of mesothelioma.^[10]

[edit] Exposure

Asbestos was known in antiquity, but it wasn’t mined and widely used commercially until the late 1800s. Its use greatly increased during World War II. Since the early 1940s, millions of American workers have been exposed to asbestos dust. Initially, the risks associated with asbestos exposure were not publicly known. However, an increased risk of developing mesothelioma was later found among shipyard workers, people who work in asbestos mines and mills, producers of asbestos products, workers in the heating and construction industries, and other tradespeople. Today, the U.S. Occupational Safety and Health Administration (OSHA) sets limits for acceptable levels of asbestos exposure in the workplace, and created guidelines for engineering controls and respirators, protective clothing, exposure monitoring, hygiene facilities and practices, warning signs, labeling, recordkeeping, and medical exams. By contrast, the British Government’s Health and Safety Executive (HSE) states formally that any threshold for mesothelioma must be at a very low level and it is widely agreed that if any such threshold does exist at all, then it cannot currently be quantified. For practical purposes, therefore, HSE does not assume that any such threshold exists. People who work with asbestos wear personal protective equipment to lower their risk of exposure. Recent findings have shown that a mineral called erionite has been known to cause genetically pre-dispositioned individuals to have malignant mesothelioma rates much higher than those not pre-dispositioned genetically. A study in Cappadocia, Turkey has shown that 3 villiages in Turkey have death rates of 51% attributed to erionite related mesothelioma.

[edit] Occupational

Exposure to asbestos fibres has been recognised as an occupational health hazard since the early 1900s. Several epidemiological studies have associated exposure to asbestos with the development of lesions such as asbestos bodies in the sputum, pleural plaques, diffuse pleural thickening, asbestosis, carcinoma of the lung and larynx, gastrointestinal tumours, and diffuse mesothelioma of the pleura and peritoneum.

The documented presence of asbestos fibres in water supplies and food products has fostered concerns about the possible impact of long-term and, as yet, unknown exposure of the general population to these fibres. Although many authorities consider brief or transient exposure to asbestos fibres as inconsequential and an unlikely risk factor, some epidemiologists claim that there is no risk threshold. Cases of mesothelioma have been found in people whose only exposure was breathing the air through ventilation systems. Other cases had very minimal (3 months or less) direct exposure.

Commercial asbestos mining at Wittenoom, Western Australia, occurred between 1945 and 1966. A cohort study of miners employed at the mine reported that while no deaths occurred within the first 10 years after crocidolite exposure, 85 deaths attributable to mesothelioma had occurred by 1985. By 1994, 539 reported deaths due to mesothelioma had been reported in Western Australia.

[edit] Paraoccupational secondary exposure

Family members and others living with asbestos workers have an increased risk of developing mesothelioma, and possibly other asbestos related diseases. This risk may be the result of exposure to asbestos dust brought home on the clothing and hair of asbestos workers. To reduce the chance of exposing family members to asbestos fibres, asbestos workers are usually required to shower and change their clothing before leaving the workplace.

[edit] Asbestos in buildings

Many building materials used in both public and domestic premises prior to the banning of asbestos may contain asbestos. Those performing renovation works or DIY activities may expose themselves to asbestos dust. In the UK use of Chrysotile asbestos was banned at the end of 1999. Brown and blue asbestos was banned in the UK around 1985. Buildings built or renovated prior to these dates may contain asbestos materials.

[edit] Environmental exposures

Incidence of mesothelioma had been found to be higher in populations living near naturally occurring asbestos. For example, in Cappadocia, Turkey, an unprecedented mesothelioma epidemic caused 50% of all deaths in three small villages. Initially, this was attributed to erionite, however, recently, it has been shown that erionite causes mesothelioma mostly in families with a genetic predisposition^[11].

[edit] Treatment

Treatment of malignant mesothelioma using conventional therapies has not proved successful and patients have a median survival time of 6 – 12 months after presentation^{[citation needed]}. The clinical behaviour of the malignancy is affected by several factors including the continuous mesothelial surface of the pleural cavity which favours local metastasis via exfoliated cells, invasion to underlying tissue and other organs within the pleural cavity, and the extremely long latency period between asbestos exposure and development of the disease.

[edit] Surgery

Surgery, either by itself or used in combination with pre- and post-operative adjuvant therapies, has proved disappointing. A pleurectomy/decortication is the most common surgery, in which the lining of the chest is removed. Less common is an extrapleural pneumonectomy (EPP), in which the lung, lining of the inside of the chest, the hemi-diaphragm and the pericardium are removed.

[edit] Radiation

Wikibooks has a book on the topic of Radiation Oncology/Lung/Mesothelioma

For patients with localized disease, and who can tolerate a radical surgery, radiation is often given post-operatively as a consolidative treatment. The entire hemi-thorax is treated with radiation therapy, often given simultaneously with chemotherapy. This approach of using surgery followed by radiation with chemotherapy has been pioneered by the thoracic oncology team at Brigham & Women’s Hospital in Boston.^[12] Delivering radiation and chemotherapy after a radical surgery has led to extended life expectancy in selected patient populations with some patients surviving more than 5 years. As part of a curative approach to mesothelioma, radiotherapy is also commonly applied to the sites of chest drain insertion, in order to prevent growth of the tumor along the track in the chest wall.

Although mesothelioma is generally resistant to curative treatment with radiotherapy alone, palliative treatment regimens are sometimes used to relieve symptoms arising from tumor growth, such as obstruction of a major blood vessel. Radiation therapy when given alone with curative intent has never been shown to improve survival from mesothelioma. The necessary radiation dose to treat mesothelioma that has not been surgically removed would be very toxic.

[edit] Chemotherapy

In February 2004, the United States Food and Drug Administration approved pemetrexed (brand name Alimta) for treatment of malignant pleural mesothelioma. Pemetrexed is given in combination with cisplatin. Folic acid is also used to reduce the side-effects of pemetrexed.

[edit] Immunotherapy

Treatment regimens involving immunotherapy have yielded variable results. For example, intrapleural inoculation of Bacillus Calmette-Guérin (BCG) in an attempt to boost the immune response, was found to be of no benefit to the patient (while it may benefit patients with bladder cancer). Mesothelioma cells proved susceptible to in vitro lysis by LAK cells following activation by interleukin-2 (IL-2), but patients undergoing this particular therapy experienced major side effects. Indeed, this trial was suspended in view of the unacceptably high levels of IL-2 toxicity and the severity of side effects such as fever and cachexia. Nonetheless, other trials involving interferon alpha have proved more encouraging with 20% of patients experiencing a greater than 50% reduction in tumor mass combined with minimal side effects.

[edit] Heated Intraoperative Intraperitoneal Chemotherapy

A procedure known as heated intraoperative intraperitoneal chemotherapy was developed by Paul Sugarbaker at the Washington Cancer Institute.^[13] The surgeon removes as much of the tumor as possible followed by the direct administration of a chemotherapy agent, heated to between 40 and 48°C, in the abdomen. The fluid is perfused for 60 to 120 minutes and then drained.

This technique permits the administration of high concentrations of selected drugs into the abdominal and pelvic surfaces. Heating the chemotherapy treatment increases the penetration of the drugs into tissues. Also, heating itself damages the malignant cells more than the normal cells.

[edit] Notable people who died from mesothelioma

Mesothelioma, though rare, has had a number of notable patients. Hamilton Jordan, Chief of Staff for President Jimmy Carter and life long cancer activist, died in 2008. Australian anti-racism activist Bob Bellear died in 2005. British science fiction writer Michael G. Coney, responsible for nearly 100 works also died in 2005. American film and television actor Paul Gleason, perhaps best known for his portrayal of Principal Richard Vernon in the 1985 film The Breakfast Club, died in 2006. Mickie Most, an English record producer, died of mesothelioma in 2003. Paul Rudolph, an American architect known for his cubist building designs, died in 1997.

Bernie Banton was an Australian workers’ rights activist, who fought a long battle for compensation from James Hardie after he contracted mesothelioma after working for that company. He claimed James Hardie knew of the dangers of asbestos before he began work with the substance making insulation for power stations. Mesothelioma eventually took his life along with his brothers and hundreds of James Hardie workers. James Hardie made an undisclosed settlement with Banton only when his mesothelioma had reached its final stages and he was expected to have no more than 48hrs to live. Australian Prime Minister-elect Kevin Rudd mentioned Banton’s extended struggle in his acceptance speech after winning the 2007 Australian Federal Election.

Steve McQueen was diagnosed with peritoneal mesothelioma on December 22, 1979. He was not offered surgery or chemotherapy because doctors felt the cancer was too advanced. McQueen sought alternative treatments from clinics in Mexico. He died of a heart attack on November 7, 1980, in Juárez, Mexico, following cancer surgery. He may have been exposed to asbestos while serving with the U.S. Marines as a young adult—asbestos was then commonly used to insulate ships’ piping—or from its use as an insulating material in car racing suits.^[14] (It is also reported that he worked in a shipyard during World War II, where he might have been exposed to asbestos.^{[citation needed]})

United States Congressman Bruce Vento died of mesothelioma in 2000. The Bruce Vento Hopebuilder is awarded yearly by his wife at the MARF Symposium to persons or organizations who have done the most to support mesothelioma research and advocacy.

After a long period of untreated illness and pain, rock and roll musician and songwriter Warren Zevon was diagnosed with inoperable mesothelioma in the fall of 2002. Refusing treatments he believed might incapacitate him, Zevon focused his energies on recording his final album The Wind including the song “Keep Me in Your Heart,” which speaks of his failing breath. Zevon died at his home in Los Angeles, California, on September 7, 2003.

Christie Hennessy, the influential Irish singer-songwriter, died of mesothelioma in 2007, and had stridently refused to accept the prognosis in the weeks before his death.^[15] His mesothelioma has been attributed to his younger years spent working on building sites in London.^[16][17]

Bob Miner, one of the founders of Software Development Labs, the forerunner of Oracle Corporation died of mesothelioma in 1994.

Scottish Labour MP John William MacDougall died of mesothelioma on August 13th, 2008, after fighting the disease for two years.^[18].

Canberra journalist and news presenter, Peter Leonard also succumbed to the condition on 23 September 2008.

Terrence McCann Olympic gold medalist and longtime Executive Director of Toastmasters, died of mesothelioma on June 7, 2006 at his home in Dana Point, California.

[edit] Notable people who have lived for some time with mesothelioma

Although life expectancy with this disease is typically limited, there are notable survivors. In July 1982, Stephen Jay Gould was diagnosed with peritoneal mesothelioma. After his diagnosis, Gould wrote the “The Median Isn’t the Message”^[19] for Discover magazine, in which he argued that statistics such as median survival are just useful abstractions, not destiny. Gould lived for another twenty years eventually succumbing to metastatic adenocarcinoma of the lung, not mesothelioma.

Author Paul Kraus was diagnosed with mesothelioma in June 1997 following an umbilical hernia operation. His prognosis was “a few months.” He continues to survive using a variety of integrative and complementary modalities and has written a book about his experience.

[edit] Legal issues

Main article: asbestos and the law

The first lawsuits against asbestos manufacturers were in 1929. Since then, many lawsuits have been filed against asbestos manufacturers and employers, for neglecting to implement safety measures after the links between asbestos, asbestosis, and mesothelioma became known (some reports seem to place this as early as 1898). Today, you may see a commercial stating something like, “Mesothelioma is a rare type of cancer caused by asbestos particles. Asbestos particles can be found in lumberyards, shipyards or any of the heating or automotive industries.” The liability resulting from the sheer number of lawsuits and people affected has reached billions of dollars. ^[20] The amounts and method of allocating compensation have been the source of many court cases, reaching up to the United States Supreme Court, and government attempts at resolution of existing and future cases. However, to date, Congress has failed to enact significant asbestos reforms. ^[21]

[edit] Legal History

The first lawsuit against asbestos manufacturers was brought in 1929. The parties settled that lawsuit, and as part of the agreement, the attorneys agreed not to pursue further cases. It was not until 1960 that an article published by Wagner et al first officially established mesothelioma as a disease arising from exposure to crocidolite asbestos.^[22] The article referred to over 30 case studies of people who had suffered from mesothelioma in South Africa. Some exposures were transient and some were mine workers. In 1962 McNulty reported the first diagnosed case of malignant mesothelioma in an Australian asbestos worker.^[23] The worker had worked in the mill at the asbestos mine in Wittenoom from 1948 to 1950.

In the town of Wittenoom, asbestos-containing mine waste was used to cover schoolyards and playgrounds. In 1965 an article in the British Journal of Industrial Medicine established that people who lived in the neighbourhoods of asbestos factories and mines, but did not work in them, had contracted mesothelioma.

Despite proof that the dust associated with asbestos mining and milling causes asbestos related disease, mining began at Wittenoom in 1943 and continued until 1966. In 1974 the first public warnings of the dangers of blue asbestos were published in a cover story called “Is this Killer in Your Home?” in Australia’s Bulletin magazine. In 1978 the Western Australian Government decided to phase out the town of Wittenoom, following the publication of a Health Dept. booklet, “The Health Hazard at Wittenoom”, containing the results of air sampling and an appraisal of worldwide medical information.

By 1979 the first writs for negligence related to Wittenoom were issued against CSR and its subsidiary ABA, and the Asbestos Diseases Society was formed to represent the Wittenoom victims.

thanks to wikipedia.org

The Master of Business Administration (MBA) is a master’s degree in business administration, which attracts people from a wide range of academic disciplines. The MBA designation originated in the United States, emerging from the late 19th century as the country industrialized and companies sought out scientific approaches to management. The MBA degree has since achieved worldwide recognition.

Accreditation bodies exist specifically for MBA programs to ensure consistency and quality of graduate business education, and business schools in many countries offer MBA programs tailored to full-time, part-time, executive, and distance learning students, with specialized concentrations.

[edit] Background

The first American business school, Wharton School of the University of Pennsylvania, was established in 1881. The Tuck School of Business, part of Dartmouth College, was the first graduate school of management in the United States. Founded in 1900, it was the first institution conferring advanced degrees (masters) in the commercial sciences, the forebearer of the modern MBA. The University of Chicago Graduate School of Business first offered working professionals the Executive MBA (EMBA) program in 1940, and this type of program is offered by most business schools today.

In 1950 the first MBA degrees were awarded outside the United States by the University of Western Ontario in Canada,^[1] followed in 1951 with the degree awarded by the University of Pretoria in South Africa.^[2] The Institute of Business Administration, Karachi in Pakistan was established in 1955 as the first Asian business school by the Wharton School of the University of Pennsylvania. In 1957, INSEAD became the first European business school to offer an MBA program.

The MBA degree has been adopted by universities worldwide.

[edit] Accreditation

Business schools or MBA programs may be accredited by external bodies which provide students and employers with an independent view of their quality, and indicate that the school’s educational curriculum meets specific quality standards. The three major accrediting bodies are The Association to Advance Collegiate Schools of Business (AACSB) which accredits research universities, the Association of Collegiate Business Schools and Programs (ACBSP) which accredits junior colleges and teaching colleges, and the International Assembly for Collegiate Business Education (IACBE) ^[3]. The AACSB and the ACBSP are recognized accrediting agencies for business schools in the United States by the Council for Higher Education Accreditation (CHEA).^[4] MBA programs with specializations for students pursuing careers in healthcare management also eligible for accreditation by the Commission on the Accreditation of Healthcare Management Education (CAHME).

In the United States, a college or university must be accredited as a whole before it is eligible to have its MBA program accredited. Accrediting bodies that accredit institutions as a whole include the Council for Higher Education Accreditation (CHEA): Middle States Association of Colleges and Schools (MSA), New England Association of Schools and Colleges (NEASCSC), North Central Association of Colleges and Schools (NCA), Northwest Commission on Colleges and Universities (NWCCU), Southern Association of Colleges and Schools (SACS), and Western Association of Schools and Colleges (WASC).^[5]

Accreditation agencies outside the United States include the Association of MBAs (AMBA), a UK based organization that accredits MBA, DBA and MBM programs worldwide; the Council on Higher Education (CHE) in South Africa; the European Quality Improvement System (EQUIS) for mostly European and Asian schools; and the Foundation for International Business Administration Accreditation (FIBAA) in Europe.

[edit] Basic types of MBA programs

Two year MBA programs normally take place over two academic years (i.e. approximately 18 months of term time), in the Northern Hemisphere beginning in late August/September of year one and continuing until May of year two, with a three to four month summer break in between years one and two. Students enter with a reasonable amount of prior real-world work experience and take classes during weekdays like other university students.

Accelerated MBA programs are a variation of the two year programs. They involve a higher course load with more intense class and examination schedules. They usually have less “down time” during the program and between semesters. For example, there is no three to four month summer break, and between semesters there might be seven to ten days off rather than three to five weeks vacation.

Part-time MBA programs normally hold classes on weekday evenings, after normal working hours. Part-time programs normally last three years or more. The students in these programs typically consist of working professionals, who take a light course load for a longer period of time until the graduation requirements are met.

Executive MBA (EMBA) programs developed to meet the educational needs of managers and executives, allowing students to earn an MBA or another business-related graduate degree in two years or less while working full time. Participants come from every type and size of organization – profit, nonprofit, government — representing a variety of industries. EMBA students typically have a higher level of work experience, often 10 years or more, compared to other MBA students. In response to the increasing number of EMBA programs offered, The Executive MBA Council was formed in 1981 to advance executive education.

Distance learning MBA programs hold classes off-campus. These programs can be offered in a number of different formats: correspondence courses by postal mail or email, non-interactive broadcast video, pre-recorded video, live teleconference or videoconference, offline or online computer courses. Many respectable schools offer these programs; however, so do many diploma mills. Potential students should check the school’s accreditation before undertaking distance learning coursework.

Dual MBA programs combine MBA degree with others (such as an MS or a J.D., etc) to let students cut costs (dual programs usually cost less than pursuing 2 degrees separately), save time on education and to tailor the business education courses to their needs. Some business schools offer programs in which students can earn both a bachelor’s degree in business administration and an MBA in four or five years.

[edit] Admissions criteria

Most programs base admission on the Graduate Management Admission Test (GMAT), significant work experience, academic transcripts, essays, references or letters of recommendation, and personal interviews. Schools are also interested in extracurricular activities, community service activities and how the student can improve the diversity and contribute to the student body as a whole. All of these qualifications are important for admission; however, some schools do not weigh GMAT scores as heavily as other criteria. In order to achieve a diverse class, business schools also consider the target male-female ratio and local-international student ratios.

Most schools are first concerned with whether or not the applicant can handle the quantity of course work. The GMAT (the quantitative score) and academic transcripts help determine this. Once the school determines that the student can succeed academically, they examine the remainder of the application to evaluate the applicant’s experience and leadership abilities.

[edit] Program content

Most top MBA programs cover similar subjects within their core required courses. For information about the typical content of an MBA program’s core curriculum, see the overview at the Wikiversity MBA topic page.

[edit] Breadth

MBA programs expose students to a variety of subjects, including economics, organizational behavior, marketing, accounting, finance, strategy, operations management, international business, information technology management, supply chain management, and project management. Students traditionally study a wide breadth of courses in the program’s first year, then pursue a specialized curriculum in the second year. Full-time students typically seek an internship during the interim.

[edit] Specialization

Many programs allow students to specialize or concentrate in a particular area. Standard concentrations include accounting, corporate strategy, decision sciences, property management, economics, entrepreneurship, finance, general management, human resources, international business, marketing, information systems / information technology, telecommunication, organizational behavior, project management, and operations management. Unspecialized MBA programs often focus second-year studies on strategic management or finance.

In addition, a program may offer more specialized concentrations such as Asian business, consulting, sports management, or degrees emphasizing real estate or insurance. Many schools offer unique concentrations available nowhere else.

[edit] The MBA degree in Europe

[edit] History of the MBA in Europe

In 1957, INSEAD became the first European university offering the MBA degree, followed in 1964 by IESE (first two-year program in Europe), UCD Smurfit Business School in 1964, Manchester Business School and London Business School in 1965, The University of Dublin (Trinity College), the Rotterdam School of Management in 1966, the Cranfield School of Management in 1967 and in 1969 by the HEC School of Management (in French, the École des Hautes Études Commerciales) and the Institut d’Etudes Politiques de Paris. In 1991, IEDC-Bled School of Management became the first school in the ex-socialist block of the Central and Eastern to offer an MBA degree.

[edit] Bologna Accord

In Europe, the recent Bologna Accord established uniformity in three levels of higher education: Bachelor (three years), Masters (two years in addition to three years for a Bachelor), and Doctorate (eight years). Students can acquire professional experience after their initial bachelor degree at any European institution and later complete their masters in any other European institution via the European Credit Transfer and Accumulation System. A European masters degree in Management is therefore equivalent to the American MBA having additional scientific content; for example, a European MBA requires writing and defending a master’s thesis.

[edit] Accreditation

Accreditation standards are not uniform in Europe. Some countries have legal requirements for accreditation (e.g. most German states), in some there is a legal requirement only for universities of a certain type (e.g. Austria), and others have no accreditation law at all. Even where there is no legal requirement, many business schools are accredited by independent bodies voluntarily to ensure quality standards.

[edit] United Kingdom

The UK based Association of MBAs (AMBA) was established in 1967 and is an active advocate for MBA degrees. The Association’s accreditation service is internationally recognised for all MBA, DBA and Masters in Business and Management (MBM) programs. AMBA also offer the only professional membership association for MBA students and graduates. UK MBA programs typically consist of a set number of taught courses plus a dissertation or project.

Persons holding an MBA from the world’s top 50 business schools (according to the list published by the UK government) automatically receive the minimum score necessary to qualify for the UK’s Highly Skilled Migrant Programme, which is being phased out. This program entitles the person to a two-year UK work permit, renewable for an additional three years, if that person is gainfully employed at the time of renewal.^[6]

[edit] Germany and Austria

Germany was one of the last western countries to adopt the MBA degree. In 1998 the Hochschulrahmengesetz (Higher Education Framework Act), a German federal law regulating higher education including the types of degrees offered, was modified to permit German universities to offer master’s degrees. The traditional German degree in business administration was the Diplom but since 1999, bachelor’s and master’s degrees have gradually displaced the traditional degrees (see Bologna process). Today most German business schools offer the MBA. Most German states require that MBA degrees have to be accredited by one of the six agencies officially recognized by the German Akkreditierungsrat (accreditation council), the German counterpart to the US-American CHEA. The busiest of these six agencies (in respect to MBA degrees) is the Foundation for International Business Administration Accreditation (FIBAA). All universities themselves have to be institutionally accredited by the state (staatlich anerkannt).

In Austria, MBA programs of private universities have to be accredited by the Austrian Accreditation Council (Österreichischer Akkreditierungsrat). State-run universities have no accreditation requirements, however, some of them voluntarily undergo accreditation procedures by independent bodies. There are also MBA programs of non-academic business schools, who are entitled by the Austrian government to offer these programs until 2010 (Lehrgang universitären Charakters). Some non-academic institutions cooperate with state-run universities to ensure legality of their degrees.

[edit] France and French speaking countries

In France and in the Francophone countries such as Switzerland, Monaco, Belgium, and Canada (Quebec), the MBA degree programs at the public accredited schools are similar to those offered in the Anglo-Saxon countries. Most French Business Schools are accredited by the Conférence des Grandes Écoles, which is an association of higher educational establishments outside the mainstream framework of the public universities system, with selective admission. English is the main learning language but French language may also be necessary for admission at some schools.

[edit] Italy

Italian MBAs programs at public accredited schools are similar to those offered in the anglo-Saxon countries. Best Italian Business Schools are accredited by Equis and by Asfor

[edit] Ukraine

Recently MBA programs appeared in Ukraine where there are now about ten schools of business offering a variety of MBA programs. Two of these are subsidiaries European schools of business, while the remaining institutions are independent.

[edit] The MBA degree in Australia, Africa and Asia

Today, MBA and Doctor of Business Administration (DBA) designations can be found in many countries and even accessed through on-line, distance learning or e-learning. Because of the varying standards of MBAs worldwide, many business schools are accredited by independent bodies.

[edit] Australia

In Australia, 42 Australian business schools offer the MBA degree. Universites differentiate themselves by gaining international accreditation and focusing on national and international rankings. Most MBAs are one to two years full time. There is little use of GMAT, and instead each educational institution specifies its own requirements, which normally entails several years of management-level work experience as well as proven academic skills.

Ratings for Australian MBAs are carried out by the Graduate Management Association of Australia, which publishes an annual Australian MBA Star Ratings.

[edit] South Africa

In 2004, South Africa’s Council on Higher Education (CHE) completed an extensive re-accreditation of MBA degrees offered in the country. The process was the first of its kind in the world to be undertaken by a statutory body and attracted widespread international media attention for its innovation and thoroughness.

[edit] Ghana

Business schools of the traditional universities run a variety of MBA programs. In addition, foreign accredited institutions offer MBA degrees by distance learning in Ghana.

[edit] Nepal

There are 6 business schools in Nepal offering two year MBA programs, mostly by government universities. Government schools do not have exam criteria for selection.

[edit] India

There are 1600 business schools in India offering two year MBA programs; predominantly targeting fresh students without any experience. Among those schools, the Indian Institutes of Management (IIM) are the oldest institutions for management education in India. Gaining admission to any of the IIM schools requires passing the Common Admission Test, which qualifies candidates for entrance into other institutions in India also. The IIM offers a post-graduate diploma in management which is recognized in India as similar to an MBA degree. Non-government accredited, one-year fast-track MBA programs have grown in India, especially for candidates with work experience. Such programs are commonly known as Post Graduate Programme (PGP) in Business Management.

[edit] Rest of Asia

International MBA programs are acquiring brand value in Asia. For example, while a foreign MBA is still preferred in the Philippines, many students are now studying at one of many “Global MBA” English language programs being offered. English-only MBA programs are also offered in Pakistan, Hong Kong, Iran, Japan, Malaysia, Singapore, South Korea, Taiwan, and Thailand. For North American students who want a different experience, many Asian programs offer scholarships and discounted tuition, to encourage an international environment in the classroom.

Rankings have been done for Asia Pacific schools by the magazine Asia Inc. which is a regional business magazine with distribution wolrdwide.

[edit] MBA program rankings

See also: List of United States business school rankings

See also: Australian MBA Star Ratings

Each year, well-known business publications such as Business Week, US News & World Report, Fortune, Financial Times, and the Wall Street Journal publish rankings of selected MBA programs that, while controversial in their methodology, nevertheless can directly influence the prestige of schools that achieve high scores.

The MBA degree has become one of the most popular masters’ degrees. As more universities started offering the degree, differences in the quality of schools, faculty, and course offerings became evident. Naturally, establishing some criteria of quality is needed to differentiate among MBA programs, especially for prospective students trying to decide on where to apply. As MBA programs proliferated, a variety of publications began providing information on them. Some of these consisted of compilations of information gathered from the universities offering the degree, usually published in book form. Eventually periodicals began publishing articles describing various MBA schools and ranking them according to some perceived quality criteria. One of the most prominent of these is Business Week, which devotes a biennial issue to ranking MBA programs. Financial Times, The Economist, Forbes magazine, The Wall Street Journal, and U.S. News & World Report also publish MBA program rankings. See the External links section below to view some of these rankings.

Different methods of varying validity were used to arrive at rankings of MBA programs. The Gourman Report, for example, did not disclose criteria or ranking methods,^[7] and these reports were criticized for reporting statistically impossible data, such as no ties among schools, narrow gaps in scores with no variation in gap widths, and ranks of nonexistent departments.^[8] In 1977 The Carter Report published rankings of MBA programs based on the number of academic articles published by faculty. Periodicals based their rankings on interviews with company recruiters who hired MBA graduates, surveys of MBA schools’ deans, polls of students or faculty, and a variety of other means. The defunct MBA Magazine asked deans to vote on the best programs. The methods of obtaining ranks often changed from year to year. Initially, rankings included only a small number of universities consisting of the largest and best known Ivy League and state schools. There are also many privately compiled rankings, including the Global Top 100 Business Schools compiled by the QS network.

The ranking of MBA programs has been discussed in articles and on academic Web sites.^[9] Critics of ranking methodologies maintain that any published rankings should be viewed with caution for the following reasons:^[10]

• Rankings limit the population size to a small number of MBA programs and ignore the majority of schools, many with excellent offerings.
• The ranking methods may be subject to biases and statistically flawed methodologies (especially for methods relying on subjective interviews of hiring managers).
• The same list of well-known schools appears in each ranking with some variation in ranks, so a school ranked as number 1 in one list may be number 17 in another list.
• Rankings tend to concentrate on the school itself, but some schools offer MBA programs of different qualities (e.g. a school may use highly reputable faculty to teach a daytime program, and use adjunct faculty in its evening program).
• A high rank in a national publication tends to become a self-fulfilling prophecy.
• Some leading business schools including Harvard, INSEAD and Wharton provide limited cooperation with certain ranking publications due to their perception that rankings are misused.^[11]

One study found that objectively ranking MBA programs by a combination of graduates’ starting salaries and average student GMAT score can reasonably duplicate the top 20 list of the national publications.^[10] The study concluded that a truly objective ranking would be individualized to the needs of each prospective student.^[12] National publications have recognized the value of rankings against different criteria, and now offer lists ranked different ways: by salary, GMAT score of students, selectivity, and so forth. While useful, these rankings still are not tailored to individual needs, and their value is diminished if they use an incomplete population of schools, fail to distinguish between the different MBA program types offered by each school, or rely on subjective interviews.

thanks to wikipedia.org

Voice over Internet Protocol (VoIP, IPA: /vɔɪp/) is a general term for a family of transmission technologies for delivery of voice communications over the Internet or other packet-switched networks. Other terms frequently encountered and synonymous with VoIP are IP telephony and Internet telephony, as well as voice over broadband, broadband telephony, and broadband phone, when the network connectivity is available over broadband Internet access.

VoIP systems usually interface with the traditional public switched telephone network (PSTN) to allow for transparent phone communications worldwide.

VoIP can be a benefit for reducing communication and infrastructure costs by routing phone calls over existing data networks and avoiding duplicate network systems. Skype and Vonage are notable service provider examples that have achieved widespread user and customer acceptance and market penetration.

Voice-over-IP systems carry telephony speech as digital audio, typically reduced in data rate using speech data compression techniques, packetized in small units of typically tens of milliseconds of speech, and encapsulated in a packet stream over IP.

Diversity of voice technologies connected through the Internet

[edit] History

Please help improve this section by expanding it. Further information might be found on the talk page. (June 2008)

Voice-over-Internet Protocol has been a subject of interest almost since the first computer network. By 1973, voice was being transmitted over the early Internet.^[1] The technology for transmitting voice conversations over the Internet has been available to end-users since at least the early 1980s. In 1996, a shrink-wrapped software product called VocalTec Internet Phone (release 4) provided VoIP along with extra features such as voice mail and caller ID. However, it did not offer a gateway to the PSTN, so it was only possible to speak to other Vocaltec Internet Phone users.^[2] In 1997, Level 3 began development of its first softswitch (a term they invented in 1998); softswitches were designed to replace traditional hardware telephone switches by serving as gateways between telephone networks.^[3]

Revenue in the total VoIP industry in the US is set to grow by 24.3% in 2008 to $3.19 billion. Subscriber growth will drive revenue in the VoIP sector, with numbers expected to rise by 21.2% in 2008 to 16.6 million.

[edit] Functionality

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VoIP can facilitate tasks and provide services that may be more difficult to implement or more expensive using the PSTN. Examples include:

• The ability to transmit more than one telephone call over the same broadband connection. This can make VoIP a simple way to add an extra telephone line to a home or office.
• Conference calling, call forwarding, automatic redial, and caller ID; zero- or near-zero-cost features that traditional telecommunication companies (telcos) normally charge extra for.
• Secure calls using standardized protocols (such as Secure Real-time Transport Protocol.) Most of the difficulties of creating a secure phone connection over traditional phone lines, like digitizing and digital transmission, are already in place with VoIP. It is only necessary to encrypt and authenticate the existing data stream.
• Location independence. Only an Internet connection is needed to get a connection to a VoIP provider. For instance, call center agents using VoIP phones can work from anywhere with a sufficiently fast and stable Internet connection.
• Integration with other services available over the Internet, including video conversation, message or data file exchange in parallel with the conversation, audio conferencing, managing address books, and passing information about whether others (e.g., friends or colleagues) are available to interested parties.
• Advanced telephony features such as call routing, computer screen pops, and IVR implementations are easier and cheaper to implement and integrate. The fact that the phone call is on the same data network as a user’s PC opens a new door to possibilities.

[edit] Implementation

This section does not cite any references or sources. Please help improve this section by adding citations to reliable sources. Unverifiable material may be challenged and removed. (August 2008)

Because the underlying IP network is inherently unreliable, in contrast to the circuit-switched public telephone network, and does not inherently provide a mechanism to ensure that data packets are delivered in sequential order, or provide Quality of Service (QoS) guarantees, VoIP implementations face problems mitigating latency and jitter. This is especially true when satellite circuits are involved, due to long round-trip propagation delay (400–600 milliseconds for links through geostationary satellites). The receiving node must restructure IP packets that may be out of order, delayed or missing, while ensuring that the audio stream maintains a proper time consistency. This function is usually accomplished by means of a jitter buffer in the voice engine.

Another challenge is routing VoIP traffic through firewalls and address translators. Private Session Border Controllers are used along with firewalls to enable VoIP calls to and from protected networks. Skype uses a proprietary protocol to route calls through other Skype peers on the network, allowing it to traverse symmetric NATs and firewalls. Other methods to traverse firewalls involve using protocols such as STUN or ICE.

VoIP challenges:

Some analog telephone adapters do not decode pulse dialing from older phones. The VoIP user may use a pulse-to-tone converter, if needed.^{[citation needed]}

Fixed delays cannot be controlled but some delays can be minimized by marking voice packets as being delay-sensitive (see, for example, DiffServ).

The principal cause of packet loss is congestion, which can sometimes be managed or avoided. Carrier VoIP networks avoid congestion by means of teletraffic engineering.

Variation in delay is called jitter. The effects of jitter can be mitigated by storing voice packets in a jitter buffer upon arrival and before producing analog audio, although this further increases delay. This avoids a condition known as buffer underrun, in which the voice engine is missing audio since the next voice packet has not yet arrived.

Common causes of echo include impedance mismatches in analog circuitry and acoustic coupling of the transmit and receive signal at the receiving end.

[edit] Reliability

Conventional phones are connected directly to telephone company phone lines, which in the event of a power failure are kept functioning by backup generators or batteries located at the telephone exchange. However, IP Phones and the IP infrastructure connect to (routers and servers), which typically depend on the availability of mains electricity or another locally generated power source. Therefore, most VoIP networks and the supporting routers and servers are also on widely available and relatively inexpensive uninterrupted power supply (UPS) systems to maintain electricity during a power outage for a predetermined length of time. The amount of time typically ranges from as little as an hour and up from there, depending on the quality of the UPS unit and the power draw and characteristics of the communications equipment.

Voice travels over the Internet in packets in the same manner as data. So when you talk over an IP network your conversation is broken up into small packets. These voice and data packets travel over the same network with a fixed bandwidth. This system is more prone to congestion and DoS attacks^[4] than traditional circuit switched systems.^{[citation needed]}

[edit] Quality of service

Some broadband connections may have less than desirable quality. Where IP packets are lost or delayed at any point in the network between VoIP users, there will be a momentary drop-out of voice. This is more noticeable in highly congested networks and/or where there are long distances between end points. Technology has improved the reliability and voice quality over time and will continue to improve VoIP performance.

It has been suggested to rely on the packetized nature of media in VoIP communications and transmit the stream of packets from the source phone to the destination phone simultaneously across different routes (multi-path routing). In such a way, temporary failures have less impact on the communication quality. In capillary routing it has been suggested to use at the packet level Fountain codes or particularly raptor codes for transmitting extra redundant packets making the communication more reliable.

A number of protocols have been defined to support the reporting of QoS/QoE for VoIP calls. These include RTCP XR (RFC3611), SIP RTCP Summary Reports, H.460.9 Annex B (for H.323), H.248.30 and MGCP extensions. The RFC3611 VoIP Metrics block is generated by an IP phone or gateway during a live call and contains information on packet loss rate, packet discard rate (due to jitter), packet loss/discard burst metrics (burst length/density, gap length/density), network delay, end system delay, signal / noise / echo level, MOS scores and R factors and configuration information related to the jitter buffer.

RFC3611 VoIP metrics reports are exchanged between IP endpoints on an occasional basis during a call, and an end of call message sent via SIP RTCP Summary Report or one of the other signaling protocol extensions. RFC3611 VoIP metrics reports are intended to support real time feedback related to QoS problems, the exchange of information between the endpoints for improved call quality calculation and a variety of other applications.

[edit] Mobile number portability

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Mobile number portability (MNP) also impacts the Internet telephony, or VOIP (Voice over IP) business. A voice call originated in the VOIP environment which is routed to a mobile phone number of a traditional mobile carrier also faces challenges to reach its destination in case the mobile phone number is ported. Mobile number portability is a service that makes it possible for subscribers to keep their existing mobile phone number when changing their service provider (or mobile operator).

VoIP is clearly identified as a Least Cost Routing (LCR) system, which is based on checking the destination of each telephone call as it is made, and then sending the call via the network that will cost the customer the least. With GSM number portability now in place, LCR providers can no longer rely on using the network root prefix to determine how to route a call. Instead, they now need to know the actual network of every number before routing the call.

Therefore, VoIP solutions also need to handle MNP when routing a voice call. In countries without a central database like the UK it might be necessary to query the GSM network about the home network a mobile phone number belongs to. As VoIP starts to take off in the enterprise markets because of least cost routing options, it needs to provide a certain level of reliability when handling calls.

MNP checks are important to assure that this quality of service is met; by handling MNP lookups before routing a call and assuring that the voice call will actually work, VoIP companies give businesses the necessary reliability they look for in an Internet telephony provider. UK-based messaging operator Tyntec provides a Voice Network Query service, which helps not only traditional voice carriers but also VoIP providers to query the GSM network to find out the home network of a ported number.

In countries such as Singapore, the most recent Mobile number portability solution is expected to open the doors to new business opportunities for non-traditional telecommunication service providers like wireless broadband providers and voice over IP (VoIP) providers.

In November 2007, the Federal Communications Commission in the United States released an order extending number portability obligations to interconnected VoIP providers and carriers that support VoIP providers.

[edit] Difficulty sending faxes

The support of sending faxes over VoIP is still limited. The existing voice codecs are not designed for fax transmission; they are designed to digitize an analog representation of a human voice efficiently. However, the inefficiency of digitizing an analog representation (modem signal) of a digital representation (a document image) of analog data (an original document) more than negates any bandwidth advantage of VoIP. In other words, the fax “sounds” simply don’t fit in the VoIP channel. An effort is underway to remedy this by defining an alternate IP-based solution for delivering fax-over-IP, namely the T.38.

The T.38 protocol is designed to work like a traditional fax machine and can work using several configurations. The fax machine could be a traditional fax machine connected to the PSTN, or an ATA box (or similar). It could be a fax machine with an RJ-45 connector plugged straight into an IP network, or it could be a computer pretending to be a fax machine. ^[5] Originally, T.38 was designed to use UDP and TCP transmission methods across an IP network. The main difference between using UDP and TCP methods for a FAX is the real time streaming attributes. TCP is better suited for use between two IP devices. However, older fax machines, connected to an analog system, does benefit from UDP near real-time characteristics.

There have been updated versions of the T.30 to resolve the FoIP issues, which is the core fax protocol. Some new fax machines have T.38 built-in capabilities which allow the user to plug right into the network with minimal configuration changes. A unique feature of T.38 is that each packet contains a copy of the main data in the previous packet. This is an option and most implementations seem to support it. This forward error correction scheme makes T.38 far more tolerant of dropped packets than using VoIP. With T.38, it requires two successive lost packets to actually lose any data. ^[6] The data you lose will only be a small piece, but with the right settings and error correction mode, there is a high probability that you will receive the whole transmission.

Tweaking the settings on the T.30 and T.38 protocols could also turn your unreliable fax into a robust machine. Some fax machines pause at the end of a line to allow the paper feed to catch up. This is good news for packets that were lost or delayed because it gives them a chance to catch up. However, if this were to happen on every line, your fax transmittal would take a long time. Another possible solution to overcome the drawback is to treat the fax system as a message switching system, which does not need a real-time data transmission (such as sending a fax as an email attachment (see Fax) or remote printout (see Internet Printing Protocol)). The end system can completely buffer the incoming fax data before displaying or printing the fax image.

[edit] Emergency calls

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The nature of IP makes it difficult to locate network users geographically. Emergency calls, therefore, cannot easily be routed to a nearby call center. Sometimes, VoIP systems may route emergency calls to a non-emergency phone line at the intended department. In the United States, at least one major police department has strongly objected to this practice as potentially endangering the public.^[7]

VoIP Enhanced 911 (E911) is another method by which VoIP providers in the United States are able to support emergency services. The VoIP E911 emergency-calling system associates a physical address with the calling party’s telephone number as required by the Wireless Communications and Public Safety Act of 1999. All “interconnected” VoIP providers (those that provide access to the PSTN system) are required to have E911 available to their customers. VoIP E911 service generally adds an additional monthly fee to the subscriber’s service per line, similar to analog phone service. Participation in E911 is not required and customers can opt-out or disable E911 service on their VoIP lines, if desired. VoIP E911 has been successfully used by many VoIP providers to provide physical address information to emergency service operators.

One shortcoming of VoIP E911 is that the emergency system is based on a static table lookup. Unlike in cellular phones, where the location of an E911 call can be traced using Assisted GPS or other methods, the VoIP E911 information is only accurate so long as subscribers are diligent in keeping their emergency address information up-to-date. In the United States, the Wireless Communications and Public Safety Act of 1999 leaves the burden of responsibility upon the subscribers and not the service providers to keep their emergency information up to date.

A tragic example of a miscommunication with VoIP is the death of 18-month-old Elijah Luck in Calgary, Canada. In an emergency, 911 services were called. An ambulance was sent to the former home of the Lucks. The VoIP telephone company knew the correct address, as they were paying their bill from the correct current billing address the company had on record. “It’s up to subscribers to ensure the company has up-to-date contact information” was the response from the VoIP company. After about a half hour wait, the Lucks called from a neighbor’s land line, whereupon emergency services arrived in six minutes. Elijah Luck was pronounced dead at the Alberta Children’s Hospital.^[8]

[edit] Integration into global telephone number system

While the wired public switched telephone network (PSTN) and mobile phone networks share a common global standard (E.164) which allocates and identifies any specific telephone line, there is no widely adopted similar standard for VoIP networks. Some allocate an E.164 number which can be used for VoIP as well as incoming and external calls. However, there are often different, incompatible schemes when calling between VoIP providers which use provider-specific short codes.

[edit] VoIP phone accessibility and portability

If using a software based soft-phone, calls can only be placed from the computer on which the soft-phone software resides. Thus with a soft-phone the caller is typically limited to a single point of calling. When using a hardware based VoIP phone-device/phone-adapter it is possible to connect traditional analog phones directly to a VoIP phone-adapter without the need to operate a computer. The converted analog phone signal can then be connected to multiple house phones or extensions, just as any traditional phone company signal can be connected. A second VoIP hardware configuration option involves the use of a specially designed VoIP telephone which incorporates a VoIP phone adapter directly into the phone itself, and which also does not require the use of a computer. A third VoIP hardware configuration option involves the use of a WiFi router and a WiFi SIP phone which can extend a service range throughout a home or office. WiFi SIP phones can also be used at any location where an “unauthenticated” open hotspot Wi-Fi signal is available.^[9] However, note that many hotspots require browser-based authentication, which most SIP phones do not support.^[10]

[edit] Mobile phones and hand-held devices

Telcos and consumers have invested billions of dollars in mobile phone equipment. In developed countries, mobile phones have achieved nearly complete market penetration, and many people are giving up landlines and using mobiles exclusively. Given this situation, it is not entirely clear whether there would be a significant higher demand for VoIP among consumers until either public or community wireless networks have similar geographical coverage to cellular networks (thereby enabling mobile VoIP phones, so called WiFi phones or VoWLAN) or VoIP is implemented over 3G networks. However, “dual mode” telephone sets, which allow for the seamless handover between a cellular network and a WiFi network, are expected to help VoIP become more popular.^[11]

Phones like the NEC N900iL, and later many of the Nokia Eseries and several WiFi enabled mobile phones have SIP clients hardcoded into the firmware. Such clients operate independently of the mobile phone network unless a network operator decides to remove the client in the firmware of a heavily branded handset. Some operators such as Vodafone actively try to block VoIP traffic from their network^[12] and therefore most VoIP calls from such devices are done over WiFi.

Several WiFi only IP hardphones exist, most of them supporting either Skype or the SIP protocol. These phones are intended as a replacement for PSTN based cordless phones but can be used anywhere where WiFi Internet access is available.

Another addition to hand held devices are ruggedized bar code type devices that are used in warehouses and retail environments. These type of devices rely on “inside the 4 walls” type of VoIP services that do not connect to the outside world and are solely to be used from employee to employee communications.

[edit] Security

Many consumer VoIP solutions do not support encryption yet, although having a secure phone is much easier to implement with VoIP than traditional phone lines. As a result, it is relatively easy to eavesdrop on VoIP calls and even change their content.^[13] An attacker with a packet sniffer could intercept your VoIP calls if you are not on a secure VLAN. This security vulnerability could lead to Denial of Service (DoS) attacks to you and anyone on your network. The DoS would devastate your phone network by creating a continuing busy signal and forced disconnects. Viper Lab predicts VoIP attacks against service providers will escalate since unlicensed mobile access technology becomes more widely deployed to allow calls to switch from cell networks to VoIP networks, Viper Labs warns that “service providers are, for the first time, allowing subscribers to have direct access to mobile core networks over IP, making it easier to spoof identities and use illegal accounts to launch a variety of attacks.[16] There is no such thing as a 100% secure solution to network security. The implementation of voice over Internet protocol just adds to that complexity, by giving hackers another means to access your system. Customers can secure their network by limiting access to the virtual local area network, thus hiding their voice data network from the users. If the customer maintains a secure and properly configured gateway, you can keep most of the hackers out.There are several open source solutions that facilitate sniffing of VoIP conversations. A modicum of security is afforded due to patented audio codecs that are not easily available for open source applications, however such security through obscurity has not proven effective in the long run in other fields. Some vendors also use compression to make eavesdropping more difficult. However, real security requires encryption and cryptographic authentication which are not widely available at a consumer level. The existing secure standard SRTP and the new ZRTP protocol is available on Analog Telephone Adapters(ATAs) as well as various softphones. It is possible to use IPsec to secure P2P VoIP by using opportunistic encryption. Skype does not use SRTP, but uses encryption which is transparent to the Skype provider.

The Voice VPN solution provides secure voice for enterprise VoIP networks by applying IPSec encryption to the digitized voice stream.

[edit] Caller ID

Caller ID support among VoIP providers varies, although the majority of VoIP providers now offer full caller ID with name on outgoing calls. When calling a PSTN number from some VoIP providers, caller ID is not supported.

In a few cases, VoIP providers may allow a caller to spoof the caller ID information, potentially making calls appear as though they are from a number that does not belong to the caller. Business grade VoIP equipment and software often makes it easy to modify caller ID information. Although this can provide many businesses great flexibility, it is also open to abuse.

[edit] VoIM

Voice over Instant Messaging (VoIM) presents VoIP as one communication mode among several, with an IM user interface (contact list and presence) as the primary user experience. Many instant messenger services added client-to-client or client-to-PSTN VoIP in the mid-2000s.

[edit] Adoption

[edit] Mass-market telephony

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A typical analog telephone adapter (ATA) for connecting an analog phone to a VoIP network

A major development starting in 2004 has been the introduction of mass-market VoIP services over broadband Internet access services, in which subscribers make and receive calls as they would over the PSTN. Full phone service VoIP phone companies provide inbound and outbound calling with Direct Inbound Dialing. Many offer unlimited calling to the U.S., and some to Canada or selected countries in Europe or Asia as well, for a flat monthly fee.

These services take a wide variety of forms which can be more or less similar to traditional POTS. At one extreme, an Analog Telephone Adapter (ATA) may be connected to the broadband Internet connection and an existing telephone jack in order to provide service nearly indistinguishable from POTS on all the other jacks in the residence. This type of service, which is fixed to one location, is generally offered by broadband Internet providers such as cable companies and telephone companies as a cheaper flat-rate traditional phone service, as they require hook-up to a VoIP-server.

Dedicated VoIP phones are phones that allow VoIP calls without the use of a computer. Instead they connect directly to the broadband Internet connection (through WiFi or Ethernet). They require service from a VoIP-server, thus most people also use them in conjunction with a paid service plan.

Alternately, software can be installed on a computer that allows (free) PC-to-PC calling, and usually PC-to-telephone calls and telephone to PC-calls as well. The latter two are usually paid services. The software/services are called “Softphones”, “Internet Phones”, or “Digital Phones”. The service is aimed at typical phone users who are not necessarily tech-savvy. Typically, the provider touts the advantage of being able to port an existing phone number. Another advantage is the ability of having a fixed phone number, which you can move to any country or location. This is especially useful for travelers. Some examples are the Gizmo Project and Skype which rely on a software client on the computer in order to place a call over the network, where one user account can be used on many different computers or in different locations on a laptop.

Finally, there are companies that allow one to make VoIP-calls using regular POTS telephones. This is done by typing it the number of the person you wish to call on-line (at the company’s website). The company then calls your phone, after which you pick up and the VoIP-connection is then made by the company between your POTS-phone and another POTS-phone. Companies providing these services include Jajah.

In the middle lie services which also provide a telephone adapter for connecting to the broadband connection similar to the services offered by broadband providers (and in some cases also allow direct connections of SIP phones) but which are aimed at a more tech-savvy user and allow portability from location to location. One advantage of these two types of services is the ability to make and receive calls as one would at home, anywhere in the world, at no extra cost. No additional charges are incurred, as call diversion via the PSTN would, and the called party does not have to pay for the call. For example, if a subscriber with a home phone number in the U.S. or Canada calls someone else within his local calling area, it will be treated as a local call regardless of where that person is in the world. Often the user may elect to use someone else’s area code as his own to minimize phone costs to a frequently called long-distance number.

For some users, the broadband phone complements, rather than replaces, a PSTN line, due to a number of inconveniences compared to traditional services. VoIP requires a broadband Internet connection and, if a telephone adapter is used, a power adapter is usually needed. In the case of a power failure, VoIP services will generally not function without a backup power supply like a common UPS system used in most office buildings. Additionally, a call to an emergency services number may not automatically be routed to the nearest local emergency dispatch center. Some VoIP providers only handle emergency call for one country. Some VoIP providers offer users the ability to register their address so that emergency services work as expected.

Another challenge for these services is the proper handling of outgoing calls from fax machines, DVR boxes, satellite television receivers, alarm systems, conventional modems or FAXmodems, and other similar devices that depend on access to a voice-grade telephone line for some or all of their functionality. At present, these types of calls sometimes go through without any problems, but in other cases they will not go through at all. And in some cases, this equipment can be made to work over a VoIP connection if the sending data rate can be changed to a lower bits per second rate. If VoIP and cellular substitution becomes very popular, some ancillary equipment makers may be forced to redesign equipment, because it would no longer be possible to assume a conventional voice-grade telephone line would be available in almost all homes in North America and western Europe. The TestYourVoIP Web site offers a free service to test the quality of or diagnose an Internet connection by placing simulated VoIP calls from any Java-enabled Web browser, or from any phone or VoIP device capable of calling the PSTN.

[edit] Corporate and telco use

Although few office environments and even fewer homes use a pure VoIP infrastructure, telecommunications providers routinely use IP telephony, often over a dedicated IP network, to connect switching stations, converting voice signals to IP packets and back. The result is a data-abstracted digital network which the provider can easily upgrade and use for multiple purposes.

Because of the bandwidth efficiency and low costs that VoIP technology provides, businesses are slowly beginning to migrate from traditional copper-wire telephone systems to VoIP systems to reduce their monthly phone costs. ^[14]

Corporate customer telephone support often use IP telephony exclusively to take advantage of the data abstraction. The benefit of using this technology is the need for only one class of circuit connection and better bandwidth use. Companies can acquire their own gateways to eliminate third-party costs, which is worthwhile in some situations.

VoIP is widely employed by carriers, especially for international telephone calls. It is commonly used to route traffic starting and ending at conventional PSTN telephones.

Many telecommunications companies are looking at the IP Multimedia Subsystem (IMS) which will merge Internet technologies with the mobile world, using a pure VoIP infrastructure. It will enable them to upgrade their existing systems while embracing Internet technologies such as the Web, email, instant messaging, presence, and video conferencing. It will also allow existing VoIP systems to interface with the conventional PSTN and [mobile phone]s.

Electronic Numbering (ENUM) uses standard phone numbers (E.164), but allows connections entirely over the Internet. If the other party uses ENUM, the only expense is the Internet connection. Virtual PBX (or IP PBX) allow companies to control their internal phone network over an existing LAN and server without needing to wire a separate telephone network. Users within this environment can then use standard telephones coupled with an FXS, IP Phones connected to a data port or a Softphone on their PC. Internal VoIP phone networks allow outbound and inbound calling on standard PSTN lines through the use of FXO adapters.

[edit] Use in amateur radio

Sometimes called Radio Over Internet Protocol or RoIP, Amateur radio has adopted VoIP by linking repeaters and users with Echolink, IRLP, D-STAR, Dingotel and EQSO. In fact, Echolink allows users to connect to repeaters via their computer (over the Internet) rather than by using a radio. By using VoIP Amateur Radio operators are able to create large repeater networks with repeaters all over the world where operators can access the system with actual ham radios.

Ham Radio operators using radios are able to tune to repeaters with VoIP capabilities and use DTMF signals to command the repeater to connect to various other repeaters, thus allowing them to talk to people all around the world, even with “line of sight” VHF radios.

[edit] Click to call

Main article: Click-to-call

Click-to-call or Click-to-Talk is a service which lets users click a button on a website and immediately speak with a service representative. The call can either be carried over VoIP, or users may request an immediate call back by entering a phone number. A significant benefit to click-to-call providers is that it allows companies to monitor when online visitors change from the website to a phone sales or support channel.

[edit] Legal issues in different countries

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As the popularity of VoIP grows, and PSTN users switch to VoIP in increasing numbers, governments are becoming more interested in regulating VoIP in a manner similar to PSTN services,^[15] especially with the encouragement of the state-mandated telephone monopolies/oligopolies in a given country, who see this as a way to stifle the new competition.

In the U.S., the Federal Communications Commission now requires all interconnected VoIP service providers to comply with requirements comparable to those for traditional telecommunications service providers. VoIP operators in the U.S. are required to support local number portability; make service accessible to people with disabilities; pay regulatory fees, universal service contributions, and other mandated payments; and enable law enforcement authorities to conduct surveillance pursuant to the Communications Assistance for Law Enforcement Act (CALEA). “Interconnected” VoIP operators also must provide Enhanced 911 service^{[citation needed]}, disclose any limitations on their E-911 functionality to their consumers, and obtain affirmative acknowledgements of these disclosures from all consumers. VoIP operators also receive the benefit of certain U.S. telecommunications regulations, including an entitlement to interconnection and exchange of traffic with incumbent local exchange carriers via wholesale carriers. Providers of “nomadic” VoIP service — those who are unable to determine the location of their users — are exempt from state telecommunications regulation.^[16]

Throughout the developing world, countries where regulation is weak or captured by the dominant operator, restrictions on the use of VoIP are imposed, including in Panama where VoIP is taxed, Guyana where VoIP is prohibited and India where its retail commercial sales is allowed but only for long distance service.^[17] In Ethiopia, where the government is monopolizing telecommunication service, it is a criminal offense to offer services using VoIP. The country has installed firewalls to prevent international calls being made using VoIP. These measures were taken after a popularity in VoIP reduced the income generated by the state owned telecommunication company.

In the European Union, the treatment of VoIP service providers is a decision for each Member State’s national telecoms regulator, which must use competition law to define relevant national markets and then determine whether any service provider on those national markets has “significant market power” (and so should be subject to certain obligations). A general distinction is usually made between VoIP services that function over managed networks (via broadband connections) and VoIP services that function over unmanaged networks (essentially, the Internet).

VoIP services that function over managed networks are often considered to be a viable substitute for PSTN telephone services (despite the problems of power outages and lack of geographical information); as a result, major operators that provide these services (in practice, incumbent operators) may find themselves bound by obligations of price control or accounting separation.

VoIP services that function over unmanaged networks are often considered to be too poor in quality to be a viable substitute for PSTN services; as a result, they may be provided without any specific obligations, even if a service provider has “significant market power”.

The relevant EU Directive is not clearly drafted concerning obligations which can exist independently of market power (e.g., the obligation to offer access to emergency calls), and it is impossible to say definitively whether VoIP service providers of either type are bound by them. A review of the EU Directive is under way and should be complete by 2007.

In India, it is legal to use VoIP, but it is illegal to have VoIP gateways inside India. This effectively means that people who have PCs can use them to make a VoIP call to any number, but if the remote side is a normal phone, the gateway that converts the VoIP call to a POTS call should not be inside India.

In the UAE, it is illegal to use any form of VoIP, to the extent that websites of Skype and Gizmo Project are blocked.

In the Republic of Korea, only providers registered with the government are authorized to offer VoIP services. Unlike many VoIP providers, most of whom offer flat rates, Korean VoIP services are generally metered and charged at rates similar to terrestrial calling. Foreign VoIP providers such as Vonage encounter high barriers to government registration. This issue came to a head in 2006 when Internet service providers providing personal Internet services by contract to United States Forces Korea members residing on USFK bases threatened to block off access to VoIP services used by USFK members of as an economical way to keep in contact with their families in the United States, on the grounds that the service members’ VoIP providers were not registered. A compromise was reached between USFK and Korean telecommunications officials in January 2007, wherein USFK service members arriving in Korea before June 1, 2007 and subscribing to the ISP services provided on base may continue to use their U.S.-based VoIP subscription, but later arrivals must use a Korean-based VoIP provider, which by contract will offer pricing similar to the flat rates offered by U.S. VoIP providers.^[18]

[edit] IP telephony in Japan

In Japan, IP telephony (IP電話, IP Denwa ^?) is regarded as a service applied by VoIP technology to the whole or a part of the telephone line. As of 2003, IP telephony services have been assigned telephone numbers. IP telephony services also often include videophone/video conferencing services. According to the Telecommunication Business Law, the service category for IP telephony also implies the service provided via Internet, which is not assigned any telephone number.

IP telephony is basically regulated by Ministry of Internal Affairs and Communications (MIC) as a telecommunication service. The operators have to disclose necessary information on its quality, etc., prior to making contracts with customers, and have an obligation to respond to their complaints cordially.

Many Japanese Internet service providers (ISP) are including IP telephony services. An ISP who also provides IP telephony service is known as a “ITSP (Internet Telephony Service Provider)”. Recently, the competition among ITSPs has been activated, by option or set sales, in connection with ADSL or FTTH services.

The tariff system normally applied to Japanese IP telephony is described below;

• A call between IP telephony subscribers, limited to the same group, is usually free of charge.
• A call from IP telephony subscribers to a fixed line or PHS is usually a uniformly fixed rate all over the country.

Between ITSPs, the interconnection is mostly maintained at VoIP level.

• Where the IP telephony is assigned normal telephone number (0AB-J), the condition for its interconnection is considered same as normal telephony.
• Where the IP telephony is assigned specific telephone number (050), the condition for its interconnection is described below;
  • Interconnection is sometimes charged. (Sometimes, it’s free of charge.) In case of free-of-charge, mostly, communication traffic is exchanged via a P2P connection with the same VoIP standard. Otherwise, certain conversions are needed at the point of the VoIP gateway which incurs operating costs.

[edit] Telephone numbers for IP telephony in Japan

Since September 2002, the MIC has assigned IP telephony telephone numbers on the condition that the service falls into certain required categories of quality.

High-quality IP telephony is assigned a telephone number, normally starting with the digits 050. When VoIP quality is so high that a customer has difficulty telling the difference between it and a normal telephone, and when the provider relates its number with a location and provides the connection with emergency call capabilities, the provider is allowed to assign a normal telephone number, which is a so-called “0AB-J” number.

thanks to wikipedia.org

Insurance, in law and economics, is a form of risk management primarily used to hedge against the risk of a contingent loss. Insurance is defined as the equitable transfer of the risk of a loss, from one entity to another, in exchange for a premium, and can be thought of a guaranteed small loss to prevent a large, possibly devastating loss. An insurer is a company selling the insurance. The insurance rate is a factor used to determine the amount, called the premium, to be charged for a certain amount of insurance coverage. Risk management, the practice of appraising and controlling risk, has evolved as a discrete field of study and practice.

[edit] Principles of insurance

Financial market participants

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v • d • e

Commercially insurable risks typically share seven common characteristics.^[1]

1. A large number of homogeneous exposure units. The vast majority of insurance policies are provided for individual members of very large classes. Automobile insurance, for example, covered about 175 million automobiles in the United States in 2004.^[2] The existence of a large number of homogeneous exposure units allows insurers to benefit from the so-called “law of large numbers,” which in effect states that as the number of exposure units increases, the actual results are increasingly likely to become close to expected results. There are exceptions to this criterion. Lloyd’s of London is famous for insuring the life or health of actors, actresses and sports figures. Satellite Launch insurance covers events that are infrequent. Large commercial property policies may insure exceptional properties for which there are no ‘homogeneous’ exposure units. Despite failing on this criterion, many exposures like these are generally considered to be insurable.
2. Definite Loss. The event that gives rise to the loss that is subject to insurance should, at least in principle, take place at a known time, in a known place, and from a known cause. The classic example is death of an insured person on a life insurance policy. Fire, automobile accidents, and worker injuries may all easily meet this criterion. Other types of losses may only be definite in theory. Occupational disease, for instance, may involve prolonged exposure to injurious conditions where no specific time, place or cause is identifiable. Ideally, the time, place and cause of a loss should be clear enough that a reasonable person, with sufficient information, could objectively verify all three elements.
3. Accidental Loss. The event that constitutes the trigger of a claim should be fortuitous, or at least outside the control of the beneficiary of the insurance. The loss should be ‘pure,’ in the sense that it results from an event for which there is only the opportunity for cost. Events that contain speculative elements, such as ordinary business risks, are generally not considered insurable.
4. Large Loss. The size of the loss must be meaningful from the perspective of the insured. Insurance premiums need to cover both the expected cost of losses, plus the cost of issuing and administering the policy, adjusting losses, and supplying the capital needed to reasonably assure that the insurer will be able to pay claims. For small losses these latter costs may be several times the size of the expected cost of losses. There is little point in paying such costs unless the protection offered has real value to a buyer.
5. Affordable Premium. If the likelihood of an insured event is so high, or the cost of the event so large, that the resulting premium is large relative to the amount of protection offered, it is not likely that anyone will buy insurance, even if on offer. Further, as the accounting profession formally recognizes in financial accounting standards, the premium cannot be so large that there is not a reasonable chance of a significant loss to the insurer. If there is no such chance of loss, the transaction may have the form of insurance, but not the substance. (See the U.S. Financial Accounting Standards Board standard number 113)
6. Calculable Loss. There are two elements that must be at least estimable, if not formally calculable: the probability of loss, and the attendant cost. Probability of loss is generally an empirical exercise, while cost has more to do with the ability of a reasonable person in possession of a copy of the insurance policy and a proof of loss associated with a claim presented under that policy to make a reasonably definite and objective evaluation of the amount of the loss recoverable as a result of the claim.
7. Limited risk of catastrophically large losses. The essential risk is often aggregation. If the same event can cause losses to numerous policyholders of the same insurer, the ability of that insurer to issue policies becomes constrained, not by factors surrounding the individual characteristics of a given policyholder, but by the factors surrounding the sum of all policyholders so exposed. Typically, insurers prefer to limit their exposure to a loss from a single event to some small portion of their capital base, on the order of 5 percent. Where the loss can be aggregated, or an individual policy could produce exceptionally large claims, the capital constraint will restrict an insurer’s appetite for additional policyholders. The classic example is earthquake insurance, where the ability of an underwriter to issue a new policy depends on the number and size of the policies that it has already underwritten. Wind insurance in hurricane zones, particularly along coast lines, is another example of this phenomenon. In extreme cases, the aggregation can affect the entire industry, since the combined capital of insurers and reinsurers can be small compared to the needs of potential policyholders in areas exposed to aggregation risk. In commercial fire insurance it is possible to find single properties whose total exposed value is well in excess of any individual insurer’s capital constraint. Such properties are generally shared among several insurers, or are insured by a single insurer who syndicates the risk into the reinsurance market.

[edit] Indemnification

Main article: Indemnity

The technical definition of “indemnity” means to make whole again. There are two types of insurance contracts; 1) an “indemnity” policy and 2) a “pay on behalf” or “on behalf of”^[3] policy. The difference is significant on paper, but rarely material in practice.

An “indemnity” policy will never pay claims until the insured has paid out of pocket to some third party; for example, a visitor to your home slips on a floor that you left wet and sues you for $10,000 and wins. Under an “indemnity” policy the homeowner would have to come up with the $10,000 to pay for the visitor’s fall and then would be “indemnified” by the insurance carrier for the out of pocket costs (the $10,000)^[4].

Under the same situation, a “pay on behalf” policy, the insurance carrier would pay the claim and the insured (the homeowner) would not be out of pocket for anything. Most modern liability insurance is written on the basis of “pay on behalf” language^[5].

An entity seeking to transfer risk (an individual, corporation, or association of any type, etc.) becomes the ‘insured’ party once risk is assumed by an ‘insurer’, the insuring party, by means of a contract, called an insurance ‘policy’. Generally, an insurance contract includes, at a minimum, the following elements: the parties (the insurer, the insured, the beneficiaries), the premium, the period of coverage, the particular loss event covered, the amount of coverage (i.e., the amount to be paid to the insured or beneficiary in the event of a loss), and exclusions (events not covered). An insured is thus said to be “indemnified” against the loss events covered in the policy.

When insured parties experience a loss for a specified peril, the coverage entitles the policyholder to make a ‘claim’ against the insurer for the covered amount of loss as specified by the policy. The fee paid by the insured to the insurer for assuming the risk is called the ‘premium’. Insurance premiums from many insureds are used to fund accounts reserved for later payment of claims—in theory for a relatively few claimants—and for overhead costs. So long as an insurer maintains adequate funds set aside for anticipated losses (i.e., reserves), the remaining margin is an insurer’s profit.

[edit] Insurers’ business model

Profit = earned premium + investment income – incurred loss – underwriting expenses.

Insurers make money in two ways: (1) through underwriting, the process by which insurers select the risks to insure and decide how much in premiums to charge for accepting those risks and (2) by investing the premiums they collect from insured parties.

The most complicated aspect of the insurance business is the underwriting of Using a wide assortment of data, insurers predict the likelihood that a claim will be made against their policies and price products accordingly. To this end, insurers use actuarial science to quantify the risks they are willing to assume and the premium they will charge to assume them. Data is analyzed to fairly accurately project the rate of future claims based on a given risk. Actuarial science uses statistics and probability to analyze the risks associated with the range of perils covered, and these scientific principles are used to determine an insurer’s overall exposure. Upon termination of a given policy, the amount of premium collected and the investment gains thereon minus the amount paid out in claims is the insurer’s underwriting profit on that policy. Of course, from the insurer’s perspective, some policies are winners (i.e., the insurer pays out less in claims and expenses than it receives in premiums and investment income) and some are losers (i.e., the insurer pays out more in claims and expenses than it receives in premiums and investment income).

An insurer’s underwriting performance is measured in its combined ratio. The loss ratio (incurred losses and loss-adjustment expenses divided by net earned premium) is added to the expense ratio (underwriting expenses divided by net premium written) to determine the company’s combined ratio. The combined ratio is a reflection of the company’s overall underwriting profitability. A combined ratio of less than 100 percent indicates underwriting profitability, while anything over 100 indicates an underwriting loss.

Insurance companies also earn investment profits on “float”. “Float” or available reserve is the amount of money, at hand at any given moment, that an insurer has collected in insurance premiums but has not been paid out in claims. Insurers start investing insurance premiums as soon as they are collected and continue to earn interest on them until claims are paid out.

In the United States, the underwriting loss of property and casualty insurance companies was $142.3 billion in the five years ending 2003. But overall profit for the same period was $68.4 billion, as the result of float. Some insurance industry insiders, most notably Hank Greenberg, do not believe that it is forever possible to sustain a profit from float without an underwriting profit as well, but this opinion is not universally held. Naturally, the “float” method is difficult to carry out in an economically depressed period. Bear markets do cause insurers to shift away from investments and to toughen up their underwriting standards. So a poor economy generally means high insurance premiums. This tendency to swing between profitable and unprofitable periods over time is commonly known as the “underwriting” or insurance cycle. ^[6]

Property and casualty insurers currently make the most money from their auto insurance line of business. Generally better statistics are available on auto losses and underwriting on this line of business has benefited greatly from advances in computing. Additionally, property losses in the United States, due to natural catastrophes, have exacerbated this trend.

Finally, claims and loss handling is the materialized utility of insurance. In managing the claims-handling function, insurers seek to balance the elements of customer satisfaction, administrative handling expenses, and claims overpayment leakages. As part of this balancing act, fraudulent insurance practices are a major business risk that must be managed and overcome.

[edit] History of insurance

Main article: History of insurance

In some sense we can say that insurance appears simultaneously with the appearance of human society. We know of two types of economies in human societies: money economies (with markets, money, financial instruments and so on) and non-money or natural economies (without money, markets, financial instruments and so on). The second type is a more ancient form than the first. In such an economy and community, we can see insurance in the form of people helping each other. For example, if a house burns down, the members of the community help build a new one. Should the same thing happen to one’s neighbour, the other neighbours must help. Otherwise, neighbours will not receive help in the future. This type of insurance has survived to the present day in some countries where modern money economy with its financial instruments is not widespread (for example countries in the territory of the former Soviet Union).

Turning to insurance in the modern sense (i.e., insurance in a modern money economy, in which insurance is part of the financial sphere), early methods of transferring or distributing risk were practised by Chinese and Babylonian traders as long ago as the 3rd and 2nd millennia BC, respectively. Chinese merchants travelling treacherous river rapids would redistribute their wares across many vessels to limit the loss due to any single vessel’s capsizing. The Babylonians developed a system which was recorded in the famous Code of Hammurabi, c. 1750 BC, and practised by early Mediterranean sailing merchants. If a merchant received a loan to fund his shipment, he would pay the lender an additional sum in exchange for the lender’s guarantee to cancel the loan should the shipment be stolen.

Achaemenian monarchs of Iran were the first to insure their people and made it official by registering the insuring process in governmental notary offices. The insurance tradition was performed each year in Norouz (beginning of the Iranian New Year); the heads of different ethnic groups as well as others willing to take part, presented gifts to the monarch. The most important gift was presented during a special ceremony. When a gift was worth more than 10,000 Derrik (Achaemenian gold coin) the issue was registered in a special office. This was advantageous to those who presented such special gifts. For others, the presents were fairly assessed by the confidants of the court. Then the assessment was registered in special offices.

The purpose of registering was that whenever the person who presented the gift registered by the court was in trouble, the monarch and the court would help him. Jahez, a historian and writer, writes in one of his books on ancient Iran: “[W]henever the owner of the present is in trouble or wants to construct a building, set up a feast, have his children married, etc. the one in charge of this in the court would check the registration. If the registered amount exceeded 10,000 Derrik, he or she would receive an amount of twice as much.”[1]

A thousand years later, the inhabitants of Rhodes invented the concept of the ‘general average’. Merchants whose goods were being shipped together would pay a proportionally divided premium which would be used to reimburse any merchant whose goods were jettisoned during storm or sinkage.

The Greeks and Romans introduced the origins of health and life insurance c. 600 AD when they organized guilds called “benevolent societies” which cared for the families and paid funeral expenses of members upon death. Guilds in the Middle Ages served a similar purpose. The Talmud deals with several aspects of insuring goods. Before insurance was established in the late 17th century, “friendly societies” existed in England, in which people donated amounts of money to a general sum that could be used for emergencies.

Separate insurance contracts (i.e., insurance policies not bundled with loans or other kinds of contracts) were invented in Genoa in the 14th century, as were insurance pools backed by pledges of landed estates. These new insurance contracts allowed insurance to be separated from investment, a separation of roles that first proved useful in marine insurance. Insurance became far more sophisticated in post-Renaissance Europe, and specialized varieties developed.

Toward the end of the seventeenth century, London’s growing importance as a centre for trade increased demand for marine insurance. In the late 1680s, Edward Lloyd opened a coffee house that became a popular haunt of ship owners, merchants, and ships’ captains, and thereby a reliable source of the latest shipping news. It became the meeting place for parties wishing to insure cargoes and ships, and those willing to underwrite such ventures. Today, Lloyd’s of London remains the leading market (note that it is not an insurance company) for marine and other specialist types of insurance, but it works rather differently than the more familiar kinds of insurance.

Insurance as we know it today can be traced to the Great Fire of London, which in 1666 devoured 13,200 houses. In the aftermath of this disaster, Nicholas Barbon opened an office to insure buildings. In 1680, he established England’s first fire insurance company, “The Fire Office,” to insure brick and frame homes.

The first insurance company in the United States underwrote fire insurance and was formed in Charles Town (modern-day Charleston), South Carolina, in 1732. Benjamin Franklin helped to popularize and make standard the practice of insurance, particularly against fire in the form of perpetual insurance. In 1752, he founded the Philadelphia Contributionship for the Insurance of Houses from Loss by Fire. Franklin’s company was the first to make contributions toward fire prevention. Not only did his company warn against certain fire hazards, it refused to insure certain buildings where the risk of fire was too great, such as all wooden houses. In the United States, regulation of the insurance industry is highly Balkanized, with primary responsibility assumed by individual state insurance departments. Whereas insurance markets have become centralized nationally and internationally, state insurance commissioners operate individually, though at times in concert through a national insurance commissioners’ organization. In recent years, some have called for a dual state and federal regulatory system (commonly referred to as the Optional Federal Charter (OFC)) for insurance similar to that which oversees state banks and national banks.

[edit] Types of insurance

Any risk that can be quantified can potentially be insured. Specific kinds of risk that may give rise to claims are known as “perils”. An insurance policy will set out in detail which perils are covered by the policy and which are not. Below are (non-exhaustive) lists of the many different types of insurance that exist. A single policy may cover risks in one or more of the categories set out below. For example, auto insurance would typically cover both property risk (covering the risk of theft or damage to the car) and liability risk (covering legal claims from causing an accident). A homeowner’s insurance policy in the U.S. typically includes property insurance covering damage to the home and the owner’s belongings, liability insurance covering certain legal claims against the owner, and even a small amount of coverage for medical expenses of guests who are injured on the owner’s property.

Business insurance can be any kind of insurance that protects businesses against risks. Some principal subtypes of business insurance are (a) the various kinds of professional liability insurance, also called professional indemnity insurance, which are discussed below under that name; and (b) the business owner’s policy (BOP), which bundles into one policy many of the kinds of coverage that a business owner needs, in a way analogous to how homeowners insurance bundles the coverages that a homeowner needs.^[7]

[edit] Auto insurance

Main article: Vehicle insurance

A wrecked vehicle

Auto insurance protects you against financial loss if you have an accident. It is a contract between you and the insurance company. You agree to pay the premium and the insurance company agrees to pay your losses as defined in your policy. Auto insurance provides property, liability and medical coverage: (1) Property coverage pays for damage to or theft of your car. (2) Liability coverage pays for your legal responsibility to others for bodily injury or property damage. and (3) Medical coverage pays for the cost of treating injuries, rehabilitation and sometimes lost wages and funeral expenses. An auto insurance policy is comprised of six different kinds of coverage. Most states require you to buy some, but not all, of these coverages. If you’re financing a car, your lender may also have requirements.

Most auto policies are for six months to a year. Your insurance company should notify you by mail when it’s time to renew the policy and to pay your premium. ^[8]

[edit] Home insurance

Main article: Home insurance

Home insurance provides compensation for damage or destruction of a home from disasters. In some geographical areas, the standard insurances excludes certain types of disasters, such as flood and earthquakes, that require additional coverage. Maintenance-related problems are the homeowners’ responsibility. The policy may include inventory, or this can be bought as a separate policy, especially for people who rent housing. In some countries, insurers offer a package which may include liability and legal responsibility for injuries and property damage caused by members of the household, including pets.^[9]

[edit] Health

Main articles: Health insurance and Dental insurance

Almost all developed countries have government-supplied insurance for health

Health insurance policies by the National Health Service in the United Kingdom (NHS) or other publicly-funded health programs will cover the cost of medical treatments. Dental insurance, like medical insurance, is coverage for individuals to protect them against dental costs. In the U.S., dental insurance is often part of an employer’s benefits package, along with health insurance. Most countries rely on public funding to ensure that all citizens have universal access to health care.

[edit] Disability

• Disability insurance policies provide financial support in the event the policyholder is unable to work because of disabling illness or injury. It provides monthly support to help pay such obligations as mortgages and credit cards.
• Total permanent disability insurance provides benefits when a person is permanently disabled and can no longer work in their profession, often taken as an adjunct to life insurance.
• Disability overhead insurance allows business owners to cover the overhead expenses of their business while they are unable to work.
• Workers’ compensation insurance replaces all or part of a worker’s wages lost and accompanying medical expenses incurred because of a job-related injury.

[edit] Casualty

Casualty insurance insures against accidents, not necessarily tied to any specific property.

Main article: Casualty insurance

• Crime insurance is a form of casualty insurance that covers the policyholder against losses arising from the criminal acts of third parties. For example, a company can obtain crime insurance to cover losses arising from theft or embezzlement.
• Political risk insurance is a form of casualty insurance that can be taken out by businesses with operations in countries in which there is a risk that revolution or other political conditions will result in a loss.

[edit] Life

Main article: Life insurance

Life insurance provides a monetary benefit to a descedent’s family or other designated beneficiary, and may specifically provide for income to an insured person’s family, burial, funeral and other final expenses. Life insurance policies often allow the option of having the proceeds paid to the beneficiary either in a lump sum cash payment or an annuity.

Annuities provide a stream of payments and are generally classified as insurance because they are issued by insurance companies and regulated as insurance and require the same kinds of actuarial and investment management expertise that life insurance requires. Annuities and pensions that pay a benefit for life are sometimes regarded as insurance against the possibility that a retiree will outlive his or her financial resources. In that sense, they are the complement of life insurance and, from an underwriting perspective, are the mirror image of life insurance.

Certain life insurance contracts accumulate cash values, which may be taken by the insured if the policy is surrendered or which may be borrowed against. Some policies, such as annuities and endowment policies, are financial instruments to accumulate or liquidate wealth when it is needed.

In many countries, such as the U.S. and the UK, the tax law provides that the interest on this cash value is not taxable under certain circumstances. This leads to widespread use of life insurance as a tax-efficient method of saving as well as protection in the event of early death.

In U.S., the tax on interest income on life insurance policies and annuities is generally deferred. However, in some cases the benefit derived from tax deferral may be offset by a low return. This depends upon the insuring company, the type of policy and other variables (mortality, market return, etc.). Moreover, other income tax saving vehicles (e.g., IRAs, 401(k) plans, Roth IRAs) may be better alternatives for value accumulation. A combination of low-cost term life insurance and a higher-return tax-efficient retirement account may achieve better investment return.

[edit] Property

Main article: Property insurance

This tornado damage to an Illinois home would be considered an “Act of God” for insurance purposes

Property insurance provides protection against risks to property, such as fire, theft or weather damage. This includes specialized forms of insurance such as fire insurance, flood insurance, earthquake insurance, home insurance, inland marine insurance or boiler insurance.

• Automobile insurance, known in the UK as motor insurance, is probably the most common form of insurance and may cover both legal liability claims against the driver and loss of or damage to the insured’s vehicle itself. Throughout the United States an auto insurance policy is required to legally operate a motor vehicle on public roads. In some jurisdictions, bodily injury compensation for automobile accident victims has been changed to a no-fault system, which reduces or eliminates the ability to sue for compensation but provides automatic eligibility for benefits. Credit card companies insure against damage on rented cars.
  • Driving School Insurance insurance provides cover for any authorized driver whilst undergoing tuition, cover also unlike other motor policies provides cover for instructor liability where both the pupil and driving instructor are equally liable in the event of a claim.
• Aviation insurance insures against hull, spares, deductibles, hull wear and liability risks.
• Boiler insurance (also known as boiler and machinery insurance or equipment breakdown insurance) insures against accidental physical damage to equipment or machinery.
• Builder’s risk insurance insures against the risk of physical loss or damage to property during construction. Builder’s risk insurance is typically written on an “all risk” basis covering damage due to any cause (including the negligence of the insured) not otherwise expressly excluded.
• Crop insurance “Farmers use crop insurance to reduce or manage various risks associated with growing crops. Such risks include crop loss or damage caused by weather, hail, drought, frost damage, insects, or disease, for instance.”^[10]
• Earthquake insurance is a form of property insurance that pays the policyholder in the event of an earthquake that causes damage to the property. Most ordinary homeowners insurance policies do not cover earthquake damage. Most earthquake insurance policies feature a high deductible. Rates depend on location and the probability of an earthquake, as well as the construction of the home.
• A fidelity bond is a form of casualty insurance that covers policyholders for losses that they incur as a result of fraudulent acts by specified individuals. It usually insures a business for losses caused by the dishonest acts of its employees.
• Flood insurance protects against property loss due to flooding. Many insurers in the U.S. do not provide flood insurance in some portions of the country. In response to this, the federal government created the National Flood Insurance Program which serves as the insurer of last resort.
• Home insurance or homeowners’ insurance: See “Property insurance”.
• Landlord insurance is specifically designed for people who own properties which they rent out. Most house insurance cover in the U.K will not be valid if the property is rented out therefore landlords must take out this specialist form of home insurance.
• Marine insurance and marine cargo insurance cover the loss or damage of ships at sea or on inland waterways, and of the cargo that may be on them. When the owner of the cargo and the carrier are separate corporations, marine cargo insurance typically compensates the owner of cargo for losses sustained from fire, shipwreck, etc., but excludes losses that can be recovered from the carrier or the carrier’s insurance. Many marine insurance underwriters will include “time element” coverage in such policies, which extends the indemnity to cover loss of profit and other business expenses attributable to the delay caused by a covered loss.
• Surety bond insurance is a three party insurance guaranteeing the performance of the principal.
• Terrorism insurance provides protection against any loss or damage caused by terrorist activities.
• Volcano insurance is an insurance that covers volcano damage in Hawaii.
• Windstorm insurance is an insurance covering the damage that can be caused by hurricanes and tropical cyclones.

[edit] Liability

Main article: Liability insurance

Liability insurance is a very broad superset that covers legal claims against the insured. Many types of insurance include an aspect of liability coverage. For example, a homeowner’s insurance policy will normally include liability coverage which protects the insured in the event of a claim brought by someone who slips and falls on the property; automobile insurance also includes an aspect of liability insurance that indemnifies against the harm that a crashing car can cause to others’ lives, health, or property. The protection offered by a liability insurance policy is twofold: a legal defense in the event of a lawsuit commenced against the policyholder and indemnification (payment on behalf of the insured) with respect to a settlement or court verdict. Liability policies typically cover only the negligence of the insured, and will not apply to results of wilful or intentional acts by the insured.

• Environmental liability insurance protects the insured from bodily injury, property damage and cleanup costs as a result of the dispersal, release or escape of pollutants.
• Errors and omissions insurance: See “Professional liability insurance” under “Liability insurance”.
• Professional liability insurance, also called professional indemnity insurance, protects insured professionals such as architectural corporation and medical practice against potential negligence claims made by their patients/clients. Professional liability insurance may take on different names depending on the profession. For example, professional liability insurance in reference to the medical profession may be called malpractice insurance. Notaries public may take out errors and omissions insurance (E&O). Other potential E&O policyholders include, for example, real estate brokers, Insurance agents, home inspectors, appraisers, and website developers.
• Directors and officers liability insurance protects an organization (usually a corporation) from costs associated with litigation resulting from mistakes made by directors and officers for which they are liable. In the industry, it is usually called “D&O” for short.
• Prize indemnity insurance protects the insured from giving away a large prize at a specific event. Examples would include offering prizes to contestants who can make a half-court shot at a basketball game, or a hole-in-one at a golf tournament.

[edit] Credit

Main article: Credit insurance

Credit insurance repays some or all of a loan when certain things happen to the borrower such as unemployment, disability, or death.

• Mortgage insurance insures the lender against default by the borrower. Mortgage insurance is a form of credit insurance, although the name credit insurance more often is used to refer to policies that cover other kinds of debt.

[edit] Other types

• Collateral protection insurance or CPI, insures property (primarily vehicles) held as collateral for loans made by lending institutions.
• Defense Base Act Workers’ compensation or DBA Insurance provides coverage for civilian workers hired by the government to perform contracts outside the U.S. and Canada. DBA is required for all U.S. citizens, U.S. residents, U.S. Green Card holders, and all employees or subcontractors hired on overseas government contracts. Depending on the country, Foreign Nationals must also be covered under DBA. This coverage typically includes expenses related to medical treatment and loss of wages, as well as disability and death benefits.
• Expatriate insurance provides individuals and organizations operating outside of their home country with protection for automobiles, property, health, liability and business pursuits.
• Financial loss insurance protects individuals and companies against various financial risks. For example, a business might purchase coverage to protect it from loss of sales if a fire in a factory prevented it from carrying out its business for a time. Insurance might also cover the failure of a creditor to pay money it owes to the insured. This type of insurance is frequently referred to as “business interruption insurance.” Fidelity bonds and surety bonds are included in this category, although these products provide a benefit to a third party (the “obligee”) in the event the insured party (usually referred to as the “obligor”) fails to perform its obligations under a contract with the obligee.
• Kidnap and ransom insurance
• Locked funds insurance is a little-known hybrid insurance policy jointly issued by governments and banks. It is used to protect public funds from tamper by unauthorized parties. In special cases, a government may authorize its use in protecting semi-private funds which are liable to tamper. The terms of this type of insurance are usually very strict. Therefore it is used only in extreme cases where maximum security of funds is required.
• Nuclear incident insurance covers damages resulting from an incident involving radioactive materials and is generally arranged at the national level. See the Nuclear exclusion clause and for the United States the Price-Anderson Nuclear Industries Indemnity Act)
• Pet insurance insures pets against accidents and illnesses – some companies cover routine/wellness care and burial, as well.
• Pollution Insurance, which consists of first-party coverage for contamination of insured property either by external or on-site sources. Coverage for liability to third parties arising from contamination of air, water, or land due to the sudden and accidental release of hazardous materials from the insured site. The policy usually covers the costs of cleanup and may include coverage for releases from underground storage tanks. Intentional acts are specifically excluded.
• Purchase insurance is aimed at providing protection on the products people purchase. Purchase insurance can cover individual purchase protection, warranties, guarantees, care plans and even mobile phone insurance. Such insurance is normally very limited in the scope of problems that are covered by the policy.
• Title insurance provides a guarantee that title to real property is vested in the purchaser and/or mortgagee, free and clear of liens or encumbrances. It is usually issued in conjunction with a search of the public records performed at the time of a real estate transaction.
• Travel insurance is an insurance cover taken by those who travel abroad, which covers certain losses such as medical expenses, loss of personal belongings, travel delay, personal liabilities, etc.

[edit] Insurance financing vehicles

• Protected Self-Insurance is an alternative risk financing mechanism in which an organization retains the mathematically calculated cost of risk within the organization and transfers the catastrophic risk with specific and aggregate limits to an insurer so the maximum total cost of the program is known. A properly designed and underwritten Protected Self-Insurance Program reduces and stabilizes the cost of insurance and provides valuable risk management information.
• Retrospectively Rated Insurance is a method of establishing a premium on large commercial accounts. The final premium is based on the insured’s actual loss experience during the policy term, sometimes subject to a minimum and maximum premium, with the final premium determined by a formula. Under this plan, the current year’s premium is based partially (or wholly) on the current year’s losses, although the premium adjustments may take months or years beyond the current year’s expiration date. The rating formula is guaranteed in the insurance contract. Formula: retrospective premium = converted loss + basic premium × tax multiplier. Numerous variations of this formula have been developed and are in use.
• Fraternal insurance is provided on a cooperative basis by fraternal benefit societies or other social organizations.^[11]
• Formal self insurance is the deliberate decision to pay for otherwise insurable losses out of one’s own money. This can be done on a formal basis by establishing a separate fund into which funds are deposited on a periodic basis, or by simply forgoing the purchase of available insurance and paying out-of-pocket. Self insurance is usually used to pay for high-frequency, low-severity losses. Such losses, if covered by conventional insurance, mean having to pay a premium that includes loadings for the company’s general expenses, cost of putting the policy on the books, acquisition expenses, premium taxes, and contingencies. While this is true for all insurance, for small, frequent losses the transaction costs may exceed the benefit of volatility reduction that insurance otherwise affords.
• No-fault insurance is a type of insurance policy (typically automobile insurance) where insureds are indemnified by their own insurer regardless of fault in the incident.
• Reinsurance is a type of insurance purchased by insurance companies or self-insured employers to protect against unexpected losses. Financial reinsurance is a form of reinsurance that is primarily used for capital management rather than to transfer insurance risk.
• Stop-loss insurance provides protection against catastrophic or unpredictable losses. It is purchased by organizations who do not want to assume 100% of the liability for losses arising from the plans. Under a stop-loss policy, the insurance company becomes liable for losses that exceed certain limits called deductibles.
• Social insurance can be many things to many people in many countries. But a summary of its essence is that it is a collection of insurance coverages (including components of life insurance, disability income insurance, unemployment insurance, health insurance, and others), plus retirement savings, that requires participation by all citizens. By forcing everyone in society to be a policyholder and pay premiums, it ensures that everyone can become a claimant when or if he/she needs to. Along the way this inevitably becomes related to other concepts such as the justice system and the welfare state. This is a large, complicated topic that engenders tremendous debate, which can be further studied in the following articles (and others):
  • Social welfare provision
  • Social security
  • Social safety net
  • National Insurance
  • Social Security (United States)
  • Social Security debate (United States)

[edit] Closed community self-insurance

Some communities prefer to create virtual insurance amongst themselves by other means than contractual risk transfer, which assigns explicit numerical values to risk. A number of religious groups, including the Amish and some Muslim groups, depend on support provided by their communities when disasters strike. The risk presented by any given person is assumed collectively by the community who all bear the cost of rebuilding lost property and supporting people whose needs are suddenly greater after a loss of some kind. In supportive communities where others can be trusted to follow community leaders, this tacit form of insurance can work. In this manner the community can even out the extreme differences in insurability that exist among its members. Some further justification is also provided by invoking the moral hazard of explicit insurance contracts.

In the United Kingdom, The Crown (which, for practical purposes, meant the Civil service) did not insure property such as government buildings. If a government building was damaged, the cost of repair would be met from public funds because, in the long run, this was cheaper than paying insurance premiums. Since many UK government buildings have been sold to property companies, and rented back, this arrangement is now less common and may have disappeared altogether.

[edit] Insurance companies

Insurance companies may be classified into two groups:

• Life insurance companies, which sell life insurance, annuities and pensions products.
• Non-life, General, or Property/Casualty insurance companies, which sell other types of insurance.

General insurance companies can be further divided into these sub categories.

• Standard Lines
• Excess Lines

In most countries, life and non-life insurers are subject to different regulatory regimes and different tax and accounting rules. The main reason for the distinction between the two types of company is that life, annuity, and pension business is very long-term in nature — coverage for life assurance or a pension can cover risks over many decades. By contrast, non-life insurance cover usually covers a shorter period, such as one year.

In the United States, standard line insurance companies are “main stream” insurers. These are the companies that typically insure autos, homes or businesses. They use pattern or “cookie-cutter” policies without variation from one person to the next. They usually have lower premiums than excess lines and can sell directly to individuals. They are regulated by state laws that can restrict the amount they can charge for insurance policies.

Excess line insurance companies (aka Excess and Surplus) typically insure risks not covered by the standard lines market. They are broadly referred as being all insurance placed with non-admitted insurers. Non-admitted insurers are not licensed in the states where the risks are located. These companies have more flexibility and can react faster than standard insurance companies because they are not required to file rates and forms as the “admitted” carriers do. However, they still have substantial regulatory requirements placed upon them. State laws generally require insurance placed with surplus line agents and brokers not to be available through standard licensed insurers.

Insurance companies are generally classified as either mutual or stock companies. Mutual companies are owned by the policyholders, while stockholders (who may or may not own policies) own stock insurance companies. Demutualization of mutual insurers to form stock companies, as well as the formation of a hybrid known as a mutual holding company, became common in some countries, such as the United States, in the late 20th century. Other possible forms for an insurance company include reciprocals, in which policyholders ‘reciprocate’ in sharing risks, and Lloyds organizations.

Insurance companies are rated by various agencies such as A. M. Best. The ratings include the company’s financial strength, which measures its ability to pay claims. It also rates financial instruments issued by the insurance company, such as bonds, notes, and securitization products.

Reinsurance companies are insurance companies that sell policies to other insurance companies, allowing them to reduce their risks and protect themselves from very large losses. The reinsurance market is dominated by a few very large companies, with huge reserves. A reinsurer may also be a direct writer of insurance risks as well.

Captive insurance companies may be defined as limited-purpose insurance companies established with the specific objective of financing risks emanating from their parent group or groups. This definition can sometimes be extended to include some of the risks of the parent company’s customers. In short, it is an in-house self-insurance vehicle. Captives may take the form of a “pure” entity (which is a 100% subsidiary of the self-insured parent company); of a “mutual” captive (which insures the collective risks of members of an industry); and of an “association” captive (which self-insures individual risks of the members of a professional, commercial or industrial association). Captives represent commercial, economic and tax advantages to their sponsors because of the reductions in costs they help create and for the ease of insurance risk management and the flexibility for cash flows they generate. Additionally, they may provide coverage of risks which is neither available nor offered in the traditional insurance market at reasonable prices.

The types of risk that a captive can underwrite for their parents include property damage, public and product liability, professional indemnity, employee benefits, employers’ liability, motor and medical aid expenses. The captive’s exposure to such risks may be limited by the use of reinsurance.

Captives are becoming an increasingly important component of the risk management and risk financing strategy of their parent. This can be understood against the following background:

• heavy and increasing premium costs in almost every line of coverage;
• difficulties in insuring certain types of fortuitous risk;
• differential coverage standards in various parts of the world;
• rating structures which reflect market trends rather than individual loss experience;
• insufficient credit for deductibles and/or loss control efforts.

There are also companies known as ‘insurance consultants’. Like a mortgage broker, these companies are paid a fee by the customer to shop around for the best insurance policy amongst many companies. Similar to an insurance consultant, an ‘insurance broker’ also shops around for the best insurance policy amongst many companies. However, with insurance brokers, the fee is usually paid in the form of commission from the insurer that is selected rather than directly from the client.

Neither insurance consultants nor insurance brokers are insurance companies and no risks are transferred to them in insurance transactions. Third party administrators are companies that perform underwriting and sometimes claims handling services for insurance companies. These companies often have special expertise that the insurance companies do not have.

The financial stability and strength of an insurance company should be a major consideration when buying an insurance contract. An insurance premium paid currently provides coverage for losses that might arise many years in the future. For that reason, the viability of the insurance carrier is very important. In recent years, a number of insurance companies have become insolvent, leaving their policyholders with no coverage (or coverage only from a government-backed insurance pool or other arrangement with less attractive payouts for losses). A number of independent rating agencies, such as Best’s, Fitch, Standard & Poor’s, and Moody’s Investors Service, provide information and rate the financial viability of insurance companies.

[edit] Global insurance industry

Life insurance premia written in 2005

Non-life insurance premia written in 2005

Global insurance premiums grew by 8.0% in 2006 (or 5% in real terms) to reach $3.7 trillion due to improved profitability and a benign economic environment characterised by solid economic growth, moderate inflation and strong equity markets. Profitability improved in both life and non-life insurance in 2006 compared to the previous year. Life insurance premiums grew by 10.2% in 2006 as demand for annuity and pension products rose. Non-life insurance premiums grew by 5.0% due to growth in premium rates. Over the past decade, global insurance premiums rose by more than a half as annual growth fluctuated between 2% and 11%.

Advanced economies account for the bulk of global insurance. With premium income of $1,485bn, Europe was the most important region, followed by North America ($1,258bn) and Asia ($801bn). The top four countries accounted for nearly two-thirds of premiums in 2006. The U.S. and Japan alone accounted for 43% of world insurance, much higher than their 7% share of the global population. Emerging markets accounted for over 85% of the world’s population but generated only around 10% of premiums. The volume of UK insurance business totalled $418bn in 2006 or 11.2% of global premiums. ^[12]

[edit] Controversies

[edit] Insurance insulates too much

By creating a “security blanket” for its insureds, an insurance company may inadvertently find that its insureds may not be as risk-averse as they might otherwise be (since, by definition, the insured has transferred the risk to the insurer). This problem is known to the insurance industry as moral hazard. To reduce their own financial exposure, insurance companies have contractual clauses that mitigate their obligation to provide coverage if the insured engages in behavior that grossly magnifies their risk of loss or liability.

For example, life insurance companies may require higher premiums or deny coverage altogether to people who work in hazardous occupations or engage in dangerous sports. Liability insurance providers do not provide coverage for liability arising from intentional torts committed by the insured. Even if a provider were so irrational as to want to provide such coverage, it is against the public policy of most countries to allow such insurance to exist, and thus it is usually illegal.

[edit] Complexity of insurance policy contracts

Insurance policies can be complex and some policyholders may not understand all the fees and coverages included in a policy. As a result, people may buy policies on unfavorable terms. In response to these issues, many countries have enacted detailed statutory and regulatory regimes governing every aspect of the insurance business, including minimum standards for policies and the ways in which they may be advertised and sold.

Many institutional insurance purchasers buy insurance through an insurance broker. Brokers represent the buyer (not the insurance company), and typically counsel the buyer on appropriate coverage and policy limitations. A broker generally holds contracts with many insurers, thereby allowing the broker to “shop” the market for the best rates and coverage possible.

Insurance may also be purchased through an agent. Unlike a broker, who represents the policyholder, an agent represents the insurance company from whom the policyholder buys. An agent can represent more than one company.

[edit] Redlining

Redlining is the practice of denying insurance coverage in specific geographic areas, supposedly because of a high likelihood of loss, while the alleged motivation is unlawful discrimination. Racial profiling or redlining has a long history in the property insurance industry in the United States. From a review of industry underwriting and marketing materials, court documents, and research by government agencies, industry and community groups, and academics, it is clear that race has long affected and continues to affect the policies and practices of the insurance industry.^[13]
All states have provisions in their rate regulation laws or in their fair trade practice acts that prohibit unfair discrimination, often called redlining, in setting rates and making insurance available.^[14]
In determining premiums and premium rate structures, insurers consider quantifiable factors, including location, credit scores, gender, occupation, marital status, and education level. However, the use of such factors is often considered to be unfair or unlawfully discriminatory, and the reaction against this practice has in some instances led to political disputes about the ways in which insurers determine premiums and regulatory intervention to limit the factors used.

An insurance underwriter’s job is to evaluate a given risk as to the likelihood that a loss will occur. Any factor that causes a greater likelihood of loss should theoretically be charged a higher rate. This basic principle of insurance must be followed if insurance companies are to remain solvent. Thus, “discrimination” against (i.e., negative differential treatment of) potential insureds in the risk evaluation and premium-setting process is a necessary by-product of the fundamentals of insurance underwriting. For instance, insurers charge older people significantly higher premiums than they charge younger people for term life insurance. Older people are thus treated differently than younger people (i.e., a distinction is made, discrimination occurs). The rationale for the differential treatment goes to the heart of the risk a life insurer takes: Old people are likely to die sooner than young people, so the risk of loss (the insured’s death) is greater in any given period of time and therefore the risk premium must be higher to cover the greater risk. However, treating insureds differently when there is no actuarially sound reason for doing so is unlawful discrimination.

What is often missing from the debate is that prohibiting the use of legitimate, actuarially sound factors means that an insufficient amount is being charged for a given risk, and there is thus a deficit in the system. The failure to address the deficit may mean insolvency and hardship for all of a company’s insureds. The options for addressing the deficit seem to be the following: Charge the deficit to the other policyholders or charge it to the government (i.e., externalize outside of the company to society at large).

[edit] Insurance patents

Further information: Insurance patent

New insurance products can now be protected from copying with a business method patent in the United States.

A recent example of a new insurance product that is patented is Usage Based auto insurance. Early versions were independently invented and patented by a major U.S. auto insurance company, Progressive Auto Insurance (U.S. Patent 5,797,134 ) and a Spanish independent inventor, Salvador Minguijon Perez (EP patent 0700009).

Many independent inventors are in favor of patenting new insurance products since it gives them protection from big companies when they bring their new insurance products to market. Independent inventors account for 70% of the new U.S. patent applications in this area. One such example is titled “Method of Expediting Insurance Claims” Patent 7,203,654 issued April 10, 2007.

Many insurance executives are opposed to patenting insurance products because it creates a new risk for them. The Hartford insurance company, for example, recently had to pay $80 million to an independent inventor, Bancorp Services, in order to settle a patent infringement and theft of trade secret lawsuit for a type of corporate owned life insurance product invented and patented by Bancorp.

There are currently about 150 new patent applications on insurance inventions filed per year in the United States. The rate at which patents have issued has steadily risen from 15 in 2002 to 44 in 2006. ^[15]

Inventors can now have their insurance U.S. patent applications reviewed by the public in the Peer to Patent program.^[16]

[edit] The insurance industry and rent seeking

Certain insurance products and practices have been described as rent seeking by critics.^{[citation needed]} That is, some insurance products or practices are useful primarily because of legal benefits, such as reducing taxes, as opposed to providing protection against risks of adverse events. Under United States tax law, for example, most owners of variable annuities and variable life insurance can invest their premium payments in the stock market and defer or eliminate paying any taxes on their investments until withdrawals are made. Sometimes this tax deferral is the only reason people use these products.^{[citation needed]} Another example is the legal infrastructure which allows life insurance to be held in an irrevocable trust which is used to pay an estate tax while the proceeds themselves are immune from the estate tax.

[edit] Criticism of insurance companies

The neutrality of this article is disputed. Please see the discussion on the talk page. (September 2008) Please do not remove this message until the dispute is resolved.

Some people believe that modern insurance companies are money-making businesses which have little interest in insurance.^{[citation needed]} They argue that the purpose of insurance is to spread risk so the reluctance of insurance companies to take on high-risk cases (e.g. houses in areas subject to flooding, or young drivers) runs counter to the principle of insurance.^{[citation needed]}

Other criticisms include:

• Insurance policies contain too many exclusion clauses. For example, some house insurance policies do not cover damage to garden walls.^{[citation needed]}

• Many insurance companies now use call centres and staff attempt to answer questions by reading from a script.^{[citation needed]} It is difficult to speak to anybody with expert knowledge.^{[citation needed]} While policyholders find their premium payments decrease when dealing with companies who sacrifice the use of trained insurance agents, they also risk greater financial loss due to inadequate coverage protection.^{[citation needed]} Those companies who invest in educated insurance agents provide a valued service to the community. Policyholders who work with knowledgeable insurance agents are more likely to identify needs, evaluate options, purchase sufficient insurance protection, and minimize the risk of heavy financial loss for themselves and their family.^{[citation needed]}

[edit] Glossary

• ‘Combined ratio’ = loss ratio + expense ratio. Loss ratio is calculated by dividing the amount of losses (sometimes including loss adjustment expenses) by the amount of earned premium. Expense ratio is calculated by dividing the amount of operational expenses by the amount of written premium. A lower number indicates a better return on the amount of capital placed at risk by an insurer.
• ‘SSA’ = subscriber savings account.
• ‘AIF’ = attorney in fact.

thanks to wikipedia.org

A loan is a type of debt. This article focuses exclusively on monetary loans, although, in practice, any material object might be lent. Like all debt instruments, a loan entails the redistribution of financial assets over time, between the lender and the borrower.

The borrower initially does receive an amount of money from the lender, which they pay back, usually but not always in regular installments, to the lender. This service is generally provided at a cost, referred to as interest on the debt. A loan is of the annuity type if the amount paid periodically (for paying off and interest together) is fixed.

A borrower may be subject to certain restrictions known as loan covenants under the terms of the loan.

Acting as a provider of loans is one of the principal tasks for financial institutions. For other institutions, issuing of debt contracts such as bonds is a typical source of funding.

Legally, a loan is a contractual promise of a debtor to repay a sum of money in exchange for the promise of a creditor to give another sum of money.

[edit] Types of loans

[edit] Secured

A secured loan is a loan in which the borrower pledges some asset (e.g. a car or property) as collateral for the loan.

A mortgage loan is a very common type of debt instrument, used by many individuals to purchase housing. In this arrangement, the money is used to purchase the property. The financial institution, however, is given security — a lien on the title to the house — until the mortgage is paid off in full. If the borrower defaults on the loan, the bank would have the legal right to repossess the house and sell it, to recover sums owing to it.

In some instances, a loan taken out to purchase a new or used car may be secured by the car, in much the same way as a mortgage is secured by housing. The duration of the loan period is considerably shorter — often corresponding to the useful life of the car. There are two types of auto loans, direct and indirect. A direct auto loan is where a bank gives the loan directly to a consumer. An indirect auto loan is where a car dealership acts as an intermediary between the bank or financial institution and the consumer.

A type of loan especially used in limited partnership agreements is the recourse note.

A stock hedge loan is a special type of securities lending whereby the stock of a borrower is hedged by the lender against loss, using options or other hedging strategies to reduce lender risk.^{[citation needed]}

[edit] Unsecured

Unsecured loans are monetary loans that are not secured against the borrowers assets. These may be available from financial institutions under many different guises or marketing packages:

• credit card debt
• personal loans
• bank overdrafts
• credit facilities or lines of credit
• corporate bonds

The interest rates applicable to these different forms may vary depending on the lender and the borrower. These may or may not be regulated by law. In the United Kingdom, when applied to individuals, these may come under the Consumer Credit Act 1974.

[edit] Abuses in lending

Predatory lending is one form of abuse in the granting of loans. It usually involves granting a loan in order to put the borrower in a position that one can gain advantage over him or her. Where the moneylender is not authorised, it could be considered a loan shark.

Usury is a different form of abuse, where the lender charges excessive interest. In different time periods and cultures the acceptable interest rate has varied, from no interest at all to unlimited interest rates. Credit card companies in some countries have been accused by consumer organisations of lending at usurious interest rates and making money out of frivolous “extra charges”. ^[1]

Abuses can also take place in the form of the customer abusing the lender by not repaying the loan or with an intent to defraud the lender.

[edit] United States taxes

Most of the basic rules governing how loans are handled for tax purposes in the United States are uncodified by both Congress (the Internal Revenue Code) and the Treasury Department (Treasury Regulations — another set of rules that interpret the Internal Revenue Code).^[2] Yet such rules are universally accepted.^[3]

1. A loan is not gross income to the borrower.^[4] Since the borrower has the obligation to repay the loan, the borrower has no accession to wealth.^[5]

2. The lender may not deduct the amount of the loan.^[6] The rationale here is that one asset (the cash) has been converted into a different asset (a promise of repayment).^[7] Deductions are not typically available when an outlay serves to create a new or different asset.^[8]

3. The amount paid to satisfy the loan obligation is not deductible by the borrower.^[9]

4. Repayment of the loan is not gross income to the lender.^[10] In effect, the promise of repayment is converted back to cash, with no accession to wealth by the lender.^[11]

5. Interest paid to the lender is included in the lender’s gross income.^[12] Interest paid represents compensation for the use of the lender’s money or property and thus represents profit or an accession to wealth to the lender.^[13] Interest income can be attributed to lenders even if the lender doesn’t charge a minimum amount of interest.^[14]

6. Interest paid to the lender may be deductible by the borrower.^[15] In general, interest paid in connection with the borrower’s business activity is deductible, while interest paid on personal loans are not deductible.^[16] The major exception here is interest paid on a home mortgage.^[17]

[edit] Income from discharge of indebtedness

Although a loan does not start out as income to the borrower, it becomes income to the borrower if the borrower is discharged of indebtedness. ^[18] Thus, if a debt is discharged, then the borrower essentially has received income equal to the amount of the indebtedness. The Internal Revenue Code lists “Income from Discharge of Indebtedness” in Section 62(a)(12) as a source of gross income.

Example: X owes Y $50,000. If Y discharges the indebtedness, then X no longer owes Y $50,000. For purposes of calculating income, this should be treated the same way as if Y gave X $50,000.

For a more detailed description of the “discharge of indebtedness”, look at Section 108 (Cancellation of Debt (COD) Income) of the Internal Revenue Code.^[19]

thanks to wikipedia.org