STANDARDIZATION POLICY
At the time of the commencement of the insurance, the existence of any insurance contract with the insurer made between parties are covered with complete freedom. The State does not intervene in the agreement unless its enforcement mechanisms provide. With the development of insurance to a level that is very technical, this freedom raises difficulties both for the policy holder as well as for the insurance company. For example, a person who incurred that have multiple insurance policies may once research carefully get that closure of the insurance not only overlapping but contradictory. He might have two policies, but each policy that may contain an article rejecting the closure if there is other insurance over the treasure. In the language of his policy of insurance, it is a non concurrent. This makes the rising insurance costs are unnecessary or perhaps give something that is empty or the closure of the overload. Often this annoying new facts he knows having incurred losses.
Competition policies complicate the insurance companies because it is difficult for companies with contracts that are frankly rival premium rate insurance companies that issued policies that sly (tricky). Then feels the need for some form of standardization.
Policy
in standardization according to three kinds of methods, namely
according to the habit, according to the law and based on the agreement
between the companies. Of course not all standardized policies. Even large corporations who want to buy the insurance hadn't bought a standard policy. He can make himself a form that meets the needs of the particular and then look for his company with the policies made by the majority of insurance companies in the field.
Standardization according to habit
Since 1764, the underwriter (the insurer) that is running its business in Lloyd's of London, realized the importance of a standard policy, either for themselves or for a party in responsibility. In the year 1779, they agreed to wear a form of marine insurance made by a fellow underwriter it as a standard policy. Since then the form known as "Lloyd's standard policies."
Because of this policy in use year after year and the number of court decisions concerning him, then the formation of a group legal insurance. He said, almost every word in the Lloyd's policy is paraphrased by the courts, so that although the words in ancient life, but every insurance company which used the true meaning of tau policy every expression.
In the uk, the Marine Insurance Act 1906 and tahun1899 acknowledge Lloyd's policy as the default policy in the uk. In the United States, the marine insurance policy is very different from the words of Lloyd's policies, but it is clear that most taken from Lloyd's it is. Therefore, the Lloyd's policy being a good example to all kinds of standardizing insurance policy.
Standardization of lawful
Some sort of polis, in standardization according to the law, either by specifying the form, either by setting a minimum standard clauses.
For example, a fire insurance policy is standard policy where the
policy Word for Word it's specified by law, but the beginning of
existence of fire insurance, individual insurance company fire was
making its own policy form. Policies are very different from each other, not only between the policy one insurance company with the company another insurance policy, but even among the policies made by the same insurance company.
Initially, the insurance business only on the run from the Central Office, but with the advent of agency system then the underwriters in the headquarters became aware of the necessity of drafting contracts of insurance are strictly to protect the company. some insurance companies seem to be very gracious on the home page of the contract, but then at the end of the contract that it contains many exemptions (exclutions) which is not in his or her responsibilities and unnatural terms that must be supplied by the party in responsibility before obtaining indemnity. Exemptions and these terms are usually hidden with delicate letters on the back of that policy.
The year 1886 established National Board of Fire Underwriters (National Council; Fire insurance) in the United States and shortly thereafter he began to produce the uniformity of the fire insurance policy.
Standardization through Standard markets
,
Between the non-marine insurance policies make it with strict wag
insurance policy, there are insurance policies where the State simply
determine the articles of certain minimum standards. Some of the clauses
of this standard is a must, other standards are optimal (option) can be
means should not enter. An example is life insurance policy and health.
Standardization according to the agreement between the company
Many insurance companies recognize the benefits of standard policies, so they are trying to create a uniform contract through agreement between the companies. This negates the standard policy of competition "fine letters" were not good between the insurance companies and facilitate the interpretation of the policy.
A avail essential for standardization through the inter company agreement for insurance companies is standard policy Act became no longer need to. Insurance companies prefer a voluntary action between companies rather than the compulsion of law. Famous examples through standardization agreements between the company presumably is a car insurance policy.
The Weakness Of Standardization
Standardization sometimes thwarted progress. It prevents the freedom of making a contract. The joint action was much slow than individual action. He disliked because it does not allow companies in its own experiment (experimentation) and therefore slow down the changes that are needed. There are insurance companies that refused to participate in the Organization of koperatif because they argued to their follow-up will limit their efforts to pioneer the closure-closure (coverage). If their efforts are successful, then the insurance companies that others will follow in the footsteps of them because of the pressure of competition and because of the desire to improve the coverages (closure). If the new ideas are not profitable or are not popular, then the industry as a whole is not so affected by the experiment. Instead, the standardization according to the agreement also opened the possibility to a cunning insurance companies who do not have standard forms for issuing an adverse party policies borne by offering low quality closure.
