Co-op funeral insurance customers accidentally go online

Co-operative Life Planning (CLP) has breached the Data Protection Act by failing to ensure a contractor followed the company’s security procedures.

According to the Information Commissioner’s Office (ICO), in March an electronic file that had been repaired by CLP’s software support contractor was “accidentally” made available online.

The file contained the names, dates of births, addresses and insurance contributions of 82,000 CLP customers who had previously bough funeral insurance.

The ICO’s investigation found that the software support services provider had no authorisation to copy the data from the insurer’s servers and had failed to delete the information once the file had been repaired.

In addition, CLP failed to realise that the data had been transferred on two separate occasions, and was unaware that customers’ details had been made available online.

The mutual’s managing director, Ian Mackie, has signed an undertaking to introduce data loss prevention software, already tested by the group, across all its servers.

The ICO’s acting head of enforcement, Sally-Anne Poole, says: “This case highlights the need for companies to ensure their contractors are following procedures on keeping customers’ personal information secure.”

Earlier this week, figures obtained by Which? Money indicated that the UK’s biggest banks could be breaching data protection rules with alarming regularity.

According to the consumer group, between August 2009 and August 2010, there were 515 complaints lodged with the ICO about possible data protection breaches by eight of Britain’s biggest banks and building societies.

Which? Money research also suggests that just one in ten people are aware of the ICO, suggesting that the volume of complaints could represent the tip of the iceberg.

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Volcanic ash and your travel insurance – everything you need to know

The ash cloud from Iceland's Grimsvotn volcano is making its way into UK airspace. What does this mean for your holiday plans and will your travel insurance cover you?

Volcanic ash from the Grimsvotn eruption is expected in UK airspace on Tuesday. Photograph: Egill Adalsteinsson/EPA

Air passengers have been warned they could face delays as a result of another erupting volcano in Iceland – this time it's Grimsvotn that is sending plumes of ash into the atmosphere.


Ryanair says that, based on current meteorological forecasts, it does not expect any disruption to its flying schedule, while easyJet says it is also not anticipating widespread flight disruptions. But airlines and airports have been warned to expect ash from the volcano to arrive in UK airspace by Tuesday, with the possibility it could affect Heathrow by the end of the week. So what can you expect if you are affected now or later this year?

What happens if my flight is cancelled?

It depends where you were flying to and from, and where the airline you were planning to use is based. Under European law, if you are planning to fly from within the EU or back to a country in the EU on an EU-based airline it is obliged to offer you a choice: you can either cancel your booking and get a refund, or rebook on a different flight.

The refund should be made within seven days and rerouting should occur as soon as possible, unless you agree to reschedule for a later date. While you wait for your new flight you are entitled to meals and refreshments, hotel accommodation (if necessary), transport between airport and accommodation, and two free telephone calls (or emails).

The Civil Aviation Authority (CAA) says if passengers are "unable to obtain advice" from their airline, they should make their own arrangements and are advised to keep receipts of any expenses they intend to claim from their airline – but these expenses should be reasonable and fall within the above advice.

What if I am flying from outside the UK on a non-EU airline?

If you are flying back to the UK from outside the EU on an airline based outside the EU – for example, you are flying from New York to Heathrow on American Airlines – the rules do not apply. The CAA says most airlines will provide a refund or an alternative flight and some may also provide assistance during the disruption. You should also check your travel insurance, as this may cover you for the cost of accommodation, meals etc – though many insurers have still failed to pay out for last year's disruption.

What if my flight is delayed rather than cancelled?

If your flight is delayed you could be entitled to meals and refreshments, and may be able to get a refund if the delay is more than five hours. If the delay goes beyond 12 hours your travel insurance should offer a payout.

What if my flight is part of a package deal?

If you are travelling as part of an ATOL-covered holiday package, contact your tour operator. It is the responsibility of the tour operator to cover all costs should air space be disrupted. Holidaymakers who have yet to leave the UK are entitled to refunds or transfers, and those stranded overseas will be kept in accommodation at the expense of the tour operator.

The advantage of booking a package holiday is that the whole deal is covered by regulations which mean that if you are unable to reach your hotel, that will be refunded at the same time as your flight.

Will I get compensation?

The CAA says passengers are "not entitled to additional financial compensation, as would be the case if the cause of the disruption were the responsibility of the airline". But if you incurred expenses while awaiting a flight home you should still contact your airline or tour operator to enquire.

What if I booked a car and hotel separately?

You won't get a payout from the airline if you have to cancel transport or accommodation at your destination, but you may not lose money. In the first instance you should contact the hotel or car hire company and see if you can change your plans or arrange a refund. If this does not yield results, contact your travel insurer.

Will my insurer pay up?

Only if you bought travel insurance that covers delays or cancellations due to volcanic ash before the current situation unfolded, but check your policy wording as different insurers have different interpretations – and most have tightened up on this following last year's payouts.


Martin Rothwell of World First Travel, which offered "no quibble payouts" to affected customers 12 months ago, says his firm will honour claims as long as travel insruance was bought before 8am on 22 May 2011. "After that the horse had already bolted and everyone knew about the ash cloud. We can't offer cover for an event that has already happened."


After last year's problems, some travel insurers introduced separate or bolt-on cover for volcanic ash delays and cancellations, meaning customers travelling on a "vanilla" policy with the same insurer might not be covered for the Grimsvotn eruption. And be prepared for a fight: some consumers are still fighting for compensation from their travel insurer for claims made last year.

Will insurance cover extra spending while I am stuck abroad?

Delay, abandonment and costs incurred while abroad are covered by some insurers, but again it depends on the small print. If your airline offers to pay for accommodation the travel insurer will not do so too.


Source: guardian.co.uk
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It's a pity mutual Nationwide isn't keen to bite into Northern Rock

Nationwide has ruled out bidding for Northern Rock.

"Proud to be different" is Nationwide Building Society's slightly self-satisfied slogan (£1.5m last year for chief executive Graham Beale is not that different) but there was good reason to boast. A provision of only £16m for mis-selling noxious payment protection insurance (PPI) is indeed very different from the banks' clean-up costs.

A reminder: Lloyds Banking Group's PPI provision is £3.2bn; Barclays' is £1bn; Royal Bank of Scotland's is £850m; HSBC's is £268m. Yes, £16m compares "very favourably," as Beale says. It would be a good basis from which to pitch to buy Northern Rock from taxpayers at a modest discount to fair value – get the Rock into trustworthy hands would be the argument. But Nationwide is not interested. A pity.


Source: guardian.co.uk

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What's gnu? Insurance for older travellers

Gnu Insurance offers cover for older travellers with pre-existing conditions. But you should still shop around

Insurance for older travellers can be prohibitively expensive. Photograph: Eamonn McCabe

We've had meerkats and the Churchill nodding dog – now it is gnus that are breaking into the insurance world. Gnu Insurance is a brand launching next week that will target older travellers, including those with pre-existing medical conditions.

People should definitely consider it for a quote, but Guardian Money's quick non-scientific price test suggests it will be pricey for some conditions.

Global financial giant Aegon came up with Gnu Insurance – which goes live on Thursday – after "spotting a gap in the market". It will offer single-trip cover with no upper age limit; annual multi-trip insurance for those up to age 85; and a new product for under-85s called Pay Per Day aimed at "the spontaneous holidaymaker". It says it can cover all pre-existing medical conditions, many at no extra cost.

In recent years, many older people have struggled to find firms willing to insure them for trips abroad, especially if they have current or past health issues. However, there are now more such companies than you might think, from big names such as Saga and Age UK to smaller players.

In a September 2009 Money article we highlighted a policy called EHICPlus which was unusual in not having an upper age limit for either single-trip or annual policies. Unfortunately, the terms have changed and there is now an upper age limit of 79 for both.

We had a quick look at what an older person with and without pre-existing conditions might pay. Using comparethemarket.com, we sought quotes for "Robert Jones," a Londoner looking for a basic single-trip policy for a week-long holiday in Europe in July. He will be 75 at the time of the trip.

Columbus Direct came out cheapest with its bronze policy costing £16.84. But what would happen if Jones had some pre-existing medical conditions? We declared two – cancer of the gallbladder and hypertension – and were pleasantly surprised to find these were both accepted. Our premium would rise to £62.86. However, this may have been down to the way we answered the questions about Robert's treatment.

How would Gnu Insurance fare with the same scenario? The quote Jones would receive online for its silver cover was £40.18, excluding medical conditions. The quote obtained via its call centre – including cover for gallbladder cancer and hypertension – would be a whopping £750. Which shows just how important it is to shop around.

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Insurance Principles

Insurance involves pooling funds from many insured entities (known as exposures) to pay for the losses that some may incur. The insured entities are therefore protected from risk for a fee, with the fee being dependent upon the frequency and severity of the event occurring. In order to be insurable, the risk insured against must meet certain characteristics in order to be an insurable risk. Insurance is a commercial enterprise and a major part of the financial services industry, but individual entities can also self-insure through saving money for possible future losses.

1. Insurability
Risk which can be insured by private companies typically share seven common characteristics:
* Large number of similar exposure units: Since insurance operates through pooling resources, the majority of insurance policies are provided for individual members of large classes, allowing insurers to benefit from the law of large numbers in which predicted losses are similar to the actual losses. Exceptions include Lloyd's of London, which is famous for insuring the life or health of actors, sports figures and other famous individuals. However, all exposures will have particular differences, which may lead to different premium rates.
* Definite loss: The loss takes 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.
* 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 or even purchasing a lottery ticket, are generally not considered insurable.
* 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 hardly any point in paying such costs unless the protection offered has real value to a buyer.
* 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 the insurance will be purchased, 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)
* 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.
* Limited risk of catastrophically large losses: Insurable losses are ideally independent and non-catastrophic, meaning that the losses do not happen all at once and individual losses are not severe enough to bankrupt the insurer; insurers may prefer to limit their exposure to a loss from a single event to some small portion of their capital base. Capital constrains insurers' ability to sell earthquake insurance as well as wind insurance in hurricane zones. In the U.S., flood risk is insured by the federal government. 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.

2. Legal
When a company insures an individual entity, there are basic legal requirements. Several commonly cited legal principles of insurance include:
a. Indemnity – the insurance company indemnifies, or compensates, the insured in the case of certain losses only up to the insured's interest.
b. Insurable interest – the insured typically must directly suffer from the loss. Insurable interest must exist whether property insurance or insurance on a person is involved. The concept requires that the insured have a "stake" in the loss or damage to the life or property insured. What that "stake" is will be determined by the kind of insurance involved and the nature of the property ownership or relationship between the persons.
c. Utmost good faith – the insured and the insurer are bound by a good faith bond of honesty and fairness. Material facts must be disclosed.
d. Contribution – insurers which have similar obligations to the insured contribute in the indemnification, according to some method.
e. Subrogation – the insurance company acquires legal rights to pursue recoveries on behalf of the insured; for example, the insurer may sue those liable for insured's loss.
f. Causa proxima, or proximate cause – the cause of loss (the peril) must be covered under the insuring agreement of the policy, and the dominant cause must not be excluded.

3. Indemnification
To "indemnify" means to make whole again, or to be reinstated to the position that one was in, to the extent possible, prior to the happening of a specified event or peril. Accordingly, life insurance is generally not considered to be indemnity insurance, but rather "contingent" insurance (i.e., a claim arises on the occurrence of a specified event). There are generally two types of insurance contracts that seek to indemnify an insured:
1) an "indemnity" policy, and
2) a "pay on behalf" or "on behalf of" 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).

Under the same situation, a "pay on behalf" policy, the insurance carrier would pay the claim and the insured (the homeowner in the above example) would not be out of pocket for anything. Most modern liability insurance is written on the basis of "pay on behalf" language.

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: identification of participating 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 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 (called reserves), the remaining margin is an insurer's profit.

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Insurance History

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: natural or non-monetary economies (using barter and trade with no centralized nor standardized set of financial instruments) and more modern monetary economies (with markets, currency, financial instruments and so on). The former is more primitive and the insurance in such economies entails agreements of mutual aid. If one family's house is destroyed the neighbours are committed to help rebuild. Granaries housed another primitive form of insurance to indemnify against famines. Often informal or formally intrinsic to local religious customs, this type of insurance has survived to the present day in some countries where modern money economy with its financial instruments is not widespread.

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 or lost at sea.

Achaemenian monarchs of Ancient Persia 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."

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 deliberately jettisoned in order to lighten the ship and save it from total loss.

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.

Some forms of insurance had developed in London by the early decades of the 17th century. For example, the will of the English colonist Robert Hayman mentions two "policies of insurance" taken out with the diocesan Chancellor of London, Arthur Duck. Of the value of £100 each, one relates to the safe arrival of Hayman's ship in Guyana and the other is in regard to "one hundred pounds assured by the said Doctor Arthur Ducke on my life". Hayman's will was signed and sealed on 17 November 1628 but not proved until 1633. 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 an insurance market rather than a company) for marine and other specialist types of insurance, but it operates 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 more than 13,000 houses. The devastating effects of the fire converted the development of insurance "from a matter of convenience into one of urgency, a change of opinion reflected in Sir Christopher Wren's inclusion of a site for 'the Insurance Office' in his new plan for London in 1667." A number of attempted fire insurance schemes came to nothing, but in 1681 Nicholas Barbon, and eleven associates, established England's first fire insurance company, the 'Insurance Office for Houses', at the back of the Royal Exchange. Initially, 5,000 homes were insured by Barbon's Insurance Office.

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.

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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, vehicle insurance would typically cover both the property risk (theft or damage to the vehicle) and the liability risk (legal claims arising from an accident). A home insurance policy in the U.S. typically includes coverage for damage to the home and the owner's belongings, 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 take a number of different forms, such as the various kinds of professional liability insurance, also called professional indemnity (PI), which are discussed below under that name; and the business owner's policy (BOP), which packages into one policy many of the kinds of coverage that a business owner needs, in a way analogous to how homeowners' insurance packages the coverages that a homeowner needs.

1. Home Insurance
2. Car Insurance
3. Life Insurance
4. Health Insurance
5. Travel Insurance
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What Is Insurance?

What Is Insurance?
In law and economics, insurance is a form of risk management primarily used to hedge against the risk of a contingent, uncertain loss. Insurance is defined as the equitable transfer of the risk of a loss, from one entity to another, in exchange for payment.

An insurer is a company selling the insurance; an insured, or policyholder, is the person or entity buying the insurance policy. The insurance rate is a factor used to determine the amount to be charged for a certain amount of insurance coverage, called the premium. Risk management, the practice of appraising and controlling risk, has evolved as a discrete field of study and practice.

The transaction involves the insured assuming a guaranteed and known relatively small loss in the form of payment to the insurer in exchange for the insurer's promise to compensate (indemnify) the insured in the case of a financial (personal) loss. The insured receives a contract, called the insurance policy, which details the conditions and circumstances under which the insured will be financially compensated.

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