Insurance

The origins of insurance policies in general differs through various countries, limited policies (particularly against damage to homes) can be traced to the 17th and 18th centuries, though establishment of newer policies (such as health insurance and car insurance) did not come until the 20th century. However, regulation on the insurance industry via law began in the 1940s in the United States, through several supreme court rulings. The first ruling on insurance had taken place in 1868 (in the Paul v. Virginia ruling[1]), with the supreme court ruling that insurance policy contracts were not in themselves commercial contracts. This stance did not change until 1944 (in the United States v. South-Eastern Underwriters Association ruling [2]), when the Supreme court upheld a ruling stating that policies were commercial, and thus were regulatable as other similar contracts were. While types of insurance vary widely, their primary goal is to allocate the risks of a loss from the individual to a great number of people. Each individual pays a "premium" into a pool, from which losses are paid out. Regardless of whether the particular individual suffers the loss or not the premium is not returnable. Thus, when a building burns down, the loss is spread to the people contributing to the pool. In general, insurance companies are the safekeepers of the premiums. Because of its importance in maintaining economic stability, the government and the courts use a heavy hand in ensuring these companies are regulated and fair to the consumer.