FEAR AND BUSINESS– ²²
FEAR IS A DREADFUL CONSTRUCTION OF THOUGHTS THAT WE USE AGAINST OURSELVES IN A DREADFUL WAY!
Those readers who love William Shakespeare, would probably remember Hecate’s monologue where she has the correct prediction that Macbeth will come to her:
“And that, distilled by magic sleights,
Shall raise such artificial sprites
As by the strength of their illusion
Shall draw him on to his confusion.
He shall spurn fate, scorn death, and bear
His hopes 'bove wisdom, grace, and fear:
And you all know security
Is mortals' chiefest enemy. “
Personally, I think the interpretation of the above cited lines, is really valuable for the development of those considerations which can be directly useful for the environment of life-insurance business in Bulgaria. As the beginning was marked by a literary introduction, I would further on use the instruments of comparison for a better clarity of immediate conclusions that are highly necessary here and now!
SETTING THE PROBLEM
Generally speaking, insurance business is a market situation of mutual fears. From the insured point of view, an insurance contract is to be concluded, which will indemnify the insured person or any other insured persons with cash payments made by the insurer when certain conditions, specified in the contract, occur. On the other hand, the insurer tries to refine the risk taken, by obtaining the optimal information related to the specific conditions of life and health status of the insured person. In this case, fear comes from the barratry shown by the insured person when giving information to the insurer in relation to the insurance contract that is to be concluded. In other words, the person who wants to be insured is worried if the insurer will pay, and the insurer is concerned about the truthfulness of certain circumstances when the risk is taken. The aforesaid relationships are regulated by the Commercial law, chapter III, however, I personally have the impression that crisis market environment subjectively affects what actually happens in practice. Most often, a one-sided arbitration of litigations is sought. It (the arbitration) is carried out by the authority in power, and there is a notion that the insurer is an extremely easy target even for barratrous clients if only there is a way the judge rules in favour of the client. This is practically executed when the clients are not satisfied with the services of their insurer by filing appeals to the supervising authority. I am well aware that the number of appeals is not decreasing, even if 80 % of them are ungrounded, however the insurers or the Association of Bulgarian insurers as well as the supervising authority, which has almost become “Appeals” department, could not hold the right position that would have a positive effect on diminishing the number of ungrounded appeals. In this disposition, when 80 % and more of the appeals are unfounded, the insurers should appeal as well. Who should they appeal to? Is this the right reaction in this situation? Perhaps the lively existence of unfounded appeals is due to objective reasons, and I am convinced that if we admit the truth and some crucial components of this process are defined, we could help ourselves by uniting in the name of a job done well by the three existing together- insurance guild, association and supervision. If we do not do it, more and more barratrous clients will use the insurance supervision as an authority with the sole purpose to repress a certain insurer. My concern is due to the fact that the most barratrous clients are in the front lines of the case and it is absolutely feasible, pursuant the Law of probabilities, to mislead the appointed judge. The consequences of a “success” like this can bring to life ugly phenomena such as turning the insurance fraud into profession.
Let’s try to analyze all that!
DISPOSITION- OR, WHO WITH WHOM, BY MEANS OF WHAT, HOW, AND AGAINST WHOM?
If we accept the statement that comparison, which depicts pictures lively enough in the minds of the interested persons, is the best method of interpretation and analysis, in this very moment I can think of a comparison to something that is so hugely popular, i.e. football and all football matches, team rankings, or championship competitors. I find the football comparison a good idea for the following reasons:
- football is a mass sport;
- football teams are classified just like the fashion to classify the insurers in different criteria;
- football is refereed strongly -during the match and even after that;
- almost all people are familiar with the rules of the game.
Let’s take a look at insurers, their games with the teams of clients, the match arbitration and the behavior of the audience.
Teams first:
The team of insurers is one that must follow the rules during the game; rules which resemble the rules in rhythmic gymnastics- ball rhythmic gymnastics group- one and only.
The team of clients, which is silently allowed by the referee to play by the rules of a freely selected Olympic or non-Olympic sport, consists of all types of players varying from gentlemanly competitors who prefer appropriate rules, corresponding to their way of thinking, to clients who demonstrate a level of cultural development equal to the development of Aleko Konstantinov’s most famous character( one who exhibits arrogant, silly and quite vulgar manners). The latter are most often in offense position following the rules of American football, professional wrestling entertainment, Muay Thai etc., and when they are discontent with the development of the game, they start swearing at the referee.
A few word about the referee himself:
The referee, just like every football referee has a whistle and cards. In this game, however, the referee has at least three cards- yellow, red and black. Everyone knows what the yellow and red card are used for. That’s why the clarification must be done that the black-carded player leaves the championship and sport forever. What is weird here is the fact that the referee shows cards of all colors to the team of insurers only!
The audience:
The audience as whole is actually half of the country’s population. We are inarguably familiar with the Roman times saying that ”…the crowd needs bread and circuses”. The bread situation is not quite pleasant, while the circuses promise to be spectacular, having in mind who is carded in the game and who constantly appeals for penalties. I personally think that the disputes in question take more time than the game itself. It is not surprising having in mind the set rules...
I am too weak to go into details in the game, because I don’t have that right and it’s against my morality.
In this case, emotion is the most unwanted thing. It would be great if we could find the strength not only to explain the situation, but also change it. However, the change should not be in the exchange of teams’ status regarding the rules, or change in the referee powers. But instead, it should influence the equality on the pitch because the crowd is watching and would hoot against the match and sport as a whole; let alone that this dissatisfaction has already been initiated.
There are other factors which hinder the so called “insurance” business. An example of this is the relationship between the active insurers and mutual protection of reputation. I mean the following: the first one is objective; the second one is subjective.
Objectivity comes from the fact that the classification, the ranking of insurers resembles the one in football group A: Levski and CSKA on the one hand, and, on the other, all the rest far behind them with almost identical scores and goal difference( especially highlighted with life-insurers.) the problem is that falling off the “A” group is normal, while in insurance it’s not normal; it’s undesired and crucial for relationships a s a whole.
Some time ago, a daily newspaper published an article entitled “ A newspaper could kill a fly and a bank, as well”. We could easily add insurer in the line, especially when the media, thirsty for sensations, is given information contradicting the requirements of article 23 from the Insurance Law. Let alone, this information is provided by the ones who are supposed to be the Law’s guardians, i.e. the law applies for some, but it doesn’t apply for others! In support of this, I would refer to the situation with appeals. The comments on the number of appeals against insurers, despite the final conclusion that practically almost all of these appeals are ungrounded, are a vulgar violation of the aforementioned article 23. It’s a different matter when speaking of morality, but I do not mean the morality of those who violate the law willingly or unwillingly; I mean the morality of media, which becomes a platform for the violation of law.
Subjectivity comes from the behavior of insurance agents, from their contest to conclude insurance contracts. Here, I will tell a story that I myself witnessed, but the voracious readers are to draw the direct conclusions.
On the first days of this year, willing to pass by a snow pack on a main street in Sofia, I went near a young man on the driving seat of his car whose door was open, and he was talking to a middle-aged woman. She was offering the man to conclude the compulsory liability vehicle insurance in the insurance company for which she worked as an insurance agent. The young man was desperately trying to explain that he has already had such an insurance, the proof of which was the insurance policy he presented. The lady, in her capacity of an insurance agent, was really stubborn in her statement that “ this is not a stable insurance company…” and insisted that the man should have a new insurance with her company!
I have to say that I was sick with what I witnessed. It is not a rare phenomenon to have such a client stealing by means of the crudest possible competition comparison!
All this bears subjectively and objectively the logo dating back from Alexandre Dumas’s time:” Freedom is sacrificed when the weak are oppressed by the strong!”
I suppose that every thinking person should be well aware that in the initiation of market economy lies the notion that there would be weak and last. There will always be! However, it is not normal for the strong and arrogant to repress the weak by breaching morality and rules, and the “referee” as well as the other institutions and organizations, who have all triggers and mechanisms, do nothing to terminate, or at least absorb this process.
Finally, no matter what we do, what would be indicative for success and movement in the right direction, is the fact that the classification, or ranking of Bulgarian insurers begins to look like the one of English professional football league- every team could become a champion as long as they play brilliantly.
It is obvious that in this process, management requires and suggests that rights and obligations are delegated and controlled equally towards all players, and the audience behavior should be strictly regulated. Having in mind my own and other people’s information and research, I personally think that, regarding the way the life insurance well developed countries have dealt with such problems, this management, in order to exclude the above mentions negative effects, should make some creative efforts, in practice and in the name of success and morality in general- not in the moments of glamour under the reporters’ flash. These efforts should include:
In the process of control- unified, applied to all insurers, general conditions for life insurance; unified actuary base regulating fixed and/or maximum technical interest rate, maximum rate if expenditures calculated in the insurance bonuses; covered risks should be pointed out, and the risks are to be defined unequivocally; there should also be legislative will to harmonize the tax treatment of life insurances according to the state interests.( I believe that the present tax treatment of long term life insurances does not correspond to the state interests. I would like to call for a thoughtful analysis of the following: why do life insurances have tax incentives, and why is the insurer activity taxed like the way it is worldwide.); all other reasonable suggestions and initiatives are believed to be considered by my colleagues.
In the process of delegation– “Best advice ...” – for reference “Encyclopedia dictionary of banking and insurance” – par.²² èëè “Hippocratic oath” of insurers, which totally excludes stealing of clients, or the use of advertising comparisons to the competition.
EPILOGUE
I believe that insurance supervision, no matter how you are going to name it, can and should be a powerful generator of positive processes; I really hope it could “back” us a little!!!
We could deal with the rest alone!
