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General liability policies can be open ended for a long time. This is especially important in workers compensation and general liability insurance. Over time, insurers accrue what they think their losses are going to be, based upon past experience and sophisticated actuarial modeling. How are claims reported? Second, assess the company's policy retention rate over the past two years; this gives you a sense of overall customer satisfaction. First, track the company's financial results to assess its stability in the marketplace and financial solvency. Managing risk is something that insurance companies must practice themselves. It may be many years after the policy is sold that the true costs are known. Unlike most other businesses, insurance companies don't know the real costs of the products they sell at the time they sell them. What role should the government play in pricing?

What about toothpaste or your local drive-through restaurant? Should the makers of breakfast cereal acquire government approval of pricing? Imagine if this requirement were placed on your industry.

Because insurance is a regulated industry, it takes more time to react to the types of coverage they provide, they have to go back to the state regulators to get permission. In addition, the judicial system in each state interprets and rules upon the language in insurance contracts, often requiring clarification and alteration of the policies, practices and pricing. Regulation affects producer (insurance agent) licensing, how claims are processed and paid and the wording of insurance policies. Insurance regulations can and do vary from state to state and affect many insurance activities. The industry is regulated by each state's legal and legislative environments, with federal oversight. The insurance industry differs from most in the volume and segmentation of government regulation. How do its rates fluctuate both up and down relative to changes or anticipated changes and exposure going forward? How many accounts actually stay with the company from one year to the next? What is its turnover rate? To track financial results, pay attention to new products and initiatives that are coming out of the company. And future judicial and legislative actions may even amend what is covered by the policies written today as some unexpected loss appears in future years. So, it is easy to see that insurers are issuing policies today with limited knowledge of what exposures they may be covering in the future. Most of the monies being paid for asbestos related injuries are coming from claims made against the insurance policies written thirty plus years ago. Many companies are still filing for bankruptcy because of the law suits that have been brought against them. Cases involving asbestos exposure are a good example of why companies need this insurance.