What is the fundamental definition of insurance?

Insurance is a method of protection against financial loss. It involves one party agreeing to compensate another party for a specified loss, damage, or injury in exchange for a fee. Essentially, it's a way to manage risk by transferring the potential financial impact of uncertain events.

What is the primary role of insurance within the financial services industry?

Insurance functions as a financial intermediary. Its primary role is to manage risk by pooling resources from many policyholders to cover the losses experienced by a few, thereby providing financial protection against uncertain future events.

Who are the key parties involved in an insurance transaction, and what are their roles?

The key parties are the insurer (the insurance company providing coverage), the policyholder (the entity buying the insurance), and the insured (the entity covered by the policy). The policyholder pays a premium to the insurer, who then promises to compensate the insured in the event of a covered loss.

What is a premium in the context of insurance?

A premium is the amount of money charged by the insurer to the policyholder for the coverage provided under the insurance policy. This payment is made in exchange for the insurer's promise to compensate the insured for specific losses.

What is a deductible, and how does it function within an insurance policy?

A deductible is a mandatory out-of-pocket expense that the policyholder must pay before the insurer begins to cover a claim. It acts as a form of risk-sharing between the insurer and the insured, reducing the number of small claims and the administrative costs associated with them.

How did early Chinese and Indian traders practice risk transfer?

As early as the 3rd and 2nd millennia BC, Chinese merchants traveling on treacherous rivers redistributed their goods across multiple vessels. This practice aimed to limit the loss incurred if any single vessel capsized, spreading the risk among different shipments.

What is the significance of the Lex Rhodia in the history of insurance?

The Lex Rhodia, originating from the island of Rhodes around 1000-800 BC, articulated the principle of general average. This fundamental concept, which involves sharing losses proportionally among all parties involved when sacrifices are made to save a voyage, underlies much of modern marine insurance.

What historical event in London spurred the development of modern fire insurance?

The Great Fire of London in 1666, which destroyed over 13,000 houses, highlighted the urgent need for fire insurance. This devastating event shifted the perception of insurance from a matter of convenience to one of necessity, leading to the establishment of dedicated fire insurance companies.

How did Lloyd's of London originate?

Lloyd's of London originated in the late 17th century from Edward Lloyd's coffee house. This establishment became a popular meeting place for individuals involved in the shipping industry who wished to insure cargoes and ships, laying the foundation for the modern insurance market.

What are the seven common characteristics of risks that can typically be insured by private companies?

Insurable risks generally share these characteristics: 1) a large number of similar exposure units, 2) a definite loss (time, place, cause), 3) an accidental loss, 4) a large loss from the insured's perspective, 5) an affordable premium, 6) a calculable loss (probability and cost), and 7) limited risk of catastrophically large losses.

How does insurance differ from gambling?

Insurance differs from gambling because it requires an insurable interest. This means the policyholder must have a genuine financial stake in the event being insured, suffering a direct loss if it occurs, whereas gambling involves speculative risks without such a direct interest.

What does the legal principle of 'utmost good faith' (Uberrima fides) entail in insurance?

Utmost good faith signifies that both the insured and the insurer are bound by a duty of honesty and fairness. This requires the disclosure of all material facts relevant to the risk being insured.

What is the principle of subrogation in insurance?

Subrogation is the legal right that allows an insurance company, after paying a claim, to pursue recovery from a third party who may be responsible for the loss. Essentially, the insurer steps into the shoes of the insured to recover the amount paid out.

What are the three main types of insurance contracts that aim to indemnify an insured?

The three types are: 1) a 'reimbursement' policy where the insured pays first and is then reimbursed, 2) a 'pay on behalf' policy where the insurer defends and pays claims directly, and 3) an 'indemnification' policy where the insurer has the flexibility to choose between reimbursing or paying on behalf of the insured.

How can insurance influence the probability of losses occurring?

Insurance can influence loss probabilities through mechanisms like moral hazard (increased carelessness due to protection), insurance fraud (intentional carelessness), and preventive measures taken by the insurer. Insurers may also encourage loss mitigation efforts through policy terms or discounts.

What is the insurer's business model centered around?

The insurer's business model aims to collect more in premiums than is paid out in claims and operating expenses, while also offering competitive prices. They generate profit through underwriting (selecting and pricing risks) and by investing the collected premiums.

What is 'float' in the context of an insurer's earnings?

Float refers to the money an insurer holds on hand at any given time that has been collected in premiums but not yet paid out in claims. Insurers invest these funds to earn interest or other income until claims are settled.

What is a 'combined ratio' and what does it indicate?

The combined ratio is a key performance metric for insurers, calculated as the ratio of expenses and losses to premiums. A combined ratio below 100% indicates an underwriting profit, while a ratio above 100% signifies an underwriting loss.

What is the purpose of vehicle insurance?

Vehicle insurance provides financial protection to the policyholder against losses resulting from incidents involving their vehicle, such as traffic collisions. It typically covers property damage, liability to others, and medical costs.

What is GAP insurance, and for whom is it typically marketed?

GAP (Guaranteed Asset Protection) insurance covers the difference between the actual cash value of a vehicle and the outstanding balance on a loan or lease, particularly if the vehicle is totaled. It is often marketed to individuals who make low down payments, have high interest rates, or choose long loan terms.

What is the function of income protection insurance?

Income protection insurance provides financial support to policyholders who become unable to work due to illness or injury. It helps cover essential obligations like mortgage payments and credit card bills, offering a monthly stipend.

What is casualty insurance, and what are some examples?

Casualty insurance is a broad category that covers losses arising from accidents, not necessarily tied to specific property. Examples include auto insurance, workers' compensation, and various types of liability insurance, as well as crime and terrorism insurance.

What is the primary benefit of life insurance?

Life insurance provides a death benefit, a monetary sum paid to the decedent's beneficiaries upon their death. This benefit can help cover final expenses, replace lost income, and provide financial security for the family.

How is property insurance defined, and what are some common types?

Property insurance protects against risks to physical property, such as damage from fire, theft, or weather events. Common types include home insurance, flood insurance, earthquake insurance, and inland marine insurance.

What is liability insurance, and what two main protections does it offer?

Liability insurance covers legal claims made against the insured for causing harm or damage to others. It provides two main protections: legal defense against lawsuits and indemnification (payment) for settlements or court judgments.

What is credit insurance?

Credit insurance is designed to repay some or all of a loan when the borrower becomes insolvent or unable to make payments. Mortgage insurance, which protects lenders against borrower default, is a form of credit insurance.

What is cyber insurance intended to cover?

Cyber insurance is a business line of insurance designed to protect corporations against risks related to their information technology infrastructure, information privacy, and liability arising from internet-based risks and data governance.

What is the difference between 'all-risk' insurance and peril-specific insurance?

All-risk insurance covers a broad range of incidents and perils, excluding only those specifically listed in the policy. In contrast, peril-specific insurance covers losses only from the particular perils that are explicitly named in the policy.

What is the purpose of business interruption insurance?

Business interruption insurance covers the loss of income and ongoing expenses that a business incurs when its normal operations are interrupted by a covered peril, such as a fire or natural disaster.

What is title insurance, and when is it typically issued?

Title insurance guarantees that the title to real property is vested in the purchaser or mortgagee, free from liens or encumbrances. It is usually issued after a search of public records is conducted during a real estate transaction.

What is the difference between admitted and non-admitted insurance companies in the U.S.?

Admitted insurance companies are licensed by state regulatory agencies, meaning their policies are considered 'admitted insurance'. Non-admitted companies, while not state-approved, are permitted to offer insurance under specific circumstances when admitted insurers cannot meet a particular need.

What is the role of an insurance consultant?

An insurance consultant is paid a fee by the client to research and identify the best insurance policies available from various companies. They act as an independent advisor, similar to how a mortgage broker operates.

Why is the financial stability and rating of an insurance company important for policyholders?

Policyholders pay premiums today for coverage that may extend far into the future. A financially stable insurer reduces the risk that the policyholder will be left without coverage if the company becomes insolvent.

Which country had the largest insurance market in 2023, and what was its market share?

The United States had the largest insurance market in 2023, accounting for $3.226 trillion in direct premiums, which represented 44.9% of the global market.

How is insurance regulated in the United States?

In the United States, insurance is primarily regulated at the state level under the McCarran-Ferguson Act. The National Association of Insurance Commissioners (NAIC) works to harmonize these diverse state laws and regulations.

What did the EU's Third Non-Life and Third Life Directives achieve?

These directives, enacted in the early 1990s, established a single insurance market within the European Union. This allows insurance companies to offer services anywhere in the EU and enables consumers to purchase insurance from any EU-based insurer.

Does insurance reduce the actual risk of an event happening?

No, insurance does not reduce the actual risk of an event occurring. Instead, it serves as a risk transfer mechanism, shifting the financial burden of a potential loss from the policyholder to the insurance company.

What is the concept of 'moral hazard' in insurance?

Moral hazard refers to the tendency for individuals to take more risks or be less careful because they are protected from the full consequences of those risks by insurance. It implies that being insulated from the true costs of risk can negate risk mitigation efforts.

What is the potential conflict of interest for insurance brokers?

Although brokers typically advise buyers on appropriate coverage, their compensation often comes as a commission based on the insurance premium. This creates a potential conflict of interest, as their financial incentive may lean towards encouraging clients to purchase more expensive or extensive coverage.

What is 'redlining' in the context of insurance?

Redlining is the practice of denying insurance coverage or charging higher premiums in specific geographic areas, often allegedly due to unlawful discrimination rather than purely objective risk assessment. Historically, race has been a factor influencing insurance industry practices in the United States.

What are some religious concerns raised about insurance practices?

Some Muslim scholars view interest-bearing insurance policies as 'riba' (usury) and even non-interest policies as potentially involving 'gharar' (speculation). Certain Christian groups may see insurance as a lack of faith, though many Anabaptist communities utilize community-based self-insurance programs.

What is the purpose of insurance patents?

Insurance patents protect new insurance products and methods from being copied by competitors. This allows independent inventors to safeguard their innovations when bringing new insurance products to market, offering protection against larger companies.

What is 'insurance on demand'?

Insurance on demand (IoD) provides coverage for specific occasions or events on an episodic basis, rather than continuous 24/7 coverage. For example, an air traveler could purchase insurance solely for a single flight.

How do insurers determine premiums for different risk factors?

Insurers consider quantifiable factors that increase the likelihood of a loss to set premiums. This includes location, credit scores, gender, occupation, marital status, and education level. However, the use of some factors is subject to regulations to prevent unfair discrimination.

What is the difference between a mutual insurance company and a proprietary insurance company?

Mutual insurance companies are owned by their policyholders, who may share in profits through dividends or lower premiums. Proprietary insurance companies are owned by shareholders, whose primary interest is the company's profitability.

What is the role of reinsurance companies?

Reinsurance companies provide insurance policies to other insurance companies (primary insurers). This allows primary insurers to transfer a portion of their risks, thereby reducing their exposure to substantial losses and protecting their capital.

What are captive insurance companies?

Captive insurance companies are established by a parent group or industry association specifically to finance their own risks. They function as an in-house self-insurance vehicle, often providing coverage for risks not readily available or affordable in the traditional insurance market.

What is the primary function of an actuary in the insurance industry?

Actuaries use statistics and probability to assess future risks and determine appropriate insurance premiums. They are crucial in the 'ratemaking' process, ensuring that premiums collected are sufficient to cover expected claims, expenses, and provide a profit.

What is the 'insurance cycle'?

The insurance cycle refers to the tendency for insurance markets to swing between periods of high profitability (leading to lower premiums and looser underwriting) and periods of unprofitability (leading to higher premiums and tighter underwriting). This cycle is often influenced by economic conditions and the availability of capital.

What is the purpose of a 'claims adjuster'?

A claims adjuster investigates insurance claims to determine if coverage is provided under the policy and to assess the reasonable monetary value of the claim. They then authorize payment to the insured or beneficiary.

Insurance Wiki: Insurance: Architecting Financial Resilience

Dive in with Flashcard Learning!

When you are ready...
🎮 Play the Wiki2Web Clarity Challenge Game🎮

Historical Evolution

Ancient Origins

The practice of risk transfer dates back to ancient civilizations. Chinese and Indian traders utilized methods of risk distribution as early as the 3rd and 2nd millennia BC. Early forms included redistributing wares across multiple vessels to mitigate losses from single shipwrecks. The Codex Hammurabi (c. 1755–1750 BC) contained provisions related to maritime risk, and the principles of general average, fundamental to marine insurance, were established in Rhodes around 1000–800 BC.

Roman and Medieval Practices

Roman jurists documented principles like general average in the Digesta seu Pandectae (533 AD). Early forms of mutual aid societies, such as burial societies, existed in Roman Egypt (c. 133 AD). In medieval Europe, separate insurance contracts began to emerge in Genoa in the 14th century, allowing insurance to be detached from loans. Marine insurance saw significant development during this period.

Modern Insurance Emergence

The Great Fire of London in 1666 spurred the development of property insurance, leading to the establishment of the first fire insurance company in 1681. Lloyd's Coffee House in London became a crucial hub for marine insurance, evolving into the renowned Lloyd's of London market. The 18th century saw the formalization of life insurance with companies like the Amicable Society for a Perpetual Assurance Office (1706) and the Society for Equitable Assurances on Lives and Survivorship (1762), which pioneered age-based premiums.

Industrialization and Regulation

The 19th and 20th centuries witnessed the expansion of insurance into new areas like accident, liability, and workers' compensation. Governments began implementing national insurance programs, notably in Germany under Bismarck and later in the UK with the National Insurance Act 1911, laying the groundwork for modern welfare states. The industry became increasingly regulated to ensure consumer protection and financial stability.

Fundamental Principles

Insurability Criteria

For a risk to be insurable by private entities, it typically must possess several characteristics: a large number of similar exposure units (law of large numbers), a definite loss (time, place, cause), an accidental loss (fortuitous event), a large loss (meaningful to the insured), an affordable premium, a calculable loss (probability and cost), and limited risk of catastrophic losses.

Legal Doctrines

Key legal principles govern insurance contracts. These include Indemnity (reinstating the insured to their prior financial position), Insurable Interest (the insured must have a stake in the subject matter), and Utmost Good Faith (Uberrima fides), requiring honesty and disclosure from both parties. Other principles include Contribution (sharing losses among insurers), Subrogation (insurer's right to recover from a third party), Proximate Cause (the dominant cause of loss must be covered), and Mitigation (insured's duty to minimize losses).

Indemnification and Claims

Indemnification aims to make the insured whole. Policies can be reimbursement-based, pay-on-behalf, or a combination. The process involves the policyholder submitting a claim, which the insurer investigates to determine coverage and value. Disputes can arise, sometimes leading to litigation, particularly concerning claims handling practices and policy interpretation.

Operational Mechanisms

The Premium Model

Insurers operate on a subscription model, collecting premiums periodically. The premium is calculated based on expected claims, underwriting expenses, operating costs, and profit margins. Actuarial science plays a critical role in setting rates by analyzing statistical data and probability to estimate future claims based on risk characteristics.

Investment and Float

Insurers generate profit not only from underwriting but also from investing premiums collected before claims are paid. This investment income, derived from "float" (reserves held before claims are paid), can be substantial. Insurers' financial stability and ratings are crucial for policyholders, as they indicate the ability to meet future obligations.

Marketing and Distribution

Insurance products are marketed through various channels, including captive agents (representing one insurer), independent agents (representing multiple insurers), brokers, banks, and other corporate entities. While agents and brokers provide personalized service, potential conflicts of interest exist due to commission structures. Independent consultants offer fee-based advice.

Diverse Insurance Types

Vehicle & Property

Vehicle insurance covers financial loss from incidents involving vehicles, including property damage, liability, and medical costs. Property insurance protects against risks like fire, theft, and weather damage, encompassing home, flood, and earthquake coverage. Specialized policies like builder's risk and marine insurance also fall under this category.

Health & Income

Health insurance covers medical treatment costs, often provided as an employee benefit. Income protection insurance, including disability insurance, provides financial support if a policyholder is unable to work due to illness or injury. Workers' compensation covers job-related injuries.

Liability & Life

Liability insurance covers legal claims against the insured for negligence, such as public liability, professional liability (E&O), and directors & officers (D&O) insurance. Life insurance provides a death benefit to beneficiaries, covering final expenses and offering financial security. Annuities and pensions are related financial products.

Specialized Coverages

Beyond traditional types, specialized insurance exists for emerging risks. Cyber insurance protects against IT infrastructure and data privacy risks. Credit insurance covers loan defaults. Other niche areas include terrorism insurance, political risk insurance, and prize indemnity insurance, reflecting the evolving risk landscape.

Insurance Entities

Classification

Insurance companies are broadly classified into life insurers, non-life (property/casualty) insurers, and health insurers. These classifications often dictate regulatory frameworks, tax rules, and accounting practices due to the long-term nature of life and pension business versus the shorter terms of non-life insurance.

Ownership Structures

Companies can be mutual (owned by policyholders) or proprietary (owned by shareholders). The late 20th century saw a trend towards demutualization. Reinsurance companies operate by insuring other insurance companies, managing large risks. Captive insurance companies are established by parent organizations to finance their own risks, offering cost and management advantages.

Global Presence

The global insurance market is substantial, with advanced economies dominating. The United States leads in direct premiums written, followed by China and the European Union. Regulatory harmonization efforts, like those within the EU, aim to create single markets and facilitate cross-border insurance provision.

Global Landscape

Market Size and Distribution

The global insurance market is a multi-trillion dollar industry. In 2023, direct premiums written exceeded $7.186 trillion. The United States represents the largest single market, with significant shares also held by China and the European Union. This indicates a concentration of insurance activity in major economic regions.

Regulatory Frameworks

Insurance regulation varies significantly by jurisdiction. In the U.S., state-level regulation prevails, with efforts by bodies like the NAIC to harmonize laws. The EU has established a single market through directives, allowing insurers to operate across member states. Different countries have distinct regulatory bodies and laws governing insurance practices.

International Cooperation

Organizations like the Global Federation of Insurance Associations (GFIA) facilitate dialogue between national associations and international regulatory bodies. This cooperation is vital for addressing global issues, standardizing practices where appropriate, and ensuring the effectiveness of the insurance sector worldwide.

Practices and Controversies

Moral Hazard and Complexity

Insurance can introduce moral hazard, where policyholders may become less risk-averse due to transferred risk. The complexity of insurance policy contracts can also lead to consumer confusion regarding terms, fees, and coverage, potentially resulting in unfavorable outcomes. Plain language drafting and regulatory oversight aim to mitigate these issues.

Discrimination and Redlining

Practices like redlining (denying coverage in specific areas, often linked to discrimination) and the use of factors like credit scores, gender, or occupation in premium setting are controversial. While insurers argue these factors are actuarially sound predictors of risk, critics contend they can lead to unfair discrimination, prompting regulatory intervention.

Innovation and Patents

The insurance industry sees innovation in product development, with some new products being protected by business method patents. While this offers protection for independent inventors, it can also create risks of infringement for larger companies. Usage-based auto insurance is an example of a patented innovation.

Religious and Ethical Concerns

Certain religious perspectives raise concerns about insurance, particularly regarding interest (riba) and speculation (gharar) in Islamic finance, or perceived lack of faith in some Christian interpretations. Many Anabaptist communities, for instance, utilize community-based self-insurance programs as an alternative to commercial insurance.

Teacher's Corner

Edit and Print this course in the Wiki2Web Teacher Studio

Edit and Print Materials from this study in the wiki2web studio

Click here to open the "Insurance" Wiki2Web Studio curriculum kit

Use the free Wiki2web Studio to generate printable flashcards, worksheets, exams, and export your materials as a web page or an interactive game.

True or False?

Test Your Knowledge!

Gamer's Corner

Are you ready for the Wiki2Web Clarity Challenge?

Learn about insurance while playing the wiki2web Clarity Challenge game.

Unlock the mystery image and prove your knowledge by earning trophies. This simple game is addictively fun and is a great way to learn!

Play now

Explore More Topics

Discover other topics to study!

jacobean architecture

futurama

suny press

bafing region

san marino in the eurovision song contest

coagulopathy

References

J. Franklin, The Science of Conjecture: Evidence and Probability Before Pascal (Baltimore: Johns Hopkins University Press, 2001), 274-277.

Amicable Society, The charters, acts of Parliament, and by-laws of the corporation of the Amicable Society for a perpetual assurance office, Gilbert and Rivington, 1854, p. 4

E. P. Hennock, The Origin of the Welfare State in England and Germany, 1850â1914: Social Policies Compared (2007)

"About us", the Global Federation of Insurance Associations.

Gollier C. (2003). To Insure or Not to Insure?: An Insurance Puzzle. The Geneva Papers on Risk and Insurance Theory.

This discussion is adapted from Mehr and Camack's "Principles of Insurance", 6th edition, 1976, pp 34 â 37.

California State PTA (2019), Insurance Guide, revised April 2019, accessed 19 December 2020

Brown RL. (1993). Introduction to Ratemaking and Loss Reserving for Property and Casualty Insurance. ACTEX Publications.

Fitzpatrick, Sean, Fear is the Key: A Behavioral Guide to Underwriting Cycles, 10 Conn. Ins. L.J. 255 (2004).

Breathe Insurance Brokers Ltd., Plant Hire Insurance, accessed 1 November 2020

Haurant S. (2005). "FSA takes on insurance regulation". The Guardian.

Gregory D. Squires (2003), "Racial Profiling, Insurance Style: Insurance Redlining and the Uneven Development of Metropolitan Areas", Journal of Urban Affairs Volume 25 Issue 4 pp. 391â410, November 2003

Credit-Based Insurance Scores: Impacts on Consumers of Automobile Insurance, Federal Trade Commission (July 2007)

Consumers Dispute FTC Report on Insurance Credit Scoring www.consumeraffairs.com (July 2007)

A full list of references for this article are available at the Insurance Wikipedia page

Feedback & Support

To report an issue with this page, or to find out ways to support the mission, please click here.

Academic Disclaimer

Important Notice

This document has been meticulously generated by an Artificial Intelligence, drawing exclusively from the provided source material. It is intended for academic and informational purposes, offering a structured overview of insurance principles and practices.

This is not financial or legal advice. The content presented herein is based on data that may not be exhaustive or entirely current. Readers are strongly advised to consult with qualified financial advisors, legal professionals, and official insurance documentation for personalized guidance and up-to-date information. Reliance on this document for financial decisions is undertaken at the user's own risk.

The creators of this content are not liable for any errors, omissions, or consequences arising from the use of this information.

Insurance: Architecting Financial Resilience

💡 Dive in with Flashcard Learning! 💡

Historical Evolution 📜

⏳ Ancient Origins

🏛️ Roman and Medieval Practices

🏙️ Modern Insurance Emergence

📈 Industrialization and Regulation

Fundamental Principles ⚖️

🎯 Insurability Criteria

📜 Legal Doctrines

🤝 Indemnification and Claims

Operational Mechanisms ⚙️

💰 The Premium Model

📈 Investment and Float

📢 Marketing and Distribution

Diverse Insurance Types 📦

🚗 Vehicle & Property

🧑‍⚕️ Health & Income

⚖️ Liability & Life

💻 Specialized Coverages

Insurance Entities 🏢

🏦 Classification

🤝 Ownership Structures

🌐 Global Presence

Global Landscape 🌍

📊 Market Size and Distribution

📜 Regulatory Frameworks

⚖️ International Cooperation

Practices and Controversies ⚠️

❓ Moral Hazard and Complexity

⚖️ Discrimination and Redlining

💡 Innovation and Patents

🙏 Religious and Ethical Concerns

Teacher's Corner 🧑‍🏫

Edit and Print this course in the Wiki2Web Teacher Studio

True or False? 🤔

❓ Test Your Knowledge! ❓

Gamer's Corner 🎮

Are you ready for the Wiki2Web Clarity Challenge?

Explore More Topics

📜 Discover other topics to study!

References

📜 References

Feedback & Support 👍

To report an issue with this page, or to find out ways to support the mission, please click here.

Academic Disclaimer ℹ️

📜 Important Notice

Dive in with Flashcard Learning!

Historical Evolution

Ancient Origins

Roman and Medieval Practices

Modern Insurance Emergence

Industrialization and Regulation

Fundamental Principles

Insurability Criteria

Legal Doctrines

Indemnification and Claims

Operational Mechanisms

The Premium Model

Investment and Float

Marketing and Distribution

Diverse Insurance Types

Vehicle & Property

Health & Income

Liability & Life

Specialized Coverages

Insurance Entities

Classification

Ownership Structures

Global Presence

Global Landscape

Market Size and Distribution

Regulatory Frameworks

International Cooperation

Practices and Controversies

Moral Hazard and Complexity

Discrimination and Redlining

Innovation and Patents

Religious and Ethical Concerns

Teacher's Corner

True or False?

Test Your Knowledge!

Gamer's Corner

Discover other topics to study!

References

Feedback & Support

Academic Disclaimer

Important Notice