As humans, we all have basic needs that include physical and economic security, food, shelter and clothing. According to the Society of Actuaries the risk is the possibility of losing economic security. We encounter many economic risks during our daily activities; whether the risk is a road accident, illness, house fire or even death. For these reasons, insurance was created to eliminate risk or substitute certainty for uncertainty. The concept of insurance dates back to at least 3000 BC with the Babylonians. As merchants traveled through the Middle East and beyond, they were at the mercy of the elements and man. Investors made loans for goods and charged a "risk premium" to reflect the potential risk of travel. The borrower often sent his belongings and family as collateral. In the event that cargo was lost or damaged, family and possessions could be sold to cover the debt (Bogardus and Moore). Before today's insurance institutions, past generations managed economic risks in a more informal way, where if your house burned down the city would band together and rebuild your house. Now the concept of group insurance is still essentially the same. The only difference is that we are not physically working together to repair a loss, but collectively, through the payment of our premiums, losses are distributed to cover another's risk. For example, I pay a $250 premium each month to Liberty Mutual to insure my home, auto, and life insurance policies. In case of loss (economic risk), I would generate a claim to the insurer (Liberty Mutual). Based on the insurance coverage I designate, Liberty Mutual will pay me directly or the third party involved will cover my loss. On the contrary, I… halfway through the document… the insurance company and the parties involved are treated fairly. Each state is regulated by the Office of the State Insurance Commissioner. The Insurance Commissioner is an independent state agency that regulates the insurance industry and protects consumers by ensuring that insurance companies and health plans act in compliance with insurance laws. (www.mdinsurance.state.md.us). No industry is completely safeguarded, but when risks are assessed and managed correctly it can be a win-win situation. Works Cited Bogardus, Jack and Robert Moore. “Spreading the Risks: Securing the American Experience.” Posterity Press (MD); 1st edition (March 30, 2003) Rubin, Harvey, “Dictionary of Insurance Terms.” 4th edition. Baron Educational Series; 2000 Feldman Anderson, Judy and Robert L. Brown. "Risk and insurance". Society of Actuaries, p. 4; P-21-05; 2005