FIN 3440 Lecture 2: FIN 3440 Ch.2
Document Summary
Insurance in some form is as old as historical society. Bottomry was also practiced by the hindus in 600 bc and was well understood in ancient greece as early as the 4th century bc. Under a bottomry contract, loans were granted to merchants with the provision that if their shipment was lost at sea, the loan did not have to be repaid. A higher interest rate was charged on such loans to cover the risk, and the additional interest was referred to as a premium . Ancient roman law recognized the bottomry contract in which an article of agreement was drawn up and funds were deposited with a moneychanger. In rome there were also burial societies that paid funeral costs of their members out of monthly dues. In early-england, a convenient place for mariners and underwriters to meet in were coffee houses in london where the famous insurance firm lloyds of london originated.
