Contractual Savings Organization

          Collect premiums and contribution from participants and provide retirement benefits and insurance against major financial losses. Insurance companies provide financial protection to individuals and businesses for life, property, liability, and health uncertainties. Customers, called policyholders, pay premiums to insurance companies that invest these funds until the insured claims must be paid. Pension funds receive contributions from employees and/or their employers and invest the proceeds on behalf of the employees. Many business organizations provide private pension plans for their employees. State and some local governments also provide pension (retirement) funds for employees. Like depository institutions, both insurance companies and pension funds are actively involved in the financial intermediation process of gathering the funds of individuals (premium payments and employee contributions) and investing these pooled funds so that businesses can grow and government units can provide more benefits for its citizens.