Definition & Meaning:
Insurance is the means of managing risk and protection against financial loss arising as a result of contingencies, which may or may not occur.In other words, insurance is the act of providing assurance, against a possible loss, by entering intoa contract, with one who is willing to give assurance. Through this contract the person willing togive assurance binds himself to make good such loss, if it occurs.
Insurance is defined as the equitable transfer of the risk of a loss, from one entity to another, inexchange for a premium, and can be thought of as a guaranteed small loss to prevent a large, possibly devastating loss. An insurer is a company selling the insurance; an insured is the person or entity buying the insurance. The insurance rate is a factor used to determine the amount to becharged for a certain amount of insurance coverage, called the premium. Risk management, the practice of appraising and controlling risk, has evolved as a discrete field of study and practice.One of the- main features of the pre-nationalized insurance sector was the utilization of theinsurance sector as a backup or extension by the well-known industrial houses of India. There aremainly two forms, of insurance in India
Life and non-life. Life insurance provides protection toa household against the risk of premature death of its income-earning, member. Non-life insurancecan be grouped under three heads
fire, marine and miscellaneous insurance. Life insuranceCorporation of India carries on life insurance business and, the General Insurance Corporation andits four subsidiaries deal with non-life insurance.After liberalization of the insurance sector in 1999 private
players have entered both life and non-life business in India. The Insurance Regulatory and Development Authority (IRDA) wasconstituted in April 2000 as an autonomous body to regulate and develop the business of insuranceand re-insurance in the country in terms of the insurance regulatory and Development AuthorityAct, 1999.1