SUMMER PROJECT

General Insurance Policies taken by the

Government

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• Introduction

• Insurance in India

Brief history of the Insurance sector

• The General Insurance Corporation of India

Malhotra Committee
Mukherjee Committee
IRDA Bill
• Policies prov vided by the government
Social Policies
Health policies
Rural policies
Travel insurance policies
Pravasi Bhartiya Bima Yojana

• Success of the above policies

• Challenges and weak points of these policies

• Opportunities

• Further offerings to be made

• Conclusion
Introduction

Insurance may be describedas a social device to reduce or

eliminate risk of life and property. Under the plan of insurance, a
large number of people associate themselves by sharing risk,
attached to individual. The risk, which can be insured against
include fire, the peril of sea, death, incident, & burglary. Any risk
contingent upon these may be insured against at a premium
commensurate with the risk involved.

Insurance is actually a contract between 2 parties whereby one party

called insurer undertakes in exchange for a fixed sum called
premium to pay the other party happening of a certain event.

Insurance is a contract whereby, in return for the payment of premium by the insured, the
insurers pay the financial losses suffered by the insured as a result of the occurrence of
unforeseen events.

With the help of insurance, large number of people exposed to a similar risk makes contributions
to a common fund out of which the losses suffered by the unfortunate few, due to accidental
events, are made good.

Insurance in India

The insurance sector in India has come a full circle from being an open competitive market to
nationalization and back to a liberalized market again. Tracing the developments in the Indian
insurance sector reveals the 360 degree turn witnessed over a period of almost two centuries.

A brief history of the Insurance sector

The business of life insurance in India in its existing form started in India in the year
1818 with the establishment of the Oriental Life Insurance Company in Calcutta.

Some of the important milestones in the life insurance business in India are:

1912: The Indian Life Assurance Companies Act enacted as the first statute to regulate the life
insurance business.

1928: The Indian Insurance Companies Act enacted to enable the government to collect
statistical information about both life and non-life insurance businesses.
,
1938: Earlier legislation consolidated and amended to by the Insurance Act with the objective of
protecting the interests of the insuring public.

1956: 245 Indian and foreign insurers and provident societies taken over by the central
government and nationalized. LIC formed by an Act of Parliament, viz. LIC Act, 1956, with a
capital contribution of Rs. 5 crore from the Government of India.

The General insurance business in India, on the other hand, can trace its roots to the Triton
Insurance Company Ltd., the first general insurance company established in the year 1850 in
Calcutta by the British.

Some of the important milestones in the general insurance business in India are:

1907: The Indian Mercantile Insurance Ltd. set up, the first company to transact all classes of
general insurance business.

1957: General Insurance Council, a wing of the Insurance Association of India, frames a code of
conduct for ensuring fair conduct and sound business practices.
1968: The Insurance Act amended to regulate investments and set minimum solvency margins
and the Tariff Advisory Committee set up.

1972: The General Insurance Business (Nationalization) Act, 1972 nationalized the general
insurance business in India with effect from 1st January 1973.

107 insurers amalgamated and grouped into four companies viz. the National Insurance
Company Ltd., the New India Assurance Company Ltd., the Oriental Insurance Company Ltd.
and the United India Insurance Company Ltd. GIC incorporated as a company.

Source: www.tourindia.com

INDIAN INSURANCE INDUSTRY:

Insurers

Insurance industry, as on 1.4.2000, comprised mainly two players: the state insurers:

Life Insurers:
• Life Insurance Corporation of India (LIC)
General Insurers:
• General Insurance Corporation of India (GIC) (with effect from Dec'2000, a National
Reinsurer)

GIC had four subsidiary companies, namely (with effect from Dec'2000) these subsidiaries have
been de-linked from the parent company and made as independent insurance companies.
1. The Oriental Insurance Company Limited
2. The New India Assurance Company Limited,
3. National Insurance Company Limited
4. United India Insurance Company Limited.
The entire general insurance business in India was nationalized by General Insurance Business
(Nationalization act), 1972(GIBNA). The Government of India (GOI), through nationalization
took over the shares of 55 Indian insurance companies and the undertaking of 52 insurers
carrying on general insurance business.
General Insurance Corporation of India was formed in the pursuance of Section 9 (1) of GIBNA.
It was incorporated on 22 November 1972 under the companies act, 1956as a private company
limited by shares.GIC was formed for the purpose of superintending, controlling and carrying on
the business of the general insurance.
As soon as GIC was formed, GOI transferred all the shares it held of the general insurance
companies to GIC. Simultaneously, the nationalized undertakings were transferred to Indian
insurance companies. After a process of mergers among Indian insurance companies, four
companies were left as fully owned subsidiary companies of GIC (1) National Insurance
Company limited (2) The New India Assurance company limited (3) The Oriental Insurance
Company limited (4) United India Insurance company limited
The next landmark happened on 19 April 2000, when the insurance regulatory and development
authority act, 1999 (IRDAA) came into force. This act also introduced amendment to GIBNA
and the insurance act 1938. An amendment to GIBNA removed the exclusive privilege of GIC
and its subsidiaries carrying of general insurance in India.
In November 2000, GIC is renotified as the Indian Reinsurance and through administrative
instruction, its supervisory role over subsidiaries was ended.
With the general insurance business (nationalization) Amendment Act 2002 came into force from
March 21 2002 GIC ceased to be the holding company of its subsidiaries. There ownership was
vested with Government of India.
General Insurers
Public
○ National Insurance
○ New India Assurance
○ Oriental insurance
○ United India Insurance
○ Agriculture Insurance Company of India Ltd
Private
○ Bajaj Allianz General Insurance
○ ICICI Lombard General Insurance
○ IFFCO-Tokio General Insurance
○ Reliance General Insurance
○ Royal Sundaram Alliance Insurance
○ TATA AIG General Insurance
○ Cholamandalam General Insurance
○ Export Credit Guarantee Corporation
○ HDFC Chubb General Insurance
○ Star Health and Allied Insurance Company Ltd
The General Insurance Corporation of India
Although efforts were made to maintain an open market for the general insurance industry
amending the Insurance Act of 1938 from time to time, malpractice escalated beyond control.
Thus, the general insurance industry was nationalized in 1972. The General Insurance
Corporation (GIC) was set up as a holding company. It had four subsidiaries: New India,
Oriental, United India and the National Insurance companies (collectively known as the NOUN).
It was understood that these companies would compete with one another in the market. It did not
happen. They were supposed to setup their own investment portfolios. That did not happen
either. It began to happen after29 years.

The GIC has a quarter of a million agents. It has more than 2,500 branches, 30million individual
and group insurance policies and assets of about USD 1,800 million at market value (at the end
of 1999). It has been suggested that the GIC should close 20-25% of its nonviable branches
(Patel, 2001). The GIC has so far been the holding company and re-insurer for the state-run
insurers. It reinsured about 20% of their business.

Two Committee Reports: One Known, One Unknown

Although Indian markets were privatized and opened up to foreign companies in a number of
sectors in 1991, insurance remained out of bounds on both counts. The government wanted to
proceed with caution. With pressure from the opposition, the government (at the time, dominated
by the Congress Party) decided to set up a committee headed by Mr. R. N. Malhotra (the then
Governor of the Reserve Bank of India).

Malhotra Committee

Liberalization of the Indian insurance market was recommended in a report released in 1994 by
the Malhotra Committee, indicating that the market should be opened for private-sector
competition, and ultimately, foreign private-sector competition. It also investigated the level of
satisfaction of the customers of the LIC. Curiously, the level of customer satisfaction seemed to
be high. The union of the LIC made political capital out of this finding.
The following are the purposes of the committee. (a) To suggest the structure of the insurance
industry, to assess the strengths and weaknesses of insurance companies in terms of the
objectives of creating an efficient and viable insurance industry, to have wide coverage of
insurance services, to have a variety of insurance products with a high quality service, and to
develop an effective instrument for mobilization of financial resources for development. (b) To
make recommendations for changing the structure of
the insurance industry, for changing the general policy framework etc. (c) To take specific
suggestions regarding LIC and GIC with a view to improve the functioning ofLIC and GIC. (d)
To make recommendations on regulation and supervision of the insurance sector in India. (e) To
make recommendations on the role and functioning of surveyors, intermediaries like agents etc.
in the insurance sector. (f) To make recommendations on any other matter which are relevant for
development of the insurance industry in India.

The committee made a number of important and far-reaching recommendations.

(a) The LIC should be selective in the recruitment of LIC agents. Train these people after the
identification of training needs. (b) The committee suggested that the Federation of Insurance
Institute, Mumbai should start new courses and diploma courses for intermediaries of the
insurance sector. (c) The LIC should use an MBA specialized in Marketing (a similar suggestion
for the GIC subsidiaries).(c) It suggested that settlement of claims were to be done within a
specific time frame without delay. (d) The committee has several recommendations on product
pricing, vigilance, systems and procedures, improving customer service and use of technology.(f)
It also made a number of recommendations to alter the existing structure of the LIC and the GIC.
(g) The committee insisted that the insurance companies should pay special attention to the rural
insurance business. (h) In the case of liberalization of the insurance sector the committee made
several recommendations, including entry to new players and the minimum capital level
requirements for such new players should be Rs. 100 crores(about USD 24 million). However, a
lower capital requirement could be considered for a co-operative sectors' entry in the insurance
business. (i) The committee suggested some norms relating to promoters’ equity and equity
capital by foreign companies, etc.

Mukherjee Committee
Immediately after the publication of the Malhotra Committee Report, a new committee (called
the Mukherjee Committee) was set up to make concrete plans for the requirements of the newly
formed insurance companies. Recommendations of the Mukherjee Committee were never made
public. But, from the information that filtered out it became clear that the committee
recommended the inclusion of certain ratios in insurance company balance sheets to ensure
transparency in accounting. But the Finance Minister objected. He argued (probably on the
advice of some of the potential entrants) that it could affect the prospects of a developing
insurance company.

Insurance Regulatory Act (1999)

After the report of the Malhotra Committee came out, changes in the insurance industry appeared
imminent. Unfortunately, instability in Central Government, changes in insurance regulation
could not pass through the parliament.

The dramatic climax came in 1999. On March 16, 1999, the Indian Cabinet approved an
Insurance Regulatory Authority (IRA) Bill that was designed to liberalize the insurance sector.
The bill was awaiting ratification by the Indian Parliament.

However, the BJP Government fell in April 1999. The deregulation was put on hold once again.

An election was held in late 1999. A new BJP-led government came to power. On December 7,
1999, the new government passed the Insurance Regulatory and Development Authority (IRDA)
Act. This Act repealed the monopoly conferred to the Life Insurance Corporation in 1956 and to
the General Insurance Corporation in 1972.The authority created by the Act is now called IRDA.
It has ten members. New licenses are being given to private companies (see below). IRDA has
separated out life, non-life and reinsurance insurance businesses. Therefore, a company has to
have separate licenses for each line of business. Each license has its own capital requirements
(around USD24 million for life or non-life and USD48 million for reinsurance).

Some Details of the IRDA Bill

On July 14, 2000, the Chairman of the IRDA, Mr. N. Rangachari set forth a set of regulations in
an extraordinary issue of the Indian Gazette that detail of the regulation.

Regulations

The first covers the Insurance Advisory Committee that sets out the rules and regulation.
The second stipulates that the "Appointed Actuary" has to be a Fellow of the Actuarial Society of
India. Given that there has been a dearth of actuaries in India with the qualification of a Fellow
of the Actuarial Society of India, this becomes a requirement of tall order. As a result, some
companies have not been able to attract a qualified Appointed Actuary (Dasgupta, 2001). The
IRDA is also in the process of replacing the Actuarial Society of India by a newly formed
institution to be called the Chartered Institute of Indian Actuaries (modeled after the Institute of
Actuaries of London).Curiously, for life insurers

the Appointed Actuary has to be an internal company employee, but he or she may be an external
consultant if the company happens to be anon-life insurance company.

Third, the Appointed Actuary would be responsible for reporting to the IRDA a detailed account
of the company.

Fourth, insurance agents should have at least a high school diploma along with training of 100
hours from a recognized institution. More than a dozen institutions have been recognized by the
IRDA for training insurance agents

Fifth, the IRDA has set up strict guidelines on asset and liability management of the insurance
companies along with solvency margin requirements. Initial margins are set high (compared with
developed countries). The margins vary with the lines of business (for example, fire insurance
has a lower margin than aviation insurance).

Sixth the disclosure requirements have been kept rather vague. This has been done despite the
recommendations to the contrary by the Mukherjee Committee recommendations.

Seventh, all the insurers are forced to provide some coverage for the rural sector.

(1) In respect of a life insurer, (a) five percent in the first financial year; (b) seven percent in the
second financial year; (c) ten percent in the third financial year; (d) twelve percent in the fourth
financial year; (e) fifteen percent in the fifth year (of total policies written direct in that year).
(2) In respect of a general insurer, (a) two percent in the first financial year; (b) three percent in
the second financial year; (c) five percent thereafter (of total gross premium income written
direct in that year).
Three days before the deadline that the IRDA had set upon itself (October 25, 2000), it issued
three companies with license papers:

(1) HDFC Standard Life. This will be jointly set up by India's Housing Development Finance
Company - the largest housing finance company in India and the Scotland based Standard Life.

(2) Sundaram Royal Alliance Insurance Company. It is a partnership created by Sundaram

Finance and three other companies of the TVS Group of Chennai (Madras) and the London
based Royal & Sun Alliance.

(3) Reliance General Insurance. This company is fully owned by Mumbai based Reliance
Industries which has operations in textile, petrochemicals, power and finance industries.

There are three other companies with "in principal" approvals:

(1) Max New York Life. It is a partnership between Delhi based pharmaceutical company Max
India and New York Life; the New York based Life Insurance Company.

(2) ICICI Prudential Life Insurance Company. This is a joint venture between Mumbai based
Industrial Credit & Investment Corporation and the London based Prudential PLC.

(3) IFFCO Tokio General Insurance Company. It is a joint venture between Indian Farmers'
Fertilizer Cooperative and Tokio Marine and Fire of Japan.

To date (end of April 2001), the following companies have thus been granted licenses: ICICI
-Prudential, Reliance General, Reliance Life,Tata-AIG General, HDFC Standard Life, Royal-
Sundaram, Max-New York Life, IFFCO-Tokio Marine, Birla-SunLife, Bajaj-Allianz General,
Tata-AIG Life, ING-Vyasa, Bajaj-Allianz Life, SBI Cardiff Life
INSURER MARKET SHARE (%)

Bajaj Allianz General Insurance Co. Ltd. 6.15

ICICI Lombard General Insurance Co. Ltd. 8.04
IFFCO Tokio General Insurance Co. Ltd. 4.00
National Insurance Co.Ltd. 17.11
United India Insurance Co. Ltd. 17.11
The New India Assurance Co. Ltd. 20.15
The Oriental Insurance Co. Ltd. 17.02
Reliance General Insurance Co. Ltd. 0.75
Royal SundaramAlliance Insurance Co. Ltd 2.17
Tata AIG General Insurance Co. Ltd. 2.89
CholamandalamMS General Insurance Co. Ltd. 1.22
HDFC-Chubb General Insurance Co. Ltd. 0.89
Export Credit Guarantee Corporation Ltd. 2.50
Agriculture Insurance Co. of India Ltd. n.a.

Policies provided by the government

As stated earlier government general insurance companies provide policies in different areas of
general insurance. Before going to the policies there are some stats provided by IRDA which
show the gross premium underwritten for the month of February and March, 2007.

In these stats there are gross premium underwritten of both private and public general
insurance companies. We can see that the gross total premium of public companies is almost
double of private insurance companies. In private sector the leader is ICICI- Lombard followed
by Bajaj-Allianz and Reliance General, where in Public sector the leader is New India Insurance.

'GROSS PREMIUM UNDERWRITTEN FOR AND UPTO THE MONTH OF

FEBRUARY, 2007

Premium 2006-07 Premium 2005-06

Growth over
For the Up to the For the Up to the the
month month month month Correspondi
INSURER ng Period of
Previous
year

Royal 48.52 542.66 33.78 407.04 33.32

Sundaram

50.68 686.96 49.91 540.16 27.18

Tata-AIG

91.33 803.59 14.61 144.67 455.46

RelianceGeneral

74.39 1070.28 67.96 779.11 37.37

IFFCO-Tokio

201.78 2803.34 113.83 1468.47 90.90

ICICI-Lombard

147.18 1621.44 97.87 1164.91 39.19

Bajaj Allianz

13.96 170.17 17.10 177.18 -3.96

HDFC CHUBB

24.07 282.71 14.87 209.14 35.18

 Cholamandalam
379.45 4505.60 377.34 4198.39 7.32
New India
319.76 3428.21 269.06 3201.88 7.07
National
256.67 3158.48 229.23 2837.74 11.30
United India
290.87 3595.88 265.11 3196.32 12.50
Oriental

Private Total 651.91 7981.15 409.93 4890.68 63.19

Public Total 1246.75 14688.17 1140.74 13434.33 9.33

Grand Total 1898.66 22669.32 1550.67 18324.01 23.71

Source: IRDA

Performance in February 2007

The second month of the detariffed regime in the current calendar year shows that the premium
growth rate in February 2007 is an impressive 22.4 percent, though it falls short of the January
2007 growth of 25.6 percent. The new players have achieved a market share of about 35 percent
in the February premium G V Rao volumes, though this falls a little short of the 37 percent
market share they had recorded in January 2007. The market grew its February renewal premium
from Rs.1551 crore to Rs.1899 crore. The established players have contributed Rs.106 crore to
the increase, while the new players have added Rs.242 crore. National Insurance, as was seen in
its January 2007 performance; is the leading player in its group, adding Rs.51 crore to the
accretion. Among the new players, ICICI-Lombard leads with an accretion of Rs.88 crore
followed by Reliance with Rs.76 crore. Other players that have made significant accretions to
February 2007 premium are:

Bajaj-Allianz with Rs.49 crore, United India with Rs.28 crore and Oriental with Rs.26 crore.
New India, as it did in January 2007, has slowed its growth momentum, by keeping its accretion
in February to Rs.2 crore; in January 2007 its premium accretion was Rs.8 crore.

The premium growth trends of the first two months of the calendar year show that among the
new players the growth pursuing players are ICICI-Lombard, Reliance and Bajaj-Allianz.
Among the established players the growth-hunt is led by National Insurance followed by
Oriental and United India.

Performance up to February 2007

The premium achievement up to February 2007 is Rs.22, 669 crore, with the established players
having recorded Rs.14, 688 crore and the new players Rs.7981 crore. To put this performance in
perspective, one should highlight that for the financial year 2005/06 the premium was Rs.20, 360
crore, with the established players having completed Rs.14, 997 crore and the new players
Rs.5360 crore. The growth rate up to February 2007 is 23.7 percent, down by 0.2 percent from
the level at January 2007.

ICICI—Lombard leads the growth list with a massive accretion of Rs.1334 crore followed by
Reliance with Rs.648 crore and Bajaj-Allianz with Rs.456 crore. Oriental with Rs.400 crore and
United India with Rs.322 crore are the others on the growth path.
'GROSS PREMIUM UNDERWRITTEN FOR AND UPTO THE MONTH OF MARCH,
2007

Premium 2006-07 Premium 2005-06

Growth over
For the Up to the For the Up to the the
month month month month Corresponding
INSURER Period of
Previous year

Royal
Sundaram
57.37 600.03 52.31 459.35 30.63

Tata-AIG
54.61 741.56 72.23 612.39 21.09

RelianceGeneral
108.64 912.23 17.66 162.33 461.96

IFFCO-Tokio
80.05 1150.32 116.96 896.11 28.37

ICICI-Lombard
200.11 3003.45 123.53 1592.00 88.66

Bajaj Allianz
183.16 1804.60 119.65 1284.57 40.48

HDFC CHUBB
19.99 190.16 28.59 205.77 -7.59

Cholamandalam
34.74 314.59 15.37 222.21 41.57

New India
515.62 5024.15 534.90 4791.51 4.86
 National 382.67 3810.88 350.63 3523.67 8.15

United India 349.15 3509.95 316.21 3154.78 11.26

Oriental 344.32 3940.53 347.07 3527.13 11.72

Private Total 738.67 8716.94 546.30 5434.73 60.39

Public Total 1591.76 16285.51 1548.81 14997.09 8.59

Grand Total 2330.43 25002.45 2095.11 20431.82 22.37

Source: IRDA

Below are the policies which are provided by the government in context of general
insurance-
Rajrajeshwari Mahila Kalyan Yojana Policy
Policy called ‘Raj Rajeshwari Mahila Kalyan Yojana’ offering security to women in the age group of
10 to 75 years irrespective of their occupation was introduced w.e.f. 19th October, 1998. Specially
designed to protect the welfare of women mainly in rural and semi-urban areas.
Insurer: National Insurance Company
End user: Women of rural and semi-urban areas.

Scope of Cover
DEATH
1. Of Husband in case of married women Compensation Rs.25, 000/- to the wife. (Death of
married women not covered)
2. Of unmarried Women Rs.25, 000/- to the nominee, legal heir.
3. Death of married woman not covered.
PERMANENT TOTAL DISABLEMENT OF THE INSURED WOMEN ONLY
1. Permanent Total Disablement Rs.25, 000/-
2. Loss of one limb of one eye or loss of two limbs or both eyes Rs.25, 000/-
3. Loss of one limb/sight in one eye Rs.12, 500/-
DEATH OR DISABILITY BY ACCIDENT WOULD INCLUDE death and P.T.D. arising out
of:
1. Slipping /falling off mountainous terrain.
2. Biting by (a) Insects (b) Snakes, (c) Animals
3. Drowning/Washing away by (a) Floods, (b) Landslides, (c) Rockslides (d) Earthquake, (e)
Cyclone, (f) Other Convulsions of nature/calamities
4. Murder
5. Terrorist activities

6. Any other accidental causes

DEATH IN CASE OF WOMEN (it also includes death and or P.T.D.)
Caused by
1. Surgical Operations such as
2. Sterilization
3. Caesarian
4. Hysterectomy
5. Cancer Operations arising from removal of breasts
6. Child Birth, not beyond a period of seven days from the date of surgical operations.
Age: 10 years to 75 years
Premium Rating
@ Rs.15/- per woman per annum for Basic Cover
 @ Rs.23/- per woman per annum for Combined cover.
Rajrajeshwari Mahila Kalyan Policy is provided by all the subsidiary government companies-
Oriental Insurance, New India Assurance, United India Insurance, National India Insurance in all
the states of the country.
Bhagyashree Child Welfare Policy
Insurer: National Insurance Company
End user: Schools, colleges and any other educational institutions can avail of this scheme for the benefit
of the girl students studying there.

Policy provides protection to the girl child in the event of death of either or both the parents.
Scope of Cover
1. For child in the age group of 0 to 18 years; and age of parents below 60 years.
2. Fixed sum insured of Rs.25, 000/- premium Rs.15/- p.a.
3. Insurance protection is not for the girl child but for her parents; however, benefit will
accrue to the child.
4. Death of parent/s would include death arising out of or traceable to slipping and/or falling
from mountainous terrain; biting by insects, snakes and/or animals; drowning or washing away
in floods, landslides, rockslides, earthquake, cyclone and/or natural calamities; rape, murder and
terrorist activities covered; any other accidental causes;
5. Death of mother of the child caused by surgical operations such as
a) Sterilization
b) Caesarean,
c) Removal of uterus and removal of breast/s due to cancer,
d) At the time of child birth are also covered provided that death occurs within a period of
seven days from the date of operation; Death by Rape attempts.
6. In case of death of either or both the parents due to an accident as above, sum Insured will
be deposited in the name of the insured girl child and she will get benefit as under:
Age Benefit Payable to
1 to 5 years Rs. 1,200 p.a. survivingparents or guardian for looking after the need
of the child
6 to 11 years Rs. 1,200 p.a. surviving parent or guardian if the girl is admitted in school
and expenses are incurred on her education
12 to 17 yrs Rs. 2,400 p.a. surviving parent or guardian if the girl child is admitted in
school and the expenses are incurred on her education
18 years Balance in credit to the insured girl child
7. In the event of discontinuation of studies between 6 and 17 years, the Scholarship will not
be paid; instead, on completion of 18 years the Balance amount in here credit will be paid to her as
lump sum.
8. In the case of death of the girl child before attaining the age of 18 years, Balance amount
standing to the credit of the girl child would be paid to the surviving parent or guardian.
Note: One girl child below the age of 18 in a family could be covered. Policies can be issued
individually or as a group.
UNIVERSAL HEALTH INSURANCE SCHEME –For BPL Families

Oriental Insurance Company has been nominated by Govt. of India to provide Universal Health
Insurance Scheme to the people who are below poverty line in the States of Delhi, Haryana,
Himachal, J & K, Punjab, Rajasthan, U.P., Uttranchal & Chandigarh (UT).

Scope of Cover: This policy has three covers as under:

1. Medical reimbursement: The Policy provides reimbursement of hospitalization expenses

uptoRs.30; 000/- to an individual/family with sub limits (Maximum per illness Rs.15000/-. The
benefit of the family will operate on floater basis i.e. the total reimbursement of Rs.30; 000/- can
be availed of individually or collectively by members of the family.
2. Personal Accident Cover: Coverage for Death of the Earning Head of the family due to
accident: Rs.25, 000/-.
3. Disability Cover: If the earning head of the family is hospitalized due to an accident/illness a
compensation of Rs.50/- per day will be paid per day of hospitalization up to a maximum of 15
days after awaiting period of 3 days.

Age limit: 3 months to 65 years.

Category Premium Subsidy by Payable GOI

For an individual Rs.165/-per annum Rs. 200/-
For a family up to 5 Rs.248/- per annum Rs. 300/-(Including the first 3dependant children)
For a family up to 7 Rs.330/- per annum Rs. 400/-(Including the first 3dependent children and
dependent parents)
Main Exclusions:

1. All pre-existing diseases and diseases contracted during the first 30days from the
commencement date of the policy.
2. Some of the diseases such as Cataract, Benign Prostatic Hypertrophy, Hysterectomy,
Hernia, Hydrocele, Piles, Sinusitis, and Congenital Internal Disease are not covered in the
first year of the policy.
3. Corrective, cosmetic or aesthetic dental surgery or treatment.
4. Cost of spectacles, contact lens and hearing aid.

Claim Settlement: The Claims are to be settled by a Third Party Administrator (TPA) mentioned
in the schedule or by the Insurance Company and to be made cashless as far as possible through
listed hospitals.

Rural Policies

Rural policies provide wide policies to the rural areas. They cover a vast area of the rural areas.
These policies are provided by all the four subsidiary companies and are applicable in all the
states of the country. They are as following-

CATTLE INSURANCE

Cattle Insurance was governed under Market Agreement as devised by GIC and the rates, terms,
conditions etc. all were applicable to all the four Insurance Companies. However, w.e.f May
2003, it is no longer under Market Agreement. This policy covers indigenous cross bred and
exotic cattle owned by private owners, various financial institutions, dairy farms, cooperatives,
corporate dairies etc. The word cattle include Milch, Cows and Buffaloes calves and heifers, stud
bulls, bullocks and he-buffaloes and mithuns. Age group is specified for all the animals. The
evaluation of the animal is done by a veterinary surgeon.
CALF HEIFER REARING INSURANCE SCHEME

The coverage under this policy is meant for calves/heifers from one day to 32 months. The
valuation depends upon the age of the cow and is fixed according the age of the calf. All terms
and conditions applicable to cattle are applicable here also. Minimum coverage is taken from 12
months however this is not an annual policy.

SHEEP AND GOAT INSURANCE

This scheme is also governed under Market Agreement. Policy provides indemnity to indigenous
cross-bred and exotic sheep and goat against death due to accident (including fire, lightening,
flood, cyclone, famine, strike, riot and civil commotion) and disease. Earthquake and landslide
covers are also provided. Standard and common exclusions apply as per Cattle Policy. Animals
are identified by means of small brass buttons ear tags. Animals under scheme category enjoy
certain benefits in premium rate and claim procedure.

CAMEL INSURANCE

The camels are covered against death due to accident or disease as per Standard Cattle Insurance
Policy. The maximum S.I. is restricted to Rs.3000/-.

PIG INSURANCE

All indigenous, cross-bred and exotic pigs are covered however under scheme category exotic
animals are not covered. The age group is from 4 months to 3 years. The coverage is against
death due to accident or disease.
Exclusions as per Cattle Policy apply here also. Permanent total disablement, breeding and
furrowing risks are not covered. Vaccination in applicable diseases is compulsory. Evaluation
depends upon the age of the animal. Animals are identified by means of small brass buttons ear
tags.

HORSE, MULE, DONKEY, PONY, YAK INSURANCE

The Coverage is as per Standard Cattle Policy. However the age group is restricted to 2 years to
8 years.

POULTRY INSURANCE

This is also governed by Market Agreement, amongst all the four subsidiary companies. The
policy shall provide indemnity against death of birds due to accident (including fire, lightning,
flood, cyclone, strike, riot and civil commotion and terrorism) or diseases contracted or occurring
during the period of insurance. The word Poultry includes layers, broilers and hatchery birds,
which are exotic and cross-bred. Indigenous and non-descript birds will not be insured. All

GRAMIN ACCIDENT INSURANCE APPLICABILITY

The Insurance can be granted to any person between the age group of 10 to 70 years irrespective
of his occupation, income etc.

BENEFITS
(A) Death due To Accident Rs. 10,000/-
(B) Total irrecoverable loss of use of 2 limbs or Rs. 10,000/- one eye and one limb due to
accident
(C) Total irrecoverable loss of one eye or one limb Rs. 5,000/-
(D) Permanent total disablement due to accident Rs.10, 000/-

EXCLUSIONS
Company shall not be liable for:

i. Compensation under more than one of the sub clauses (A), (B), (C) & (D) in respect of same
injury/disablement.
ii. Payment of compensation in respect of injury/disablement directly or indirectly arising out of
or contributed to by or traceable to any disability existing on the date of issue of the policy.
iii. Death/injury/disablement of the insured from:
(a) Intentional self injury, suicide or attempted suicide.
(b) Whilst under the influence of intoxicating liquor or drugs.
(c) Directly of indirectly caused by insanity.
(d) Arising or resulting from the insured committing any breach of law with criminal intent.
iv. Compensation arising out of war and allied perils.
v. Death or bodily injury arising out of ionizing radiation or contamination by radioactivity from
any source whatsoever.
Policy is available on long-term basis also and is also subject to group discount and long-term
discount.

JANATA PERSONAL ACCIDENT POLICY

Brief Description:
We all in our day to day life are exposed to the risks of accidents. Despite all possible
precautions accident do occur. This may result into disablement or loss of limbs or sometimes
even death. To give relief to the insured or its family, this scheme was devised.

Covered Risks:
This policy provides compensation in the event of death or permanent disablement or loss of
limbs or sight in eyes.

Major Exclusions:
Intentional self injury, suicide or attempted suicide, Accident while the insured in under the
influence of intoxicating liquor or drugs, loss caused by insanity, loss due to breach of law with
criminal intent, War and allied perils, nuclear radiation.

HUT INSURANCE
APPLICABILITY – This insurance applies only to those huts used for dwellings and
constructed in rural areas with financial assistance from Banking/ Cooperative / Government
Institutions. It can also apply to a selected area or cluster of huts for which proposal should be
referred to H.O.

SCOPE OF COVER – Against loss or damage due to fire, (including fire resulting from
explosion and short circuiting), lightning, and explosion of boiler or gas used for domestic
purpose only, earthquake, flood, inundation, storm, tempest, cyclone and other allied perils, riot
and strike damage, malicious damage, aircraft and impact damage.

SUM INSURED – The maximum sum insured will be Rs.6000/-of which Rs.5000/- can be for
structure and Rs.1000/- for contents. However, it should be noted that the sum insured on the
structure should be so fixed that it is not more than 20% of the financed or subsidy amounts or
market value of structure whichever is less, not exceeding Rs.5000/-.

PREMIUM – Rs.3/- per thousand on the sum insured. However, under a policy the premium
should not be less than Rs.30/-

Above mentioned rural policies are designed by government to cover the risk of the rural
population. These policies are specially designed to provide the risk coverage in all the states of
the country. There is a wide range of rural policies which are offered by Oriental Insurance, New
India Assurance, National Insurance & United India Insurance.

KISAN CREDIT CARD-PAIS

This is a Personal Accident Insurance Master Policy covering all the Kisan Credit Card holders.
This will include the holders of KCC issued by the District Central Co-op. Banks, RRBs and
commercial Banks throughout India. This scheme will cover all the KCC holders against Death
or Permanent disability resulting from accidents caused by external, violent and visible means
and occurring within the geographical jurisdiction of India. This policy will cover the KCC
holders up to the age of 70 years and whose names are declared by the Banks and in respect of
whom the premium is paid by the Bank to the Insurance Company for a maximum benefit of
Rs.50, 000/- in case pf (i) Accidental Death, (ii) Permanent total disability (iii) Loss of two limbs
or two eyes or one limb and one eye and Rs.25, 000/- in case of loss of one limb or one eye
(subject to exclusion).

The Master Policy shall remain valid for a period of three years effective from April 2001 and
any modification/alteration shall be made at the end of three years after review of the premium
and claims experience. If the claim experience exceeds 70%, the premium shall be suitably
loaded. The policy can be issued for one year or three years period by charging Rs.15/- for
annual policy and Rs.45/- for three years period. Service Tax is waived for this policy. The
participating Banks will pay premium to designated Insurance Company on Flagship Company
basis.

Health policies
Insurer: General Insurance Corporation through its four subsidiaries: Oriental Insurance, New
India Assurance, National Insurance Company, United India Insurance.

Group Mediclaim Policy

Brief Description:
Mediclaim Insurance is a cover which takes care of medical expenses following
Hospitalization/Domiciliary Hospitalization of the Insured in respect of the following situations:
(A) In case of a sudden illness (B) In case of an accident (C) In case of any

surgery which is required in respect of any disease which has arisen during the policy period.
The major benefit for taking a Group Mediclaim policy is that the insured gets a Group discount;
hence the premium per person is lower.

Covered Risks:
This cover is a hospitalization cover and reimburses the medical expenses incurred in respect of
covered disease /surgery while the insured was admitted in the hospital as an in patient. The
cover also extends to pre- hospitalization and post- hospitalization for periods of 30 days and 60
days respectively

Major Exclusions:
Any pre-existing disease, any expense incurred during first 30 days of cover except injury due to
accident, all expenses incurred in respect of any treatment relating to pregnancy and child birth.
Treatment for Cataracts, Benign prostatic hypertrophy, Hysterectomy, Menorrhagia or
Fibromyoma, Hernia,Fitula of anus,Piles, Sinusitis, Asthma, Bronchitis, All Psychiatric or
Psychosomatic disorders are excluded from the scope of the cover.
Personal Accident - Group
Brief Description:
We all in our day to day life are exposed to the risks of accidents. Despite all possible
precautions accidents do occur. This may result into disablement or loss of limbs or sometimes
even death. To cater to this need insurers has devised an insurance cover, known as Personal
Accident Insurance. This policy provides compensation in the event of insured sustaining
injuries, solely and directly from an accident caused by violence, visible and external means,
resulting into death or disablement be it temporary or permanent. This policy is also available to
a Group of Persons and is known as Group Personal Accident Policy. This policy can be granted
for restricted hours of Duty and not for all the 24 hours of the days and nights) at a reduced
premium also. The Central Government bears the entire premium cost in respect of the scheme.
During the year 1998-99, a total number of 8,128 claims involving an amount of Rs. 1.84 crores
were settled.

Covered Risks:
This policy provides compensation in the event of insured sustaining injuries, solely and directly
from an accident.

Major Exclusions:
Intentional self injury, suicide or attempted suicide, Death or disablement resulting from child birth
and pregnancy; Accident while the insured is under the influence of intoxicating liquor or drugs;
War and allied perils.
Jan Arogya Bima Policy
Brief Description:
This policy provides for Hospitalization and Domiciliary hospitalization for a premium as low as
Rs 70/- for a adult male or female and Rs 50/- for each dependent son/daughter not exceeding 25
years of age. The benefits are up to Rs 5000/- per person per annum without any inner limits.
This insurance is available to persons between the age of 5 years and 70 years. Children between
the age of 3 months and 5 years of age can be covered provided one or both the parents are
covered concurrently. The scheme which is primarily meant for the larger segment of the
population, who cannot afford the high cost of medical treatment, was introduced w.e.f. 12th
August, 1996.

Covered Risks:
This cover is a hospitalization cover and reimburses the medical expenses incurred in respect of
covered disease /surgery while the insured was admitted in the hospital as an in patient. The
cover also extends to pre- hospitalization and post- hospitalization for periods of 30 days and 60
days respectively

Major Exclusions:
Any pre-existing disease, any expense incurred during first 30 days of cover except injury due to
accident, all expenses incurred in respect of any treatment relating to pregnancy and child birth.
Treatment for Cataracts, Benign prostatic hypertrophy, Hysterectomy, Menorrhagia or
Fibromyoma, Hernia,Fitula of anus,Piles, Sinusitis, Asthma, Bronchitis, All Psychiatric or
Psychosomatic disorders are excluded from the scope of the cover.

Health policies are one of the most popular policies of government general insurance sector.
These policies provide a big amount of premium to the insurance companies. Health
insurance as it is different from other segments of insurance business is
more complex because of serious conflicts arising out of adverse selection,
moral hazard, and information gap problems. Health insurance is typically
annual and has to be renewed yearly. Policy, which is not renewed in time
lapses and a new policy, has to be taken out.

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