PROJECT REPORT ON

GENERAL INSURANCE CORPORATION

IN PARTIAL FULFILLMENT OF

THE DEGREE AWARDED AT

B.COM (BANKING AND INSURANCE)

SEMESTER VI

SUBMITTED TO

UNIVERSITY OF MUMBAI

FOR ACADEMIC YEAR 2022 – 2023

SUBMITTED BY

NAME: MANISH MAHENDRA PAWAR

ROLL NO: 99

VIVA COLLEGE OF ARTS, COMMERCE AND SCIENCE

VIRAR (WEST)
401303

1
 DECLARATION

I Hereby Declare that the Project Titled “GENERAL INSURANCE

CORPORATION” is an original work prepared by me and is being
submitted to University of Mumbai in partial fulfillment of “B. Com.
(BANKING AND INSURANCE)” degree for the academic year 2022-2023.
To the best of my knowledge this report has not been submitted earlier to the
University of Mumbai or any other affiliated college for the fulfillment of
“B. Com (BANKING AND INSURANCE)” degree

Date: Place: VIRAR

Name: MANISH MAHENDRA PAWAR Signature:

2
 ACKNOWLEDGEMENT

I MANISH MAHENDRA PAWAR the student of VIVA College pursuing

my “B.COM (BANKING AND INSURANCE)”, would like to pay the
credits, for all those who helped in the making of this project. The first in
accomplishment of this project is our Principal Dr. V. S Adigal, Vice-
Principal Prof. Prajakta Paranjape, Course Co-Ordinator Dr. Roshani
Nagar and Guide Dr./Prof. Rashmi Naik and teaching & non-teaching staff
of VIVA college. I would also like to thank all my college friends those
who influenced my project in order to achieve the desired result correctly.

3
4
Project Title: __General Insurance Corporation__ Roll no: __ 99__

Sr.no Particulars Page.no

1 Introduction of GIC 7-10

2 History of GIC 11-17

3 Review of literature 18-21

4 Mission / Vision 22-23

5 Structure of GIC 24-27

6 Role of GIC 28-30

7 Function of GIC 31-34

8 Types of GIC 35-38

9 Documentation and claim 39-49

Settlement
10 Conclusion 50

11 Bibliography 51

Guides Name:

Guides Signature:

5
6
 CHAPTER 1

INTRODUCTION OF GENERAL INSURANCE CORPORATION

General Insurance Corporation of India Limited, abbreviated as GIC Re, is an Indian

public sector reinsurance company which has its registered office and headquarters in Mumbai. It
was incorporated on 22 November 1972 under Companies Act, 1956. It was the sole nationalised
reinsurance company in the Indian insurance market until the insurance market was open to foreign
reinsurance players by late 2016 including companies from Germany, Switzerland and France. GIC
Re's sharesare listed on BSE Limited and National Stock Exchange of India Ltd.

. The General Insurance Corporation of India Ltd., of the GIC, is a government- owned Insurances
Company under the ownership of the Ministry of Finance.
UPSC IAS aspirants planning to appear for the competitive exams are advised to read through the
following article for more clarity on the GIC.

. The General Insurance Business (Nationalization) Act of 1972 (GIBNA) nationalized the entire
general insurances business in India. Hence, the General Insurance Corporation of India (GIC) was
formed in pursuance of Section 9 (1) of GIBNA.

. Through nationalization, the Indian government took over the shares of 55 Indian insurance
companies and the undertakings of 52 insurers carrying on the generalinsurance business.

. The GIC was incorporated on 22nd November 1972 under the Companies Act of 1956 as a private
company limited by shares.

. The GIC was formed to superintend, control, and carry on the business of general insurance
across the country.

. The General Insurance Corporation of India topic is not only important to know from the exam
point of view but also helpful for practical knowledge. Hence, candidates appearing for related
competitive exams are advised to check the below sections for more insights on the GIC

General insurance corporation or non-life insurance policy, including automobile and

homeowners policies, provide payments depending on the loss from a particular financial event.
General insurance is typically defined as any insurance that is not determined to be life insurance. It
is called property and casualty insurance in the United States and Canada and non-life insurance in
Continental Europe.

In the United Kingdom, insurance is broadly divided into three areas: personal lines,
commercial lines and London market.The London market insures large commercial risks such as
supermarkets, football players, corporation risks, and other very specific risks. It consists of a
number of insurers, reinsurers, P&I Clubs, brokers and other companies that are typically physically
located in the City of London. Lloyd's of London is a big participant in this market.[1] The London
market also participates in personal lines and commercial lines, domestic and foreign,
through reinsurance.

GIC Private Limited is a Singaporean sovereign wealth fund that manages the country's
foreign reserves. Established by the Government of Singapore in 1981 as the Government of
7
Singapore Investment Corporation, of which "GIC" is derived from as an acronym, its mission is
to preserve and enhance the international purchasing power of the reserves, with the aim to achieve
good long-term returns above global inflation over the investment time horizon of 20 years.
With a network of 10 offices in key financial capitals worldwide, GIC invests internationally
in developed market equities, emerging market equities, nominal bonds and cash, inflation-linked
bonds, private equity and real estate The Sovereign Wealth Fund Institute (SWFI) had estimated the
fund's assets at US$690 billion as of June 2022[5] while Forbes estimated the fund's assets at
US$744 billion after legislation were passed to transfer about US$137 billion from the Monetary
Authority of Singapore (MAS), the country's central bank and monetary authority.

Besides GIC, Singapore also owns another sovereign wealth fund, Temasek Holdings, with
managed assets at about US$630 billion of assets under management, along with the national
pension plan Central Provident Fund (CPF) with assets of US$397 billion, giving an assets under
management (AUM) of US$1.77 trillion The MAS also holds a further US$478 billion.

Introduction of Insurance

Insurance is a means of protection from financial loss in which, in exchange for a fee, a party
agrees to compensate another party in the event of a certain loss, damage, or injury. It is a form of
risk management, primarilyused to hedge against the risk of a contingent or uncertain loss.

An entity which provides insurance is known as an insurer, insurance company, insurance

carrier, or underwriter. A person or entity who buys insurance is known as a policyholder, while a
person or entity covered underthe policy is called an insured. The insurance transaction involves the
policyholder assuming a guaranteed, known, and relatively small loss in the form of a payment to
the insurer (a premium) in exchange for the insurer's promise to compensate the insured in the event
of a covered loss. The loss may or may not be financial, but it must be reducible to financial terms.
Furthermore, it usually involves something in which the insured has an insurable interest established
by ownership, possession, or pre-existing relationship.

The insured receives a contract, called the insurance policy, which details the conditions and
circumstances under which the insurer will compensate the insured, or their designated beneficiary
or assignee. The amount of money charged by the insurer to the policyholder for the coverage set
forth in the insurance policy is called the premium. If the insured experiences a loss which is
potentially covered by the insurance policy, the insured submits a claim to the insurer for processing
by a claims adjuster. A mandatory out-of-pocket expense required by an insurance policy before an
insurer will pay a claim is called a deductible (or if required by a health insurance policy, a
copayment). The insurer may hedge its own risk by takingout reinsurance, whereby another
insurance company agrees to carry some of the risks, especially if the primary insurer deems the
Risk too large for it to carry.

8
ORIGIN OF INSURANCE

About 4 the dot Babylon is, which is today ant to berserk of the canvas wade by giving blue
repaid with interest when the goods arrived that had why to 2100 The Code of Hammurabi granted
legal states to the pica That was the beginning of lance. Life insurance had its original Reed the
capital city of Italy where citizen formed hone chef that would me the funeral expenses of its
members as well help survivors by making some payments. As Foreseen civilization progresses.

He social ions and welfare practices also got more and With the discovery of new hands,
sex routes and the consequent growth in de Medieval guilds sock it upon themselves to protect their
member traders from lows is cast of fire, shipwrecks and the like. Since most of the trade took place
by sex, there was also the fear of pirates. So these guilds even offend ransomfor members held captive
by pirates. Burial exposes and support in times of sickness and poverty were other services offered
essentially, all these revolved around the concept of instance of risk coverage. That's how old these
concepts are really. In 1347, in Genius imposes maritime nations entered into the curliest known
finance contract and decided to accept marine insurance as a practice. Insurance as we know it today
owes its existence to 17th century England.

In fact, it began taking shape in 1688 at a rather interesting place called Lloyd's Coffee
House in London, where merchants, ship-owners and underwriters met to discuss and transact
business. Back to the 17th the age life span en low of interest. In 1756, Jough DOD kedde age. The
first sock companies to get cated in England in 1720 the ye 17th finance company in the Amics
colonie.

In 1759, the Pashtuns Synod of Philadelphia the b insane caption in Amicus for the beef of
ministers and the dependents. The 1h notary get develop in the f finance, with newer products being
devised me the gung of urbanization and indication in 1915, the ins York the drew people's action to
the duo provideend den and les Two years later, Massachusetts became the flat state to pie comps by
law to maintain much reserves. The great Chicago fee of 1871 other emphasized how fires can come
huge fees in doubly pendant cities. The practice of win, who the risks a sprawls several companies,
was devised specifically few suctions There were more offshoots of the process of induxialization.
In 1907, the British government passed the Workmen's Compton Act, which made it mandatory for
a company to more its players against industrial accidents In the 19th century, many societies were
founded to the life health of their members, while female orders provided low-cost, members-only
insurance. Even today, such tillers continue provide insurance coverage to members as de most
labor organ many employers sponsor group insurancepolicies for their employees.

providing not just life are, but sickness and accident benefits and old age pensions trance in
idea com traced back to the Vedas for instance, yogakahema, the same of Life insurance
Corporation of India's corporate headquarters, is derived from the Rig Veda. The term suggests that
form of "community insurance was prevalent around 1000 BC and practiced by the Aryans Burial
societies of the kind found in ancient Rome were fanned in the Buddhist period to help families build
houses, protect widows and children:

Bombay Mutual Assurance Society, the first Indian life assurance society, was formed in
1870. Other companies like Oriental, Bharat and Empire of India were also set up in the 1870-90s.
It was during the swadeshi movement in the early 20th century that insurance witnessed a big boom
in India with several more companies being set up.

The Insurance Regulatory & Development Authority, an autonomousinsurance regulator set up

9
in 2000, has extensive powers to oversee the insurance business and regulate in a manner that will
safeguard the interests of the insured. In 1st September 1956, under the first Indian Prime Minister
Panduit Jawaharlal Nehru, the LIC (Life Insurance Corporation) the most trusted insurance
company was established.

Importance of GIC

Insurance is one of the ways you can mitigate and hedge against the risk of unforeseen
losses. While risks lead to rewards, the downside is a possible loss. Losses can happen du to
multiple reasons both on professional and personal fronts. When you start a new venture by
investing your savings, you have a chance to either make a profit or a loss by selling those goods.
However, if you happen to lose the goods in a mishap you lose the chance to sell them at all. While
a business risk is expected and can lead to higher profits, unexpected loss of goods can only lead to
financial loss. Therefore, risks like serious damage to movable and immovable property,
hospitalization and theft and similar calamities must be insured against.

1. Distributes Large Risks

Insurance is a financial instrument. The risk of significant loss due to an event is borne by a large
group of people exposed to the same possibility in a business. Thus, the losses are distributed over a
large group making it bearable for each individual.

2. Provides Financial Stability

Without insurance, it will be extremely costly for businesses to bounce back after a major loss of
inventory. Natural hazards, accidents, theft or burglary can affect the financial status of a business
or a family. With Insurance compensating a large part of the losses businesses and families can
bounce back rather easily.

3. Helps Economic Growth

Insurance companies pool a large amount of money. Part of this money can be invested to support
investment activities by the government. Due to the safety concerns insurers only invest in Gilts or
government securities. On the other hand, governments can raise funds easily from insurers for
large public projects, which aid in economic growth.

4. Generates Long-Term Wealth

Insurance is often a long-term contract, especially life insurance. Life insurance plans can continue
for more than three decades. Within this time they will collect a large amount of wealth, which
returns to the investor if they survive. If not, the wealth goes to their family.

10
 CHAPTER 2

HISTORY OF GENERAL INSURANCE CORPORATION

The government of India nationalized the entire general insurance business in the country
through the General Insurance Business (Nationalization) Act, 1972. The shares of 55 Indian
insurers as well as the undertakings of 52 insurers carrying on non-life insurance business were taken
over by the government through nationalization.

GIC was established in pursuance of Section 9(1) of General Insurance Business

(Nationalization) Act, 1972. It was formed on 22 November, 1972, under the Companies Act, 1956,
as a private company limited by shares. Its functions then included superintending, controlling and
carrying on the business of general insurance. The government transferred all of its shares in the
non-life insurers to GIC, and the nationalized undertakings were transferred to Indian insurance.

After a process of mergers among the insurance companies, four remained as fully-owned
subsidiary companies of GIC, namely National Insurance Co. Ltd., The New India Assurance Co.
Ltd., The Oriental Insurance Co. Ltd and united India insurance co. Ltd.

1. National Insurance Company Limited.

2. The New India Assurance Company Limited.
3. The Oriental Insurance Company Limited.
4. United India Insurance Company Limited.

When the Insurance Regulatory and Development Authority Act, 1999, was introduced,
however, the exclusive privilege of GIC and its subsidiaries undertaking general insurance business
in India was removed. In November 2000, GIC was formally designated as a reinsurer and its
supervisory role over the four subsidiaries came to an end. Once the General Insurance Business
(Nationalization) Amendment Act, 2002 (40 of 2002), came into effect from 21 March 2003, GIC
was no longer a holding company of its subsidiaries.

The ownership of GIC and the four subsidiary companies was vested with the
government.

11
HISTORY OF INSURANCE

Early methods

Merchants have sought methods to minimize risks since early times. Pictured, Governors of the
Wine Merchant's Guild by Ferdinand boll c. 1680.

Methods for transferring or distributing risk were practiced by Babylonian, Chinese and
Indian traders as long ago as the 3rd and 2nd millennia BC, respectively. Chinese merchants
travelling treacherous river rapids would redistribute their wares across many vessels to limit the loss
dueto any single vessel capsizing.

Codex Hammurabi Law 238 (c. 1755–1750 BC) stipulated that a sea captain, ship-manager,
or ship charterer that saved a ship from total loss was only required to pay one-half the value of the
ship to the ship-owner. In the Digest sue Pandect (533), the second volume of the codification of
laws ordered by Justinian I (527–565), a legal opinion written by the Roman jurist Paulus in 235
AD was included about the Lax Rhoda ("Rhodium law").

It articulates the general average principle of marine insurance established on the island of
Rhodes in approximately 1000 to 800 BC, plausibly by the Phoenicians during the proposed Dorian
invasion and emergence of the purported Sea Peoples during the Greek Dark Ages (c. 1100–c. 750).

The law of general average is the fundamental principle that underlies all insurance. In 1816,
an archeological excavation in Mina, Egypt produced a Nerve-era tablet from the ruins of the
Temple of Antonius in Antimonopolies, Egypt’s. The tablet prescribed the rules and membership
dues of a burial society collegium established in Alluviums, Italia in approximately 133 AD during
the reign of Hadrian (117–138) of the Roman Empire. In 1851 AD, future U.S. Supreme Court
Associate Justice Joseph P. Bradley (1870–1892 AD),once employed as an actuary for the Mutual
Benefit Life Insurance Company, submitted an article to the Journal of the Institute of Actuaries.
His article detailed an historical account of a Severna dynasty-era life table compiled by the Roman
jurist Ulpian in approximately220 AD that was also included in the Digest..

Concepts of insurance has been also found in 3rd century BC Hindu scriptures such as
12
Dharmasastra, Arthashastra and Manuscript. The ancient Greeks had marine loans. Money was
advanced on a ship or cargo, to be repaid with large interest if the voyage prospers. However, the
money would not be repaid at all if the ship were lost, thus making the rate of interest high enough
to pay for not only for the use of the capital but also for the risk of losing it (fully described by
Demosthenes). Loans of this character have ever since been common in maritime lands under the
nameof bottom and rntiaesponde bonds.

The direct insurance of sea-risks for a premium paid independently ofloans began in Belgium
about 1300 AD.

Separate insurance contracts (i.e., insurance policies not bundled with loans or other kinds of
contracts) were invented in Genoa in the 14th century, as were insurance pools backed by pledges of
landed estates. The first known insurance contract dates from Genoa in 1347. In the next century,
maritime insurance developed widely, and premiums were varied with risks. These new insurance
contracts allowed insurance to be separated from investment, a separation of roles that first proved
useful in marine insurance.

The earliest known policy of life insurance was made in the Royal Exchange, London, on the
18th of June 1583, for £383, 6s. 8d for twelve months on the life of William Gibbons.

13
Modern methods

Property insurances as we know it today can be traced to the Great Fire of

London, which in 1666 devoured more than 13,000 houses. The devastating effects of the fire
converted the development of insurance "from a matter of convenience into one of urgency, a
change of opinion reflected in Sir Christopher Wren's inclusion of a site for "the Insurance Office" in
his new plan for London in 1667." A number of attempted fire insurance schemes came to nothing,
but in 1681, economist Nicholas Barb on and eleven associates established the first fire insurance
company, the "Insurance Office for Houses", at the back of the Royal Exchange to insure brick and
frame homes. Initially, 5,000 homes were insured by his Insurance Office.

At the same time, the first insurance schemes for the underwriting of business ventures
became available. By the end of the seventeenth century, London's growth as a center for trade was
increasing due to the demand for marine insurance. In the late 1680s, Edward Lloyd opened a coffee
house, which became the meeting place for parties in the shipping industry wishing to insure
cargoes and ships, including those willing to underwrite suchventures.

These informal beginnings led to the establishment of the insurance market Lloyd's of London
and several related shipping and insurancebusinesses.

14
 Life insurance e policies were ta ken out in the early 18th Leaflet promoting the National
Insurance Act 1911 century. The first company to offer life insurance was the Amicable Society for
a Perpetual Assurance Office, founded in London in 1706 by William Talbot and Sir Thomas Allen.
Upon the same principle, Edward Rowe Mores established the Society for Equitable Assurances on
Lives and Survivorship in 1762.

It was the world's first mutual insurer and it pioneered age based premiums based on mortality
rate laying "the framework for scientific insurance practice and development" and "the basis of
modern life assurance upon which all lifeassurance schemes were subsequently based."

In the late 19th century "accident insurance" began to become available. The first company to offer
accident insurance was the Railway Passengers Assurance Company, formed in 1848 in England to
insureagainst the rising number of fatalities on the nascent railway system.

The first international insurance rule was the York Antwerp Rules (YAR) for the distribution
of costs between ship and cargo in the event of general average. In 1873 the "Association for the
Reform and Codification ofthe Law of Nations", the forerunner of the International Law Association
(ILA), was founded in Brussels. It published the first YAR in 1890, before switching to the present
title of the "International Law Association" in 1895.

By the late 19th century governments began to initiate national insurance programs
against sickness and old age. Germany built on atradition of welfare programs in Prussia and Saxony
that began as early as in the 1840s. In the 1880s Chancellor Otto von Bismarck introduced old age
pensions, accident insurance and medical care that formed the basis for Germany's welfare state. In
Britain more extensive legislation was introduced by the Liberal government in the 1911 National
Insurance Act. This gave the British working classes the first contributory system of insurance
against illness and unemployment. This system was greatly expanded after the Second World War
under the influence of the Beveridge Report, to form the first modern welfare state.

In 2008, the International Network of Insurance Associations (INIA), then an informal

network, became active and it has been succeeded by the Global Federation of Insurance
Associations (GFIA), which was formally founded in 2012 to aim to increase insurance industry
effectiveness inproviding input to international regulatory bodies and to contribute more effectively
15
to the international dialogue on issues of common interest. It consists of its 40 member associations
and 1 observer association in 67 countries, which companies account for around 89% of total
insurance premiums worldwide.

Above:

While the first pure reinsurance companies came into existence around the middle of the 19th
century, many direct insurers had already been practicing reinsurance for some decades. Many
companies later advertised as both insurer and reinsurers such as the above pictured S.I.A.R. in
Italy.

Opposite:

Glarus after the fire in 1861. The fire is said to have led to the foundation of Swiss Re. While
certainly, it highlighted the need for reinsurance there is no direct evidence in the records indicating
that Swiss Re was founded because of the fire. Rather, the founding fathers aimed at curbing the
outflow of reinsurance premiums to foreign insurers.

Right:

The Great Fire of Hamburg in 1842 was the first large loss to shake the by then already
international insurance industry. Many British insurers were faced with enormous losses and
subsequent retreated from the German market. The foundation of the world’s oldest independent
reinsurance company Kölner Rück (Cologne Re) is associated with the Great Hamburg Fire, but
also here endeavors to keep reinsurance premiums in the country appear to have been at least as
important for its foundation.

Both the size and number of risks to be insured began outstripping the capacities of the
insurance industry towards the second half of the 19th century. Traditionally, insurers resorted to
sharing risks among each other or reinsuring with other insurers. By implication if not by design,
however, this practice required competitors to grant each other access to their books. It also
increased the likelihood of accumulating risks regionally and in certain lines of business. One way
of avoiding these problems was to seek reinsurance across national borders.

But this again meant that capital would flow out of national economies, and capital at the
time was a sought-after commodity needed for keeping up with industrial and economic
development. Early specialized reinsurance companies such as Cologne Re or Swiss Re were thus
founded to stem the outflow of capital and strengthen national economies. Moreover, large
catastrophes such as the fires of Hamburg in Germany and Glarus in Switzerland had increased the
need for spreading risks beyond local insurers. Founding reinsurers, rather than just founding
additional insurance companies, proved to be an efficient way of providing additional risk capital.

Reinsurers were comparatively inexpensive to set up and run, not needing the large
salesforce of direct insurers. Also, reinsurers started spreading risks more broadly than their clients.
They tended to be more international, for one thing, and they were active in most or all lines of
business known at the time, which allowed offsetting losses in one line with gains in another.The
fledgling reinsurers were off to a bumpy start, however, as international business led to large losses.
Risk assessment outside the L&H business was virtually non-existent in those days.

16
 Reinsurers had to rely on the word of their clients or brokers and apply the famous
uberrima fides or utmost good faith principle. Many insurers could not resist offloading their worst
risks onto reinsurers, or charging reinsurers excessively for the cost of acquiring business. For a
while, it looked as if the new business idea was turning into a complete failure. Only gradually did
the industry come into its own through much stricter underwriting discipline, such as Swiss Re’s,
and by adopting a business model, introduced by Munich Re, which allowed cedents to share in the
success of reinsurers.Even though the ban on reinsurance in England had been lifted in 1864, the
Continent was to be the dominant provider of global reinsurance. The English markets had
developed a well-functioning co-insurance system which for some time hindered the development
of proper English reinsurance companies.

This also allowed continental reinsurers to build up a strong presence in the by then all-
important and still growing US market.It was there that the global network of insurance and
reinsurance was to face its hardest test yet

17
 CHAPTER 3

REVIEW OF LITERATURE

Singh (2011) suggested that the policy of Liberalization, Privatization and Globalization
and the emergence of the private sector has facilitated the positive growth of LIC. In a study to
provide an overview of the financial efficiency and level of financial soundness of 16 non-life
insurance companies in the private sector, Ghimire (2013) concluded that maintaining the sound
financial health of the insurance industry is one of the most challenging jobs for regulatory
agencies. Dar (2015) assessed the financial and statistical returns of non-life insurers by using the
set of ratios and CARAMEL Model. The authors found that the private insurers have a lower mean
ratio and higher variability when compared to the public insurer which perhaps reflects the
underwriting inefficiency. The solvency margin of public and private sector insurers needs to be
evaluated in this regard as well. Jogo (2013) concluded that they have performed successfully in the
grabbing the market in a deregulated environment.

Do General Insurance corporation efficient in their Performance?

Chakravorty (2016) assessed the financial efficiencies of four general insurance companies
from the public-sector in India. The author found that the United India general insurance company
is the best performer among all the four public-sector general insurance firms in India. Studies have
also examined the financial performance of Indian Life Insurance Companies through analyzing the
determinants of their Profitability (Samiya, 2013). Samiya (2013) evaluated that the public sector
player LIC has good liquidity position among all life insurers.

Studies have also examined the financial performance of Indian Life Insurance Companies
through analyzing the determinants of their Profitability (Samiya, 2013). Samiya (2013) evaluated
that the public sector player LIC has good liquidity position among all life insurers.

On another note, Singh (2015) has highlighted the changes in the selling environment in the
digitalization era and has also analyzed the trends and challenging issues regarding the same. The
financial performance in terms of capital adequacy and asset quality of public sector general insurance
companies in India is an important aspect for this study and we have taken insights from the study
conducted by Shankar (2014). Savitha (2014) has analyzed the major source of income like
premium and expenses like claimsof GIC to measure the operational efficiency. The author found that
the overallefficiency of the GIC is good.

Tanveer Ahmad Darzi (2009) in the research paper, “Financial Performance of Insurance Industry
in Post liberalization era in India” made a comparison of public and private general insurance
companies’ performance using statistical analysis. The motive behind the paper was to discover the
influence of privatization of the insurance sector in 2000 on the monetary performance of overall
industry. The paper also examines the effect of liberalization on the security of the private and
public companies.

18
T. Chandrasekhara and Dr. K.S. Sarala (2017) in their research paper “An Evaluation of
Performance of Selected General Insurance Companies in India” calculated the performance using
claims and premium as variables of four public and six private companies. The analysis was done
on the data collected for the last 10 years of the companies through IRDA annual report. The study
finds out that the public companies need to prepare for the tough competition by the private
companies by accepting new and different strategies. The paper also suggests that the function and
power of the regulator and insurance companies need to be recognised by IRDA

Dr. Nalini PraveThripathy (2007) in his research paper “Indian Insurance Industry-The Paradigm
Shift” stated that the economy of India has been in evolution for over 2 decades because of the
introduction of strong economic reforms affecting all sectors. Indian insurance business being one
of the most important one amongst the sectors. The paper also talks about General insurance
industry dealing with exposure of risks to goods and property.

Hook, n.d. in his research article, “Insurance business has changed over time” finds out that
Technology, regulation, disintermediation and globalization had its own effect on the insurance
sector during the last several decades. Today it faces lots of challenges and there is no events
creating a shortage in shaking its foundation. Rise in knowledgeable client base in a market place
promotes the consumers in educated purchases and increased insurance take ups. The increased
insurance takes up rate can help the producers of the products in efficient risk management and take
the benefits of a more competitive and stable financial market and economic growth.

Basir Ahmad Joo in his research paper, “Analysis of financial Stability of Indian Non-Life
Insurance companies stated that the Indian insurance market was assaulted by the presence of MNC
post privatization of the insurance sector in the year 2000 which has both threats and opportunities
for the existing public companies. The paper highlights the relationship between claim ratio an firm
size on the solvency position of the company. The research tool used for the process of analysis was
multiple regression analysis.

Rajesh K. Yadav and Sarvesh Mohania in their research paper, “ Impact of F.D.I. on Life
insurance sector in India” stated that how FDI movement in the Indian insurance sector increase the
overall performance of the sector. It also talks about the outflow of money (Indian Currency) which
the RBI and IRDA need to keep check on. The data for the analysis have been collected from the
annual report of IRDA.

Ms. Tnr. Kavitha, Dr. A. Latha and Ms. Jamuna in their research paper, “Customers’ Attitude
towards General Insurance - A Factor Analysis Approach” analysed the attitude of customers
towards the insurance offered by general insurance companies where 750 policy holders opinion
was collected on the basis of 5 point scaling.

Ade Ibiwoye (2010) in his paper entitled "Evaluating Financial Services Productivity: A
comparison of Ratios, Index numbers and Frontier Methods" compares the financial performance of
the select insurance companies and to determine the direction to go by way of efficient operators. In
this study when only one output is used to find out the single productivity and multiple outputs are
used to measure multiple productivity. Four main types financial ratios are analyzed like liquidity,
leverage, activity and profitability ratios are measured to make financial performance comparisons,

Bhagabat Barik, (2014) A general study of life insurance sector in India has been done. Life
insurance is not merely an investment but it is a protective tool. The protection of human being
against calamities and financial compensation in term of death is the basic idea of life insurance.
19
Insurance is the fastest growing industry in the country.

B. Muthu Krishnan, (2013) accessed health insurance sector in India has been done. There is very
less penetration of health insurance. Only 3% of the population has got some what health insurance.
Unfortunately health insurance is purchased only to save income tax. The reason behind this is very
poor level of awareness about health insurance products.

B. S. Bodla, (2012) studied ICICI Prudential Life Insurance Company is a leading life insurance
company in private sector. A study of this company has been done. Quality service is the key for
growth of any insurance company. Studied the quality of service is accessed through following
parameters.

B. Charumathi, (2012) reviewed the various factors which are affecting the profitability of life
insurance companies in India have been studied and discussed. Indian life insurance industry has
been ranked 9th largest market among 156 countries and 5 th fastest growing life insurance industry
in the world.

D.Rajasekar, (2014) The SWOT analysis i.e. strengths, weakness, opportunities and threats for
bancassurance has been studied. Bancassurance is a distribution model for insurance products.
World bancassurance is a combination of bank insurance. Bank is a vehicle which selling different
types of financial products like loans, PPF, Money Transfer, Share & debentures, deposits, etc

G. Karunanithi, (2012) took overall review of performance and marketing strategies of LIC of
India. Before Privatization LIC has monopoly over the sector. But after privatization now there 24
insurance companies in life insurance market. It has eroded LIC share to 71% of the market. LIC
was not able to tap all the market and more than 80% of the population of India does not have any
insurance cover.

Harpreet Singh Bedi, (2011) analyzed of business of life insurance before the financial and
economic reforms and after their reforms. Also present insurance scenario and competitative
environment has been discussed in detail. The investment strategy of LIC has been studied.

Harmanpreet Singh, (2012) evaluated satisfaction level of female employees working in

insurance industry in India is critically analyzed. For this present scenario of insurance sector and
causes which produce stress on female employees has been studied.

Ipsita Swain, (2012) Service delivery and relationship management in life insurance industry has
been critically analyzed. Quality of service is very important factor in service industry. Life
insurance is related to service industry. Customers satisfaction is key for success in life insurance
has been studied.

Joginder Singh Arora, (2011) the distribution channels in life insurance sector has been critically
examined from the period of 2001 to 2011. Distribution channels are means to reach potential
customers. The efficiency professionalism, effectively of the distribution channels will directly
result into the performance of the company.

Kavita Mahajan, (2013) studied quality of service in insurance sector is analyzed and importance
of delivery of quality service is stressed upon. Service is the key for better performance. It is easy to
get new business from existing customers by delivering good service that to develop new business.

20
Kishor Kumar Meena, The impact of foreign investment in life insurance sector has been studied.
It is observed that private sector life insurance companies are breading life insurance market and
creating new business records. Easier it was LIC monopoly over this Sector. Due to foreign
investment, the needed capital is available. It has helped to boost life insurance business in the
country.

Kamal Gulati, (2012) studied customer satisfaction level and analyzed quality of service and post
sale relationship is very important. Many a times in Insurance industry, it is assumed that “Sell it
and forget it” nature of insurance agents and employee

21
 CHAPTER 4

MISSION AND VISION

OUR MISSION AND VISION:

The insurance industry has transformed considerably since the establishment of Insurance
Regulatory and Development Authority. The industry is poised for radical evolution in times to come
due to changes in the overall economic environment, its bearing on the financial sector and related
need for risk management. The General Insurance Council recognizes its role in the changing
business environment by articulating the following vision and mission.
To become the most admired and trusted upon insurance companies in India, by keeping up
with all the promises that we make to you, our customers, by providing the most convenient dealing
process, creating sustainable values, and empowering all our employees.
When you think about Liberty General Insurance, think of a company which aims to help
people live safer, with more security. To go beyond what other health insurance companies or the
car insurance companies in India might offer; to become an attentive and empathetic insurer of
choice for the citizens of the country

THE VISION FOR THE INDUSTRY AND THE GIC COUNCIL:

. A sustainably profitable and growing non-lifeinsurance industry in India.

. An industry trusted and recognized as contributing to society and the economy.
. An economic and public policy climate conducive to a flourishing industry.

A body (GI Council) recognized as providing active leadership and an authoritative collective
voice for the non-life insurance industry in India.

THE GIC COUNCIL'S MISSION: -

To provide leadership on issues having a bearing on the industry's collective strength and
image and to shape and influence decisions made by the Government, regulator and other public
authorities, within the country, in order to benefit the industry collectively.

This will be achieved on an active, collective andnon-competitive basis by.

. Pro-active analysis and lobbying to secure improvement in the legal and regulatory
framework.

. Analysis and representations in response to initiatives from others which affect the industry.
22
 . Being recognized as a leading contributor to public policy thinking on issues relevant to non-life
insurance industry.

. Presenting a positive image of the industry tothe public, the media and other opinion-formers.

. Providing leadership and guidance to the industry on issues which may affect its public image
and reputation.

. Maintaining a core secretariat with staff of high caliber and relevant skills drawn from the industry
on project to project basis, workingunder the guidance of the Board and itscommittees, focused on
delivering the mission, GI Council will provide other services to member companies (such as an
active role in management of commercial vehicle third party liability motor pool) which benefit the
industry collectively, which support the mission, which can be provided without diversion of
resourcesfrom the core functions; and which cannot be done more effectively by any other body .

Our Values

1 Trust - Building trusting relationships with all our stakeholders

2 Dignity & Respect - Treating everyone fairly with dignity and respect

3 Passion - We exude positive energy and are passionate about what we do

4 Agility - We assess opportunities and respond with speed

5 Commitment - We are committed to results and deliver on our promise

23
 CHAPTER 5

STRUCTURE OF GENERAL INSURANCE CORPORATION

People are the heart of GIC. Our investment professionals manage the reserves for the
long term, with the cooperation, collaboration and support of our business professionals. Regardless
of role or function, we are one GIC team — united in the common pursuit of investing for
Singapore.

Board of Directors

The GIC Board assumes ultimate responsibility for asset allocation and performance for the
total portfolio. Management executes investment strategies and regularly discusses overall portfolio
performance with the GIC Board.
As of 2022, GIC Re's Board of Director consists of Mr. Devesh Srivastava (Chairman-and-
Managing Director), Mr. A K Das (MD and CEO, BOI), Mr. V Ramasamy (Independent Director),
Mr. Amarendra Pratap Singh (Independent Director), Mr. G B Pande (Independent Director), Ms.
Dakshita Das (Additional Secretary, DFS), and Ms. A Manimekhalai (Executive Director, Canara
Bank).

Mr. Devesh Srivastava has been involved in the insurance sector since 1987 following
his joining the industry as a direct recruit. He has experience in both direct insurance and
reinsurance. He has gained international exposure through postings to the company’s London
branch where he was overseeing operations in UK, Europe, Caribbean countries of Brazil,
Argentina, and Mexico territories. He was a key player in the setting up of GIC Re ’s Lloyds
Syndicate 1947 in London. He is presently employed on a full-time basis by the Company in the
capacity of Chairman and Managing Director.

He holds a B. Sc (Hons) and a Master of Science degree from St Stephen’s College, Delhi.
He subsequently obtained a post-graduate degree in Management, majoring in Marketing with a
Gold Medal from the Management Development Institute (MDI) Gurgaon.

He is presently on the Boards of GIC Re South Africa Ltd.- Johannesburg, GIC

Perestrakhovanie LLC - Russia, Export & Credit Guarantee Corporation, Indian Register of
Shipping, Kenindia Assurance Co. Ltd., Nairobi, Agriculture Insurance Corporation of India, Health
TPA Ltd., Asian Reinsurance Corporation, GIC Housing Finance Ltd and GIC Re Corporate
Member, London.

Executives

Mr. Devesh Srivastava is the currently appointed Chairman- and- Managing Director of GIC
Re. GIC Re's various line of business are headed by the General Managers namely Ms. Reena
Bhatnagar, Mr. Deepak Prasad, Ms. Madhulika Bhaskar, Mr. Shashikant More, Ms. Suchita Gupta,
and Mr. S L Tripathy.
24
International Advisory Board

The International Advisory Board provides the GIC Board, Board Committees and GIC
Management with global and regional perspectives on geopolitical, economic and market
developments. It offers advice on a range of investment-related matters, in particular, global
investment trends, emerging asset classes and new growth opportunities.

BOARD COMMITTEES

1 Investment strategies committee

2 Risk Committee

3 Audit Committee

4 Investment Board

5 Human Resource & Organization Committee

1 Investment Strategies Committee

The Investment Strategies Committee assists the GIC Board in evaluating Management’s
recommendations on asset allocation, and its oversight of overall portfolio performance.

2 Risk Committee

The Risk Committee advises the Board on risk matters and focuses on overseeing GIC’s
risk policies and risk management.

3 Audit Committee
The Audit Committee reviews and assesses the adequacy and effectiveness of the system
of internal controls, including financial, operational and compliance controls, and risk management
policies and procedures. It also supervises and evaluates the effectiveness of the internal audit
function. The Committee also reviews the integrity of the financial reporting process and other
related disclosures for GIC companies, significant ethics violations, impact of changes in the

25
regulatory and legal environment, and issues of fraud and financial losses.

4 Investment Board

The Investment Board assists the GIC Board in its oversight of GIC’s investment process.

5 Human Resource & Organization Committee

The Human Resource & Organization Committee discharges the Board’s responsibilities
relating to the evaluation and approval of GIC’s compensation policies for the group and senior
management, Managing Directors Scheme and succession planning for key man appointments, as
well as oversees organizational development.

Governance and risk management

The funds managed by GIC are owned by the Singapore Government. Its investment
returns supplement the country's annual budget in areas such as education, R&D, health care and
physical environment.

As a Fifth Schedule company under the Singapore Constitution, GIC is accountable in

various key areas to the President of Singapore who is empowered under the constitution to obtain
information to enable her to safeguard the country's reserves. The Auditor-General, who is
appointed by the President of Singapore, submits an annual report to the President and Parliament
on his audit of the Government and other bodies managing public funds.

GIC manages risk by investing in a well-diversified portfolio, with a balanced distribution

of asset classes and their underlying business sectors and geographies. This, too, is why GIC's
performance has to be measured on the basis of its overall portfolio rather than by how much it
makes or loses on individual investments. Its approach to "risk management" has three distinct
components: portfolio risk; process risk and people risk.

As a board member of the International Forum of Sovereign Wealth Funds, the successor
of the International Working Group of SWFs that developed the Santiago Principles in October
2008, GIC publishes how it adopts and implements the voluntary set of principles and practices.

26
Organizational Structure

Insurance companies operate under one of two business structures. These structures have
their own unique features, advantages and disadvantages. The structure of the company also drives
the long-term business activity and how the company operates. It may affect the investments it
makes and even the types of policies it designs and sells.

Mutual Structure

A mutual insurance company is an insurance company that is not publicly traded. The
company is effectively owned by the policyholders. Because of this, the interests of the
management are aligned with those of the policyholders in a direct way. The management is
incentivized to work for the long-term benefit of the policyholders, since actions that work against
the policyholders may cause them to leave the company. Mutual insurers generally have only one
way to make money. They must sell new policies. The exception to this is life insurers, which may
also raise funds through interest on policy loans.

Stock Structure

A stock insurance company is publicly traded. The company is not necessarily

disincentivized to work for the long-term best interest of the policyholders. However, the insurer
has to balance the interests of the policyholders with that of outside stockholders. These
stockholders may or may not own policies issued by the company. A stock company may raise
money by selling policies or issuing more stock of the company. In the case of life insurance
companies, stock insurers may encourage policyholders to take policy loans and collect interest
payments.

Changing Structure

A mutual insurance company may demutualize. This means that the company becomes a
stock company. Likewise, a stock company may mutualize. The stock company buys up all of its
outstanding shares and can then do business as a mutual insurer.

Product Incentives

Mutual insurance companies may be incentivized to build and sell certain kinds of products.
This is because policyholders own the company. The insurer may elect to pay dividends to
policyholders. For life insurance companies, this means that whole life insurance which pays
dividends may be favored over universal life insurance which does not.

27
 CHAPTER 6

ROLE OF GENERAL INSURANCE CORPORATION:

General Insurance Corporation of India Limited abbreviated as GIC Re is an Indian public sector
reinsurance company. It was incorporated on 22 November 1972 under Companies Act, 1956. GIC
Re has its registered office and headquarters in Mumbai. It was the sole reinsurance company in the
Indian insurance market until the insurance market was open to foreign reinsurance players by late
2016 including companies from Germany, Switzerland and France. GIC Re's shares are listed on
BSE Limited and National Stock Exchange of India Ltd.

The business of general insurance was nationalised through The General Insurance (Emergency)
Provisions Ordinance promulgated on 13 May 1971 and thereby the business being carried on by
107 entities was consolidated and restructured into four companies namely The New India
Assurance Company Limited, Bombay, United India Fire & General Insurance Company Limited,
Madras, Oriental Fire & General Insurance Company Limited, Bombay and National Insurance
Company Limited, Calcutta (New India Assurance Co. Ltd., United India Insurance Co. Ltd., The
Oriental Insurance Co. Ltd., and National Insurance Company Co. Ltd. respectively).

The General Insurance Business (Nationalisation) Act, 1972 (GIBNA) that followed paved the way
for the Government to take over ownership of these businesses. Accordingly, GIC was incorporated
on 22 November 1972 as a private company under Companies Act, 1956[4] in Bombay and
received its Certificate for Commencement of Business on 1 January 1973.

GIC's stated role was to function as the holding company of the four companies, and superintend,
control and carry on the business of General insurance on behalf of the Government of India.

Provide safety and security: -

Insurance provides financial support and reduce uncertainties in business and human life. It
provides safety and security against particular event. There is always a fear of sudden loss.
Insurance provides a cover against any sudden loss. For example, in case of life insurance financial
assistance is provided to the family of the insured on his death. In case of other insurance security is
provided against the loss due to fire, marine, accidents etc.

Generates financial resources: -

Insurance generates funds by collecting premium. These funds are invested in government
securities and stock. These funds are gainfullyemployed in industrial development of a country for
generating more funds and utilized for the economic development of the country. Employment
opportunities are increased by big investments leading to capital formation.

28
Life insurance encourages savings: -

Insurance does not only protect against risks and uncertainties, but also provides an
investment channel too. Life insurance enables systematic savings due to payment of regular
premium. Life insurance provides a mode of investment. It develops a habit of saving money by
paying premium. The insured get the lump sum amount at the maturity of the contract.

Thus, life insurance encourages savings.

Promotes economic growth: -

Insurance generates significant impact on the economy by mobilizing domestic savings.

Insurance turn accumulated capital into productive investments. Insurance enables to mitigate loss,
financial stability and promotes trade and commerce activities those results into economic growth
and development. Thus, insurance plays a crucial role in sustainable growth of an economy.

Medical support: -

A medical insurance considered essential in managing risk in health. Anyone can be a victim
of critical illness unexpectedly. And rising medical expense is of great concern. Medical Insurance
is one of the insurance policies that cater for different type of health risks. The insuredgets a medical
support in case of medical insurance policy.

Spreading of risk: -

Insurance facilitates spreading of risk from the insured to the insurer. The basic principle of
insurance is to spread risk among a large number of people. A large number of persons get
insurance policies and pay premium to the insurer. Whenever a loss occurs, it is compensated out of
funds of theinsurer.

Source of collecting funds: -

Large funds are collected by the way of premium. These funds are utilised in the industrial
development of a country, which accelerates the economic growth. Employment opportunities are
increased by such big investments. Thus, insurance has become an important source of capital
formation.

29
Facilitate economic development: -

The insurance companies invest money which is collected by way of premiums. They
purchase shares and debentures of companies. They also provide loan to industries.

Sources of employment: -

Insurance companies provide a number of employment facilities directly in the insurance

sector. They are also responsible indirectly for a number of jobs in the industrial and other sector.

Tax relief: -

Premium paid are eligible for tax exemptions. The policy holders can claim insurance
premium as tax-deductible expenses.

Financial Support to family deceased: -

The life insurance provides financial assistance on the Dane of theinsured person
Premium paid are eligible for tax exemptions. The policy holderscan claim insurance premium as
tax-deductible expenses.

Loan to policy holders: -

The policy holders can get housing loans in the case of lifeinsurance police Support

30
 CHAPTER 7

Function of General Insurance Corporation

Definition: -

Insurance is a legal contract (insurance policy) made between two parties, i.e. the insurance
company (known as insurer) and the individualor group (known as insured). Both these parties enter
into a contract under which the insured pays a predetermined sum of money to the insurer (knownas
a premium) with the promise that the company will compensate the insured in the event of a financial
loss (risk) due to the causes that the insurer has agreed to provide a cover for.

The basic principle behind any insurance contract is that the insured would prefer to spend
small amounts of money on a periodic basis against the possibility of incurring a huge unexpected
loss. This concept works because all the policyholders pool in their risks together, and in case there
are any losses arising due to the occurrence of the insured event, the personsuffering the loss will be
compensated up to the extent agreed in the contract.

The function of the General Insurance Corporation of India (GIC):

To carry on the general insurance business other than life, such as accident, fire, etc.

Now, To aid and achieve the subsidiaries to conduct the insurance business.

To help the conduct of investment strategies of the subsidiaries in an efficient and productive
manner.

A company counted upon by our clients to provide IT solutions solving business challenges, on time
and budget utilizing the latest technology.

The company who takes pride in the empowerment of its employees.

A company who are able to design, deploy and manage projects from the business challenges to an
operational production system.

The company who collaborates with customer’s and the technology partners in its drive to provide
solutions.

A company who focuses on the continuous development of new solutions or new markets, services,
or product offerings, or the individual growth and development of its employees and their ideas.

Carrying on of any part of the general insurance, if it thinks it is desirable to do so.

Aiding, assisting and advising the acquiring companies in the matter of setting up standards of
31
conduct and sound practice in the general insurance business.

Rendering efficient services to policyholders of general insurance.

Advising the acquiring companies in the matter of controlling their expenses including the payment
of commission and other expenses.

Advising the acquiring companies in the matter of investing their fund.

Issuing directives to the acquiring companies in relation to the conduct of general insurance
business.

Issuing directions and encouraging competition among the acquiring companies in order to render
their services more efficiently.

Basic Functions of Insurance: -

It is important to understand that an insurance policy has both a financial and an emotional
aspect for the policyholder. There are certain functions that an insurance company must promise to
take care of while theyare finalizing the contract with the insured party. We will attempt to explain
those functions below

To provide safety and security to the insured –

One of the prime reasons for entering into an insurance contract is to seek financial security in
the event of a loss from an unexpected occurrence. Insurance offers support to the policyholder and
helps to reduce the uncertainties in the business or in human lives. With the help of a policy, the
insured party is protected against future hazards, vulnerabilities and accidents. Although no insurer
in the world can prevent the dangerous event from occurring, they can certainly help by providing
some sort of financial protection to compensate the insured party.

Protection for your loved ones–

Medical insurance can help you and your family gets the right sort of treatment and cover
hospitalization expenses. It helps to take care of their health in case of an accident, illness or any other
unfortunate event. The well-being of your family comes before anything, and insurance helps take
care of that in the best possible manner.

Collective Risks –

Another function of an insurance contract is that it helps a number of individuals get an

32
insurance policy to safeguard themselves fromthe losses that may occur due to an unfortunate event.
This strategy workson the principle that not all of the policyholders for a particular risk will face it at
the same time. For example, if a total of fifty thousand people are insured against damage to their
cars due to accidents, the most likely scenario is that only a few of them would have accidents in a
single year. So the amount that they can claim from the insurance company for the financial
losses due to the accidents would be adequately covered by the insurance premiums from all fifty
thousand policyholders.

Risk Assessment –

Insurance organizations play an important role in determining the actual amount of risk from
the occurrence of a particular event by assessing the situation. They analyses all the aspects of a risk
carefully to make an informed decision. It helps them to arrive at the final insurance amount as well
as fix the premium to be paid by the insured.

Certainty –

One of the main benefits of taking a policy for the insured is that they can feel secure about
meeting the future losses after taking coverage for a particular risk. It can be very reassuring for the
insured party and can also help them to proceed with their daily activities in a much more assured
manner without fear or hesitation.

It helps to forestall losses –

An insurance contract can help the insured to mitigate their losses by providing some sort of
security in case of an unforeseen event. It helps businesses have a contingency plan in case things
do not go as planned. Insurance is a very important tool for organizations as it allows them to cover
their bases while operating in a very risky environment where the losses can be huge if they do not
play their cards right. It also allows them to be able to cover these huge risks in their businesses by
paying a relatively small amount as the premium.

Fulfill the legal requirements –

In some countries, any business is required to have certain insurance covers in order to engage
in any economic activity. So the insurance company can help organizations fulfill these
requirements.

33
It allows the development of big businesses –

Any large sized organization is exposed to a greater amount of risk. If the chances of loss are
relatively higher, it may prevent the management in those organizations from taking calculated risks,
which has the potential of bringing more profits. Insurance helps to mitigate that risk in a way and
encourage businesses to take bold decisions. Insurance takesaway some of the financial pressures and
allows businesses to flourish in the long run.

It can help in boosting the economy –

When the businesses have sufficient insurance cover, they can increase their scope of
economic activity that will bring commensurate rewards. This can provide an impetus to the overall
economy of a country in the long run.

Conclusion:

There are several functions of insurance in the everyday life of both an individual as well as a
business. It provides a safety net against the uncertainties of life and helps to minimize the loss for
the insured, and give them some sort of comfort in the face of a loss or tragedy. It is important for us
to look at insurance as a necessity in our life that can help protect us bothfinancially and emotionally
in the long

34
 CHAPTER 8

TYPES OF GENERAL INSURANCE CORPORATION

Types of Insurance

. health insurance

. car insurance

. life insurance

. homeowners’ insurance

. umbrella insurance

. renters’ insurance

. travel insurance

. pet insurance

. Fire Insurance

35
 THIS TYPES OF GIC

After having gone through the following points, one can get an answer to the question of
how many types of insurance are there?

Health Insurance
Health insurance is a contract that is formed between a health insurer and a policyholder. This
policyholder is also known as the insured person. In this contract, the health insurer agrees to pay
the full medical cost of the insured or just a portion of it.

Car Insurance

Vehicle insurance covers cars, motorcycles, trucks and all the other vehicles running on the
road. This insurance is meant for giving protection against any physical damage or bodily injury
that the vehicle suffers from recklessness or an accident. All the cost incurred to repair the vehicle is
met by the insurance company.

Life Insurance
Life insurance is a contract in which the beneficiary is paid a fixed amount of money by the
insurer after the death of the insured. The beneficiary uses this money to clear out the debts of the
insured and also to meet his/her financial expenses after the death of the insured. The beneficiary is
usually the spouse of the deceased. The beneficiary’s name is mentioned in the contract.

Homeowners Insurance
Homeowners' insurance protects one's house from the uncertainty of any damages. The
insurance covers the house the insured person resides in and other associated structures connected to
the house such as the balcony, garage and porch. The insurer will provide the amount incurred to
repair any damage in the house or its associated structures.

Umbrella Insurance

Umbrella insurance is also known as liability insurance. It covers the cost that is incurred in
excess of other insurance policies. It gives a person extra coverage on another type of insurance
policy that he/she is in.

Renters Insurance

36
 Renters insurance is meant for tenants who use it to protect their personal property from any
damage or theft. The insurance covers all the assets owned by the tenants. This is done because the
landlord doesn't take any responsibility for the assets of the tenant. Nowadays, landlords are not
allowing tenants who don't have renters’ insurance.

Travel Insurance

Travel insurance is good for those people who travel a lot. It covers trip cancellations, lost or
misplaced luggage, travel accidents and even medical expenses.

Pet Insurance
Pet insurance is meant for meeting all the expenses that are incurred concerning the sickness and
accidents of the pet. All the medical expenses of the pet are taken care of by the insurer.

Fire Insurance

Fire insurance is a type of property insurance that covers loss or damage caused to your office
buildings, home or any other site/place where you run your business. Purchasing this insurance
policy helps to cover the repair cost, replacement cost or reconstruction of property as per the sum
insured amount specified in the policy.

Why is Fire Insurance important?

Let us understand the fire insurance meaning and why is it a wise choice. Here are some of the
features of fire insurance that indicate why you should purchase it.

• Protection against any loss or damage caused due to any movable or immovable object that turns
into a fiery explosion.

• A fire policy covers property damage such as furnishings, office building, machinery, stock, etc.
due to a fire accident.

• Besides, fire perils, a burglary insurance policy also provides coverage for the damages caused due
to any natural calamity, explosion, bursting of the water tank, etc.

Types of Fire Insurance in India

Here are the types of fire insurance policies in India that you can purchase:

Standard Fire & Special Perils: This is a type of fire insurance contract between the insurer and
insured that provides coverage for the loss or damage caused to the building, plan & machinery,
stock and other assets for a sum insured exceeding Rs 50 Crores.

There are 5 types of policies specifically under Standard Fire & Special Perils insurance (SFSP).
They are as follows:

37
Specific Policy: A specified sum insured is determined for a particular property and in case of loss
the actual loss does not exceed the chosen insured amount

Comprehensive Policy: This policy provides extensive Coverage not only against fire related perils
but also provides coverage against any other perils, such as robbery, burglary, civil rampage, etc.

Valued Policy: At the intimation of the policy, the value of a particular property is determined.
Instead of the current market value, the indemnity of the policy is determined which is based on the
value of the property. So, the agreed value at the property.

Floating Pole: If you don’t with fluctuating stocks in different areas. This policy prontidos
coverage for one or more goods at the same time andor one granum and ne samm assured

Valuable Riley: The claim amount is decided according to the current market price of the damaged
proports.

All these insurances are provided by different types of insurance companies.

38
 CHAPTER 9

DOCUMENTATION AND CLAIM SETTELMENT

Documents required for insurance policies:

In India, insurance policies are required to be backed by documents. These documents are
proof of the existence of a policy and its validity. They also provide information about who is
covered under the policy and what kind of coverage it provides.
Documentation is necessary for any type of insurance policy, including life insurance, car
insurance, bike insurance, and health insurance. To be valid in India, these policies need to have a
police verification certificate from the state where they were issued. The document must also have
an attestation from an Indian consulate or embassy in that country.

Buying insurance plans has become quite simple due to the availability of an online platform that
allows you to buy a policy from your home or office. Whenever you buy insurance whether online
or through insurance agents, you are required to submit a set of documents to the insurance
company.

An insurance policy is a legal contract and thus, to establish the legality of the contract,
insurance documents are needed. After the insurance company verifies the submitted documents,
the insurance policy is issued. Moreover, at the time of an insurance claim, a specific set of
39
 documents would have to be submitted for claim settlement.

What is an Insurance Document?

An insurance document is a legal instrument that protects against financial loss due to injury,
property damage, or death. Insurance documents are issued by an insurance company to individuals
or businesses. They are designed to provide for the payment of a sum of money in the event of
injury, property damage, or death.
An insurance document is a document that has been created by an insurance company to
protect the insured from a loss. A document is a legal contract between the insured and the insurer.
The main purpose of an insurance document is to provide financial protection for its holder. It
can be used by individuals, businesses, or governments. Insurance documents are created to cover
different types of risks such as property damage, health, life, and Car.
A common example of an insurance document would be car insurance which protects the
car owner against any damages that may occur to their vehicle in case it's involved in an accident,
theft, or vandalism.

Why are Documents Required for Insurance Policies in India?

In India, it is mandatory to have an insurance policy before starting any business. To get a
license from the government, you will need to provide a copy of your insurance policy as well as
other documents.
The Indian government requires that all businesses have an insurance policy before they
can start operating. This is done to protect both the business and its customers from any financial
loss that might occur due to accidents or other disasters. For a company to receive a license, they
will also need copies of their insurance policy and other related documents.
Documents are required for insurance policies in India because they help to establish that
the person who is applying for the policy is the insured. The documents required for insurance
policies in India can vary depending on the type of policy and the company offering it. For example,
some insurance companies require a copy of your passport, driving license, and credit card
statement as well as your bank statement.

Find Policy Documents for Car, Life, Health, and Bike:

1.) Documents Required for Car Insurance:

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a.) Buy:

Documents required for car insurance in India are: -

 Birth Certificate

 Voter ID card

 PAN Card

 Aadhaar Card

 Driving License

 Car registration certificate

 Car registration number

 Old car insurance policy number

 Passport.

New car insurance:

 Aadhar Card Number

 Chassis Number

 Engine Number
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  Body Type

 Fuel Type

 Vehicle Colour

 Manufacturer Details

 Model Details

 Registration Number

 Full Name of the Owner.

b.) Renewal:

 Government-issued ID proof (PAN card/ Aadhar card/ Passport/Photo ID)

 Address proof (Passport/Driving License/ Bank passbook/)

 Recent Photograph

 Driving License

 Vehicle registration number

 Registration certificate

 PUC certificate/Pollution test certificate

 Old motor insurance policy number

 Credit or debit card details for online banking.

c.) Claim Process:

Documents Required for Car Insurance Claim Settlement:

 Duly signed and filled claim form

 Insurance Policy Document

 Car’s Registration Certificate (RC)

 Driver’s license (DL)

 Pollution Under Control (PUC) Certificate

 Original receipt/bills of repairs (in case of reimbursement claim)

 FIR (in case of fatal injuries/accidents or third-party liabilities)

 A copy of PAN Card (if the claim amount is more than Rs. 1 lakh).

 Duly signed Satisfaction Voucher (SV) or Discharge Voucher (DV)

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 Accidental Death Claim: -

 Death certificate

 Post-mortem report

 Medical certificate

 FIR report

 Medicine bills.

2.) Documents Required for Health Insurance:

a.) Buy:

List of Documents Required for Health Insurance Policy

 Proof of Age such as Passport/driving license/Aadhaar card/PAN card/Birth certificate, 10th or 12th
marks sheet, etc.
 Proof of Address such as Aadhaar/telephone bill/ power bill/ration card/ pan card/driving license

 Passport Size Photograph

 Medical reports in case needed.

b.) Renewal:

Documents Required for Health Insurance Renewal

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  Old insurance policy number

 Policy renewal notice

 Proposal form

 Photographs

 Premium Cheque

 Mandate letter.

c.) Claim:

 Original investigation reports

 Pharmacy bills along with the prescription

 Final hospital discharge summary

 FIR or post-mortem report if happened

 Original bills, receipts, and discharge report

 Original hospital bills and a valid photo ID proof

 Treating doctor's report, and original consultation notes

 Nature of operation performed and surgeon's bill and receipt

 Indoor case papers and duly-filled claim form

 Test reports along with attending doctor’s or surgeon’s report.

3.) Documents Required for Life Insurance:

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 a.) Buy:

To buy a life insurance policy, the following documents would be required: -

 Life insurance proposal form, duly filled and signed by the proposer and/or the life insured

 Photograph of the proposer

 Photograph of the life insured (if different from the proposer)

 Age proof of the proposer and/or the life insured

 Identity proof of the proposer and/or the life insured

 Address proof of the proposer

 Medical examination report of the life insured if required by the policy because of the age and/or the
sum assured chosen
 Income proof of the proposer if the sum assured and/or the premium of the policy is high

 PAN card of the proposer.

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b.) Renewal:

 Life insurance proposal form, duly filled and signed by the proposer and/or the life insured

 Photograph of the proposer

 Photograph of the life insured (if different from the proposer)

 Age proof of the proposer and/or the life insured

 Identity proof of the proposer and/or the life insured

 Address proof of the proposer

 Medical examination report of the life insured if required by the policy because of the age and/or the
sum assured chosen
 Income proof of the proposer if the sum assured and/or the premium of the policy is high

 PAN card of the proposer

 Old life insurance policy copy/number

c.) Claim Process:

Documents Required for Life Insurance Claims:

 Original Policy Documents

 Claimant’s Photo ID Proof

 Claimant’s Address Proof

 Claim Forms (Duly signed and attested)

 Death Certificate attested by the local authorities

 Copy of Cancelled Cheque/Bank Statement/Bank Passbook

 Copy of FIR/Post Mortem Reports/Punch Nama.

 Medical Records (including hospital discharge summary).

Maturity or Survival Claims:

 Discharge voucher sent by the insurance company, duly filled and signed by the policyholder

 Life insurance policy bond

 Identity proof of the policyholder, legal heirs or assignee as the case may be, Bank account details of
the policyholder, legal heirs or assignee as the case may be, Age proof of the insured member if it
was not submitted at the time of buying the policy.
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Death Claims:

 The death claim form, duly filled and signed by the nominee

 Life insurance policy bond

 Death certificate of the life insured

 Identity proof of the nominee, legal heirs, or assignee as the case may be Bank account details of the
nominee, legal heirs, or assignee as the case may be Police FIR if death happened due to an accident
 Post-mortem report, coroner’s report, police inquest report, panchnama, and other relevant records if
death happened in an accident
 Any other document as needed by the insurance company to settle the claim.

4.) Documents Required for Two-Wheeler Insurance:

a.) Buy:

 Proof of identity such as Ration card/ voter ID/Driving license/ passport/Aadhaar Card

 Proof of Address such as Aadhaar Card/telephone bill/ power bill/ration card/ pan card/driving
license
 Registration certificate of the bike

 Old policy number, if have.

b.) Renewal:

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 Documents required for old policy renewal:

 Policyholder’s details such as name date of birth, gender, address, occupation

 Driving license of Policyholder

 Vehicle registration certificate number and registration number

 Old two-wheeler insurance policy number

 Net banking/credit/debit card details.

Transfer and renew your insurance policy:

 Policyholder’s details such as name, address, date of birth, gender, occupation

 Identity proof such as passport/driving license/Aadhaar card/PAN card/Birth certificate, 10th or 12th
marks sheet, etc.
 Proof of address documents (passport/driving license/bank or post office passbook/government-
issued address proof)
 Passport-sized photograph

 Policyholder’s driving license information

 Old insurance policy number

 Vehicle registration number and registration certificate (RC) number

 Credit/debit card/ net banking details.

b.) Claim:

Documents required submitting to the insurance company to process your claim.

 Original RC copy in case of Theft claim

 Driving license of the driver at the time of the accident

 Original policy copy

 Duly filled and signed claim form

 Description of the accident

 Canceled cheque to process the payment

 FIR in case of theft claim

 Details of other vehicles involved or any third-party claims which can arise in future

 An estimate of the vehicle repair cost

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 Repair bills and payment receipts.

Documents Required To File Fire Insurance Claim

The following is the list of common documents. which will be required while filling any claim
related to fire insurance

. An authorised copy of the policy, which includes the schedule and clauses
. The complete duly filled claim form
. In case, if the incident is published a proof to substantiate the same such as a Newspaper proof
. Records of previous claims, if any
. Photographs
. Report by the fire brigade.
. Forensic report wherever is needed.
. A copy of the final investigation report
. to take care of the possibilities. It is better to be safe than sorry.
The truth is that if you own a business, it is always vulnerable to risks despite the precautions you
undertake or you use the technological advancements. It is better An authorised copy of the policy,
which includes the schedule and clauses

Conclusion:

These documents are necessary to buy an insurance policy or make a claim in it. You
should, therefore, keep the documents handy in both these instances so that you can buy an
insurance policy easily and also get the claim settlement of your insurance claims without any
hassles.

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 Chapter 10

Conclusion:

There is a probability of a spurt in employment opportunities. A number of web sites are

coming up on a few financial magazines exclusively devoted to insurance and also a few training
institutes being set up hurriedly. Many of the universities and management institutes have already
started orare contemplating new courses in insurance.

Life insurance has today become a mainstay of any market economy since it offers plenty of
scope for game ring large sums of money for long periods of time. A well-regulated life
insurance industry which moves with the times by offering its customers tailor- made products to
satisfy their financial needs is, therefore, essential if we desire to progress towards a worry-free
future.

Insurance is a large investment and you will most likely purchase multiple policies
throughout your lifetime. It is essential that you know what each type of insurance covers and how
it works so you can make the best decision about what to buy. Do not base your decision on just
what is cheapest, but look at what it provides.

Take the time to shop around and find the right insurance for your situation. People often say
they cannot afford insurance, but the reality is that they cannot afford not to have it. It can save them
from thousands or more dollars in unplanned expenses when unexpected situations arise. You do
not want to waste your money on policies that do not meet your needs, but the right insurance policy
can protect you and your family from unforeseen disasters.

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 CHAPTER 11

Bibliography

https://www.google.com/search?q=www.gic&rlz=1C1CHZN_enIN1023IN1023&oq
=www.GIC&aqs=chrome.0.0i512l3j0i10i512j69i60l4.9980j0j15&sourceid=chrome&
ie=UTF-8

https://www.gicre.in/en/tenders-notices/summary/30-sd/141-notice-for-cancellation-
of-selection-process-of-registrar

Www.gicof India.com

Www.Insurance.com

Www.Insurance india.com

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