Definition of insurance

An agreement between the insurance company and the

policyholder that underlies the premium collection by the insurance
company. Insurance is a people's choice that minimizes risks that can
cause loss of life or property of a person by transferring the loss to an
insurance company. The benefits of insurance are very important and
of great significance today, including:
a. Insurance can provide a sense of security or a sense of security in
running a business. Because even if you suffer a loss, you will receive
compensation from the insurance company.
b. Insurance can increase efficiency and company activities.
c. Insurance tends towards a reasonable cost valuation estimate.
d. Insurance is the basis for consideration of granting a credit.
e. Insurance can reduce the incidence of losses.
f. Insurance is a tool to form income capital for future expectations.
g. Insurance is a development tool.

INSURANCE HISTORY
History of insurance before Christ
Insurance to transfer risk, it turns out, has been used by Chinese and
Babylonian (Iraq) merchants and traders since BC. So it became
common for merchants or creditors to provide ships and some money
to give ships and some money as collateral.
 What is used as collateral for the ship is a sailing ship, the loan is
called Bottomry. and if what is used as a loan is trade goods/load, then
the loan is called a respondia.
The birth of the world's first insurance company
Development insurance in the following year in the UK. Its place in
london, stood the first insurance company in the world. Which was
founded in 1688. The insurance company offers a trade insurance
product that provides protection against the movement of export cargo
ships by sea.
Insurance in the post-independence period of Indonesia
Insurance is growing rapidly and can already be felt by indigenous
peoples. Dutch owned insurance named Nederladsh Indisch Leven
Verzekering En Liefrente Maatschappij was taken over by the
Indonesian government PT. Asuransi Jiwasraya. Followed by boemi
poetra life insurance in 1912.
It turned out that after independence there were also insurance
mergers in the territory of Indonesia. An example is PT. Asuransi
Bendasraya and PT. General Internasional Underwriters becoming
PT Asuransi Jasa Indonesia, which is more familiar with Jasindo
insurance.

Insurance Transaction & Documentation

1.Types of Transaction:
-Direct
-Insurance Agent
-Insurance Broker
-Bank/Leasing (As Kreditor) & Bancassurance (Lapak)
-Other
Types of Insurance Transactions
1. Director / Come directly to the insurance company.
Consists of 2 actors; Insurance company > Customer
Note: Theoretically more economical, Unbalanced, Benefit of the doubt
2. Agent
Consists of 3 actors; Insurance company > Agent > Customer
Note: Insurance knowledge, market knowledge, representing insurance, problem:
misselling, premiums
3. Brokers
Consists of 3 actors; Insurance company > Broker > Customer
Note: Insurance knowledge, market knowledge, representing the insured, No “Benefit of
the
doubt”, Appointment Letter

Co-insurance; -One biz is covered by several insurances

-There are leaders and members
Bank: Banks insure their assets, directly or collateral
Bancassurance: -Explore the biz of the customer's bank
- Practically the bank as an intermediary
Leasing: -Similar to the bank above
-In Indonesia, it is very dominant in the motor biz
Affinity Group: -Can be through associations or associations
Consortium: -Biz closed together, similar to co-insurance but done for the portfolio

Types of Reinsurance Transactions – Actors

Insurance > Broker Re > Reas X
 Reas Y
 Reas Z
Insurance > Reas Z
Insurance > Reas Q

1. Steps Of Transaction
Type Of Transaction
-Direct; Insurance Company > Customer
Process Flow: -Fill SPPA
-Survey
-Offer
-Negotiations
-Agreement
-Cover Note
-Policy
-Premium
Required documents:
-SPPA: -Proof of request for asutransi
-Often with risk information
-Survey Report: -From the insurance officer
-For a rather large risk and above
-Insurance Offer: -Made by the insurance company
-Policy: -Contract of insurance
- Standard or taylor made
Debit/Credit Note: -Exit : Proof of invoice
-Depth: Basic accounting/financial records
-Agent: Insurance Company > Agent > Customer or
-Broker : Insurance Company > Broker > Customer
Flow of Life Insurance Processes; -Intro
-Explain
-Query
 -Proposal
-Illustration
-Agreement
-SPAJ + Premium
- Policy
General Insurance Process Flow: -Appointment Letter
-Survey
-Offer Slips
-Consent negotiations
-Cover Note
-Police to Agent
-Policy to the Customer
Required documents:
-Appointment Letter: Appointment of the customer's agent
-Survey report: Independent surveyor, or insurance or agent
-Offer Slip: Created by the insurer
-Policy: Insurance contract, Standard or taylor made
-Debt/Credit Note: Exit: invoice proof,
Into: basic accounting/financial records
1. POLICY
A schedule: Printed wording contract (General Conditions, General Exceptions,
Definitions, Scope, Special Exceptions, Claims Procedure)

Hold Cover: Guarantee has been given "My Word Is My Bond"

Binder: Granting power of attorney to third parties to receive biz in accordance with
predetermined requirements
Cover Note: The guarantee statement document has been provided, before the policy is
issued
Open Cover: Similar to a binder but usually given to the insured directly
BINDER
> Scope of Biz, Terms and Conditions, Monetary Limits, etc
1. A kind of power of attorney given to a broker/agent to accept biz without individual approval
from insurance
2. Usually for small/medium biz, with the goal of efficiency and speed
3. Periodic reports to insurance
4. Although it has not been reported to insurance, if there is a claim it will be paid

OPEN COVER
• >Type of Biz, Terms and Cond, Monetary Limit, etc
• Guarantee from insurance that the type of biz according to the requirements will be
automatically guaranteed by insurance
• Commonly found in Marine Cargo biz where there are many biz and need speed of
acceptance
• Periodically reported to insurance (declaration) and premiums will be billed/paid
• Even though it hasn't been reported yet, if there is a claim, the insurance is already
responsible
• Generally given to certain customers

• TERMINOLOGIES
• Insured Name: The named insured is the actual person (person/business) mentioned in the
policy, there may be more than 1 name insured and can usually be found on the first page.
The name and data of the insured located in the policy heading.
• Period: the insurance grace period is the time limit to determine how much longer the
customer's insurance policy will still be active after not paying the premium.
• Interest: Insurable interest is an insurance principle that gives the legally recognized insured
the right to insure life or assets, due to a financial relationship between the insured and the
life or assets to be insured.
• Location: Location of coverage (Building)
• Sum Insured: Sum Insured/Sum Insured = The price of the insured motorized vehicle listed
in the policy, is also the maximum limit of reimbursement that the customer is entitled to
receive
• Rate: Guidelines for determining the upper and lower limits for car insurance premium
rates regulated by the Financial Services Authority (OJK).
• Premium: Guaranteed money that must be paid regularly by a person/institution to enjoy an
insurance policy
• Clauses: Clauses. In an insurance policy, sentences and paragraphs describing the various
coverage insurance coverage, exclusions, obligations of the insured, the location of the
covered, and conditions that delay or terminate the insurance.
• Warranties (Premium Warranty, FEA Warranty, House Keeping Warranty, Seaworthiness
Warranty, ETC): In an insurance policy, a warranty is a promise or guarantee. Warranty is an
agreement made by both parties (the insured and the insurer) which must be carried out with
full responsibility by the insured.
• Deductible: Deductible or also known as own risk | deductible, describes a certain amount
that the policyholder must pay in the event of a claim.