insurance

INSURANCE
(Governed by Insurance Act -1938,Now By IRDA act-1999)

History:-

India:- First Indian insurance company

was Calcutta Insurance Company which
setup in 1798 exclusively for
Europeans. The Bombay Life
Assurance Society formed in 1870
Insured Indians first time.

Indian life assurance companies act ,1912 was first

. statutory act to regulate life business.

In 1928 the indian insurance companies act enacted.

In 1938 insurance act amended to consolidate
legislation and effective control over the activities of
insurer.

19th Jan.1956

LIC is formed by absorbing 154

Indian,16 non-indian insurer and 75 provident

societies.

GIC was Incorporated as a company in Year 1971 .

In
. 1972 General Insurance Business(nationalization)
Act passed with effect from 1st Jan 1973 GIC is
formed by amalgamation of 107 insurer and 4
company formed named as
national Insurance Co. Ltd.
the new India Assurance Co. Ltd.
the Oriental Insurance Co. Ltd.
the United India insurance co. Ltd.

Cont
In Dec. 2000 subsidiaries of GIC were

restructured as independent company.

And in July 2002 parliament passed a bill
of De-linking of four subsidiaries of GIC.
Today there are 14 General insurance
companies including ECGC &
Agricultural insurance corporation of
India and 14 life Insurance company
operating in India.

IRDA
In 1993 Government setup a committee

under chairmanship of RN Malhotra ,former

Governor of RBI for reforms in Insurance
sector.
Recommendations are :IRDA was constituted as an autonomous
body to regulate and develop the
insurance industry.
Foreign companies are allowed up to 26%
of paid up capital and can operate with an
Indian company.

Composition of Authority under

IRDA Act, 1999
The Authority is a ten member team

consisting of
(a) a Chairman;
(b) five whole-time members;
(c) four part-time members

Duties, Powers and Functions of

IRDA
To regulate, promote and ensure orderly

growth of the insurance business and reinsurance business.

Issue to the applicant a certificate of
registration, renew, modify, withdraw,
suspend or cancel such registration .
Protection of the interests of the policy
holders in matters concerning assigning of
policy, nomination by policy holders, insurable
interest, settlement of insurance claim,
surrender value of policy and other terms and
conditions of contracts of insurance;

Cont.
Specifying requisite qualifications, code of

conduct and practical training for intermediary

or insurance intermediaries and agents.
Specifying the code of conduct for surveyors
and loss assessors.
Promoting efficiency in the conduct of
insurance business.

Cont..
Levying fees and other charges for

carrying out the purposes of this Act

Calling for information from, undertaking
inspection of, conducting enquiries and
investigations including audit of the
insurers, intermediaries.
Control and regulation of the rates,
advantages, terms and conditions that
may be offered by insurers in respect of
general insurance business .

Cont
Specifying the form and manner in which

books of account shall be maintained and

statement of accounts shall be rendered by
insurers and other insurance intermediaries.
Regulating investment of funds by insurance
companies.
Regulating maintenance of margin of
solvency
Adjudication of disputes between insurers and
intermediaries or insurance intermediaries.

Definition:Insurance is pooling of risks. In

contract of insurance, the insurer
(insurance company) agree in
consideration of a sum of money
(premium) , to make good the loss
suffered by the insured against a
specified risk such as fire , accident
etc .

Life insurance
Contracts of insurance upon human

life, including any contract whereby

the payment of money is assured on
death (except death by accident only)
or the happening of any contingency
dependent on human life.

Type of Life Insurance

Term Insurance Policy

Whole Life Policy
Endowment Policy
Money Back Policy
Annuities And Pension

Term assurance planIn insurance language this is a pure

risk cover. In case of your untimely
death, your dependents will receive
the risk-cover amount or the sum
assured. On the other hand, there is
no survival benefits if you survive the
policy term, and you also do not get
back the premiums paid.

Whole
plan-

life

This policy provides the life

assurance cover for almost the entire
life. Most of the insurance companies
provide protection up to the age of
100 years. The sum assured is paid to
you once you reach this age, and the
policy is terminated.

Endowment assurance
plans-

It is a traditional investment-cuminsurance plan. In other words, it

provides both life cover (in the event
of death of life insured) or maturity
benefits if he/she survives the policy
term.

Pension planA pension plan can be looked as more

of an investment product offered by
insurers to cater to the golden
retirement years of an individual. Also
referred to as retirement plans, these
are designed to ensure that you are
financially independent during your
retirement years.

ANNUITIES
Annuities are annual payments made by the
Insurer to the Annuitant in return for a lump
sum or periodical payment made by the other.
The annuities can be purchased in two ways
1. Immediate annuity: here the purchaser pays
a single one time payment to the Insurer and
desires that annuity to flow immediately
2. Deferred annuity: Here the purchase price is
paid by the buyer in installments and annuity
starts after the corpus is built.

List of Life Insurers..

Life insurance corporation of india

Bajaj Allianz Life Insurance Company

Limited
Birla Sun Life Insurance Co. Ltd
HDFC Standard life Insurance Co. Ltd
ICICI Prudential Life Insurance Co. Ltd.
ING Vysya Life Insurance Company Ltd.
Life Insurance Corporation of India
Max New York Life Insurance Co. Ltd
Met Life India Insurance Company Ltd.

General Insurance
Insurance of the non life assets are
called general insurance, this includes
loss of asset against water, fire,
earthquake, Fire and allied perils, flood,
storm and inundation, policies covering
machinery against breakdown etc.
In Indian Market General Insurance
corporation (GIC) have the monopoly

Fire Insurance
Fire insurance is a comprehensive policy,
which goes beyond only fire accidents.
The policy, besides covering loss on
account of fire, also covers loss on
account of the following
o Earthquake
o Malicious Intent
o Floods
o Riots
o Strikes

Cargo/marine insurance:
A generic term used in both inland
marine and ocean marine insurance to
designate the types of insurance
available to provide coverage for
cargo that is being transported by
truck, rail, air, ship, or boat.

Motor Insurance
Motor insurance is mandatory for all types

of vehicles in India.
There are two types of motor insurance viz
o Third party, which only insures the party /
parties their than the owner in an accident
o Comprehensive, which insures the owner
as well as the third party involved.

The premium for motor vehicles is

decided on the following factors:

Value of the vehicle
Location where it is to registered. places
having higher claim rates (like Mumbai)
are likely to have higher premium
The premium for heavy commercial
Value of the vehicle
Gross laden weight, that is, the carrying
capacity of the vehicle.

Health/ medical
insurance:
This cover only two type of benefits
Re-imbursement of medical expenses

related to specific diseases and

Hospitalization

GROUP INSURANCE
Group Insurance is a device by which

members belonging to a homogeneous

group can be given insurance cover
under a single contract. The contract is
renewable every year. At the time of
renewal, based on the previous years
experience, the premium may get
revised. This is called experience rating.

Burglary insurance
Burglary insurance covers all losses

arisen out of burglary committed in ones

premises.
The only condition for lodging a claim
on the insurance party is that there should
be a forced entry in to the premises. A
forced entry may in the form of physical
damage to the entry area, or to a person or
entry gained through coercion.

General insurance companies

Cholamandalam MS General Insurance
HDFC Ergo General Insurance Company
ICICI Lombard General Insurance
IFFCO Tokio General Insurance
National Insurance Company Ltd
New India Assurance
Oriental Insurance Company
Reliance General Insurance
Royal Sundaram Alliance Insurance
Shriram General Insurance Company Limited
Tata AIG General Insurance
United India Insurance
Universal Sompo General Insurance Co. Ltd

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