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In 1956, 245 Indian and Foreign life insurers and provident societies were nationalized, and new single entity namely LIC was established by passing the LIC Act, 1956. Similarly, in 1972, 107 general insurers were nationalized through the passing of General Insurance Business (Nationalization) Act, 1972. The existing 107 insurers were amalgamated and grouped into Five companies, viz., National Insurance Company (NIC), New India Assurance Company (NIAC), Oriental Insurance Company (OIC), United India Insurance Company (UIIC), and General Insurance Corporation (GIC). Then insurance industry transformed into monopoly and Oligopolistic state or public sector insurance industry in India. After liberalization in 1991 insurance sector open for private players.
In 1999, the Insurance Regulatory and Development Authority (IRDA) was constituted as an autonomous body to regulate and develop the insurance industry. The IRDA was incorporated as a statutory body in April, 2000. The key objectives of the IRDA include promotion of competition so as to enhance customer satisfaction through increased consumer choice and lower premiums.
Today there are 24 general insurance companies and Agriculture Insurance Corporation of India and 23 life insurance companies operating in the country.
The health insurance business constitutes more than 25 per cent of the general insurance industry in India. Health insurance premium collection during the April-September period of 2011-12 rose 21.3 per cent to Rs 6,721.53 crore (US$ 1.36 billion) from Rs 5,540.34 crore (US$ 1.12 billion) in the year-ago period
Recent Developments
Health insurance policies are on their way to get 'age-free'. Though the proposal is still at a nascent stage, IRDA has already taken a step towards this concept by making it mandatory for policies to have 'life long' renewal clause. This implies that once a health insurance policy is issued, an insurer would be obliged to continue renewing such a policy during the policyholder's lifetime. However, the entry age barrier would continue to be there Some general insurance companies have already started applying for such 'age-free' policies. For instance, Apollo Munich Insurance applied for such a policy a few months back and is awaiting regulator's approval. State-owned Life Insurance Corporation (LIC) would buy 5 per cent stake in Punjab & Sind Bank. The bank's proposal to issue 11.2 million fresh shares is awaiting Securities and Exchange Board of India (SEBI)'s decision regarding the rate and is eventually subject to approval from the Government of India and other regulatory entities
HDFC Life, a private life insurance company and a JV between India's Housing Development Finance Corporation Ltd (HDFC) and UK's Standard Life plc has launched its first international operations with the opening of its representative office in Dubai. The launch comes as a result of the company's strategy to serve large non-resident Indian (NRI) base in the Gulf region.
RISK MANAGEMENT
RISK
Risk refers to the possibility that actual outcome of an investment will differ from its expected outcome.
RISK MANAGEMENT
Risk Management refer to the process of identify loss exposure faced by an organization and selecting most appropriate technique for treat such exposure.
OBJECTIVE
To reduce the uncertainty Stability of earning To meet out the legal obligation Continuous operation Growth of firm To reduce the anxiety
Evaluate potential loss: This means measuring the potential size of the loss and the
probability that it is likely to occur.
The four basic techniques subsumed under the broad approaches of risk control and risk financing.
The decision is made to retain a risk. This may be accomplished with or without a reserve and with or without a fund. If the plan is to include the accumulation of a fund, proper administrative procedures must be set up to implement the decision. If loss prevention is selected to deal with a particular risk, the proper loss-prevention program must be designed and implemented. The decision to transfer the risk through insurance must be followed by the selection of an insurer, negotiations, and placement of the insurance