Download VTU (Visvesvaraya Technological University) MBA 4th Semester (Fourth Semester) 16MBAFM402-Risk Management and Insurance RMI Module 6 Important Lecture Notes (MBA Study Material Notes)
MODULE 6
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General Insurance
MODULE 6
General insurance
? First general insurance company in India,
called Triton insurance co was started in 1850 in
Calcutta.
? First general insurance co with Indian promoters
was started in 1906-07, by the name Indian
merchantile Insurance company
? Following world war 1 several foreign
companies started general insurance in India
having about 40% market share at the time of
lndependence.
FirstRanker.com - FirstRanker's Choice
General Insurance
MODULE 6
General insurance
? First general insurance company in India,
called Triton insurance co was started in 1850 in
Calcutta.
? First general insurance co with Indian promoters
was started in 1906-07, by the name Indian
merchantile Insurance company
? Following world war 1 several foreign
companies started general insurance in India
having about 40% market share at the time of
lndependence.
Laws related to general
Insurance
? General insurance in India is governed by the Insurance Act
of 1938 which was later amended in 1969.
? Nationalisation of all companies by the General insurance
nationalisation Act , 1972. GIC covered 107 companies
? GIC was entrusted with responsibility of superintending,
controlling, and smooth conduct of the sector with its 4
subsidiaries in all zones of India.
? Following laws also touch upon general insurance:
- The motor vehicles act, 1939
- The inland steam-vessels (amendment act), 1977
- The marine insurance act, 1963
FirstRanker.com - FirstRanker's Choice
General Insurance
MODULE 6
General insurance
? First general insurance company in India,
called Triton insurance co was started in 1850 in
Calcutta.
? First general insurance co with Indian promoters
was started in 1906-07, by the name Indian
merchantile Insurance company
? Following world war 1 several foreign
companies started general insurance in India
having about 40% market share at the time of
lndependence.
Laws related to general
Insurance
? General insurance in India is governed by the Insurance Act
of 1938 which was later amended in 1969.
? Nationalisation of all companies by the General insurance
nationalisation Act , 1972. GIC covered 107 companies
? GIC was entrusted with responsibility of superintending,
controlling, and smooth conduct of the sector with its 4
subsidiaries in all zones of India.
? Following laws also touch upon general insurance:
- The motor vehicles act, 1939
- The inland steam-vessels (amendment act), 1977
- The marine insurance act, 1963
? The carriage of goods by the sea act, 1925
? The merchant shipping act, 1958
? The bill of lading act, 1956
? The indian ports (major ports) act, 1956
? The indian railways act, 1989
? The carriers act, 1965
? The indian post office act 1898
? The carriage by air act, 1972
? The multi-modal transportation act, 1993
? The public liability insurance act, 1991
? The indian stamp act, 1899
? The consumer protection act, 1986
Read P K Gupta old book for explanation page 51
FirstRanker.com - FirstRanker's Choice
General Insurance
MODULE 6
General insurance
? First general insurance company in India,
called Triton insurance co was started in 1850 in
Calcutta.
? First general insurance co with Indian promoters
was started in 1906-07, by the name Indian
merchantile Insurance company
? Following world war 1 several foreign
companies started general insurance in India
having about 40% market share at the time of
lndependence.
Laws related to general
Insurance
? General insurance in India is governed by the Insurance Act
of 1938 which was later amended in 1969.
? Nationalisation of all companies by the General insurance
nationalisation Act , 1972. GIC covered 107 companies
? GIC was entrusted with responsibility of superintending,
controlling, and smooth conduct of the sector with its 4
subsidiaries in all zones of India.
? Following laws also touch upon general insurance:
- The motor vehicles act, 1939
- The inland steam-vessels (amendment act), 1977
- The marine insurance act, 1963
? The carriage of goods by the sea act, 1925
? The merchant shipping act, 1958
? The bill of lading act, 1956
? The indian ports (major ports) act, 1956
? The indian railways act, 1989
? The carriers act, 1965
? The indian post office act 1898
? The carriage by air act, 1972
? The multi-modal transportation act, 1993
? The public liability insurance act, 1991
? The indian stamp act, 1899
? The consumer protection act, 1986
Read P K Gupta old book for explanation page 51
General insurance contract
? General insurance aims to protect the economic value of assets
or life of a person.
? Contract agrees to make good the loss on the property or life of
the insured that may occur during the term of the contract for a
small premium to be paid by the insurer.
? In addition any insurance contract is bound by the following
PRINCIPLES:
? Principle of utmost good faith
? Principle of insurable interest
? Principle of indemnity
? Principle of subrogation
? Principle of contribution
? Principle of proximate cause (see module 4 for details)
FirstRanker.com - FirstRanker's Choice
General Insurance
MODULE 6
General insurance
? First general insurance company in India,
called Triton insurance co was started in 1850 in
Calcutta.
? First general insurance co with Indian promoters
was started in 1906-07, by the name Indian
merchantile Insurance company
? Following world war 1 several foreign
companies started general insurance in India
having about 40% market share at the time of
lndependence.
Laws related to general
Insurance
? General insurance in India is governed by the Insurance Act
of 1938 which was later amended in 1969.
? Nationalisation of all companies by the General insurance
nationalisation Act , 1972. GIC covered 107 companies
? GIC was entrusted with responsibility of superintending,
controlling, and smooth conduct of the sector with its 4
subsidiaries in all zones of India.
? Following laws also touch upon general insurance:
- The motor vehicles act, 1939
- The inland steam-vessels (amendment act), 1977
- The marine insurance act, 1963
? The carriage of goods by the sea act, 1925
? The merchant shipping act, 1958
? The bill of lading act, 1956
? The indian ports (major ports) act, 1956
? The indian railways act, 1989
? The carriers act, 1965
? The indian post office act 1898
? The carriage by air act, 1972
? The multi-modal transportation act, 1993
? The public liability insurance act, 1991
? The indian stamp act, 1899
? The consumer protection act, 1986
Read P K Gupta old book for explanation page 51
General insurance contract
? General insurance aims to protect the economic value of assets
or life of a person.
? Contract agrees to make good the loss on the property or life of
the insured that may occur during the term of the contract for a
small premium to be paid by the insurer.
? In addition any insurance contract is bound by the following
PRINCIPLES:
? Principle of utmost good faith
? Principle of insurable interest
? Principle of indemnity
? Principle of subrogation
? Principle of contribution
? Principle of proximate cause (see module 4 for details)
General insurance corpn (GIC)
? GIC was formed on 1.1.1973 under the Insurance Act, 1938 in
accordance with provisions of general insurance business
(nationalisation) act, 1972.
? All the existing insurance companies were merged into 4
subsidiaries of GIC starting from 1.1.1973
? National insurance co, incorporated in 1906 in Calcutta, was
privately managed till 1972. 21 foreign and 11 indian companies
were merged with national insurance to form a subsidiary of GIC
? The new india assurance company was incorporated in 1919
operating from Bombay. Got nationalised in 1972 along with 23
other private players to form a subsidiary of GIC
? United india insurance co was incorporated as a company in
1938 with HQ in Madras. It was later nationalised along with 12
indian, 4 co operative, 5 foreign and the general insurance wing
of LIC
FirstRanker.com - FirstRanker's Choice
General Insurance
MODULE 6
General insurance
? First general insurance company in India,
called Triton insurance co was started in 1850 in
Calcutta.
? First general insurance co with Indian promoters
was started in 1906-07, by the name Indian
merchantile Insurance company
? Following world war 1 several foreign
companies started general insurance in India
having about 40% market share at the time of
lndependence.
Laws related to general
Insurance
? General insurance in India is governed by the Insurance Act
of 1938 which was later amended in 1969.
? Nationalisation of all companies by the General insurance
nationalisation Act , 1972. GIC covered 107 companies
? GIC was entrusted with responsibility of superintending,
controlling, and smooth conduct of the sector with its 4
subsidiaries in all zones of India.
? Following laws also touch upon general insurance:
- The motor vehicles act, 1939
- The inland steam-vessels (amendment act), 1977
- The marine insurance act, 1963
? The carriage of goods by the sea act, 1925
? The merchant shipping act, 1958
? The bill of lading act, 1956
? The indian ports (major ports) act, 1956
? The indian railways act, 1989
? The carriers act, 1965
? The indian post office act 1898
? The carriage by air act, 1972
? The multi-modal transportation act, 1993
? The public liability insurance act, 1991
? The indian stamp act, 1899
? The consumer protection act, 1986
Read P K Gupta old book for explanation page 51
General insurance contract
? General insurance aims to protect the economic value of assets
or life of a person.
? Contract agrees to make good the loss on the property or life of
the insured that may occur during the term of the contract for a
small premium to be paid by the insurer.
? In addition any insurance contract is bound by the following
PRINCIPLES:
? Principle of utmost good faith
? Principle of insurable interest
? Principle of indemnity
? Principle of subrogation
? Principle of contribution
? Principle of proximate cause (see module 4 for details)
General insurance corpn (GIC)
? GIC was formed on 1.1.1973 under the Insurance Act, 1938 in
accordance with provisions of general insurance business
(nationalisation) act, 1972.
? All the existing insurance companies were merged into 4
subsidiaries of GIC starting from 1.1.1973
? National insurance co, incorporated in 1906 in Calcutta, was
privately managed till 1972. 21 foreign and 11 indian companies
were merged with national insurance to form a subsidiary of GIC
? The new india assurance company was incorporated in 1919
operating from Bombay. Got nationalised in 1972 along with 23
other private players to form a subsidiary of GIC
? United india insurance co was incorporated as a company in
1938 with HQ in Madras. It was later nationalised along with 12
indian, 4 co operative, 5 foreign and the general insurance wing
of LIC
? The Oriental fire and general insurance co with its HQ
in Delhi was incorporated in 1947 as a subsidiary of
oriental government security life assurance in 1947. it
became a subsidiary of LIC in 1956. it came under
GIC in 1973 after nationalisation of general insurance
business.
? In 2002 after passage of insurance amendment bill
(2002) all the four public sector companies were
delinked from GIC and started operating as
independent companies.
? Malhotra committee 1993 recommended opening up
of insurance sector for private players.
? IRDA is currently the governing body responsible for
regulation and control of insurance sector in india.
Their main aim is protection of policy holders? interest.
FirstRanker.com - FirstRanker's Choice
General Insurance
MODULE 6
General insurance
? First general insurance company in India,
called Triton insurance co was started in 1850 in
Calcutta.
? First general insurance co with Indian promoters
was started in 1906-07, by the name Indian
merchantile Insurance company
? Following world war 1 several foreign
companies started general insurance in India
having about 40% market share at the time of
lndependence.
Laws related to general
Insurance
? General insurance in India is governed by the Insurance Act
of 1938 which was later amended in 1969.
? Nationalisation of all companies by the General insurance
nationalisation Act , 1972. GIC covered 107 companies
? GIC was entrusted with responsibility of superintending,
controlling, and smooth conduct of the sector with its 4
subsidiaries in all zones of India.
? Following laws also touch upon general insurance:
- The motor vehicles act, 1939
- The inland steam-vessels (amendment act), 1977
- The marine insurance act, 1963
? The carriage of goods by the sea act, 1925
? The merchant shipping act, 1958
? The bill of lading act, 1956
? The indian ports (major ports) act, 1956
? The indian railways act, 1989
? The carriers act, 1965
? The indian post office act 1898
? The carriage by air act, 1972
? The multi-modal transportation act, 1993
? The public liability insurance act, 1991
? The indian stamp act, 1899
? The consumer protection act, 1986
Read P K Gupta old book for explanation page 51
General insurance contract
? General insurance aims to protect the economic value of assets
or life of a person.
? Contract agrees to make good the loss on the property or life of
the insured that may occur during the term of the contract for a
small premium to be paid by the insurer.
? In addition any insurance contract is bound by the following
PRINCIPLES:
? Principle of utmost good faith
? Principle of insurable interest
? Principle of indemnity
? Principle of subrogation
? Principle of contribution
? Principle of proximate cause (see module 4 for details)
General insurance corpn (GIC)
? GIC was formed on 1.1.1973 under the Insurance Act, 1938 in
accordance with provisions of general insurance business
(nationalisation) act, 1972.
? All the existing insurance companies were merged into 4
subsidiaries of GIC starting from 1.1.1973
? National insurance co, incorporated in 1906 in Calcutta, was
privately managed till 1972. 21 foreign and 11 indian companies
were merged with national insurance to form a subsidiary of GIC
? The new india assurance company was incorporated in 1919
operating from Bombay. Got nationalised in 1972 along with 23
other private players to form a subsidiary of GIC
? United india insurance co was incorporated as a company in
1938 with HQ in Madras. It was later nationalised along with 12
indian, 4 co operative, 5 foreign and the general insurance wing
of LIC
? The Oriental fire and general insurance co with its HQ
in Delhi was incorporated in 1947 as a subsidiary of
oriental government security life assurance in 1947. it
became a subsidiary of LIC in 1956. it came under
GIC in 1973 after nationalisation of general insurance
business.
? In 2002 after passage of insurance amendment bill
(2002) all the four public sector companies were
delinked from GIC and started operating as
independent companies.
? Malhotra committee 1993 recommended opening up
of insurance sector for private players.
? IRDA is currently the governing body responsible for
regulation and control of insurance sector in india.
Their main aim is protection of policy holders? interest.
Performance of private and public
general insurance companies
? Insurance penetration is very low in india due to lack of awareness.
Therefore potential for growth is large with new regulations and
new players coming in and economy growing at healthy rate.
General insurance has grown from Rs 11000 Cr in 1999 to Rs 40,000
cr in 2011. target is to cross Rs 1,00,000 by 2020.
? Factors that enabled the sector to grow are as follows:
? 1. Leverage: private players have leveraged upon the image and
business relationships of their parent organisations. This has helped
build awareness and penetration.
? 2. Operational flexibility: operational flexibility of private players
including pricing policy, marketing etc has contributed to the
growth of the sector.
FirstRanker.com - FirstRanker's Choice
General Insurance
MODULE 6
General insurance
? First general insurance company in India,
called Triton insurance co was started in 1850 in
Calcutta.
? First general insurance co with Indian promoters
was started in 1906-07, by the name Indian
merchantile Insurance company
? Following world war 1 several foreign
companies started general insurance in India
having about 40% market share at the time of
lndependence.
Laws related to general
Insurance
? General insurance in India is governed by the Insurance Act
of 1938 which was later amended in 1969.
? Nationalisation of all companies by the General insurance
nationalisation Act , 1972. GIC covered 107 companies
? GIC was entrusted with responsibility of superintending,
controlling, and smooth conduct of the sector with its 4
subsidiaries in all zones of India.
? Following laws also touch upon general insurance:
- The motor vehicles act, 1939
- The inland steam-vessels (amendment act), 1977
- The marine insurance act, 1963
? The carriage of goods by the sea act, 1925
? The merchant shipping act, 1958
? The bill of lading act, 1956
? The indian ports (major ports) act, 1956
? The indian railways act, 1989
? The carriers act, 1965
? The indian post office act 1898
? The carriage by air act, 1972
? The multi-modal transportation act, 1993
? The public liability insurance act, 1991
? The indian stamp act, 1899
? The consumer protection act, 1986
Read P K Gupta old book for explanation page 51
General insurance contract
? General insurance aims to protect the economic value of assets
or life of a person.
? Contract agrees to make good the loss on the property or life of
the insured that may occur during the term of the contract for a
small premium to be paid by the insurer.
? In addition any insurance contract is bound by the following
PRINCIPLES:
? Principle of utmost good faith
? Principle of insurable interest
? Principle of indemnity
? Principle of subrogation
? Principle of contribution
? Principle of proximate cause (see module 4 for details)
General insurance corpn (GIC)
? GIC was formed on 1.1.1973 under the Insurance Act, 1938 in
accordance with provisions of general insurance business
(nationalisation) act, 1972.
? All the existing insurance companies were merged into 4
subsidiaries of GIC starting from 1.1.1973
? National insurance co, incorporated in 1906 in Calcutta, was
privately managed till 1972. 21 foreign and 11 indian companies
were merged with national insurance to form a subsidiary of GIC
? The new india assurance company was incorporated in 1919
operating from Bombay. Got nationalised in 1972 along with 23
other private players to form a subsidiary of GIC
? United india insurance co was incorporated as a company in
1938 with HQ in Madras. It was later nationalised along with 12
indian, 4 co operative, 5 foreign and the general insurance wing
of LIC
? The Oriental fire and general insurance co with its HQ
in Delhi was incorporated in 1947 as a subsidiary of
oriental government security life assurance in 1947. it
became a subsidiary of LIC in 1956. it came under
GIC in 1973 after nationalisation of general insurance
business.
? In 2002 after passage of insurance amendment bill
(2002) all the four public sector companies were
delinked from GIC and started operating as
independent companies.
? Malhotra committee 1993 recommended opening up
of insurance sector for private players.
? IRDA is currently the governing body responsible for
regulation and control of insurance sector in india.
Their main aim is protection of policy holders? interest.
Performance of private and public
general insurance companies
? Insurance penetration is very low in india due to lack of awareness.
Therefore potential for growth is large with new regulations and
new players coming in and economy growing at healthy rate.
General insurance has grown from Rs 11000 Cr in 1999 to Rs 40,000
cr in 2011. target is to cross Rs 1,00,000 by 2020.
? Factors that enabled the sector to grow are as follows:
? 1. Leverage: private players have leveraged upon the image and
business relationships of their parent organisations. This has helped
build awareness and penetration.
? 2. Operational flexibility: operational flexibility of private players
including pricing policy, marketing etc has contributed to the
growth of the sector.
? 3. innovation: innovative pricing and cross-subsidised product
mixes have helped private players grow as against public players.
? 4. strong infrastructure and systems: private players have built
state-of-the-art infrastructure and systems in order to provide
better service to customers. Quicker decision making and claim
settlements have boosted their business as compared to public
players.
? Claims settlement: selective underwriting by the private players
on 3P insurance have reduced claims burden and waiting for
tribunal judgements. This has led to better claim settlement
service by private players as compared to public players.
? 6. Distribution: traditionally agency channel had dominated the
industry but of late bancassurance, brokers, corporate agents,
direct sales channels are gaining importance.
FirstRanker.com - FirstRanker's Choice
General Insurance
MODULE 6
General insurance
? First general insurance company in India,
called Triton insurance co was started in 1850 in
Calcutta.
? First general insurance co with Indian promoters
was started in 1906-07, by the name Indian
merchantile Insurance company
? Following world war 1 several foreign
companies started general insurance in India
having about 40% market share at the time of
lndependence.
Laws related to general
Insurance
? General insurance in India is governed by the Insurance Act
of 1938 which was later amended in 1969.
? Nationalisation of all companies by the General insurance
nationalisation Act , 1972. GIC covered 107 companies
? GIC was entrusted with responsibility of superintending,
controlling, and smooth conduct of the sector with its 4
subsidiaries in all zones of India.
? Following laws also touch upon general insurance:
- The motor vehicles act, 1939
- The inland steam-vessels (amendment act), 1977
- The marine insurance act, 1963
? The carriage of goods by the sea act, 1925
? The merchant shipping act, 1958
? The bill of lading act, 1956
? The indian ports (major ports) act, 1956
? The indian railways act, 1989
? The carriers act, 1965
? The indian post office act 1898
? The carriage by air act, 1972
? The multi-modal transportation act, 1993
? The public liability insurance act, 1991
? The indian stamp act, 1899
? The consumer protection act, 1986
Read P K Gupta old book for explanation page 51
General insurance contract
? General insurance aims to protect the economic value of assets
or life of a person.
? Contract agrees to make good the loss on the property or life of
the insured that may occur during the term of the contract for a
small premium to be paid by the insurer.
? In addition any insurance contract is bound by the following
PRINCIPLES:
? Principle of utmost good faith
? Principle of insurable interest
? Principle of indemnity
? Principle of subrogation
? Principle of contribution
? Principle of proximate cause (see module 4 for details)
General insurance corpn (GIC)
? GIC was formed on 1.1.1973 under the Insurance Act, 1938 in
accordance with provisions of general insurance business
(nationalisation) act, 1972.
? All the existing insurance companies were merged into 4
subsidiaries of GIC starting from 1.1.1973
? National insurance co, incorporated in 1906 in Calcutta, was
privately managed till 1972. 21 foreign and 11 indian companies
were merged with national insurance to form a subsidiary of GIC
? The new india assurance company was incorporated in 1919
operating from Bombay. Got nationalised in 1972 along with 23
other private players to form a subsidiary of GIC
? United india insurance co was incorporated as a company in
1938 with HQ in Madras. It was later nationalised along with 12
indian, 4 co operative, 5 foreign and the general insurance wing
of LIC
? The Oriental fire and general insurance co with its HQ
in Delhi was incorporated in 1947 as a subsidiary of
oriental government security life assurance in 1947. it
became a subsidiary of LIC in 1956. it came under
GIC in 1973 after nationalisation of general insurance
business.
? In 2002 after passage of insurance amendment bill
(2002) all the four public sector companies were
delinked from GIC and started operating as
independent companies.
? Malhotra committee 1993 recommended opening up
of insurance sector for private players.
? IRDA is currently the governing body responsible for
regulation and control of insurance sector in india.
Their main aim is protection of policy holders? interest.
Performance of private and public
general insurance companies
? Insurance penetration is very low in india due to lack of awareness.
Therefore potential for growth is large with new regulations and
new players coming in and economy growing at healthy rate.
General insurance has grown from Rs 11000 Cr in 1999 to Rs 40,000
cr in 2011. target is to cross Rs 1,00,000 by 2020.
? Factors that enabled the sector to grow are as follows:
? 1. Leverage: private players have leveraged upon the image and
business relationships of their parent organisations. This has helped
build awareness and penetration.
? 2. Operational flexibility: operational flexibility of private players
including pricing policy, marketing etc has contributed to the
growth of the sector.
? 3. innovation: innovative pricing and cross-subsidised product
mixes have helped private players grow as against public players.
? 4. strong infrastructure and systems: private players have built
state-of-the-art infrastructure and systems in order to provide
better service to customers. Quicker decision making and claim
settlements have boosted their business as compared to public
players.
? Claims settlement: selective underwriting by the private players
on 3P insurance have reduced claims burden and waiting for
tribunal judgements. This has led to better claim settlement
service by private players as compared to public players.
? 6. Distribution: traditionally agency channel had dominated the
industry but of late bancassurance, brokers, corporate agents,
direct sales channels are gaining importance.
Health
insurance
FirstRanker.com - FirstRanker's Choice
General Insurance
MODULE 6
General insurance
? First general insurance company in India,
called Triton insurance co was started in 1850 in
Calcutta.
? First general insurance co with Indian promoters
was started in 1906-07, by the name Indian
merchantile Insurance company
? Following world war 1 several foreign
companies started general insurance in India
having about 40% market share at the time of
lndependence.
Laws related to general
Insurance
? General insurance in India is governed by the Insurance Act
of 1938 which was later amended in 1969.
? Nationalisation of all companies by the General insurance
nationalisation Act , 1972. GIC covered 107 companies
? GIC was entrusted with responsibility of superintending,
controlling, and smooth conduct of the sector with its 4
subsidiaries in all zones of India.
? Following laws also touch upon general insurance:
- The motor vehicles act, 1939
- The inland steam-vessels (amendment act), 1977
- The marine insurance act, 1963
? The carriage of goods by the sea act, 1925
? The merchant shipping act, 1958
? The bill of lading act, 1956
? The indian ports (major ports) act, 1956
? The indian railways act, 1989
? The carriers act, 1965
? The indian post office act 1898
? The carriage by air act, 1972
? The multi-modal transportation act, 1993
? The public liability insurance act, 1991
? The indian stamp act, 1899
? The consumer protection act, 1986
Read P K Gupta old book for explanation page 51
General insurance contract
? General insurance aims to protect the economic value of assets
or life of a person.
? Contract agrees to make good the loss on the property or life of
the insured that may occur during the term of the contract for a
small premium to be paid by the insurer.
? In addition any insurance contract is bound by the following
PRINCIPLES:
? Principle of utmost good faith
? Principle of insurable interest
? Principle of indemnity
? Principle of subrogation
? Principle of contribution
? Principle of proximate cause (see module 4 for details)
General insurance corpn (GIC)
? GIC was formed on 1.1.1973 under the Insurance Act, 1938 in
accordance with provisions of general insurance business
(nationalisation) act, 1972.
? All the existing insurance companies were merged into 4
subsidiaries of GIC starting from 1.1.1973
? National insurance co, incorporated in 1906 in Calcutta, was
privately managed till 1972. 21 foreign and 11 indian companies
were merged with national insurance to form a subsidiary of GIC
? The new india assurance company was incorporated in 1919
operating from Bombay. Got nationalised in 1972 along with 23
other private players to form a subsidiary of GIC
? United india insurance co was incorporated as a company in
1938 with HQ in Madras. It was later nationalised along with 12
indian, 4 co operative, 5 foreign and the general insurance wing
of LIC
? The Oriental fire and general insurance co with its HQ
in Delhi was incorporated in 1947 as a subsidiary of
oriental government security life assurance in 1947. it
became a subsidiary of LIC in 1956. it came under
GIC in 1973 after nationalisation of general insurance
business.
? In 2002 after passage of insurance amendment bill
(2002) all the four public sector companies were
delinked from GIC and started operating as
independent companies.
? Malhotra committee 1993 recommended opening up
of insurance sector for private players.
? IRDA is currently the governing body responsible for
regulation and control of insurance sector in india.
Their main aim is protection of policy holders? interest.
Performance of private and public
general insurance companies
? Insurance penetration is very low in india due to lack of awareness.
Therefore potential for growth is large with new regulations and
new players coming in and economy growing at healthy rate.
General insurance has grown from Rs 11000 Cr in 1999 to Rs 40,000
cr in 2011. target is to cross Rs 1,00,000 by 2020.
? Factors that enabled the sector to grow are as follows:
? 1. Leverage: private players have leveraged upon the image and
business relationships of their parent organisations. This has helped
build awareness and penetration.
? 2. Operational flexibility: operational flexibility of private players
including pricing policy, marketing etc has contributed to the
growth of the sector.
? 3. innovation: innovative pricing and cross-subsidised product
mixes have helped private players grow as against public players.
? 4. strong infrastructure and systems: private players have built
state-of-the-art infrastructure and systems in order to provide
better service to customers. Quicker decision making and claim
settlements have boosted their business as compared to public
players.
? Claims settlement: selective underwriting by the private players
on 3P insurance have reduced claims burden and waiting for
tribunal judgements. This has led to better claim settlement
service by private players as compared to public players.
? 6. Distribution: traditionally agency channel had dominated the
industry but of late bancassurance, brokers, corporate agents,
direct sales channels are gaining importance.
Health
insurance
Introduction
? Increasing rate of ill health
? Increasing cost of treatment
? Health insurance has become important
? Health insurance covers the financial loss
arising out of poor health conditions or
due to permanent disability which results
in loss of income
? Insurance contract that promises to
cover medical expenses upon during
illness or hospitalisation upon paying a
premium.
FirstRanker.com - FirstRanker's Choice
General Insurance
MODULE 6
General insurance
? First general insurance company in India,
called Triton insurance co was started in 1850 in
Calcutta.
? First general insurance co with Indian promoters
was started in 1906-07, by the name Indian
merchantile Insurance company
? Following world war 1 several foreign
companies started general insurance in India
having about 40% market share at the time of
lndependence.
Laws related to general
Insurance
? General insurance in India is governed by the Insurance Act
of 1938 which was later amended in 1969.
? Nationalisation of all companies by the General insurance
nationalisation Act , 1972. GIC covered 107 companies
? GIC was entrusted with responsibility of superintending,
controlling, and smooth conduct of the sector with its 4
subsidiaries in all zones of India.
? Following laws also touch upon general insurance:
- The motor vehicles act, 1939
- The inland steam-vessels (amendment act), 1977
- The marine insurance act, 1963
? The carriage of goods by the sea act, 1925
? The merchant shipping act, 1958
? The bill of lading act, 1956
? The indian ports (major ports) act, 1956
? The indian railways act, 1989
? The carriers act, 1965
? The indian post office act 1898
? The carriage by air act, 1972
? The multi-modal transportation act, 1993
? The public liability insurance act, 1991
? The indian stamp act, 1899
? The consumer protection act, 1986
Read P K Gupta old book for explanation page 51
General insurance contract
? General insurance aims to protect the economic value of assets
or life of a person.
? Contract agrees to make good the loss on the property or life of
the insured that may occur during the term of the contract for a
small premium to be paid by the insurer.
? In addition any insurance contract is bound by the following
PRINCIPLES:
? Principle of utmost good faith
? Principle of insurable interest
? Principle of indemnity
? Principle of subrogation
? Principle of contribution
? Principle of proximate cause (see module 4 for details)
General insurance corpn (GIC)
? GIC was formed on 1.1.1973 under the Insurance Act, 1938 in
accordance with provisions of general insurance business
(nationalisation) act, 1972.
? All the existing insurance companies were merged into 4
subsidiaries of GIC starting from 1.1.1973
? National insurance co, incorporated in 1906 in Calcutta, was
privately managed till 1972. 21 foreign and 11 indian companies
were merged with national insurance to form a subsidiary of GIC
? The new india assurance company was incorporated in 1919
operating from Bombay. Got nationalised in 1972 along with 23
other private players to form a subsidiary of GIC
? United india insurance co was incorporated as a company in
1938 with HQ in Madras. It was later nationalised along with 12
indian, 4 co operative, 5 foreign and the general insurance wing
of LIC
? The Oriental fire and general insurance co with its HQ
in Delhi was incorporated in 1947 as a subsidiary of
oriental government security life assurance in 1947. it
became a subsidiary of LIC in 1956. it came under
GIC in 1973 after nationalisation of general insurance
business.
? In 2002 after passage of insurance amendment bill
(2002) all the four public sector companies were
delinked from GIC and started operating as
independent companies.
? Malhotra committee 1993 recommended opening up
of insurance sector for private players.
? IRDA is currently the governing body responsible for
regulation and control of insurance sector in india.
Their main aim is protection of policy holders? interest.
Performance of private and public
general insurance companies
? Insurance penetration is very low in india due to lack of awareness.
Therefore potential for growth is large with new regulations and
new players coming in and economy growing at healthy rate.
General insurance has grown from Rs 11000 Cr in 1999 to Rs 40,000
cr in 2011. target is to cross Rs 1,00,000 by 2020.
? Factors that enabled the sector to grow are as follows:
? 1. Leverage: private players have leveraged upon the image and
business relationships of their parent organisations. This has helped
build awareness and penetration.
? 2. Operational flexibility: operational flexibility of private players
including pricing policy, marketing etc has contributed to the
growth of the sector.
? 3. innovation: innovative pricing and cross-subsidised product
mixes have helped private players grow as against public players.
? 4. strong infrastructure and systems: private players have built
state-of-the-art infrastructure and systems in order to provide
better service to customers. Quicker decision making and claim
settlements have boosted their business as compared to public
players.
? Claims settlement: selective underwriting by the private players
on 3P insurance have reduced claims burden and waiting for
tribunal judgements. This has led to better claim settlement
service by private players as compared to public players.
? 6. Distribution: traditionally agency channel had dominated the
industry but of late bancassurance, brokers, corporate agents,
direct sales channels are gaining importance.
Health
insurance
Introduction
? Increasing rate of ill health
? Increasing cost of treatment
? Health insurance has become important
? Health insurance covers the financial loss
arising out of poor health conditions or
due to permanent disability which results
in loss of income
? Insurance contract that promises to
cover medical expenses upon during
illness or hospitalisation upon paying a
premium.
Individual medical expense
insurance
? Taken on individual basis for self or for family. Different
from group insurance
? Generally more expensive but suitable for individuals
who have no access to group policies
? Best suited for people who have better health than
average.
? Flexibility to choose from a wide choice of policies.
? Non-dependency on employer and avlid even after
resignation/shift/retirement
? It can be turned down based on risk and higher risk
attracts higher premium
FirstRanker.com - FirstRanker's Choice
General Insurance
MODULE 6
General insurance
? First general insurance company in India,
called Triton insurance co was started in 1850 in
Calcutta.
? First general insurance co with Indian promoters
was started in 1906-07, by the name Indian
merchantile Insurance company
? Following world war 1 several foreign
companies started general insurance in India
having about 40% market share at the time of
lndependence.
Laws related to general
Insurance
? General insurance in India is governed by the Insurance Act
of 1938 which was later amended in 1969.
? Nationalisation of all companies by the General insurance
nationalisation Act , 1972. GIC covered 107 companies
? GIC was entrusted with responsibility of superintending,
controlling, and smooth conduct of the sector with its 4
subsidiaries in all zones of India.
? Following laws also touch upon general insurance:
- The motor vehicles act, 1939
- The inland steam-vessels (amendment act), 1977
- The marine insurance act, 1963
? The carriage of goods by the sea act, 1925
? The merchant shipping act, 1958
? The bill of lading act, 1956
? The indian ports (major ports) act, 1956
? The indian railways act, 1989
? The carriers act, 1965
? The indian post office act 1898
? The carriage by air act, 1972
? The multi-modal transportation act, 1993
? The public liability insurance act, 1991
? The indian stamp act, 1899
? The consumer protection act, 1986
Read P K Gupta old book for explanation page 51
General insurance contract
? General insurance aims to protect the economic value of assets
or life of a person.
? Contract agrees to make good the loss on the property or life of
the insured that may occur during the term of the contract for a
small premium to be paid by the insurer.
? In addition any insurance contract is bound by the following
PRINCIPLES:
? Principle of utmost good faith
? Principle of insurable interest
? Principle of indemnity
? Principle of subrogation
? Principle of contribution
? Principle of proximate cause (see module 4 for details)
General insurance corpn (GIC)
? GIC was formed on 1.1.1973 under the Insurance Act, 1938 in
accordance with provisions of general insurance business
(nationalisation) act, 1972.
? All the existing insurance companies were merged into 4
subsidiaries of GIC starting from 1.1.1973
? National insurance co, incorporated in 1906 in Calcutta, was
privately managed till 1972. 21 foreign and 11 indian companies
were merged with national insurance to form a subsidiary of GIC
? The new india assurance company was incorporated in 1919
operating from Bombay. Got nationalised in 1972 along with 23
other private players to form a subsidiary of GIC
? United india insurance co was incorporated as a company in
1938 with HQ in Madras. It was later nationalised along with 12
indian, 4 co operative, 5 foreign and the general insurance wing
of LIC
? The Oriental fire and general insurance co with its HQ
in Delhi was incorporated in 1947 as a subsidiary of
oriental government security life assurance in 1947. it
became a subsidiary of LIC in 1956. it came under
GIC in 1973 after nationalisation of general insurance
business.
? In 2002 after passage of insurance amendment bill
(2002) all the four public sector companies were
delinked from GIC and started operating as
independent companies.
? Malhotra committee 1993 recommended opening up
of insurance sector for private players.
? IRDA is currently the governing body responsible for
regulation and control of insurance sector in india.
Their main aim is protection of policy holders? interest.
Performance of private and public
general insurance companies
? Insurance penetration is very low in india due to lack of awareness.
Therefore potential for growth is large with new regulations and
new players coming in and economy growing at healthy rate.
General insurance has grown from Rs 11000 Cr in 1999 to Rs 40,000
cr in 2011. target is to cross Rs 1,00,000 by 2020.
? Factors that enabled the sector to grow are as follows:
? 1. Leverage: private players have leveraged upon the image and
business relationships of their parent organisations. This has helped
build awareness and penetration.
? 2. Operational flexibility: operational flexibility of private players
including pricing policy, marketing etc has contributed to the
growth of the sector.
? 3. innovation: innovative pricing and cross-subsidised product
mixes have helped private players grow as against public players.
? 4. strong infrastructure and systems: private players have built
state-of-the-art infrastructure and systems in order to provide
better service to customers. Quicker decision making and claim
settlements have boosted their business as compared to public
players.
? Claims settlement: selective underwriting by the private players
on 3P insurance have reduced claims burden and waiting for
tribunal judgements. This has led to better claim settlement
service by private players as compared to public players.
? 6. Distribution: traditionally agency channel had dominated the
industry but of late bancassurance, brokers, corporate agents,
direct sales channels are gaining importance.
Health
insurance
Introduction
? Increasing rate of ill health
? Increasing cost of treatment
? Health insurance has become important
? Health insurance covers the financial loss
arising out of poor health conditions or
due to permanent disability which results
in loss of income
? Insurance contract that promises to
cover medical expenses upon during
illness or hospitalisation upon paying a
premium.
Individual medical expense
insurance
? Taken on individual basis for self or for family. Different
from group insurance
? Generally more expensive but suitable for individuals
who have no access to group policies
? Best suited for people who have better health than
average.
? Flexibility to choose from a wide choice of policies.
? Non-dependency on employer and avlid even after
resignation/shift/retirement
? It can be turned down based on risk and higher risk
attracts higher premium
Long term care coverage
? With increase in life expectancy long term care becomes important
? Nuclear family, less children, no children and more working women
makes it difficult to take care of elders
? Policy covers nursing home care and hospital care for the aged for
the long term, not necessarily sick
? Popular concept in the US, Canada, UK etc
? Can be in-house or at hospital
? Premiums and eligibility depends upon age
? Benefits are varied like home care, visiting experts expenses, home
nurse, etc
? Can be taken for a specific period or for life time. Life time is
expensive
? Inflation protection clause available
? Can be home healthcare/facilities only or comprehensive type of
policy
FirstRanker.com - FirstRanker's Choice
General Insurance
MODULE 6
General insurance
? First general insurance company in India,
called Triton insurance co was started in 1850 in
Calcutta.
? First general insurance co with Indian promoters
was started in 1906-07, by the name Indian
merchantile Insurance company
? Following world war 1 several foreign
companies started general insurance in India
having about 40% market share at the time of
lndependence.
Laws related to general
Insurance
? General insurance in India is governed by the Insurance Act
of 1938 which was later amended in 1969.
? Nationalisation of all companies by the General insurance
nationalisation Act , 1972. GIC covered 107 companies
? GIC was entrusted with responsibility of superintending,
controlling, and smooth conduct of the sector with its 4
subsidiaries in all zones of India.
? Following laws also touch upon general insurance:
- The motor vehicles act, 1939
- The inland steam-vessels (amendment act), 1977
- The marine insurance act, 1963
? The carriage of goods by the sea act, 1925
? The merchant shipping act, 1958
? The bill of lading act, 1956
? The indian ports (major ports) act, 1956
? The indian railways act, 1989
? The carriers act, 1965
? The indian post office act 1898
? The carriage by air act, 1972
? The multi-modal transportation act, 1993
? The public liability insurance act, 1991
? The indian stamp act, 1899
? The consumer protection act, 1986
Read P K Gupta old book for explanation page 51
General insurance contract
? General insurance aims to protect the economic value of assets
or life of a person.
? Contract agrees to make good the loss on the property or life of
the insured that may occur during the term of the contract for a
small premium to be paid by the insurer.
? In addition any insurance contract is bound by the following
PRINCIPLES:
? Principle of utmost good faith
? Principle of insurable interest
? Principle of indemnity
? Principle of subrogation
? Principle of contribution
? Principle of proximate cause (see module 4 for details)
General insurance corpn (GIC)
? GIC was formed on 1.1.1973 under the Insurance Act, 1938 in
accordance with provisions of general insurance business
(nationalisation) act, 1972.
? All the existing insurance companies were merged into 4
subsidiaries of GIC starting from 1.1.1973
? National insurance co, incorporated in 1906 in Calcutta, was
privately managed till 1972. 21 foreign and 11 indian companies
were merged with national insurance to form a subsidiary of GIC
? The new india assurance company was incorporated in 1919
operating from Bombay. Got nationalised in 1972 along with 23
other private players to form a subsidiary of GIC
? United india insurance co was incorporated as a company in
1938 with HQ in Madras. It was later nationalised along with 12
indian, 4 co operative, 5 foreign and the general insurance wing
of LIC
? The Oriental fire and general insurance co with its HQ
in Delhi was incorporated in 1947 as a subsidiary of
oriental government security life assurance in 1947. it
became a subsidiary of LIC in 1956. it came under
GIC in 1973 after nationalisation of general insurance
business.
? In 2002 after passage of insurance amendment bill
(2002) all the four public sector companies were
delinked from GIC and started operating as
independent companies.
? Malhotra committee 1993 recommended opening up
of insurance sector for private players.
? IRDA is currently the governing body responsible for
regulation and control of insurance sector in india.
Their main aim is protection of policy holders? interest.
Performance of private and public
general insurance companies
? Insurance penetration is very low in india due to lack of awareness.
Therefore potential for growth is large with new regulations and
new players coming in and economy growing at healthy rate.
General insurance has grown from Rs 11000 Cr in 1999 to Rs 40,000
cr in 2011. target is to cross Rs 1,00,000 by 2020.
? Factors that enabled the sector to grow are as follows:
? 1. Leverage: private players have leveraged upon the image and
business relationships of their parent organisations. This has helped
build awareness and penetration.
? 2. Operational flexibility: operational flexibility of private players
including pricing policy, marketing etc has contributed to the
growth of the sector.
? 3. innovation: innovative pricing and cross-subsidised product
mixes have helped private players grow as against public players.
? 4. strong infrastructure and systems: private players have built
state-of-the-art infrastructure and systems in order to provide
better service to customers. Quicker decision making and claim
settlements have boosted their business as compared to public
players.
? Claims settlement: selective underwriting by the private players
on 3P insurance have reduced claims burden and waiting for
tribunal judgements. This has led to better claim settlement
service by private players as compared to public players.
? 6. Distribution: traditionally agency channel had dominated the
industry but of late bancassurance, brokers, corporate agents,
direct sales channels are gaining importance.
Health
insurance
Introduction
? Increasing rate of ill health
? Increasing cost of treatment
? Health insurance has become important
? Health insurance covers the financial loss
arising out of poor health conditions or
due to permanent disability which results
in loss of income
? Insurance contract that promises to
cover medical expenses upon during
illness or hospitalisation upon paying a
premium.
Individual medical expense
insurance
? Taken on individual basis for self or for family. Different
from group insurance
? Generally more expensive but suitable for individuals
who have no access to group policies
? Best suited for people who have better health than
average.
? Flexibility to choose from a wide choice of policies.
? Non-dependency on employer and avlid even after
resignation/shift/retirement
? It can be turned down based on risk and higher risk
attracts higher premium
Long term care coverage
? With increase in life expectancy long term care becomes important
? Nuclear family, less children, no children and more working women
makes it difficult to take care of elders
? Policy covers nursing home care and hospital care for the aged for
the long term, not necessarily sick
? Popular concept in the US, Canada, UK etc
? Can be in-house or at hospital
? Premiums and eligibility depends upon age
? Benefits are varied like home care, visiting experts expenses, home
nurse, etc
? Can be taken for a specific period or for life time. Life time is
expensive
? Inflation protection clause available
? Can be home healthcare/facilities only or comprehensive type of
policy
Disability income insurance
? One of the oldest coverages where insurer provides
compensation to the insured when he is unable to perform his
regular duties due to sickness or injuries arising out of an
accident.
? Injury is any bodily injury caused due to an accident during the
period of the policy
? Provides security against loss of income.
? Policies can be a short term or long term.
? Provided by life insurers or health insurers.
? Either to group or individually.
? Exclusions: doesn?t cover disability due to wars, intentional
injuries, and normal pregnencies in individual and group policies.
Pre-existing conditions are excluded.
FirstRanker.com - FirstRanker's Choice
General Insurance
MODULE 6
General insurance
? First general insurance company in India,
called Triton insurance co was started in 1850 in
Calcutta.
? First general insurance co with Indian promoters
was started in 1906-07, by the name Indian
merchantile Insurance company
? Following world war 1 several foreign
companies started general insurance in India
having about 40% market share at the time of
lndependence.
Laws related to general
Insurance
? General insurance in India is governed by the Insurance Act
of 1938 which was later amended in 1969.
? Nationalisation of all companies by the General insurance
nationalisation Act , 1972. GIC covered 107 companies
? GIC was entrusted with responsibility of superintending,
controlling, and smooth conduct of the sector with its 4
subsidiaries in all zones of India.
? Following laws also touch upon general insurance:
- The motor vehicles act, 1939
- The inland steam-vessels (amendment act), 1977
- The marine insurance act, 1963
? The carriage of goods by the sea act, 1925
? The merchant shipping act, 1958
? The bill of lading act, 1956
? The indian ports (major ports) act, 1956
? The indian railways act, 1989
? The carriers act, 1965
? The indian post office act 1898
? The carriage by air act, 1972
? The multi-modal transportation act, 1993
? The public liability insurance act, 1991
? The indian stamp act, 1899
? The consumer protection act, 1986
Read P K Gupta old book for explanation page 51
General insurance contract
? General insurance aims to protect the economic value of assets
or life of a person.
? Contract agrees to make good the loss on the property or life of
the insured that may occur during the term of the contract for a
small premium to be paid by the insurer.
? In addition any insurance contract is bound by the following
PRINCIPLES:
? Principle of utmost good faith
? Principle of insurable interest
? Principle of indemnity
? Principle of subrogation
? Principle of contribution
? Principle of proximate cause (see module 4 for details)
General insurance corpn (GIC)
? GIC was formed on 1.1.1973 under the Insurance Act, 1938 in
accordance with provisions of general insurance business
(nationalisation) act, 1972.
? All the existing insurance companies were merged into 4
subsidiaries of GIC starting from 1.1.1973
? National insurance co, incorporated in 1906 in Calcutta, was
privately managed till 1972. 21 foreign and 11 indian companies
were merged with national insurance to form a subsidiary of GIC
? The new india assurance company was incorporated in 1919
operating from Bombay. Got nationalised in 1972 along with 23
other private players to form a subsidiary of GIC
? United india insurance co was incorporated as a company in
1938 with HQ in Madras. It was later nationalised along with 12
indian, 4 co operative, 5 foreign and the general insurance wing
of LIC
? The Oriental fire and general insurance co with its HQ
in Delhi was incorporated in 1947 as a subsidiary of
oriental government security life assurance in 1947. it
became a subsidiary of LIC in 1956. it came under
GIC in 1973 after nationalisation of general insurance
business.
? In 2002 after passage of insurance amendment bill
(2002) all the four public sector companies were
delinked from GIC and started operating as
independent companies.
? Malhotra committee 1993 recommended opening up
of insurance sector for private players.
? IRDA is currently the governing body responsible for
regulation and control of insurance sector in india.
Their main aim is protection of policy holders? interest.
Performance of private and public
general insurance companies
? Insurance penetration is very low in india due to lack of awareness.
Therefore potential for growth is large with new regulations and
new players coming in and economy growing at healthy rate.
General insurance has grown from Rs 11000 Cr in 1999 to Rs 40,000
cr in 2011. target is to cross Rs 1,00,000 by 2020.
? Factors that enabled the sector to grow are as follows:
? 1. Leverage: private players have leveraged upon the image and
business relationships of their parent organisations. This has helped
build awareness and penetration.
? 2. Operational flexibility: operational flexibility of private players
including pricing policy, marketing etc has contributed to the
growth of the sector.
? 3. innovation: innovative pricing and cross-subsidised product
mixes have helped private players grow as against public players.
? 4. strong infrastructure and systems: private players have built
state-of-the-art infrastructure and systems in order to provide
better service to customers. Quicker decision making and claim
settlements have boosted their business as compared to public
players.
? Claims settlement: selective underwriting by the private players
on 3P insurance have reduced claims burden and waiting for
tribunal judgements. This has led to better claim settlement
service by private players as compared to public players.
? 6. Distribution: traditionally agency channel had dominated the
industry but of late bancassurance, brokers, corporate agents,
direct sales channels are gaining importance.
Health
insurance
Introduction
? Increasing rate of ill health
? Increasing cost of treatment
? Health insurance has become important
? Health insurance covers the financial loss
arising out of poor health conditions or
due to permanent disability which results
in loss of income
? Insurance contract that promises to
cover medical expenses upon during
illness or hospitalisation upon paying a
premium.
Individual medical expense
insurance
? Taken on individual basis for self or for family. Different
from group insurance
? Generally more expensive but suitable for individuals
who have no access to group policies
? Best suited for people who have better health than
average.
? Flexibility to choose from a wide choice of policies.
? Non-dependency on employer and avlid even after
resignation/shift/retirement
? It can be turned down based on risk and higher risk
attracts higher premium
Long term care coverage
? With increase in life expectancy long term care becomes important
? Nuclear family, less children, no children and more working women
makes it difficult to take care of elders
? Policy covers nursing home care and hospital care for the aged for
the long term, not necessarily sick
? Popular concept in the US, Canada, UK etc
? Can be in-house or at hospital
? Premiums and eligibility depends upon age
? Benefits are varied like home care, visiting experts expenses, home
nurse, etc
? Can be taken for a specific period or for life time. Life time is
expensive
? Inflation protection clause available
? Can be home healthcare/facilities only or comprehensive type of
policy
Disability income insurance
? One of the oldest coverages where insurer provides
compensation to the insured when he is unable to perform his
regular duties due to sickness or injuries arising out of an
accident.
? Injury is any bodily injury caused due to an accident during the
period of the policy
? Provides security against loss of income.
? Policies can be a short term or long term.
? Provided by life insurers or health insurers.
? Either to group or individually.
? Exclusions: doesn?t cover disability due to wars, intentional
injuries, and normal pregnencies in individual and group policies.
Pre-existing conditions are excluded.
Mediclaim policy
? Reimbursement of hospital expenses caused due to
sickness or disease or injuries. Payable only if the insured
is admitted into a hospital for more than 24 hrs. group
policy of more the 101 members gets a discount in
premium. Benefits of mediclaim policy:
? All medical expenses like doctor?s fee, room rent,
medicines, check-ups etc
? Family policy offers a discount in premium
? Some policies offer health check-up expenses once
every 3/4 years
? No claim bonus is usually added in terms of increased
sum assured
? Income tax benefit u/s 80D to the tune of Rs 25000 and
Rs 30000 for Sr citizens
FirstRanker.com - FirstRanker's Choice
General Insurance
MODULE 6
General insurance
? First general insurance company in India,
called Triton insurance co was started in 1850 in
Calcutta.
? First general insurance co with Indian promoters
was started in 1906-07, by the name Indian
merchantile Insurance company
? Following world war 1 several foreign
companies started general insurance in India
having about 40% market share at the time of
lndependence.
Laws related to general
Insurance
? General insurance in India is governed by the Insurance Act
of 1938 which was later amended in 1969.
? Nationalisation of all companies by the General insurance
nationalisation Act , 1972. GIC covered 107 companies
? GIC was entrusted with responsibility of superintending,
controlling, and smooth conduct of the sector with its 4
subsidiaries in all zones of India.
? Following laws also touch upon general insurance:
- The motor vehicles act, 1939
- The inland steam-vessels (amendment act), 1977
- The marine insurance act, 1963
? The carriage of goods by the sea act, 1925
? The merchant shipping act, 1958
? The bill of lading act, 1956
? The indian ports (major ports) act, 1956
? The indian railways act, 1989
? The carriers act, 1965
? The indian post office act 1898
? The carriage by air act, 1972
? The multi-modal transportation act, 1993
? The public liability insurance act, 1991
? The indian stamp act, 1899
? The consumer protection act, 1986
Read P K Gupta old book for explanation page 51
General insurance contract
? General insurance aims to protect the economic value of assets
or life of a person.
? Contract agrees to make good the loss on the property or life of
the insured that may occur during the term of the contract for a
small premium to be paid by the insurer.
? In addition any insurance contract is bound by the following
PRINCIPLES:
? Principle of utmost good faith
? Principle of insurable interest
? Principle of indemnity
? Principle of subrogation
? Principle of contribution
? Principle of proximate cause (see module 4 for details)
General insurance corpn (GIC)
? GIC was formed on 1.1.1973 under the Insurance Act, 1938 in
accordance with provisions of general insurance business
(nationalisation) act, 1972.
? All the existing insurance companies were merged into 4
subsidiaries of GIC starting from 1.1.1973
? National insurance co, incorporated in 1906 in Calcutta, was
privately managed till 1972. 21 foreign and 11 indian companies
were merged with national insurance to form a subsidiary of GIC
? The new india assurance company was incorporated in 1919
operating from Bombay. Got nationalised in 1972 along with 23
other private players to form a subsidiary of GIC
? United india insurance co was incorporated as a company in
1938 with HQ in Madras. It was later nationalised along with 12
indian, 4 co operative, 5 foreign and the general insurance wing
of LIC
? The Oriental fire and general insurance co with its HQ
in Delhi was incorporated in 1947 as a subsidiary of
oriental government security life assurance in 1947. it
became a subsidiary of LIC in 1956. it came under
GIC in 1973 after nationalisation of general insurance
business.
? In 2002 after passage of insurance amendment bill
(2002) all the four public sector companies were
delinked from GIC and started operating as
independent companies.
? Malhotra committee 1993 recommended opening up
of insurance sector for private players.
? IRDA is currently the governing body responsible for
regulation and control of insurance sector in india.
Their main aim is protection of policy holders? interest.
Performance of private and public
general insurance companies
? Insurance penetration is very low in india due to lack of awareness.
Therefore potential for growth is large with new regulations and
new players coming in and economy growing at healthy rate.
General insurance has grown from Rs 11000 Cr in 1999 to Rs 40,000
cr in 2011. target is to cross Rs 1,00,000 by 2020.
? Factors that enabled the sector to grow are as follows:
? 1. Leverage: private players have leveraged upon the image and
business relationships of their parent organisations. This has helped
build awareness and penetration.
? 2. Operational flexibility: operational flexibility of private players
including pricing policy, marketing etc has contributed to the
growth of the sector.
? 3. innovation: innovative pricing and cross-subsidised product
mixes have helped private players grow as against public players.
? 4. strong infrastructure and systems: private players have built
state-of-the-art infrastructure and systems in order to provide
better service to customers. Quicker decision making and claim
settlements have boosted their business as compared to public
players.
? Claims settlement: selective underwriting by the private players
on 3P insurance have reduced claims burden and waiting for
tribunal judgements. This has led to better claim settlement
service by private players as compared to public players.
? 6. Distribution: traditionally agency channel had dominated the
industry but of late bancassurance, brokers, corporate agents,
direct sales channels are gaining importance.
Health
insurance
Introduction
? Increasing rate of ill health
? Increasing cost of treatment
? Health insurance has become important
? Health insurance covers the financial loss
arising out of poor health conditions or
due to permanent disability which results
in loss of income
? Insurance contract that promises to
cover medical expenses upon during
illness or hospitalisation upon paying a
premium.
Individual medical expense
insurance
? Taken on individual basis for self or for family. Different
from group insurance
? Generally more expensive but suitable for individuals
who have no access to group policies
? Best suited for people who have better health than
average.
? Flexibility to choose from a wide choice of policies.
? Non-dependency on employer and avlid even after
resignation/shift/retirement
? It can be turned down based on risk and higher risk
attracts higher premium
Long term care coverage
? With increase in life expectancy long term care becomes important
? Nuclear family, less children, no children and more working women
makes it difficult to take care of elders
? Policy covers nursing home care and hospital care for the aged for
the long term, not necessarily sick
? Popular concept in the US, Canada, UK etc
? Can be in-house or at hospital
? Premiums and eligibility depends upon age
? Benefits are varied like home care, visiting experts expenses, home
nurse, etc
? Can be taken for a specific period or for life time. Life time is
expensive
? Inflation protection clause available
? Can be home healthcare/facilities only or comprehensive type of
policy
Disability income insurance
? One of the oldest coverages where insurer provides
compensation to the insured when he is unable to perform his
regular duties due to sickness or injuries arising out of an
accident.
? Injury is any bodily injury caused due to an accident during the
period of the policy
? Provides security against loss of income.
? Policies can be a short term or long term.
? Provided by life insurers or health insurers.
? Either to group or individually.
? Exclusions: doesn?t cover disability due to wars, intentional
injuries, and normal pregnencies in individual and group policies.
Pre-existing conditions are excluded.
Mediclaim policy
? Reimbursement of hospital expenses caused due to
sickness or disease or injuries. Payable only if the insured
is admitted into a hospital for more than 24 hrs. group
policy of more the 101 members gets a discount in
premium. Benefits of mediclaim policy:
? All medical expenses like doctor?s fee, room rent,
medicines, check-ups etc
? Family policy offers a discount in premium
? Some policies offer health check-up expenses once
every 3/4 years
? No claim bonus is usually added in terms of increased
sum assured
? Income tax benefit u/s 80D to the tune of Rs 25000 and
Rs 30000 for Sr citizens
Features of a mediclaim policy
?Premium
?Entry age
?Duration
?Co-payment
?Exclusions
?Pre-existing diseases
?Claim method
FirstRanker.com - FirstRanker's Choice
General Insurance
MODULE 6
General insurance
? First general insurance company in India,
called Triton insurance co was started in 1850 in
Calcutta.
? First general insurance co with Indian promoters
was started in 1906-07, by the name Indian
merchantile Insurance company
? Following world war 1 several foreign
companies started general insurance in India
having about 40% market share at the time of
lndependence.
Laws related to general
Insurance
? General insurance in India is governed by the Insurance Act
of 1938 which was later amended in 1969.
? Nationalisation of all companies by the General insurance
nationalisation Act , 1972. GIC covered 107 companies
? GIC was entrusted with responsibility of superintending,
controlling, and smooth conduct of the sector with its 4
subsidiaries in all zones of India.
? Following laws also touch upon general insurance:
- The motor vehicles act, 1939
- The inland steam-vessels (amendment act), 1977
- The marine insurance act, 1963
? The carriage of goods by the sea act, 1925
? The merchant shipping act, 1958
? The bill of lading act, 1956
? The indian ports (major ports) act, 1956
? The indian railways act, 1989
? The carriers act, 1965
? The indian post office act 1898
? The carriage by air act, 1972
? The multi-modal transportation act, 1993
? The public liability insurance act, 1991
? The indian stamp act, 1899
? The consumer protection act, 1986
Read P K Gupta old book for explanation page 51
General insurance contract
? General insurance aims to protect the economic value of assets
or life of a person.
? Contract agrees to make good the loss on the property or life of
the insured that may occur during the term of the contract for a
small premium to be paid by the insurer.
? In addition any insurance contract is bound by the following
PRINCIPLES:
? Principle of utmost good faith
? Principle of insurable interest
? Principle of indemnity
? Principle of subrogation
? Principle of contribution
? Principle of proximate cause (see module 4 for details)
General insurance corpn (GIC)
? GIC was formed on 1.1.1973 under the Insurance Act, 1938 in
accordance with provisions of general insurance business
(nationalisation) act, 1972.
? All the existing insurance companies were merged into 4
subsidiaries of GIC starting from 1.1.1973
? National insurance co, incorporated in 1906 in Calcutta, was
privately managed till 1972. 21 foreign and 11 indian companies
were merged with national insurance to form a subsidiary of GIC
? The new india assurance company was incorporated in 1919
operating from Bombay. Got nationalised in 1972 along with 23
other private players to form a subsidiary of GIC
? United india insurance co was incorporated as a company in
1938 with HQ in Madras. It was later nationalised along with 12
indian, 4 co operative, 5 foreign and the general insurance wing
of LIC
? The Oriental fire and general insurance co with its HQ
in Delhi was incorporated in 1947 as a subsidiary of
oriental government security life assurance in 1947. it
became a subsidiary of LIC in 1956. it came under
GIC in 1973 after nationalisation of general insurance
business.
? In 2002 after passage of insurance amendment bill
(2002) all the four public sector companies were
delinked from GIC and started operating as
independent companies.
? Malhotra committee 1993 recommended opening up
of insurance sector for private players.
? IRDA is currently the governing body responsible for
regulation and control of insurance sector in india.
Their main aim is protection of policy holders? interest.
Performance of private and public
general insurance companies
? Insurance penetration is very low in india due to lack of awareness.
Therefore potential for growth is large with new regulations and
new players coming in and economy growing at healthy rate.
General insurance has grown from Rs 11000 Cr in 1999 to Rs 40,000
cr in 2011. target is to cross Rs 1,00,000 by 2020.
? Factors that enabled the sector to grow are as follows:
? 1. Leverage: private players have leveraged upon the image and
business relationships of their parent organisations. This has helped
build awareness and penetration.
? 2. Operational flexibility: operational flexibility of private players
including pricing policy, marketing etc has contributed to the
growth of the sector.
? 3. innovation: innovative pricing and cross-subsidised product
mixes have helped private players grow as against public players.
? 4. strong infrastructure and systems: private players have built
state-of-the-art infrastructure and systems in order to provide
better service to customers. Quicker decision making and claim
settlements have boosted their business as compared to public
players.
? Claims settlement: selective underwriting by the private players
on 3P insurance have reduced claims burden and waiting for
tribunal judgements. This has led to better claim settlement
service by private players as compared to public players.
? 6. Distribution: traditionally agency channel had dominated the
industry but of late bancassurance, brokers, corporate agents,
direct sales channels are gaining importance.
Health
insurance
Introduction
? Increasing rate of ill health
? Increasing cost of treatment
? Health insurance has become important
? Health insurance covers the financial loss
arising out of poor health conditions or
due to permanent disability which results
in loss of income
? Insurance contract that promises to
cover medical expenses upon during
illness or hospitalisation upon paying a
premium.
Individual medical expense
insurance
? Taken on individual basis for self or for family. Different
from group insurance
? Generally more expensive but suitable for individuals
who have no access to group policies
? Best suited for people who have better health than
average.
? Flexibility to choose from a wide choice of policies.
? Non-dependency on employer and avlid even after
resignation/shift/retirement
? It can be turned down based on risk and higher risk
attracts higher premium
Long term care coverage
? With increase in life expectancy long term care becomes important
? Nuclear family, less children, no children and more working women
makes it difficult to take care of elders
? Policy covers nursing home care and hospital care for the aged for
the long term, not necessarily sick
? Popular concept in the US, Canada, UK etc
? Can be in-house or at hospital
? Premiums and eligibility depends upon age
? Benefits are varied like home care, visiting experts expenses, home
nurse, etc
? Can be taken for a specific period or for life time. Life time is
expensive
? Inflation protection clause available
? Can be home healthcare/facilities only or comprehensive type of
policy
Disability income insurance
? One of the oldest coverages where insurer provides
compensation to the insured when he is unable to perform his
regular duties due to sickness or injuries arising out of an
accident.
? Injury is any bodily injury caused due to an accident during the
period of the policy
? Provides security against loss of income.
? Policies can be a short term or long term.
? Provided by life insurers or health insurers.
? Either to group or individually.
? Exclusions: doesn?t cover disability due to wars, intentional
injuries, and normal pregnencies in individual and group policies.
Pre-existing conditions are excluded.
Mediclaim policy
? Reimbursement of hospital expenses caused due to
sickness or disease or injuries. Payable only if the insured
is admitted into a hospital for more than 24 hrs. group
policy of more the 101 members gets a discount in
premium. Benefits of mediclaim policy:
? All medical expenses like doctor?s fee, room rent,
medicines, check-ups etc
? Family policy offers a discount in premium
? Some policies offer health check-up expenses once
every 3/4 years
? No claim bonus is usually added in terms of increased
sum assured
? Income tax benefit u/s 80D to the tune of Rs 25000 and
Rs 30000 for Sr citizens
Features of a mediclaim policy
?Premium
?Entry age
?Duration
?Co-payment
?Exclusions
?Pre-existing diseases
?Claim method
Group mediclaim policy
? Applicable to any group , association, institution,
corporate bodies having common administration and
having a minimum number of persons covered.
? Group discounts in premium available but no NCB and
health check up expenses payable.
? Benefits include-
? - inpatient benefits
? - covers pre-existing diseases.
? - post hospitalisation banefits
? - day care procedures but not OPD
? - maternity related procedures
? -new born benefits
FirstRanker.com - FirstRanker's Choice
General Insurance
MODULE 6
General insurance
? First general insurance company in India,
called Triton insurance co was started in 1850 in
Calcutta.
? First general insurance co with Indian promoters
was started in 1906-07, by the name Indian
merchantile Insurance company
? Following world war 1 several foreign
companies started general insurance in India
having about 40% market share at the time of
lndependence.
Laws related to general
Insurance
? General insurance in India is governed by the Insurance Act
of 1938 which was later amended in 1969.
? Nationalisation of all companies by the General insurance
nationalisation Act , 1972. GIC covered 107 companies
? GIC was entrusted with responsibility of superintending,
controlling, and smooth conduct of the sector with its 4
subsidiaries in all zones of India.
? Following laws also touch upon general insurance:
- The motor vehicles act, 1939
- The inland steam-vessels (amendment act), 1977
- The marine insurance act, 1963
? The carriage of goods by the sea act, 1925
? The merchant shipping act, 1958
? The bill of lading act, 1956
? The indian ports (major ports) act, 1956
? The indian railways act, 1989
? The carriers act, 1965
? The indian post office act 1898
? The carriage by air act, 1972
? The multi-modal transportation act, 1993
? The public liability insurance act, 1991
? The indian stamp act, 1899
? The consumer protection act, 1986
Read P K Gupta old book for explanation page 51
General insurance contract
? General insurance aims to protect the economic value of assets
or life of a person.
? Contract agrees to make good the loss on the property or life of
the insured that may occur during the term of the contract for a
small premium to be paid by the insurer.
? In addition any insurance contract is bound by the following
PRINCIPLES:
? Principle of utmost good faith
? Principle of insurable interest
? Principle of indemnity
? Principle of subrogation
? Principle of contribution
? Principle of proximate cause (see module 4 for details)
General insurance corpn (GIC)
? GIC was formed on 1.1.1973 under the Insurance Act, 1938 in
accordance with provisions of general insurance business
(nationalisation) act, 1972.
? All the existing insurance companies were merged into 4
subsidiaries of GIC starting from 1.1.1973
? National insurance co, incorporated in 1906 in Calcutta, was
privately managed till 1972. 21 foreign and 11 indian companies
were merged with national insurance to form a subsidiary of GIC
? The new india assurance company was incorporated in 1919
operating from Bombay. Got nationalised in 1972 along with 23
other private players to form a subsidiary of GIC
? United india insurance co was incorporated as a company in
1938 with HQ in Madras. It was later nationalised along with 12
indian, 4 co operative, 5 foreign and the general insurance wing
of LIC
? The Oriental fire and general insurance co with its HQ
in Delhi was incorporated in 1947 as a subsidiary of
oriental government security life assurance in 1947. it
became a subsidiary of LIC in 1956. it came under
GIC in 1973 after nationalisation of general insurance
business.
? In 2002 after passage of insurance amendment bill
(2002) all the four public sector companies were
delinked from GIC and started operating as
independent companies.
? Malhotra committee 1993 recommended opening up
of insurance sector for private players.
? IRDA is currently the governing body responsible for
regulation and control of insurance sector in india.
Their main aim is protection of policy holders? interest.
Performance of private and public
general insurance companies
? Insurance penetration is very low in india due to lack of awareness.
Therefore potential for growth is large with new regulations and
new players coming in and economy growing at healthy rate.
General insurance has grown from Rs 11000 Cr in 1999 to Rs 40,000
cr in 2011. target is to cross Rs 1,00,000 by 2020.
? Factors that enabled the sector to grow are as follows:
? 1. Leverage: private players have leveraged upon the image and
business relationships of their parent organisations. This has helped
build awareness and penetration.
? 2. Operational flexibility: operational flexibility of private players
including pricing policy, marketing etc has contributed to the
growth of the sector.
? 3. innovation: innovative pricing and cross-subsidised product
mixes have helped private players grow as against public players.
? 4. strong infrastructure and systems: private players have built
state-of-the-art infrastructure and systems in order to provide
better service to customers. Quicker decision making and claim
settlements have boosted their business as compared to public
players.
? Claims settlement: selective underwriting by the private players
on 3P insurance have reduced claims burden and waiting for
tribunal judgements. This has led to better claim settlement
service by private players as compared to public players.
? 6. Distribution: traditionally agency channel had dominated the
industry but of late bancassurance, brokers, corporate agents,
direct sales channels are gaining importance.
Health
insurance
Introduction
? Increasing rate of ill health
? Increasing cost of treatment
? Health insurance has become important
? Health insurance covers the financial loss
arising out of poor health conditions or
due to permanent disability which results
in loss of income
? Insurance contract that promises to
cover medical expenses upon during
illness or hospitalisation upon paying a
premium.
Individual medical expense
insurance
? Taken on individual basis for self or for family. Different
from group insurance
? Generally more expensive but suitable for individuals
who have no access to group policies
? Best suited for people who have better health than
average.
? Flexibility to choose from a wide choice of policies.
? Non-dependency on employer and avlid even after
resignation/shift/retirement
? It can be turned down based on risk and higher risk
attracts higher premium
Long term care coverage
? With increase in life expectancy long term care becomes important
? Nuclear family, less children, no children and more working women
makes it difficult to take care of elders
? Policy covers nursing home care and hospital care for the aged for
the long term, not necessarily sick
? Popular concept in the US, Canada, UK etc
? Can be in-house or at hospital
? Premiums and eligibility depends upon age
? Benefits are varied like home care, visiting experts expenses, home
nurse, etc
? Can be taken for a specific period or for life time. Life time is
expensive
? Inflation protection clause available
? Can be home healthcare/facilities only or comprehensive type of
policy
Disability income insurance
? One of the oldest coverages where insurer provides
compensation to the insured when he is unable to perform his
regular duties due to sickness or injuries arising out of an
accident.
? Injury is any bodily injury caused due to an accident during the
period of the policy
? Provides security against loss of income.
? Policies can be a short term or long term.
? Provided by life insurers or health insurers.
? Either to group or individually.
? Exclusions: doesn?t cover disability due to wars, intentional
injuries, and normal pregnencies in individual and group policies.
Pre-existing conditions are excluded.
Mediclaim policy
? Reimbursement of hospital expenses caused due to
sickness or disease or injuries. Payable only if the insured
is admitted into a hospital for more than 24 hrs. group
policy of more the 101 members gets a discount in
premium. Benefits of mediclaim policy:
? All medical expenses like doctor?s fee, room rent,
medicines, check-ups etc
? Family policy offers a discount in premium
? Some policies offer health check-up expenses once
every 3/4 years
? No claim bonus is usually added in terms of increased
sum assured
? Income tax benefit u/s 80D to the tune of Rs 25000 and
Rs 30000 for Sr citizens
Features of a mediclaim policy
?Premium
?Entry age
?Duration
?Co-payment
?Exclusions
?Pre-existing diseases
?Claim method
Group mediclaim policy
? Applicable to any group , association, institution,
corporate bodies having common administration and
having a minimum number of persons covered.
? Group discounts in premium available but no NCB and
health check up expenses payable.
? Benefits include-
? - inpatient benefits
? - covers pre-existing diseases.
? - post hospitalisation banefits
? - day care procedures but not OPD
? - maternity related procedures
? -new born benefits
Personal accident policy
? Policy covers accidents causing disability/death by
external violent means. Permanent partial/total
disability and temporary total disability. Disability
includes loss of organs
? Includes all kinds of accidents including snake bites.
? There are exclusions like intentional injury, suicide,
drugs, liquor, danger sports, war etc
? Premia depend upon nature of job, discounts
available to family/groups
? Banks tie up with insurance companies to provide this
cover
? Janatha personal accident insurance scheme is quite
cheap and popular
FirstRanker.com - FirstRanker's Choice
General Insurance
MODULE 6
General insurance
? First general insurance company in India,
called Triton insurance co was started in 1850 in
Calcutta.
? First general insurance co with Indian promoters
was started in 1906-07, by the name Indian
merchantile Insurance company
? Following world war 1 several foreign
companies started general insurance in India
having about 40% market share at the time of
lndependence.
Laws related to general
Insurance
? General insurance in India is governed by the Insurance Act
of 1938 which was later amended in 1969.
? Nationalisation of all companies by the General insurance
nationalisation Act , 1972. GIC covered 107 companies
? GIC was entrusted with responsibility of superintending,
controlling, and smooth conduct of the sector with its 4
subsidiaries in all zones of India.
? Following laws also touch upon general insurance:
- The motor vehicles act, 1939
- The inland steam-vessels (amendment act), 1977
- The marine insurance act, 1963
? The carriage of goods by the sea act, 1925
? The merchant shipping act, 1958
? The bill of lading act, 1956
? The indian ports (major ports) act, 1956
? The indian railways act, 1989
? The carriers act, 1965
? The indian post office act 1898
? The carriage by air act, 1972
? The multi-modal transportation act, 1993
? The public liability insurance act, 1991
? The indian stamp act, 1899
? The consumer protection act, 1986
Read P K Gupta old book for explanation page 51
General insurance contract
? General insurance aims to protect the economic value of assets
or life of a person.
? Contract agrees to make good the loss on the property or life of
the insured that may occur during the term of the contract for a
small premium to be paid by the insurer.
? In addition any insurance contract is bound by the following
PRINCIPLES:
? Principle of utmost good faith
? Principle of insurable interest
? Principle of indemnity
? Principle of subrogation
? Principle of contribution
? Principle of proximate cause (see module 4 for details)
General insurance corpn (GIC)
? GIC was formed on 1.1.1973 under the Insurance Act, 1938 in
accordance with provisions of general insurance business
(nationalisation) act, 1972.
? All the existing insurance companies were merged into 4
subsidiaries of GIC starting from 1.1.1973
? National insurance co, incorporated in 1906 in Calcutta, was
privately managed till 1972. 21 foreign and 11 indian companies
were merged with national insurance to form a subsidiary of GIC
? The new india assurance company was incorporated in 1919
operating from Bombay. Got nationalised in 1972 along with 23
other private players to form a subsidiary of GIC
? United india insurance co was incorporated as a company in
1938 with HQ in Madras. It was later nationalised along with 12
indian, 4 co operative, 5 foreign and the general insurance wing
of LIC
? The Oriental fire and general insurance co with its HQ
in Delhi was incorporated in 1947 as a subsidiary of
oriental government security life assurance in 1947. it
became a subsidiary of LIC in 1956. it came under
GIC in 1973 after nationalisation of general insurance
business.
? In 2002 after passage of insurance amendment bill
(2002) all the four public sector companies were
delinked from GIC and started operating as
independent companies.
? Malhotra committee 1993 recommended opening up
of insurance sector for private players.
? IRDA is currently the governing body responsible for
regulation and control of insurance sector in india.
Their main aim is protection of policy holders? interest.
Performance of private and public
general insurance companies
? Insurance penetration is very low in india due to lack of awareness.
Therefore potential for growth is large with new regulations and
new players coming in and economy growing at healthy rate.
General insurance has grown from Rs 11000 Cr in 1999 to Rs 40,000
cr in 2011. target is to cross Rs 1,00,000 by 2020.
? Factors that enabled the sector to grow are as follows:
? 1. Leverage: private players have leveraged upon the image and
business relationships of their parent organisations. This has helped
build awareness and penetration.
? 2. Operational flexibility: operational flexibility of private players
including pricing policy, marketing etc has contributed to the
growth of the sector.
? 3. innovation: innovative pricing and cross-subsidised product
mixes have helped private players grow as against public players.
? 4. strong infrastructure and systems: private players have built
state-of-the-art infrastructure and systems in order to provide
better service to customers. Quicker decision making and claim
settlements have boosted their business as compared to public
players.
? Claims settlement: selective underwriting by the private players
on 3P insurance have reduced claims burden and waiting for
tribunal judgements. This has led to better claim settlement
service by private players as compared to public players.
? 6. Distribution: traditionally agency channel had dominated the
industry but of late bancassurance, brokers, corporate agents,
direct sales channels are gaining importance.
Health
insurance
Introduction
? Increasing rate of ill health
? Increasing cost of treatment
? Health insurance has become important
? Health insurance covers the financial loss
arising out of poor health conditions or
due to permanent disability which results
in loss of income
? Insurance contract that promises to
cover medical expenses upon during
illness or hospitalisation upon paying a
premium.
Individual medical expense
insurance
? Taken on individual basis for self or for family. Different
from group insurance
? Generally more expensive but suitable for individuals
who have no access to group policies
? Best suited for people who have better health than
average.
? Flexibility to choose from a wide choice of policies.
? Non-dependency on employer and avlid even after
resignation/shift/retirement
? It can be turned down based on risk and higher risk
attracts higher premium
Long term care coverage
? With increase in life expectancy long term care becomes important
? Nuclear family, less children, no children and more working women
makes it difficult to take care of elders
? Policy covers nursing home care and hospital care for the aged for
the long term, not necessarily sick
? Popular concept in the US, Canada, UK etc
? Can be in-house or at hospital
? Premiums and eligibility depends upon age
? Benefits are varied like home care, visiting experts expenses, home
nurse, etc
? Can be taken for a specific period or for life time. Life time is
expensive
? Inflation protection clause available
? Can be home healthcare/facilities only or comprehensive type of
policy
Disability income insurance
? One of the oldest coverages where insurer provides
compensation to the insured when he is unable to perform his
regular duties due to sickness or injuries arising out of an
accident.
? Injury is any bodily injury caused due to an accident during the
period of the policy
? Provides security against loss of income.
? Policies can be a short term or long term.
? Provided by life insurers or health insurers.
? Either to group or individually.
? Exclusions: doesn?t cover disability due to wars, intentional
injuries, and normal pregnencies in individual and group policies.
Pre-existing conditions are excluded.
Mediclaim policy
? Reimbursement of hospital expenses caused due to
sickness or disease or injuries. Payable only if the insured
is admitted into a hospital for more than 24 hrs. group
policy of more the 101 members gets a discount in
premium. Benefits of mediclaim policy:
? All medical expenses like doctor?s fee, room rent,
medicines, check-ups etc
? Family policy offers a discount in premium
? Some policies offer health check-up expenses once
every 3/4 years
? No claim bonus is usually added in terms of increased
sum assured
? Income tax benefit u/s 80D to the tune of Rs 25000 and
Rs 30000 for Sr citizens
Features of a mediclaim policy
?Premium
?Entry age
?Duration
?Co-payment
?Exclusions
?Pre-existing diseases
?Claim method
Group mediclaim policy
? Applicable to any group , association, institution,
corporate bodies having common administration and
having a minimum number of persons covered.
? Group discounts in premium available but no NCB and
health check up expenses payable.
? Benefits include-
? - inpatient benefits
? - covers pre-existing diseases.
? - post hospitalisation banefits
? - day care procedures but not OPD
? - maternity related procedures
? -new born benefits
Personal accident policy
? Policy covers accidents causing disability/death by
external violent means. Permanent partial/total
disability and temporary total disability. Disability
includes loss of organs
? Includes all kinds of accidents including snake bites.
? There are exclusions like intentional injury, suicide,
drugs, liquor, danger sports, war etc
? Premia depend upon nature of job, discounts
available to family/groups
? Banks tie up with insurance companies to provide this
cover
? Janatha personal accident insurance scheme is quite
cheap and popular
Child welfare policy
? Important for the child?s future.
? Involves insuring parent?s life
? Involves investment as well for education/marriage.
? Premium depends upon rider, age and company
? Sum assured to take care of goal
? Matures at critical life stage
? Waiver of premiun is a characteristic rider of this policy.
? Critical illness is another imp rider
? Double accident benefit as well
? Money back at intervals also possible
? Some of the imp policies are Child ULIP, Child endowment or
specific benefit policy like Bhagyashree for the gorl child
FirstRanker.com - FirstRanker's Choice
General Insurance
MODULE 6
General insurance
? First general insurance company in India,
called Triton insurance co was started in 1850 in
Calcutta.
? First general insurance co with Indian promoters
was started in 1906-07, by the name Indian
merchantile Insurance company
? Following world war 1 several foreign
companies started general insurance in India
having about 40% market share at the time of
lndependence.
Laws related to general
Insurance
? General insurance in India is governed by the Insurance Act
of 1938 which was later amended in 1969.
? Nationalisation of all companies by the General insurance
nationalisation Act , 1972. GIC covered 107 companies
? GIC was entrusted with responsibility of superintending,
controlling, and smooth conduct of the sector with its 4
subsidiaries in all zones of India.
? Following laws also touch upon general insurance:
- The motor vehicles act, 1939
- The inland steam-vessels (amendment act), 1977
- The marine insurance act, 1963
? The carriage of goods by the sea act, 1925
? The merchant shipping act, 1958
? The bill of lading act, 1956
? The indian ports (major ports) act, 1956
? The indian railways act, 1989
? The carriers act, 1965
? The indian post office act 1898
? The carriage by air act, 1972
? The multi-modal transportation act, 1993
? The public liability insurance act, 1991
? The indian stamp act, 1899
? The consumer protection act, 1986
Read P K Gupta old book for explanation page 51
General insurance contract
? General insurance aims to protect the economic value of assets
or life of a person.
? Contract agrees to make good the loss on the property or life of
the insured that may occur during the term of the contract for a
small premium to be paid by the insurer.
? In addition any insurance contract is bound by the following
PRINCIPLES:
? Principle of utmost good faith
? Principle of insurable interest
? Principle of indemnity
? Principle of subrogation
? Principle of contribution
? Principle of proximate cause (see module 4 for details)
General insurance corpn (GIC)
? GIC was formed on 1.1.1973 under the Insurance Act, 1938 in
accordance with provisions of general insurance business
(nationalisation) act, 1972.
? All the existing insurance companies were merged into 4
subsidiaries of GIC starting from 1.1.1973
? National insurance co, incorporated in 1906 in Calcutta, was
privately managed till 1972. 21 foreign and 11 indian companies
were merged with national insurance to form a subsidiary of GIC
? The new india assurance company was incorporated in 1919
operating from Bombay. Got nationalised in 1972 along with 23
other private players to form a subsidiary of GIC
? United india insurance co was incorporated as a company in
1938 with HQ in Madras. It was later nationalised along with 12
indian, 4 co operative, 5 foreign and the general insurance wing
of LIC
? The Oriental fire and general insurance co with its HQ
in Delhi was incorporated in 1947 as a subsidiary of
oriental government security life assurance in 1947. it
became a subsidiary of LIC in 1956. it came under
GIC in 1973 after nationalisation of general insurance
business.
? In 2002 after passage of insurance amendment bill
(2002) all the four public sector companies were
delinked from GIC and started operating as
independent companies.
? Malhotra committee 1993 recommended opening up
of insurance sector for private players.
? IRDA is currently the governing body responsible for
regulation and control of insurance sector in india.
Their main aim is protection of policy holders? interest.
Performance of private and public
general insurance companies
? Insurance penetration is very low in india due to lack of awareness.
Therefore potential for growth is large with new regulations and
new players coming in and economy growing at healthy rate.
General insurance has grown from Rs 11000 Cr in 1999 to Rs 40,000
cr in 2011. target is to cross Rs 1,00,000 by 2020.
? Factors that enabled the sector to grow are as follows:
? 1. Leverage: private players have leveraged upon the image and
business relationships of their parent organisations. This has helped
build awareness and penetration.
? 2. Operational flexibility: operational flexibility of private players
including pricing policy, marketing etc has contributed to the
growth of the sector.
? 3. innovation: innovative pricing and cross-subsidised product
mixes have helped private players grow as against public players.
? 4. strong infrastructure and systems: private players have built
state-of-the-art infrastructure and systems in order to provide
better service to customers. Quicker decision making and claim
settlements have boosted their business as compared to public
players.
? Claims settlement: selective underwriting by the private players
on 3P insurance have reduced claims burden and waiting for
tribunal judgements. This has led to better claim settlement
service by private players as compared to public players.
? 6. Distribution: traditionally agency channel had dominated the
industry but of late bancassurance, brokers, corporate agents,
direct sales channels are gaining importance.
Health
insurance
Introduction
? Increasing rate of ill health
? Increasing cost of treatment
? Health insurance has become important
? Health insurance covers the financial loss
arising out of poor health conditions or
due to permanent disability which results
in loss of income
? Insurance contract that promises to
cover medical expenses upon during
illness or hospitalisation upon paying a
premium.
Individual medical expense
insurance
? Taken on individual basis for self or for family. Different
from group insurance
? Generally more expensive but suitable for individuals
who have no access to group policies
? Best suited for people who have better health than
average.
? Flexibility to choose from a wide choice of policies.
? Non-dependency on employer and avlid even after
resignation/shift/retirement
? It can be turned down based on risk and higher risk
attracts higher premium
Long term care coverage
? With increase in life expectancy long term care becomes important
? Nuclear family, less children, no children and more working women
makes it difficult to take care of elders
? Policy covers nursing home care and hospital care for the aged for
the long term, not necessarily sick
? Popular concept in the US, Canada, UK etc
? Can be in-house or at hospital
? Premiums and eligibility depends upon age
? Benefits are varied like home care, visiting experts expenses, home
nurse, etc
? Can be taken for a specific period or for life time. Life time is
expensive
? Inflation protection clause available
? Can be home healthcare/facilities only or comprehensive type of
policy
Disability income insurance
? One of the oldest coverages where insurer provides
compensation to the insured when he is unable to perform his
regular duties due to sickness or injuries arising out of an
accident.
? Injury is any bodily injury caused due to an accident during the
period of the policy
? Provides security against loss of income.
? Policies can be a short term or long term.
? Provided by life insurers or health insurers.
? Either to group or individually.
? Exclusions: doesn?t cover disability due to wars, intentional
injuries, and normal pregnencies in individual and group policies.
Pre-existing conditions are excluded.
Mediclaim policy
? Reimbursement of hospital expenses caused due to
sickness or disease or injuries. Payable only if the insured
is admitted into a hospital for more than 24 hrs. group
policy of more the 101 members gets a discount in
premium. Benefits of mediclaim policy:
? All medical expenses like doctor?s fee, room rent,
medicines, check-ups etc
? Family policy offers a discount in premium
? Some policies offer health check-up expenses once
every 3/4 years
? No claim bonus is usually added in terms of increased
sum assured
? Income tax benefit u/s 80D to the tune of Rs 25000 and
Rs 30000 for Sr citizens
Features of a mediclaim policy
?Premium
?Entry age
?Duration
?Co-payment
?Exclusions
?Pre-existing diseases
?Claim method
Group mediclaim policy
? Applicable to any group , association, institution,
corporate bodies having common administration and
having a minimum number of persons covered.
? Group discounts in premium available but no NCB and
health check up expenses payable.
? Benefits include-
? - inpatient benefits
? - covers pre-existing diseases.
? - post hospitalisation banefits
? - day care procedures but not OPD
? - maternity related procedures
? -new born benefits
Personal accident policy
? Policy covers accidents causing disability/death by
external violent means. Permanent partial/total
disability and temporary total disability. Disability
includes loss of organs
? Includes all kinds of accidents including snake bites.
? There are exclusions like intentional injury, suicide,
drugs, liquor, danger sports, war etc
? Premia depend upon nature of job, discounts
available to family/groups
? Banks tie up with insurance companies to provide this
cover
? Janatha personal accident insurance scheme is quite
cheap and popular
Child welfare policy
? Important for the child?s future.
? Involves insuring parent?s life
? Involves investment as well for education/marriage.
? Premium depends upon rider, age and company
? Sum assured to take care of goal
? Matures at critical life stage
? Waiver of premiun is a characteristic rider of this policy.
? Critical illness is another imp rider
? Double accident benefit as well
? Money back at intervals also possible
? Some of the imp policies are Child ULIP, Child endowment or
specific benefit policy like Bhagyashree for the gorl child
Employee group Insurance
?Group policy issued to the employer
?To cover group of employees
?To submit employees list every month
along with premiums
?An employee loses insurance the
moment he/she quits/retires
?New additions are included every month
?Premiums are cheap
?Non-medical in nature
FirstRanker.com - FirstRanker's Choice
General Insurance
MODULE 6
General insurance
? First general insurance company in India,
called Triton insurance co was started in 1850 in
Calcutta.
? First general insurance co with Indian promoters
was started in 1906-07, by the name Indian
merchantile Insurance company
? Following world war 1 several foreign
companies started general insurance in India
having about 40% market share at the time of
lndependence.
Laws related to general
Insurance
? General insurance in India is governed by the Insurance Act
of 1938 which was later amended in 1969.
? Nationalisation of all companies by the General insurance
nationalisation Act , 1972. GIC covered 107 companies
? GIC was entrusted with responsibility of superintending,
controlling, and smooth conduct of the sector with its 4
subsidiaries in all zones of India.
? Following laws also touch upon general insurance:
- The motor vehicles act, 1939
- The inland steam-vessels (amendment act), 1977
- The marine insurance act, 1963
? The carriage of goods by the sea act, 1925
? The merchant shipping act, 1958
? The bill of lading act, 1956
? The indian ports (major ports) act, 1956
? The indian railways act, 1989
? The carriers act, 1965
? The indian post office act 1898
? The carriage by air act, 1972
? The multi-modal transportation act, 1993
? The public liability insurance act, 1991
? The indian stamp act, 1899
? The consumer protection act, 1986
Read P K Gupta old book for explanation page 51
General insurance contract
? General insurance aims to protect the economic value of assets
or life of a person.
? Contract agrees to make good the loss on the property or life of
the insured that may occur during the term of the contract for a
small premium to be paid by the insurer.
? In addition any insurance contract is bound by the following
PRINCIPLES:
? Principle of utmost good faith
? Principle of insurable interest
? Principle of indemnity
? Principle of subrogation
? Principle of contribution
? Principle of proximate cause (see module 4 for details)
General insurance corpn (GIC)
? GIC was formed on 1.1.1973 under the Insurance Act, 1938 in
accordance with provisions of general insurance business
(nationalisation) act, 1972.
? All the existing insurance companies were merged into 4
subsidiaries of GIC starting from 1.1.1973
? National insurance co, incorporated in 1906 in Calcutta, was
privately managed till 1972. 21 foreign and 11 indian companies
were merged with national insurance to form a subsidiary of GIC
? The new india assurance company was incorporated in 1919
operating from Bombay. Got nationalised in 1972 along with 23
other private players to form a subsidiary of GIC
? United india insurance co was incorporated as a company in
1938 with HQ in Madras. It was later nationalised along with 12
indian, 4 co operative, 5 foreign and the general insurance wing
of LIC
? The Oriental fire and general insurance co with its HQ
in Delhi was incorporated in 1947 as a subsidiary of
oriental government security life assurance in 1947. it
became a subsidiary of LIC in 1956. it came under
GIC in 1973 after nationalisation of general insurance
business.
? In 2002 after passage of insurance amendment bill
(2002) all the four public sector companies were
delinked from GIC and started operating as
independent companies.
? Malhotra committee 1993 recommended opening up
of insurance sector for private players.
? IRDA is currently the governing body responsible for
regulation and control of insurance sector in india.
Their main aim is protection of policy holders? interest.
Performance of private and public
general insurance companies
? Insurance penetration is very low in india due to lack of awareness.
Therefore potential for growth is large with new regulations and
new players coming in and economy growing at healthy rate.
General insurance has grown from Rs 11000 Cr in 1999 to Rs 40,000
cr in 2011. target is to cross Rs 1,00,000 by 2020.
? Factors that enabled the sector to grow are as follows:
? 1. Leverage: private players have leveraged upon the image and
business relationships of their parent organisations. This has helped
build awareness and penetration.
? 2. Operational flexibility: operational flexibility of private players
including pricing policy, marketing etc has contributed to the
growth of the sector.
? 3. innovation: innovative pricing and cross-subsidised product
mixes have helped private players grow as against public players.
? 4. strong infrastructure and systems: private players have built
state-of-the-art infrastructure and systems in order to provide
better service to customers. Quicker decision making and claim
settlements have boosted their business as compared to public
players.
? Claims settlement: selective underwriting by the private players
on 3P insurance have reduced claims burden and waiting for
tribunal judgements. This has led to better claim settlement
service by private players as compared to public players.
? 6. Distribution: traditionally agency channel had dominated the
industry but of late bancassurance, brokers, corporate agents,
direct sales channels are gaining importance.
Health
insurance
Introduction
? Increasing rate of ill health
? Increasing cost of treatment
? Health insurance has become important
? Health insurance covers the financial loss
arising out of poor health conditions or
due to permanent disability which results
in loss of income
? Insurance contract that promises to
cover medical expenses upon during
illness or hospitalisation upon paying a
premium.
Individual medical expense
insurance
? Taken on individual basis for self or for family. Different
from group insurance
? Generally more expensive but suitable for individuals
who have no access to group policies
? Best suited for people who have better health than
average.
? Flexibility to choose from a wide choice of policies.
? Non-dependency on employer and avlid even after
resignation/shift/retirement
? It can be turned down based on risk and higher risk
attracts higher premium
Long term care coverage
? With increase in life expectancy long term care becomes important
? Nuclear family, less children, no children and more working women
makes it difficult to take care of elders
? Policy covers nursing home care and hospital care for the aged for
the long term, not necessarily sick
? Popular concept in the US, Canada, UK etc
? Can be in-house or at hospital
? Premiums and eligibility depends upon age
? Benefits are varied like home care, visiting experts expenses, home
nurse, etc
? Can be taken for a specific period or for life time. Life time is
expensive
? Inflation protection clause available
? Can be home healthcare/facilities only or comprehensive type of
policy
Disability income insurance
? One of the oldest coverages where insurer provides
compensation to the insured when he is unable to perform his
regular duties due to sickness or injuries arising out of an
accident.
? Injury is any bodily injury caused due to an accident during the
period of the policy
? Provides security against loss of income.
? Policies can be a short term or long term.
? Provided by life insurers or health insurers.
? Either to group or individually.
? Exclusions: doesn?t cover disability due to wars, intentional
injuries, and normal pregnencies in individual and group policies.
Pre-existing conditions are excluded.
Mediclaim policy
? Reimbursement of hospital expenses caused due to
sickness or disease or injuries. Payable only if the insured
is admitted into a hospital for more than 24 hrs. group
policy of more the 101 members gets a discount in
premium. Benefits of mediclaim policy:
? All medical expenses like doctor?s fee, room rent,
medicines, check-ups etc
? Family policy offers a discount in premium
? Some policies offer health check-up expenses once
every 3/4 years
? No claim bonus is usually added in terms of increased
sum assured
? Income tax benefit u/s 80D to the tune of Rs 25000 and
Rs 30000 for Sr citizens
Features of a mediclaim policy
?Premium
?Entry age
?Duration
?Co-payment
?Exclusions
?Pre-existing diseases
?Claim method
Group mediclaim policy
? Applicable to any group , association, institution,
corporate bodies having common administration and
having a minimum number of persons covered.
? Group discounts in premium available but no NCB and
health check up expenses payable.
? Benefits include-
? - inpatient benefits
? - covers pre-existing diseases.
? - post hospitalisation banefits
? - day care procedures but not OPD
? - maternity related procedures
? -new born benefits
Personal accident policy
? Policy covers accidents causing disability/death by
external violent means. Permanent partial/total
disability and temporary total disability. Disability
includes loss of organs
? Includes all kinds of accidents including snake bites.
? There are exclusions like intentional injury, suicide,
drugs, liquor, danger sports, war etc
? Premia depend upon nature of job, discounts
available to family/groups
? Banks tie up with insurance companies to provide this
cover
? Janatha personal accident insurance scheme is quite
cheap and popular
Child welfare policy
? Important for the child?s future.
? Involves insuring parent?s life
? Involves investment as well for education/marriage.
? Premium depends upon rider, age and company
? Sum assured to take care of goal
? Matures at critical life stage
? Waiver of premiun is a characteristic rider of this policy.
? Critical illness is another imp rider
? Double accident benefit as well
? Money back at intervals also possible
? Some of the imp policies are Child ULIP, Child endowment or
specific benefit policy like Bhagyashree for the gorl child
Employee group Insurance
?Group policy issued to the employer
?To cover group of employees
?To submit employees list every month
along with premiums
?An employee loses insurance the
moment he/she quits/retires
?New additions are included every month
?Premiums are cheap
?Non-medical in nature
Features of group health insurance
? Cheap and common premium for all irrespective of
age, gender, family size
? Easy entry: any new recruit gets enrolled
automatically without any questions
? Better benefits: full spectrum benefits apply to all, no
specific clauses
? Custom made by the employer for his employees
? Attractive underwriting features like guaranteed issue,
onetime underwriting, common premium for all and
simple health questions which also reduces with
number
? One loses policy benefits if he quits the organisation
FirstRanker.com - FirstRanker's Choice
General Insurance
MODULE 6
General insurance
? First general insurance company in India,
called Triton insurance co was started in 1850 in
Calcutta.
? First general insurance co with Indian promoters
was started in 1906-07, by the name Indian
merchantile Insurance company
? Following world war 1 several foreign
companies started general insurance in India
having about 40% market share at the time of
lndependence.
Laws related to general
Insurance
? General insurance in India is governed by the Insurance Act
of 1938 which was later amended in 1969.
? Nationalisation of all companies by the General insurance
nationalisation Act , 1972. GIC covered 107 companies
? GIC was entrusted with responsibility of superintending,
controlling, and smooth conduct of the sector with its 4
subsidiaries in all zones of India.
? Following laws also touch upon general insurance:
- The motor vehicles act, 1939
- The inland steam-vessels (amendment act), 1977
- The marine insurance act, 1963
? The carriage of goods by the sea act, 1925
? The merchant shipping act, 1958
? The bill of lading act, 1956
? The indian ports (major ports) act, 1956
? The indian railways act, 1989
? The carriers act, 1965
? The indian post office act 1898
? The carriage by air act, 1972
? The multi-modal transportation act, 1993
? The public liability insurance act, 1991
? The indian stamp act, 1899
? The consumer protection act, 1986
Read P K Gupta old book for explanation page 51
General insurance contract
? General insurance aims to protect the economic value of assets
or life of a person.
? Contract agrees to make good the loss on the property or life of
the insured that may occur during the term of the contract for a
small premium to be paid by the insurer.
? In addition any insurance contract is bound by the following
PRINCIPLES:
? Principle of utmost good faith
? Principle of insurable interest
? Principle of indemnity
? Principle of subrogation
? Principle of contribution
? Principle of proximate cause (see module 4 for details)
General insurance corpn (GIC)
? GIC was formed on 1.1.1973 under the Insurance Act, 1938 in
accordance with provisions of general insurance business
(nationalisation) act, 1972.
? All the existing insurance companies were merged into 4
subsidiaries of GIC starting from 1.1.1973
? National insurance co, incorporated in 1906 in Calcutta, was
privately managed till 1972. 21 foreign and 11 indian companies
were merged with national insurance to form a subsidiary of GIC
? The new india assurance company was incorporated in 1919
operating from Bombay. Got nationalised in 1972 along with 23
other private players to form a subsidiary of GIC
? United india insurance co was incorporated as a company in
1938 with HQ in Madras. It was later nationalised along with 12
indian, 4 co operative, 5 foreign and the general insurance wing
of LIC
? The Oriental fire and general insurance co with its HQ
in Delhi was incorporated in 1947 as a subsidiary of
oriental government security life assurance in 1947. it
became a subsidiary of LIC in 1956. it came under
GIC in 1973 after nationalisation of general insurance
business.
? In 2002 after passage of insurance amendment bill
(2002) all the four public sector companies were
delinked from GIC and started operating as
independent companies.
? Malhotra committee 1993 recommended opening up
of insurance sector for private players.
? IRDA is currently the governing body responsible for
regulation and control of insurance sector in india.
Their main aim is protection of policy holders? interest.
Performance of private and public
general insurance companies
? Insurance penetration is very low in india due to lack of awareness.
Therefore potential for growth is large with new regulations and
new players coming in and economy growing at healthy rate.
General insurance has grown from Rs 11000 Cr in 1999 to Rs 40,000
cr in 2011. target is to cross Rs 1,00,000 by 2020.
? Factors that enabled the sector to grow are as follows:
? 1. Leverage: private players have leveraged upon the image and
business relationships of their parent organisations. This has helped
build awareness and penetration.
? 2. Operational flexibility: operational flexibility of private players
including pricing policy, marketing etc has contributed to the
growth of the sector.
? 3. innovation: innovative pricing and cross-subsidised product
mixes have helped private players grow as against public players.
? 4. strong infrastructure and systems: private players have built
state-of-the-art infrastructure and systems in order to provide
better service to customers. Quicker decision making and claim
settlements have boosted their business as compared to public
players.
? Claims settlement: selective underwriting by the private players
on 3P insurance have reduced claims burden and waiting for
tribunal judgements. This has led to better claim settlement
service by private players as compared to public players.
? 6. Distribution: traditionally agency channel had dominated the
industry but of late bancassurance, brokers, corporate agents,
direct sales channels are gaining importance.
Health
insurance
Introduction
? Increasing rate of ill health
? Increasing cost of treatment
? Health insurance has become important
? Health insurance covers the financial loss
arising out of poor health conditions or
due to permanent disability which results
in loss of income
? Insurance contract that promises to
cover medical expenses upon during
illness or hospitalisation upon paying a
premium.
Individual medical expense
insurance
? Taken on individual basis for self or for family. Different
from group insurance
? Generally more expensive but suitable for individuals
who have no access to group policies
? Best suited for people who have better health than
average.
? Flexibility to choose from a wide choice of policies.
? Non-dependency on employer and avlid even after
resignation/shift/retirement
? It can be turned down based on risk and higher risk
attracts higher premium
Long term care coverage
? With increase in life expectancy long term care becomes important
? Nuclear family, less children, no children and more working women
makes it difficult to take care of elders
? Policy covers nursing home care and hospital care for the aged for
the long term, not necessarily sick
? Popular concept in the US, Canada, UK etc
? Can be in-house or at hospital
? Premiums and eligibility depends upon age
? Benefits are varied like home care, visiting experts expenses, home
nurse, etc
? Can be taken for a specific period or for life time. Life time is
expensive
? Inflation protection clause available
? Can be home healthcare/facilities only or comprehensive type of
policy
Disability income insurance
? One of the oldest coverages where insurer provides
compensation to the insured when he is unable to perform his
regular duties due to sickness or injuries arising out of an
accident.
? Injury is any bodily injury caused due to an accident during the
period of the policy
? Provides security against loss of income.
? Policies can be a short term or long term.
? Provided by life insurers or health insurers.
? Either to group or individually.
? Exclusions: doesn?t cover disability due to wars, intentional
injuries, and normal pregnencies in individual and group policies.
Pre-existing conditions are excluded.
Mediclaim policy
? Reimbursement of hospital expenses caused due to
sickness or disease or injuries. Payable only if the insured
is admitted into a hospital for more than 24 hrs. group
policy of more the 101 members gets a discount in
premium. Benefits of mediclaim policy:
? All medical expenses like doctor?s fee, room rent,
medicines, check-ups etc
? Family policy offers a discount in premium
? Some policies offer health check-up expenses once
every 3/4 years
? No claim bonus is usually added in terms of increased
sum assured
? Income tax benefit u/s 80D to the tune of Rs 25000 and
Rs 30000 for Sr citizens
Features of a mediclaim policy
?Premium
?Entry age
?Duration
?Co-payment
?Exclusions
?Pre-existing diseases
?Claim method
Group mediclaim policy
? Applicable to any group , association, institution,
corporate bodies having common administration and
having a minimum number of persons covered.
? Group discounts in premium available but no NCB and
health check up expenses payable.
? Benefits include-
? - inpatient benefits
? - covers pre-existing diseases.
? - post hospitalisation banefits
? - day care procedures but not OPD
? - maternity related procedures
? -new born benefits
Personal accident policy
? Policy covers accidents causing disability/death by
external violent means. Permanent partial/total
disability and temporary total disability. Disability
includes loss of organs
? Includes all kinds of accidents including snake bites.
? There are exclusions like intentional injury, suicide,
drugs, liquor, danger sports, war etc
? Premia depend upon nature of job, discounts
available to family/groups
? Banks tie up with insurance companies to provide this
cover
? Janatha personal accident insurance scheme is quite
cheap and popular
Child welfare policy
? Important for the child?s future.
? Involves insuring parent?s life
? Involves investment as well for education/marriage.
? Premium depends upon rider, age and company
? Sum assured to take care of goal
? Matures at critical life stage
? Waiver of premiun is a characteristic rider of this policy.
? Critical illness is another imp rider
? Double accident benefit as well
? Money back at intervals also possible
? Some of the imp policies are Child ULIP, Child endowment or
specific benefit policy like Bhagyashree for the gorl child
Employee group Insurance
?Group policy issued to the employer
?To cover group of employees
?To submit employees list every month
along with premiums
?An employee loses insurance the
moment he/she quits/retires
?New additions are included every month
?Premiums are cheap
?Non-medical in nature
Features of group health insurance
? Cheap and common premium for all irrespective of
age, gender, family size
? Easy entry: any new recruit gets enrolled
automatically without any questions
? Better benefits: full spectrum benefits apply to all, no
specific clauses
? Custom made by the employer for his employees
? Attractive underwriting features like guaranteed issue,
onetime underwriting, common premium for all and
simple health questions which also reduces with
number
? One loses policy benefits if he quits the organisation
Group availability plan
???
FirstRanker.com - FirstRanker's Choice
This post was last modified on 18 February 2020