Insurance

Understanding the concept of insurance Functions of insurance Types of insurance Best form of insurance

Learning Objectives

Insurance is a protection against a financial loss arising on the happenings of an unexpected event.

Concept of Insurance

Protection Long-term Saving Liquidity Tax Relief

Benefits of Insurance

Department of the Ministry of Commerce, headed by a Controller of Insurance Act, 1938.

SECP New Act 2000 with features; Registration and regulation of insurance companies; Investigation into the affairs of insurance companies and

issuance of directives under the Law; Inspection of the record of the companies and insurance

intermediaries; Approvals and permissions under the powers conferred

under the Insurance Law; Appointment of administrators to replace board of directors

and to make applications to the Courts for winding up (source:www.secp.gov.pk/annualreport/2000/regulat ionInsurance.)

Regulators of Insurance

1. Marine Insurance2. Fire insurance3. Life Insurance

Types of Insurance

It is the oldest form of insurance dating over 5000 years. It gives coverage to ships and cargo at sea. It has major two categories;

1. Ocean marine

2. Inland Marine

1. Marine Insurance

This is best form of insurance because it can be surrendered at any time.

Event happen or not it gives coverage.

2. Life Insurance

Not a contract of indemnity Particular coverage

Difference from other types of Insurances

It is a contract between the insurance company and policy holder wherein the insurance company undertakes in exchange for premium to indemnify.

3. Fire Insurance

Contract of indemnity The insured cannot make profit form

contract Prescribed period The limit of liability Payment of the claim Assignment of policy Consequential loss

Essential of Fire Insurance