a - types of gi
DESCRIPTION
Types of GITRANSCRIPT
Practice of General Insurance
Presentation By:Manoj Verma
B.B.A (B & I): 306 PRACTICE OF GENERAL INSURANCE
UNIT-I No. of Hrs:10Different non life insurance products: Fire, Marine, Property, Vehicle, Theft, Aviation, Finished Goods, Goods in Transit, Technology, Political, Currency Risks, Construction Industry, Composite Insurance, Insurance products pertaining to Rural Market.
UNIT-II No. of Hrs:10Forms used in General Insurance, Appraisal of Risk, Tariff and Non-Tariff Rates, Use of Credibility theory for Rate Making, Experience Rating
UNIT-III No. Of Hrs:10Physical and Moral Hazards Loss Prevention, Loss Survey, Loss Assessment, Investigation and Claim Settlement, No Claim Bonus and Renewal of Policy
UNIT-IV No. of Hrs:10Unexpired Risk and Assessment of Liability in respect thereof., Periodic Valuation andDeclaration of Profit, Concept of Reinsurance
Reference Books: General Insurance; Insurance Institute of India; 2003 General Insurance Vol.1 ; ICFAI Press; 2005 Mishra M.N.; “Principles and Practices of Insurance”;
S. Chand and Co. 2004 Gupta P.K.; “Insurance and Risk Management”;
Himlaya Publishing House; 2004 Bodla,B.S. and Garg,M.C., “ Insurance Environment
and Procedure”, Deep & Deep Publications. Insurance Industry: Emerging Trends by ICFAI.
History of Insurance Business The history of general insurance dates back to the
Industrial Revolution in the west and the consequent growth of sea-faring trade and commerce in the 17th century.
It came to India as a legacy of British occupation. General Insurance in India has its roots in the establishment of Triton Insurance Company Ltd., in the year 1850 in Calcutta by the British. In 1907, the Indian Mercantile Insurance Ltd, was set up. This was the first company to transact all classes of general insurance business.
1957 saw the formation of the General Insurance Council, a wing of the Insurance Associaton of India. The General Insurance Council framed a code of conduct for ensuring fair conduct and sound business practices.
In 1968, the Insurance Act was amended to regulate investments and set minimum solvency margins. The Tariff Advisory Committee was also set up then.
History of Insurance Business In 1972 with the passing of the General Insurance
Business (Nationalisation) Act, general insurance business was nationalized with effect from 1st January, 1973.
107 insurers were amalgamated and grouped into four companies, namely National Insurance Company Ltd., the New India Assurance Company Ltd., the Oriental Insurance Company Ltd and the United India Insurance Company Ltd.
The General Insurance Corporation of India was incorporated as a company in 1971 and it commence business on January 1sst 1973.
History of Insurance Business This millennium has seen insurance come a full circle in a
journey extending to nearly 200 years. The process of re-opening of the sector had begun in the
early 1990s and the last decade and more has seen it been opened up substantially.
In 1993, the Government set up a committee under the chairmanship of RN Malhotra, former Governor of RBI, to propose recommendations for reforms in the insurance sector.The objective was to complement the reforms initiated in the financial sector.
The committee submitted its report in 1994 wherein , among other things, it recommended that the private sector be permitted to enter the insurance industry. They stated that foreign companies be allowed to enter by floating Indian companies, preferably a joint venture with Indian partners.
History of Insurance Business In December, 2000, the subsidiaries of the General
Insurance Corporation of India were restructured as independent companies and at the same time GIC was converted into a national re-insurer. Parliament passed a bill de-linking the four subsidiaries from GIC in July, 2002.
Today there are 24 general insurance companies including the ECGC and Agriculture Insurance Corporation of India and 23 life insurance companies operating in the country.
History of Insurance Business The insurance sector is a colossal one
and is growing at a speedy rate of 15-20%. Together with banking services, insurance services add about 7% to the country’s GDP. A well-developed and evolved insurance sector is a boon for economic development as it provides long- term funds for infrastructure development at the same time strengthening the risk taking ability of the country.
Different Non-life insurance productsNon-life insurance can take a number of different forms such as:
Marine Insurance Fire Insurance Automobile Insurance Property Insurance Liability Insurance Miscellaneous Insurance
Marine Insurance Marine insurance as we know it today can
be described as mother of all insurances. It is believed to have originated in England owing to the frequent movement of ships over high seas for trade.
In India, insurance has been in vogue for several centuries. History holds proof that these people had a system of pooling their contributions, if any one of their clan were to meet a tragedy in their
Marine Insurance Marine insurance is a contract under which,
the insurer undertakes to indemnify the insured in the manner and to the extent thereby agreed, against marine losses, incidental to marine adventures.
It may be defined as a form of insurance covering loss or damage to vessels or to cargo during transportation to the high seas.
Fire Insurance Fire is hazardous to human life as well as property.
Fire causes enormous damage by physically reducing the materials to ashes.
A fire insurance policy provides protection strictly against fire.
A contract of fire insurance can be defined as a contract under which one party ( the insurer) agrees for consideration (premium) to indemnify the other party (the insured) for the financial loss which the latter may suffer due to damage to the property insured by fire during a specified period of time and up to an agreed amount.
Auto Insurance There has been a sudden rise in the motor
accidents in the last few years. Much of these are attributable to increase in
the number of vehicles. Every vehicle before being driven on roads has to be compulsorily insured.
The motor insurance policy represents a combined coverage of the vehicles including accessories, loss or damage to his property or life and the third party coverage.
Auto Insurance Motor insurance policy is a contract between the
insured and the insurer in which the insurer promises to indemnify the financial liability in event of loss to the insured.
Motor Vehicles Act in 1939 was passed to mainly safeguard the interests of pedestrians. According to the Act, a vehicle cannot be used in a public place without insuring the third part liability.
According to Section 24 of Motor Vehicles Act, “No person shall use or allow any other person to use a motor vehicle in a public place, unless the vehicle is covered by a policy of insurance.”
Property Insurance Property insurance provides
protection against risks to property, such as fire, theft or weather damage.
This may include specialized forms of insurance such as fire insurance, flood insurance, earthquake insurance, home insurance, inland marine insurance or boiler insurance.
Liability Insurance Liability insurance is a very broad superset that covers
legal claims against the insured. Many types of insurance include an aspect of liability coverage.
For example, a homeowner's insurance policy will normally include liability coverage which protects the insured in the event of a claim brought by someone who slips and falls on the property;
automobile insurance also includes an aspect of liability insurance that indemnifies against the harm that a crashing car can cause to others' lives, health, or property. The protection offered by a liability insurance policy is twofold: a legal defense in the event of a lawsuit commenced against the policyholder and indemnification (payment on behalf of the insured) with respect to a settlement or court verdict. Liability policies typically cover only the negligence of the insured, and will not apply to results of wilful or intentional acts by the insured.
Miscellaneous Insurance Aviation insurance protects aircraft hulls and spares,
and associated liability risks, such as passenger and third-party liability. Airports may also appear under this subcategory, including air traffic control and refuelling operations for international airports through to smaller domestic exposures.
Boiler insurance (also known as boiler and machinery insurance, or equipment breakdown insurance) insures against accidental physical damage to boilers, equipment or machinery.
Builder's risk insurance insures against the risk of physical loss or damage to property during construction. Builder's risk insurance is typically written on an "all risk" basis covering damage arising from any cause (including the negligence of the insured) not otherwise expressly excluded. Builder's risk insurance is coverage that protects a person's or organization's insurable interest in materials, fixtures and/or equipment being used in the construction or renovation of a building or structure should those items sustain physical loss or damage from an insured peril.[20]
Crop insurance may be purchased by farmers to reduce or manage various risks associated with growing crops. Such risks include crop loss or damage caused by weather, hail, drought, frost damage, insects, or disease.
Earthquake insurance is a form of property insurance that pays the policyholder in the event of an earthquake that causes damage to the property. Most ordinary home insurance policies do not cover earthquake damage. Earthquake insurance policies generally feature a high deductible. Rates depend on location and hence the likelihood of an earthquake, as well as the construction of the home.
Fidelity bond is a form of casualty insurance that covers policyholders for losses incurred as a result of fraudulent acts by specified individuals. It usually insures a business for losses caused by the dishonest acts of its employees.
Flood insurance protects against property loss due to flooding. Many insurers in the U.S. do not provide flood insurance in some parts of the country. In response to this, the federal government created the National Flood Insurance Program which serves as the insurer of last resort.
Home insurance, also commonly called hazard insurance, or homeowners insurance (often abbreviated in the real estate industry as HOI), is the type of property insurance that covers private homes, as outlined above.
Landlord insurance covers residential and commercial properties which are rented to others. Most homeowners' insurance covers only owner-occupied homes.
Credit insurance repays some or all of a loan when certain circumstances arise to the borrower such as unemployment, disability, or death.
Mortgage insurance insures the lender against default by the borrower. Mortgage insurance is a form of credit insurance, although the name "credit insurance" more often is used to refer to policies that cover other kinds of debt.
Many credit cards offer payment protection plans which are a form of credit insurance.
All-risk insurance is an insurance that covers a wide-range of incidents and perils, except those noted in the policy. All-risk insurance is different from peril-specific insurance that cover losses from only those perils listed in the policy.[22] In car insurance, all-risk policy includes also the damages caused by the own driver.
Bloodstock insurance covers individual horses or a number of horses under common ownership. Coverage is typically for mortality as a result of accident, illness or disease but may extend to include infertility, in-transit loss, veterinary fees, and prospective foal.
Business interruption insurance covers the loss of income, and the expenses incurred, after a covered peril interrupts normal business operations.
Collateral protection insurance (CPI) insures property (primarily vehicles) held as collateral for loans made by lending institutions.
Defense Base Act (DBA) insurance provides coverage for civilian workers hired by the government to perform contracts outside the U.S. and Canada. DBA is required for all U.S. citizens, U.S. residents, U.S. Green Card holders, and all employees or subcontractors hired on overseas government contracts. Depending on the country, foreign nationals must also be covered under DBA. This coverage typically includes expenses related to medical treatment and loss of wages, as well as disability and death benefits.
Expatriate insurance provides individuals and organizations operating outside of their home country with protection for automobiles, property, health, liability and business pursuits.
Kidnap and ransom insurance is designed to protect individuals and corporations operating in high-risk areas around the world against the perils of kidnap, extortion, wrongful detention and hijacking.
Legal expenses insurance covers policyholders for the potential costs of legal action against an institution or an individual. When something happens which triggers the need for legal action, it is known as "the event". There are two main types of legal expenses insurance: before the event insurance and after the event insurance.
Locked funds insurance is a little-known hybrid insurance policy jointly issued by governments and banks. It is used to protect public funds from tamper by unauthorized parties. In special cases, a government may authorize its use in protecting semi-private funds which are liable to tamper. The terms of this type of insurance are usually very strict. Therefore it is used only in extreme cases where maximum security of funds is required.
Livestock insurance is a specialist policy provided to, for example, commercial or hobby farms, aquariums, fish farms or any other animal holding. Cover is available for mortality or economic slaughter as a result of accident, illness or disease but can extend to include destruction by government order.