Presented By:

Mithil Patel(73)

Utpal Prajapati(77)

Mahendrasinh Vaghela(94)

Ajaypalsinh Zala(98)

V.M.Patel Institute of Management

Ganpat University

General Insurance(GI) in India

The entire general insurance business in India was nationalised by General Insurance Business (Nationalisation) Act, 1972 (GIBNA).

The Government of India (GOI), through Nationalisation took over the shares of 55 Indian insurance companies and the undertakings of 52 insurers carrying on general insurance business.

After a process of mergers among Indian insurance companies, four companies were left as fully owned subsidiary companies of GIC(1) National Insurance Company Limited, (2) The New India Assurance Company Limited,(3) The Oriental Insurance Company Limited, and (4) United India Insurance Company Limited

Classes of GI Business

1. Fire –Property damage and business interruption insurance

2. Marine- Cargo and Hull

3. Misc - Motor/ Engineering/Liability/ Aviation/ Space/Energy/ Guarantee/ Bonds/ Rural/ Livestock/ weather/ Crop/All risks/ accident/ Travel/ Baggage

Origins of Formal Marine InsuranceMaritime insurance was the earliest well-developed kind

of insurance, with origins in the Greek and Roman maritime loan.

Separate marine insurance contracts were developed in Genoa and

other Italian cities in the fourteenth century and spread to northern Europe.

The modern origins of marine insurance law in English law were in

the law merchant, with the establishment in England in 1601 of a specialized chamber of assurance separate from the other Courts.

Cont.….

In the 19th. century, Lloyd's and the Institute of London Underwriters (a grouping of London company insurers) developed between them standardised clauses for the use of marine insurance, and these have been maintained since. These are known as the Institute Clauses because the Institute covered the cost of their publication.

Nowadays, Marine insurance is often grouped with Aviation and Transit (ie. cargo) risks, and in this form is known by the acronym 'MAT'.

Marine Insurance in India

Marine insurance was being practiced in India from the beginning of 19th century

Offices were established in Kolkatta which was the centre for East India Company

Swadeshi movement also had its impact on Insurance and first Indian Company was formed in 1907 – Indian Mercantile Insurance Company

Need to control insurance business was felt by the British government which introduced the Insurance Act in 1938 and Insurance Rules in 1939

The Marine Insurance Act, 1963, ACT NO. 11 OF 1963, [18th April, 1963.]

Marine Insurance

Marine Insurance covers the loss or damage of ships, cargo, terminals, and any transport or property by which cargo is transferred, acquired, or held between the points of origin and final destination.

Marine insurance falls under commercial insurance. The policy is taken to reduce business risks. It caters to small scale business organisations to large corporates. Policy does not cover loss or damage due to willful misconduct, ordinary leakage, improper packing, delay, war, strike and riot .

Marine insurance business

This is the oldest branch of Insurance comprising HULL & CARGO.

Hull Insurance deals the Loss associated with floating crafts, Cargo insurance provides cover in respect of loss or damage to goods during transit by rail, road, sea or air.

The RISKS covered in a marine policy falls under three categories 1.MARINE PERILS

2.EXTRANEOUS PERILS

3.WAR & STIRKES, RIOTS & CIVIL COMMOTION RISKS (S.R.C.C)

Calculation of Marine Insurance Amount/Premium

Amount of premium depends on factors like nature of cargo, scope of cover, packing, mode of conveyance, distance and past claims experience.

Premium can be paid on a monthly/quarterly/half-yearly/yearly basis.

Marine Insurance Claim Procedure: In case of loss/damage in transit, a monetary claim should be lodged

with the carrier within the time limit to protect recovery rights Appointment of surveyor or claim representative in agreement with the

insurer to determine the nature, cause and extent of loss/damage. The surveyor informs the insurer of the approximate value of loss

incurred The claim procedure takes from one to three weeks

Documents Required for Marine Insurance Claim:

1. Original Invoice & packing List - if forming part of Invoice

2. Document of declaration of consignment

3. Damage Certificate from the carrier

List of Some of Insurance Companies Offering Marine Insurance: ICICI Lombard - Marine Import Transit Insurance Policy United India Insurance Co. - Marine Cargo The New India Assurance Co. - Marine Cargo Policy Tata AIG Bajaj Allianz

Protection and indemnityA marine policy typically covered only three-quarter of the insured's liabilities

towards third parties. The typical liabilities arise in respect of collision with another ship, known as 'running down’.

In the 19th century, shipowners banded together in mutual underwriting clubs known as Protection and Indemnity Clubs (P&I), to insure the remaining one-quarter liability amongst themselves.

Clubs work on the basis of agreeing to accept a shipowner as a member and levying an initial 'call' (premium). With the fund accumulated, reinsurance will be purchased; however, if the loss experience is unfavourable one or more 'supplementary calls' may be made. Clubs also typically try to build up reserves, but this puts them at odds with their mutual status.

Actual Total Loss and Constructive Total LossThese two terms are used to differentiate the degree of proof

where a vessel or cargo has been lost.

An Actual Total Loss refers to the situation where the position is clear and a Constructive Total Loss refers to the situation where a loss is inferred. In practice, a Constructive Total Loss might also be used to describe a loss where the cost of repair is not economic; ie a 'write-off'.

Specialist Policies

New building risks: This covers the risk of damage to the hull whilst it is under construction.

Yacht Insurance: Insurance of pleasure craft is generally known as 'yacht insurance' and includes liability coverage. Smaller vessels, such as yachts and fishing vessels, are typically underwritten on a 'binding authority' or 'lineslip' basis.

War risks: Usual Hull insurance does not cover the risks of a vessel sailing into a war zone. War risks cover protects, at an additional premium, against the danger of loss in a war zone.

Cont...Increased Value (IV): Increased Value cover protects the

ship owner against any difference between the insured value of the vessel and the market value of the vessel.

Overdue insurance: This is a form of insurance now largely obsolete due to advances in communications. It was an early form of reinsurance and was bought by an insurer when a ship was late at arriving at her destination port and there was a risk that she might have been lost (but, equally, might simply have been delayed).

Warranties and ConditionsA peculiarity of marine insurance, and insurance law generally, is the use of

the terms condition and warranty.

In English law, a condition typically describes a part of the contract that is fundamental to the performance of that contract, and, if breached, the non-breaching party is entitled not only to claim damages but to terminate the contract on the basis that it has been repudiated by the party in breach.

Warranty is not fundamental to the performance of the contract and breach of a warranty, whilst giving rise to a claim for damages, does not entitle the non-breaching party to terminate the contract.

SALVAGE CHARGES:

With Marine cargo policies, the term is often referred to as salvage loss. The difference between the insured value and the net proceeds of the sale becomes the salvage value.