General Insurance Ppt by Brijesh Chauhan(f36) Priyank Barot(f40) and Bhavesh Vaghela(f15)

8/6/2019 General Insurance Ppt by Brijesh Chauhan(f36) Priyank Barot(f40) and Bhavesh Vaghela(f15)

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Principles of General Insurance

SUMBITEED BY

Brijesh chauhan(F36)Priyank Barot(F40)

Bhavesh Vaghela(F15)


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General Insurance

Insurance is classified into Life and General

Any insurance other than human lives comesunder the scope of General Insurance

It is preferable to call this as General Insuranceinstead of non-life insurance

There is vast scope and the market is trying to

cope up with the demands of the market Insurance penetration is improving in India and

being the second largest developing economyin the world the scope is huge


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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

Fire insurance followed in 1825 at Madras

Swadeshi movement also had its impact on Insurance

and first Indian Company was formed in 1907 IndianMercantile 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


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Development in 1970 Life Insurance business was nationalised in India in the year

1956 General Insurance business was being done by 106 companiesincluding LIC (GI)

On May 13th 1971 an ordinance was promulgated taking statecontrol of general insurance business with custodians in charge

In 1972 GI Nationalisation act was passed allowing theformation of GIC as the holding company and with 4subsidiaries each having its Head Office at one metro

1st Jan 1973 GIC and 4 companies were formed taking in them106 companies and the 4 PSUs were taking care of the generalinsurance business in the country till 2000 totally. GIC on its

own was also writing aviation and crop business besidesbecoming the National & Asian Reinsurer

The objective of nationalisation was to spread insurance tonook and corner of the country and to utilise peoples money forthe peoples good thus uplifting the socio economic condition of

the country


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Developments since 2000

Surveyors and loss assessors regulations 2000 Third party administrators regulations 2001

Investment regulations 2001

Policy holders interests regulations 2002 Brokers regulations 2002

Corporate Agents regulations 2002

Manner of receipt of premium 2002 Rural sector 2002

Distribution of surplus 2002


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Insurance councils & Institutes

Two councils which had been reconstituted lifeinsurance council

Insurance ombudsman had been appointed

General insurance council

IIISLA has been formed IIBA- Brokers association

IIRM- Institute of risk management

Intermediaries now allowed-Agents/ corporate agents/

Brokers Institutes for educating the agents/Brokers have beenformed and passing the examination has been mademandatory for carrying out insurance business

Surveyor licensing is being controlled by Regulator


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General Insurance

Insurance of property

Insurance of persons

Insurance of liability Insurance of Interest


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Classes of GI Business

Fire Property damage and business

interruption insurance

Marine- Cargo and Hull Misc - Motor/ Engineering/Liability/

Aviation/ Space/Energy/ Guarantee/

Bonds/ Rural/ Livestock/ weather/ Crop/

All risks/ accident/ Travel/ Baggage/


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Insurers now licensed by IRDA LIFE INSURERS 1. Bajaj Allianz

2. Birla sun life

3. HDFC Std life

4. ICICI Prduential

5. ING Vysya

6. LIC 7. Max New York Life

8. Metlife

9. Kotak Mahindra OM

10.SBI Life

11.TATA-AIG Life 12.Reliance Life

13.AVIVA life

14.Sahara India life

15.Shri Ram Life

16.Bharti AXA Life

GENERAL INSURERS 1. Bajaj Allianz

2. ICICI Lombard

3. Iffco-Tokio General Insurance

4. National Insurance

5. New India Assurance Company

6. Oriental Insurance 7. Reliance General Insurance

8. Royal Sundaram Alliance

9. TATA-AIG General

10.United India Insurance

11. Cholamandalam MS General

12. HDFC Chubb General

13. Export Credit Guarantee

14. Agriculture Insurance Company

15. Star Health & Allied

Sompho/ Shri Ram General/AXA/

Apollo DKV


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Terminology used in General

Insurance Proposer-Insured-Insurer Risk- Peril

Proposal form

Sum Insured

Premium ( Consideration)

Excess ( Deductible)

Indemnity

Cover note

Policy document

Endorsement-for effecting changes in the policy Warranties/ Clauses

Conditions

Underwriting

Renewal

Hazard


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Basic Principles of General Insce

Insurance is a legal agreement enteredbetween Insured and Insurer due to which due

to the consideration, the Insurer agrees to

indemnify the Insured, for the loss or damage or

liability created due an accident which is

covered under the policy subject to the terms

and conditions of the contract

All insurance policies are subject to thewarranties, conditions and clauses of the policy

contract and claims will be settled accordingly


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Basic principles

UTMOST GOOD FAITH- which is embodied in allinsurance contracts and appears in the conditions ofthe policy documents.

Since only the Insured who is the owner/possessingthe property he/she needs to declare the details which

are to be considered by the Underwriter. To obtain therequisite details the Insurer arranges all questions inorder in the proposal form so that he/she knows whereto look for the required details. Material fact is thedetail of the risk which will influence the mind of the

Underwriter to accept/reject; and if to accept the rate/terms at which the risk is to be accepted.

Duty of disclosure is on the proposer/Insured and ifwilful concealment/ non-disclosure of facts could beestablished the claim if any could be denied


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Insurable interest

Only the person who has insurable interest canarrange insurance and seek indemnity due to

loss or damage

Insurable interest is defined as legal interest in

another persons life or in the protection of

property from injury,loss,destruction or

pecuniary damage

By virtue of ownership Tenant who had leased property

Employers interest on employees lives


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Proximate cause

Insurer is liable for any loss proximately causedby a peril insured against, but he is not liable for

any loss which is not proximately caused by a

peril insured against-Judge Lumb

Proximate cause means the active, efficient

cause that sets in motion a train of events

which brings about a result, without the

intervention of any force started and workingactively from a new and independent source


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Indemnity

Insurance contracts are mostly contracts of indemnity Insured is entitled to obtain the loss amount suffered

from the insurances he had effected on the property

He is not to be benefited due the loss/damage

If sum insured is on agreed value basis the loss will besettled on that basis

Extent of indemnity will be based on the market value

of the property at the time of occurrence of the event

which caused the loss/damage or destruction

Subrogation and contribution are the corollaries of

indemnity to ensure that the claim settlement follows

the normal indemnity


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Underwriting and claims

Offer and acceptance- Proposal is studied by the Underwriterwho then quotes the premium terms, warranties and conditions

Once accepted by the proposer and premium is paid, the covernote is issued. Later on policy document is issued.

Alterations/ changes are effected by endorsements

Claim is being processed to take into account the salvage,under-insurance and excess under the policy and many timesto deduct the additional premium for restoring the sum insured

to the original level by charging the additional premium on theclaim amount paid from the date of loss till the date of expiry.

Claim will be subject to getting the subrogation rights preservedagainst the third parties responsible for making good the lossand transferring the same to Insurers


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Changes

Fire insurance; Reinstatement value

(other than stocks) Market value

Marine insurance : Agreed value Marine hull insurance: Agreed value

Motor insurance: Insured declared value

Engineering insurance: Present dayreplacement value

Misc insurance: Market value


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Documents

General Insurance Ppt by Brijesh Chauhan(f36) Priyank Barot(f40) and Bhavesh Vaghela(f15)