Insurance – in simple language it means to transfer risk to someone who is capable of handling it generally to insurer (Insurance Company).
The origin of insurance business started from London Lloyd coffee house.
1st Life insurance company in the world was Amicable society for Perpetual Assurance.
1st life insurance company to be set up in India was The Oriental Life Insurance company ltd.
1st Non-life insurance company established in India was Triton Insurance company ltd.
1st Indian insurance company was Bombay Mutual Assurance society ltd found in 1870 in Mumbai.
National Insurance company ltd. is the oldest insurance company founded in 1906.
In 1912, the Life Insurance Companies Act and the Provident Fund Act were passed to regulate the insurance business.
The Life Insurance Companies Act 1912 made it compulsory that premiumrate tables and periodical valuation of companies be certified by an actuary.
The Insurance Act 1938 was the first legislation enacted to regulate the conduct of insurance companies in India.
Life insurance Business was nationalized on 1st September 1956 by merging 170 insurance companies and 75 Provident Fund societies and Life Insurance corporation of India ( LIC ) was formed.
Non – Life insurance business was nationalized in 1972 by amalgamating 106 insurers, General Insurance Corporation of India (GIC) & its 4 subsidaries was formed.
Malhotra committee and IRDA:- Malhotra committee – setup in 1993 to explore and recommend changes for development & it submitted the report in 1994.
IRDAI – Insurance regulatory and Development Authority of India was setup by an act IRDA Act 1999 as a statutory regulatory body for both life and nonlife
There must be an asset which has economic value (Car-physical; Goodwill-nonphysical; Eye-personal). These assets may lose value due to uncertain event. This chance of loss/damage is known as risk. The cause of risk is known as peril. Persons having similar risks pool (contribute) money (premium) together.
a)Primary burden of risk – losses actually suffered. E.g. Factory getting fire.
b)Secondary burden of risk – losses that might happen. Eg. physical/mental Stress strain.
a)Risk avoidance – Controlling risk by avoiding a loss situation
b)Risk retention – One tries to manage the impact to risk and divides to bear the risk and its effects by oneself.
c)Risk reduction and Control – This is a more practical and relevant approach than risk avoidance. It means taking steps to lower the chance of occurrence of a loss and / or to reduce severity of its impact if such loss should occur.
Insurance is a risk transfer mechanism.
Don't risk a lot for a little. E.g. there is no need to insure a ball pen as its cost is not high.
Don't risk more than what we can afford to lose. E.g. we cannot afford to not insure our house as its cost is high.
Don't insure without considering the likely outcome. E.g. can anyone insure a space satellite?
Insurance refers to protection against an event that might happen whereas Assurance refers to protection against an event that will happen
Employees state insurance corporation, Crop Insurance Schemes (RKBY), Rural insurance schemes.
Janata Personal Accident, Jan Arogya
Customers provides the bread and butter of a business and no enterprise can afford to treat them indifferently.
The role of customer service and relationships is far more critical in the case of insurance than in other products.
Because Insurance is a Service. Insurance is a Intangible good.
It is necessary for insurance companies and their personnel, which includes their agents, to render high quality service and delight the customer.
The Secret for success in insurance sales is commitment to serving their Customers.
Customer lifetime value may be defined as the sum of economic benefits that can be derived from building a sound relationship with a customer over a long period of time.
Communication can take place in several forms – Oral; Written; Non-Verbal; Body Language.
A) Making a great first impression
B) Body Language - refers to movements, gestures, facial expressions. The Way we talk, walk, sit and stand.
Is where we consciously try to hear not only the words but also, more importantly, try to understand the complete message being sent by another.
Grievance redressal mechanism – IRDA has various regulations in order to render the consumers grievances/complaints which come under protection of policy holder”s interests regulation 2002.
Integrated grievance management system (IGMS) - IRDA has launched an integrated grievance management system (IGMS) which acts as a central repository of insurance grievance data and as a tool for monitoring grievances in the industry. Policy holders can register on this system with their policy details. Complaints are then forwarded to the respective insurance company.
The consumer protection act 1986 - the act was passed “to provide for better protection of the interest of consumers and to make provision for the establishment of consumers disputes”.
The complainant had made a previous written representation to the insurance company and the insurance company had :
An applicant seeking appointment as a „ Composite Insurance Agent shall make an application to the Designated Official of respective life, general, health insurer or monocline insurer .
Composite Agency Application Form I-B.
Insurance Agency Examination : An applicant shall pass in the Insurance Agency Examination conducted by the Examination Body in the subjects of Life, General, or Health Insurance
Disqualification to act as an Insurance Agent: The conditions for disqualification shall be as stipulated under Section 42 (3) of the Act
An insurance policy is a contract between 2 parties – Insurer (Insurance Company) and Insured (Policy holder) as per Indian Contract act 1872.
For any contract to be a valid contract following elements should be there –
In Life Insurance – Insurable interest should be present at the start of policy.
In Non-life Insurance – Insurable interest should be present both at the start and during claim.
In Marine Insurance – Insurable Interest should be present at the time of claim.
The NRIs will be allowed insurance policies in Indian Rupee Currency only.
All plans are allowed for NRIs subject to few restrictions.
The premium can be paid by any of the following manner
The settlement of claims (in rupee) of life insurance policies in favour of claimants residing outside India will be permitted in foreign currency only in proportion in which the amount of premiums paid in foreign currency is in relation to the total premiums payable.
Life Insurance Policies bought by NRIs in India are governed by the regulations issued by the Reserve Bank of India (RBI). These regulations are known as the Life Insurance Manual.
LIC offers its services to Non Resident Indians (NRI) as well as to People of Indian Origin (PIO) having foreign nationality and residing in foreign countries.
Eligibility criteria: NRIs holding valid passport issued by the Government of India and who are Indian National can take LIC policies in Indian Rupee currency from any of LICs 2048 branches in India. LIC also accepts proposals for Life Insurance in Rupee currency from Persons of Indian Origin who have acquired Foreign Nationality / Green Card holders.
Claims of any nature arising under the policy will be settled in Indian currency in India. The payment of policy monies in foreign currency can be made proportionate to the premiums paid in foreign currency by direct Remittance or from the Non Resident (External) Account or Foreign currency Non Resident Account with a Bank in India.
The LIC offices are located in the following foreign offices, viz. U.K; MAURITUS & FIJI, which issue policies in local currencies to Local NRIs. The following are the addresses of the office located in abroad.
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