ch.14 mfs insurance

8/13/2019 Ch.14 MFS Insurance

1/85

Insurance services and

products


2/85

Introduction

It is polling of risks

In the contract of insurance,

The insurer agrees (insurance company)

In consideration of sum of money (premium)

To make good the loss suffered by the insured

against a specific risk

Types of insurance

Life insurance General insurance


3/85

Insurance Act,1938

Eligibility Registration

Cancellation of Registration

Renewal of Registration

Restriction on Name

Capital requirement

Promoter's holding

Deposits Reservation of deposits

Refund of deposits

Refund of deposits


4/85

Contd..

Accounts and Balance sheet Actuarial report and Abstract

Investments of Assets

Approved investments

Other investments

Investment of General insurance business

Prohibition of investment

Manner and Condition of investment

Statement of investment of assets

Returns of Investments relating to controlled fund

Return on investment by general insurance

companies


5/85

Default in compliance with/Act in contravention

Carrying on business in contravention of

requirement of registration and deposits

False statement in document

Wrongfully obtaining/withholding property

Offences by companies

Failure to comply with

Power to call for information Power of Government to make rules

Power of IRDA to make regulations

Penalties


6/85

Insurance Regulatory and

Development Authority (IRDA)

1. Issue of certificate of registration to the applicant

2. Protection of interest of policy holders

3. Specifying requisite qualifications and practical

training

4. Specifying code of conduct for surveyor and loss

assessors

5. Promoting efficiency

6. Promoting and regulating professional

organizations

7. Calling for the information

8. Control of the rates, terms and conditions


7/85

Contd..

9. Regulating investment of funds

10. Adjudication of disputes

11. Supervising the functioning of the Tariff

advisory committee

12. Specifying the percentage of premium income

13. Specifying the percentage of life insurance and

general insurance

14. Exercising such other powers as may be

prescribed


8/85

Power and functions of IRDA

1. Issue of certificate of registration to the

applicant

2. Protection of interest of policy holders

3. Specifying requisite qualifications and practicaltraining

4. Specifying code of conduct for surveyor and

loss assessors

5. Promoting efficiency

6. Promoting and regulating professional

organizations


9/85

Contd..

7. Calling for the information8. Control of the rates, terms and conditions

9. Regulating investment of funds

10.Adjudication of disputes

11. Supervising the functioning of the Tariffadvisory committee

12. Specifying the percentage of premium

income13. Specifying the percentage of life insuranceand general insurance

14. Exercising such other powers as may be

prescribed


10/85

IRDA Regulations

Rural/social sector obligation

New insurer

Rural sector

Social sector

Existing insurers

Insurance Advertisement and Disclosure

Compliance and control

Changes in Advertisement Insurance company Advertisements

Advertisements by insurance Agents

Advertisements by insurance Intermediaries


11/85

Contd..

Advertising on internet

Identity of Advertiser

Endorsements and other third party involvement

Procedure in case of complaint

Adherence to advertisement code

Statutory warning


12/85


13/85

Absolute Privilege:An appointed actuary should

enjoy absolute privilege to make any statement-oral

or written-so that he can perform his functions Asset, Liabilities and Solvency Margins:

1. Valuation of Assets:It includes: Values of

Assets, Statement of Assets, Determination of

Amount of Liabilities, Methods of Determinationof mathematical Reserves, Policy Cash Flows,

Policy Options, Valuation Parameters,

Applicability to Reinsurance, Additional

Requirements for Linked Business, AdditionalRequirements for provisions.

2. Statement of Liabilities: It includes: Valuation

of liabilities, Determination of Liabilities and

Statement of Liability.


14/85

Contd3. Determination of Solvency Margin: The statement

of solvency margin should be separately prepared

for Life Insurance Business and GeneralInsurance Business

Solvency Margin is calculated based on Net

Premium and Net Incurred Claims

RSM-1 means required Solvency Margin basedon net premiums, and should be determined as

20% of the amount which is the higher of the

gross premiums multiplied by Factor-A as

specified and the net premiums RSM-2 is based on net incurred claims, and

should be determined as 30% of the amount

which is higher of the gross net incurred claims

multiplied by a Factor-B as specified below andthe net incurred claims


15/85

Contd..

Business Outside India: Where the insurertransacts insurance business outside India, and

submits statements or returns to a public

authority of that country, he should enclose the

same along with the details specified inaccordance with the regulations and the IRDA

Actuarial Report and Abstract Regulations 2000.


16/85

Registration of Indian

Insurance Companies

Indian Insurance Companies: it is a company in

which holding by a foreign company does not

exceed 26 percent.

The registration of Indian insurance companies is

with reference to :

1. Requisition for Registration:An applicant who

want to do insurance business in India have to

file requisition of registration and when it is

accepted by IRDA, he can apply for certificate ofregistration.


17/85

Contd..

Requisition of registration should beaccompanied by:

a. A certified copy of MOA/AOA

b. Names/address/occupation of

directors/principal officer

c. a statement of proposed class of business

d. A statement indicating source of the required

Rs. 100 cr and 200 cr share capital for

life/general and reinsurance businessrespectively


18/85

Contd.

2. Application for Registration:An applicant,whose requisition has been accepted, may make

an application in prescribed form for grant of

certificate of registration. Every applicant should

accompany certain documents as per law whilemaking application of registration, like: evidence

of making of deposits, evidence of required paid

up capital, affidavit by the principal officer that

eq. capital held by foreign company do not

exceed 26%, MOA etc.


19/85

Contd..

3. Renewal of Certificate of Registration:

all insurers who have been granted a certificate

of registration would have to apply to IRDA before

December 31 every year together with a fee of

(a) Rs 50000 for each class of business and (b)1/10 of one % of the total gross premium written

by them or Rs 5 cr whichever is less. Failure to

apply within prescribed time limit would require to

pay additional penalty of 10% of the total fee.


20/85

Contd.

4. Action in case of default: The registration can be

suspended by the IRDA for a specified period if theinsurance company:

conducts its business in manner prejudicial to the

policy holdersinterests

Fails to furnish any information required by the

IRDA

Does not submit periodical returns as required by

the Insurance Act or by the IRDA

Does not cooperate in any inquiry by the IRDA

Indulges in manipulating the insurance business

Indulges in unfair trade practices and fails to

invest in the infrastructure or social sector as per

the regulations


21/85

Investment Regulations/Norms

Regulation norms pertains to investment assets of(1) life/pension/general annuity and unit linked

business and (2) general insurance business

1. (A) Life Business: Investment should be as

follows:Types of Investment % of Fund

1. Government Securities, Not < than 25

2. Government and other approved

securities including 1 above, Not less than

50

3. Investment specified in section-27(A) of

the insurance Act/Approved investment

subject to specified prudential norms

50


22/85

Contd.

(B) Pension and General Annuity Business:

2. General Insurance Business:

Types of Investment % of Fund


2. Government and other approved securities

including 1 above, Not less than

40

3. Investment specified in section-27(A) of the

insurance Act/Approved investment subject tospecified prudential norms, Not exceeding

60

Types of Investment % of Fund


2. Government and other approved

securities including 1 above, Not less than

30

3. Investment specified in section-27(B) of

the insurance Act/Approved investment

subject to specified prudential norms

70


23/85

Third Party Administrators

(TPAs)- Health

Definition: It is a company which provides health services fora fee to an insurance company

1. Licensing of TPAs:

The main/primary purpose of the company should be to

carry on business as a TPA in health services and it

should not engage into any other business It should have minimum (1) paid-up equity capital and (2)

working capital of 1 cr

At least 1 of its directors should be a qualified medical

doctor registered with medical council of India

Not more than 26% eq. shares can be held by a foreign

company

Any license granted to a TPA would be valid for 3 years

and it can be renewed by paying a fee of Rs 30000 at

least before 30 days of its expiration


24/85

Contd

2. Revocation/Cancellation of License: The

license granted to any TPA may, after due notice,be revoked or cancelled by the IRDA for notfollowing guidelines prescribed by the IRDA

3. Code of Conduct:A TPA should, as far aspossible, act in the best manner. In particular,every TPA/its CAO/its CEO/ its employees wouldbe bound to norms as prescribed by the IRDA

4. Maintenance and Confidentiality ofInformation: Every TPA is required to maintain,

in accordance with the accepted professionalstandards of record keeping for at least 3 yearsand they should be available to the IRDA andaccess cannot be denied on any ground

P t ti f P li h ld


25/85

Protection of Policyholders

Interest Regulations

This regulations apply to all insurers, insuranceagents, insurance intermediaries and policy

holders and its essential elements are:

1. Point of sale

2. Proposal for insurance3. Grievance redressal procedure

4. Matters to be stated in life insurance policy

5. Matters to be stated in general insurance

policy6. Claims procedures in respect of life and

general insurance policy

7. Policy holders servicing

8. general


26/85

Corporate Agents Regulations Corporate Agent is any person licensed by the IRDA

to act as an insurance agent.

Elements of these regulations

1. Issue/Renewal of license

a) Qualifications

b) Practical Training

c) Examination

2. Remuneration

3. Code of Conduct4. Renewal of License

a) Cancellation of License Certificate

b) Issue of Duplicate License

5. Miscellaneous


27/85

Insurance Brokers

Insurance Broker arranges insurance contractswith insurance companies on behalf of his clients.

Functions/Categories

a) Direct Broker

b) Reinsurance Broker

c) Composite Broker


28/85

Code of Conduct

Professional Conduct Conduct of matters relating to clients relationship

Conduct of matters relating to sales practices

Conduct of relation to furnishing of information

Conduct in regulation to explanation of insurance

contracts

Conduct in relation to renewal of policies

Conduct in relation to claim by client


29/85

Contd

Conduct in relation to receipt of complaints Conduct in relation to documentation

Conduct in matters relating to advertising

Conduct in matters relating to receipts of

remuneration

Conduct in relation to matters relating to relating


30/85

Professional Indemnity

Insurance

Every insurance broker should maintain a professionalindemnity insurance cover throughout the period of his

license

In suitable case 15 months from the date of issue of

original license is given to produce such a guarantee

Insurance cover must indemnify an insurance broker

against

a) Any error or omission on his part or on the part of

his employee and directors

b) Any loss of money or other property for which the

broker is legally liable

c) Any loss of documents and costs and expenses

incurred in replacing or restoring such documents

d) Dishonest or fraudulent acts or omissions by


31/85

Maintenance of Books of

Accounts and Records Every insurance broker should prepare

I. Balance sheet/statement of affairs

II. A Profit and loss a/c

III. A statement of cash/funds flow

IV. Additional statements on insurance brokingbusiness required by IRDA

These books of accounts and records should besubmitted within 90 days to IRDA together with

the auditors report These books of accounts and records should be

retained for atleast 10 years

A half-yearly unaudited financial statementsshould also be submitted to IRDA by insurance

broker.


32/85

Disclosures

An insurance broker may be required to disclose toIRDA within 30 days of requisition the following

information

I. His responsibilities with regard to placement of

an insurance contractII. Any change in the information/particulars

previously furnished having a bearing on the

grant of license

III. Name of clients whose insurance portfolio hemanages/has managed

IV. Any other requirement specified from time to

time by the IRDA


33/85

Inspection The IRDA has the right to appoint inspecting officer to

inspect the premises of insurance broker to ascertain how

the business is carried on and also to inspect the books ofaccounts, records and documents to

I. Ensure that they are being maintained in the prescribed

manner

II. Ensure that the provisions of the insurance act, rules,regulations are being complied with

III. Investigate the complaints from any

insured/insurer/insurance broker/any other person or

any matter having a bearing on his activities

IV. Investigate his affairs suo motuin the interest of theproper development of the insurance business or policy

holders interests

IRDA may also appoint a CA or an actuary or any qualified

and experienced individual in the insurance field as aninvesti atin officer.


34/85

Cancellation or Suspension of

License with Notice Reasons for cancellation/suspension of license:

a) Violation of the provision of the insurance act,

IRDA act;

b) Failure to furnish any information required by

the IRDA;c) Furnishing wrong or false information for

obtaining a license;

d) Failure to submit periodical returns as required

by IRDA;

e) Not co-operating with any inspection or inquiry

conducted by IRDA;

f) Failure to resolve the complaints of the policy

holders.


35/85

Contd

g) Breaching of the code of conduct by him;h) Failure to maintain capital requirements ;

i) Failure to pay the fees or reimbursement of

expenses;

j) Violation of the conditions of license;

k) Failure to carry out obligations as specified in

the regulations;

l) If the principal officer does not acquire

practical training and pass the examinationwithin the stipulated period.


36/85

Cancellation or Suspension of

License without Notice Reasons for cancellation of license without notice:

a) Violation of any one or more of the

requirements under the code of conduct;

b) Found guilty or fraud, or is convicted of a

criminal offence;c) Commitment of such default which requires

immediate action in the opinion of IRDA;

d) If the insurance broker has not commenced

business within six months of being granted alicense.


37/85

Micro-Insurance

A micro-insurance product includes life as well asgeneral micro-insurance products.

i. General micro-insurance productmeans a

health insurance contract/any contract

covering the belongings, such as a hut, livestock, tools etc.

ii. Life micro-insurance product means any

term insurance contract, with/without return of

premium/any endowment insurancecontract/health insurance contract with/without

an accident benefit rider, either on individual

or group basis.


38/85

Tie-up

The insurer should tie-up with a general insurer forthe purpose and subject to the provisions of

Section 64-VB of the insurance act, collect the

attributable premium from the prospect and make it

over to the general insurer(GI). He would forward any claim in regard to the

general micro-insurance product to the general

insurer and offer all assistance for its expeditious

disposal.

A GI can similarly tie-up with a life insurer to offer

life micro-insurance products.


39/85

Micro-insurance Agents

A micro-insurance agent meansi. NGO/SHG i.e. a Non-Government

organization or a self help group registered as

a society/an informal group, consisting of 10-

20 persons, which has been working foratleast 3 years with marginalized groups, with

proven track record, clearly stated terms and

objectives as outlined in its memorandum.

ii. MFI :Any entity registered with non-profitobjective for sanctioning loans/finance to

members


40/85

Duties of MIA

Collection of proposal forms/self declaration formsfrom the proposer;

Distribution of policy documents;

Maintenance of a register of all the insured and

their dependants with all the details in it; Assistance in settlement of claims;

Ensuring nominations to be made by the insured;

Any policy administrative service

A MIA can work for only one life insurer and one

general insurer.


41/85

Insurance products/services

Fundamental principlesProducts including groups/life insurance

General insurance products

Fire insurance

Marine insurance

Motor insurance

Health insurance

Liability insurance


42/85

Insuranceproducts/services

Fundamental

principals Insuranceprincipals

F d t l i i l


43/85

Fundamental principal Insurance

Means of protection of economic value of assets Assets are insured against the risk of being

destroyed/lost/made non-functional

Reduces impact of risk to the owner or those who

depends on it Does not protect asset

Only compensate economic/financial losses

Perils

Occurrences which can cause any damage to theassets

The damage by perils to the assets is the risk that

the asset is exposed to


44/85

Fundamentalprincipals

Insurableinterest

Utmost goodfaith

indemnity subrogation contribution

Insurable interest


45/85

Insurable interest

Means a person entering into a contract of insurance

would stand to lose financially on the occurrence ofthe event insured against

Insurable interest in life insurance contract

Own life

Husband/wife in each others life

Creditor in the life of debtor

Partners in the life of other partners(to the extent of

their int in the firm)

An employer in the lives of the key employee

A parent in the life of the child


46/85

Contd..

Insurable interest in non-life insurance contract Ownership of property

Car owner in third party to an accident

An employer to health of his employees

A bank in the loyalty/integrity of cashiers/tellers

An insured person can transfer(assign) his rights/

liabilities to another person(assignee)/liabilities to

another person

The assignee would acquire all the benefits of

insurance contract

Ut t d f ith


47/85

Utmost good faith

Implies full and accurate disclosure of facts material

to the risk to the insurer without being asked

Material fact:

The breach of utmost good faith may arise from

Misrepresentation (i.e. an statement of materialfact)

Nondisclosure (i.e. failure to disclose/ suppression

known fact)

Facts which should be disclosed are 1)facts which show greater risk than normally

expected(e.g. dangerous hobby like bungee-

jumping)

2)external factors enhancing risk like occupatione. . fi hter ilot

C td


48/85

Contd...

3)losses/claims on previous polices

4)decline/postponement of a previous proposed,

5)full facts (e.g. age, medical history,

smoking/drinking habits)

Principal of indemnity

Insurance contracts basically indemnify the

insured in the sense the sense that he is not

allowed to make profit from them

The indemnity principle implies that the financial

position of the insured must be restored to the

level he enjoyed before suffering the loss


49/85

Principal of subrogation

As an extension of the core principle of

indemnity, subrogation means the automatictransfer of rights/remedies of the insured to the

insurer upon the insured having received the

benefits of insurance such as

salvaged/recovered value of a wrecked car, a

stolen property in case of theft and burglary

The recovered/salvage property goes towards

reducing the insurers loss

Subrogation comes into effect only on the

payment of a claim


50/85

Principal of contribution

The principal applies if the insured has taken

several insurance policies for the same riskfrom several insurers

Each insure in such a case pays only thatportin of the risk as is represented by the

proportion of the sum assured by him to theoverall sum assured by the different insurers

Example

Under a fire insurance policy, if the insuredhas three policies of Rs. 10,00,000, 20,00,00

and 30,00,000 each, The respective insurers will suffer 1/6th, 1/3rd

,1/2 of the loss respectively.


51/85

Insurance

polices

Life

Insurance

General

Insurance


52/85

Life insurance products

Life insurance products are based on core risk

coverage needs of individuals

As well as long term investment concerns

Could be with or without profits There are also group insurance products



53/85


Term policy

Whole life policy

endowment

annuities

Unit linked policy

With/without profit policy

Group life insurance

Term Insurance Policy


54/85

Term Insurance Policy

Provides pure element of risk cover without any

saving For specified period only (temporary insurance)

The payment is made only when the insured dies

during selected period if not than nothing is payable

Different Types of Term Insurance Plans(1)Level Term Insurance:

(2)Decreasing Term Insurance

(3)Increasing Term Insurance

(4)Renewable Term Insurance

(5)Convertible term insurance

(6)Term insurance with Return of Premium


55/85

Whole Life Insurance Policy

The assured sum is paid whenever death of the

assured occurs

Premiums are paid throughout the life or for

shorter period

Endowment Insurance Policy

Benefit is payable to the insured only on survival

after the specified term

Payment made either on death or on the term get

over


56/85

Contd..

Annuities Starts when life insurance ends

Involves a series of periodic payments to the

annuitant or dependents

Immediate annuity: if the person purchasing theannuity dies during the term, his legal

heirs/nominees are entitled to the remaining

installments

Differed annuity: payments commence at somespecified time/age of annuitant

and such annuity can be funded by single

payment or by series of regular payments

U it li k I P li (ULIP)


57/85

Unit-link Insurance Policy(ULIP)

Combines the benefits of insurance protection

and investment in managed fund

Benefits depends on investment portfolio

Each premium split in two parts: one to provide

insurance cover and balance is invested in

mutual fund units

With Profit and Without Profit Policies

Additional amount or cash bonus paid to the

assured sum is called with profit policy

Policies with no bonus are without profit policy

Group Life Insurance Products

Covers similar/homogeneous individuals under

single policy

General insurance


58/85

General insurance

fire

marine

Motor/accident

Health /medical

liability

Fire Insurance


59/85

Fire Insurance For financial loss to property due to fire and related

hazards

Examples of property that can be covered under

fire insurance

Buildings and their contents(machinery/

equipments/ accessories/ goods/ raw materials/

finished goods so on..)

Electrical installation of a buildings

Goods in the open

Dwellings and their contents furniture/ fixtures/ fittings

Pipelines located inside/ outside buildings/

dwellings/ compounds

Fire Hazards


60/85

Fire Hazards

Fire

Explosion/Implosion

Aircraft Damage

Riots, strikes, malicious and terrorism damage

Impact Damage Subsidence and landslide including road slides

General Conditions


61/85

General Conditions

1) Policy would become void if: non-discloser ofmaterial facts, misrepresentation, mis-description

2) All insurance under such policies wouldautomatically cease if the building or structurecovered by the policy falls, or displaced in full or inpart.

Insurer should given a notice within 7days of theevent of fall/displacement

3) The insurance ceases to exist before anyloss/damage the insurer does not obtain sanction ofthe insurer:

(a) If trade/manufacturer or any othercircumstances are alter which can increase the riskof loss/damage

(b) if the building or property insured becomesunoccupied for more than 30 days

(c) if interest is passes from insured to some oneelse except by succession will or such similar

Contd


62/85

Contd..

(d) All above changes have to be notified to the

insurer prior to occurrence/damagerOn the death of the insured his legal heirs

automatically become the insured

(4) If there is marine policy than fire policy would pay

only the excess over the amount payable undermarine policy

(5) Cancellation is possible by either party:

(a) if insured cancel the policy the premium is

retained by insurer

(b) if insurance company cancel by giving 15days

notice than premium would be refunded on a

pro-rata basis


63/85

Contd..

(6) Duties of insured(a) notice of loss/damage to insurer

immediately

(b) within 15days or as time allowedby insurer submit claimstatement giving item wisedetail

(c) particulars of other insuranceshould be given

(d) non compliance of these

conditions could make the

Contd


64/85

Contd..(e) after 12 months from date of loss the insurer is

not liable unless claim is sub to pending action,

arbitration or litigation

(f) if insurer disclaim the liability and insured not file a

suit in court for recovery within 12 months of the

disclaim than it is not recoverable thereafter

(7) Rights of insurer:

(a) can take possession of building/premises where

loss occurred

(b) can take possession of insured property in

building

(c ) remove, sort, arrange or salvage insured property

(d) sell or dispose off the damaged property


65/85

Contd..

(e) insurer can exercise above rights until the claim isclosed or withdrawn by the insured in writing

(f) if insured does not co-operate in any way all

benefits of policy could be forfeited

(g) insured doesnt have right to abandon damagedproperty whether the insurer takes possession of it

or not

Contd


66/85

Contd..

(8)If claim is fraudulent or any false evidence is given

to get benefit by insured than he will lose all benefitsof policy

(9) Insurer can replace or re-instate the property

damaged instead of paying for the loss or damage

(10)At the event of claim if insured has not coveredthe property to its full value he has to bear a portion

of the loss

(11) If one or more policies are there for same

property than all policies would contribute to claim inthe same proportion

(12) Insured is require to help insurer in recovering the

loss from third party, the insureds right to recover

against a third party are subrogated to the insurer

Contd..


67/85

Co td

(13)Any discipline regarding the amount of claim

payable would referred as per the provisions of theArbitration and Conciliation Act(14) Upon the settlement of any loss under the fire

policy, pro rata premium for the un-expired period

from the date of loss to expiry of policy for the

amount equivalent to the loss is payable by the

insured to the insurer

(15)All notices must given in written

Special policies


68/85

Special policies

Fire insurance policies have some unique issues

Such as

Consequential Loss

Replacement/ Reinstatement Value Policy

Floater/ Multi-location Policy

Industrial All Risk Policy


69/85

Marine Insurance

Marine Insurance has two broad components

(1) Hull Insurance

(2) Cargo Insurance

Marine Insurance Act(MIA): MIA,1963 has provided legal framework for Marine

Insurance

Deals with details contents of marine insurance


70/85

Contd..

Institute Cargo Clauses(ICC) ICCC (C)

ICC (B)

ICC (A)

ICC (AIR) Excluding Sending by Post

Inland Transit (Rail/Road) Clause C

Inland Transit (Rail/Road) Clause B

Inland Transit (Rail/Road) Clause A

Motor/Accident Insurance


71/85

Motor/Accident Insurance

The Motor Vehicle Act requires compulsory Insurance

to take care of injured person in accident Insurance to damage for vehicle is not mandatory

The Liabilities..

Arising in respect of death/bodily injured to the

owner/person in carriage Damage to any third party or property

Death/bodily injury of passenger of public service

vehicle

Under Workmans Compensation Act atdeath/injury of a paid driver, conductor/ticket

examiner and workers carried in a goods vehicle


72/85

Contd..

Death/injury of Passenger carried for reward/ hireto contract of employment

Policy should carry No Fault liability to specified

sum in case of

Rs50,000 in case of death

Rs25,000 in case of permanent disability

Rs 6000 in case of property damage

Injured/ insured does not have to prove any fault

to claim this amount


73/85

Types of Vehicles

a) Private cars

b) Motor cycles/scooters

c) Commercial vehicles

I. Goods carrying vehicles

II. Passenger carrying vehicles( i.e. auto

rickshaw, taxis, buses)

III. Miscellaneous (i.e. hearses, ambulances,

cinema/recording vans, mobile utilities)

Types of Policies


74/85

Types of Policies

1) Third party liability policy/ act liability policy

a) Death/bodily injury of third party

b) Damage or loss to the property of third

party

2) Comprehensive/own damage losses and act

liability policy

a) Fire, explosion, self-ignition/lightning

b) Burglary/ house-break/ theft, earthquake

c) Flood/ typhoon/ hurricane/ storm/ tempest/

inundation / cyclone/ hailstorm/ frost

d) Terrorist activity

e) Malicious act

f) Riot and strike

g) Landslide/ rockslide, evator/air


75/85

Contd..

Exclusion Mechanical breakdown/Failures/ Breakages/

wear and tear/Depreciation/Consequential loss

Loss when vehicle driven under intoxication

Overloading/strain to commercial vehicles

Health Medical Insurance


76/85

Health insurance covers mainly two types of

benefits

1) Reimbursement of medical expenses

related to specific diseases

2) Hospitalization

Recently available policies are..

Individual Mediclaim Policy

Group Mediclaim Policy

Bhavishya Arogya Policy

Jan Arogya Bima Policy Cancer Insurance

Overseas Mediclaim Cover

Individual Mediclaim Policy


77/85

Individual Mediclaim Policy Policy covers

Boarding expenses in hospital as description ofpolicy

Surgical, anesthetist, medical practitioner and

consultants fees specialists fees

Nursing expenses Anesthesia, blood, oxygen, operation theatre

charges, surgical appliances, medicines and

drugs, diagnostic reports, dialysis, chemotherapy,

prosthetic limbs

Domiciliary Hospitalization:

This is a medical treatment where patient is not

able to move hospital due to conditions or lack of

facility and treatment is done at home by

rofessional doctors at home



78/85


Taken between the age of 25 to 55 of years

Retirement age is selected by insured and is

between 55 and 60 years of age

Amount of total benefit maximum Rs50,000

Cannot exceed Rs 20,000 per injury

Jan Arogya Bima Policy Policy for smaller covers and people with

limited means of paying the premium

Sum assured is limited to Rs. 5000

Works like a usual mediclaim policy but deferson few value added extras

1. Not offer any cumulative bonuses

2. Not offer any medical check up benefits

C I


79/85

Cancer Insurance

In India there are two cancer policies:

A group policy issued by the Indian Cancer Society

(ICS)

Group Policy offered to members of the

Society/Association to qualify for the policy

Cover is limited to Rs 50,000 in the case of the ICS

policy an can go up to RS 2,00,000 in case of theCPAA policy

Group Mediclaim Policy

Available to corporate, association, institution and

group of people Group is policyholder and premium is payable to

group

Overseas Medical Cover

The policy is for the Indians who got illness or injuries

Liability Insurance


80/85

y

Liability Insurance Act, 1991 defines scope of

liability insurance in India

Types of Liabilities (Indemnity Policies)

1) Employee liabilities

2) Employees state insurance liability

3) Non-industrial risks4) Professional liabilities

5) Product liabilities

Industrial Risks

Compulsory liability; not required to prove thedeath, injury or damage occurred due to any

neglect

C td


81/85

Contd..

Amount of relief payablefatal accident: Rs 25,000 per person

Permanent total disability: Rs 25,000per person

Permanent partial disability: Amount of relief on

the basis of % of disablement as certified by adoctor

Temporary partial disability: fixed monthly relief

snot exceeding Rs 1,000 per month

Actual medical expenses: maximum of 12,500Actual damage to property: Up to Rs 6,000


82/85

Product Liability:-

Product insurance arisen because of some

products which can bodily harm or death or injury

to consumers if defective

Electrical appliances, LPG cooking gas,

household cleaning agents that includes strong

acids/chemicals, ready to eat packages

There are different groups for purpose of product

liability

Professional Indemnities


83/85

Professional Indemnities

1. Doctors and medical practitioners

2. Medical establishments

3. Engineers, architects and interior decorators

4. Chartered accountants, financial consultants,

management consultants

5. Lawyers, solicitors, advocates and counselor

Directors Liability

To provide insurance protection against liability

arising from damages for wrongful acts

committed by a company/its directors

Workmens Compensation Insurance


84/85

This policy basically covers employers against

liability arising from compensations given to

workman as a result of death or disability

Two types of cover provides indemnity against

legal liability under

Table A:-

The Workmens compensation Act, FatalAccidents Act and common Law

Table B:-

Fatal Accident Act and Common Law

Employee State Insurance Liability To provide employee benefits in case of sickness,

maternity, and employment injury

Employee State Insurance Corporation monitor the

ESI rules


85/85

Thank You

ch.14 mfs insurance

Documents