Q1: Explain the different types of pure risk and the difference between pure and speculative risk.

Pure risk is broadly classified in to the following four categories:1. Property risk Direct loss Indirect loss 2. Personal risk Risk of premature death. Risk of insufficient income during old age Risk of poor health. Risk of unemployment 3. Liability risk 4. Loss of income risk The difference between pure and speculative risk : The contract of insurance is usually applicable to pure risks but not to speculative risks. Insurance is meant to assure us against losses that arise as pure risk , but not comes to insures that lead to both loss and gain. The law of large numbers is easily applicable to pure risk than to speculative risk. The law is important to insures since it predicts future loss experience . Speculative risk may profit the society even if a loss occurs. It carries some inherent advantages to the economy. Since pure risk is usually insurable , the discussion on risk s skewed towards pure risk only.

Q2:what are voluntary and involuntary insurance?

Apart from the public and private sector classification, insurance coverages are classified as voluntary and involuntary. Voluntary insurance is an optional insurance which is taken by an individual or a company by their own wish. Private insurance is usually a voluntary insurance which includes automobile insurance , worker compensaton insurance etc . only 3 % of Indias population is covered under voluntary health insurance and three voluntary health insurance and there is scope for expansion

In voluntary insurance comes under public sector where the individual is liable take up insurance by law . it is usually taken for social development. Unemployment or for the protecation of particular class of people in the society.

Q3:Explain the steps in underwriting process ?

The general steps followed by underwriters are : 1.Getting application : the application for insurance is the main source of insurability information that the underwriter of the life insurance company evaluates first . application are generally collected by the filed officers the agents . a typical life insurance consists of : > General information > medical information 2. The medical report : An average medical test is compulsory. Depending on the information filed in the application. An insurance company may ask the physician of the customer for further information. 3. Underwriting review : After collecting all the relevant information about the applicant. An underwriter from company evaluates the information. During this evaluation , the underwriter will organize the risk offered to the company. 4. Policy writing : A special department writes the policy, whose main function is to issue written according to the instructions from the underwriting departments. Insurance company generally use computerized systems to maintain the records of the customers, premium payments, and they to verify that all requirements of underwriting have been met.

Q4: Describe factors affecting claim management and the importance of time element in claims payment.
General factors affecting claims are : The risk and cause of event covered in policy. The cause of event is directly related to the loss , a remote cause cannot be placed in the settlement. The policy should be valid on the date of event. If conditions and warranties are not fulfilled according to the cover of the policy ,the cover of the insurance does not come into effect even though premium is paid. The loss occurred should not be international in order to make profit.. Without presence of the insurable interest for the property insured at the time of loss, the benefit cannot be availed. The reasons for the importance of time element in the claims payment are as: The delay in the claim settlement causes an unfavorable about the insurer.

 The extension of time increases the cost of claims. The delay in payment ,may lead to legal action , which is costly. Legal action will affect on the productive areas of the business mainly in the marketing of the insurance business.

Q5.what do you understand by marketing of insurance products ? write down the issues in insurance marketing.
Marketing of insurance products is an important tool in the insurance business. The marketing of insurance is possible in both the life insurance and the non life insurance. The marketing tools that help in advertising the companys insurance policies are :Online advertisement Block line advertisement Television advertisement and print advertisement . Issues in insurance marketing are :Initial marketing focus issue A potential initiator of an insurance of an insurance marketing business is needed , because without support, the insurance company cannot succeed. Marketing the company vs. sponsoring product issue A new or young unknown insurance company has to be accepted within the market place before marketing effectively to the end user. Marketing programs issues Once after a young insurance company is positioned in the market, if its marketing program is not designed specifically to accomplish their current programs objective. Exit strategy issues it is also one of the marketing issues. Right at the beginning , an insurer must understand , and be able to explain how they can exit. Pricing issues The desired price or premium at which an insurer seeks to sell their policy can impact on the distribution of the same. Target market issue : An insurance marketing is said to be effective, only if customers obtain the policies.

Q6: list the changes made in the third and fourth regulations in the insurance regulatory and development authority regulations 2001.

The modification made for the regulations 3 and 4 are given below : 1. Every insurer shall endeavor to maintain a proper balance between the investments made in infrastructure sector and those in the social sector. Bonds issued for development of these sectors, duly guaranteed by Government or otherwise rated not less than AA by independent, reputed and recognised rating agencies, issued by others would qualify for compliance of this regulation. 2. All investment in assets/ instruments, which are capable of being rated as per market practice, be based on rating of such assets/ instruments. 3. The rating should be by an independent, reputed and recognised Indian or foreign rating agency. 4. The assets/ instruments under consideration for investment, shall be of a grade not less than AA of investment grade as per their current rating. In case Investments of this grade are not available to meet the investment requirements of the investing insurance company and investment committee of the investing insurance company is fully satisfied about the same, then, for the reasons to be recorded in the investment committees minutes, the investment committee may approve investment in instruments carrying current rating of not less than +A. Investments in the +A to be kept to the minimum. 5. The rating of Debt Instruments issued by all India financial institutions recognised as such by RBI may be of AAA or equivalent rating. In case investment of this grade are not available to meet the requirements of the investing insurance company and investment committee of the investing insurance company is fully satisfied about the same, then, for the reasons to be recorded in the investment committees minutes, the investment committee may approve investments in instruments carrying current rating of not less than AA or equivalent as rated by an independent, reputed and recognised Indian or foreign rating agency. 6. No investment shall be made in an asset/ instrument, which is capable of being rated as per market practice but has not been rated. 7. Investments in equity shares listed on a recognised stock exchange should be made in actively traded and liquid instruments viz., its trading volume does not fall below ten thousand units in any trading session during the last 12 months or trading value of which exceeds Rs. 10 lacs in any trading session during last 12 months.