Concepts:

Insurance: Insurance is kind of risk management to protect against the risk of loss. It is transfer of risk from one entity to another in exchange for a premium. Parties :There are two parties to an Insurance contracts as:Insurer/assurer/underwriter, Insured/assured/beneficiary

Policy: The document laying down the term of contract is called (insurance) policy.

principles of insurance

TYPES OF INSURANCE :

LIFE INSURANCE:
Life insurance or life assurance is a contract between the policy owner and theinsurer, where the insurer agrees to pay a designated beneficiary a sum of money upon the occurrence of the insured individual's or individuals' death or on expiry of specified number of years whichever is earlier.Life insurance is the insurance of human life and is long term bsiness.

Non life insurance

Fire insurance: It provides an insurance against loss by fire, lightning, windstorm, tornado or earthquake and other allied risks, when such risks are covered by extension of fire insurance policies

Motor insurance: It covers the private and commercial vehicles against damage and destruction, due to accident or theft.

Non life insurance

Marine Insurance Marine insurance basically covers three risk areas, namely, hull, cargo and freight. The risks which these areas are exposed to are collectively known as "Perils of the Sea". These perils include theft, fire, collision etc.

Miscellaneous

As per the Insurance Act, all types of general insurance other than fire and marine insurance are covered under miscellaneous insurance.

EVOLUTION of Insurance Act, 1938:

To regulate the activities of the Insurance Companies, .the Life Insurance Companies Act was passed in 1912. The Government of India appointed a committee to study the problem and suggest measures. As a result The Insurance Act 1938 was passed. The salient features of this Act were as follows : Constituting a Department of Insurance to supervise and control insurance business. Compulsory registration of insurance companies & submission of annual financial returns. Provision for initial deposits to allow only serious players in the field. Compulsory investment of life fund to the extent of 55% in Government approved securities. Prohibiting rebating, restriction on payment of commission and licensing of agents were other important provisions to bring in a sort of professionalism in to this business. Periodical Valuation was made compulsory to assess financial viability of the insurance companies. Provision was made for policyholders director in the Board. Policy formats were standardised and premium tables were to be certified by an Actuary.

Life Insurance Corporation Of India :

Life insurance in India was completely nationalized on January 19, 1956, through the Life Insurance Corporation Act 1956. All 245 insurance companies operating then in the country were merged into one entity, the Life Insurance Corporation of India. There are a number of life insurance products .

General Insurance Corporation of India

The entire general insurance business in India was nationalized by general insurance business (Nationalization ) act , 1972 (GIBNA). It was incorporated on 22 November 1972 under the companies act , 1956 as a private company limited by shares. As soon as GIC was formed, GOI transferred all shares it held of the general insurance companies to GIC. . Four companies were left as fully owned subsidiary companies of GIC (i) National Insurance (headquarters in Kolkata) (ii) New Indian Assurance (headquartes in Mumbai) (iii)Oriental Insurances (headquartes in New Delhi) (iv) United India Insurance (headquarters in Chennai)

Insurance Regulatory and Development Authority (IRDA)

The IRDA was incorporated as a statutory body in April, 2000. The key objectives of the IRDA include promotion of competition so as to enhance customer satisfaction through increased consumer choice and lower premiums, while ensuring the financial security of the insurance market.

IRDA
The Authority has the power to frame regulations under Section 114A of the Insurance Act, 1938 . The IRDA opened up the market in August 2000 with the invitation for application for registrations. Foreign companies were allowed ownership of up to 26%. In December, 2000, the subsidiaries of the General Insurance Corporation of India were restructured as independent companies .