Post on 04-Apr-2018
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INSURANCESECTOR AND
OVERVIEW OFIRDA
ROHIT JINDAL11238 MBA 3rd SEM.
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Meaning :
Insurance is a co-operative device whichspreads , the loss caused by a particular risk to
some persons, over a number of persons who
are exposed to, same or similar risk and who
agree to insure against that risk.
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Functional Definition :Insurance may be defined as a social device
whereby a large group of individuals, through asystem of equitable contributions, may reduce oreliminate measurable risk of economic losscommon to all members of the group.
Features :It is a co-operative device
It spreads the risk over a large number of personswho are insured against the risk
It provides security to the insured
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ContractualDefinition: Insurance is a contract in which a sum of money is
paid to the assured in consideration of insurersincurring the risk of paying a large sum upon agiven contingency.
Features :
It is a contractWhere by insurer assumes the risk of insured
Promises to pay a specified amount
On the happening of a specific event
In consideration of the premium paid by theinsured
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Principles Of Insurance-
Basic Principles:
Principle of Co-operation
Principle of Probability
Legal Principles:Principles of Utmost good faith
Principles of Insurable Interest
Principle of Indemnity
Principle of Proximate cause
Principle of Subrogation
Principle of Contribution
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Kinds of Insurance:
Life Insurance:-
A form of insurance on the life of a person. If theperson dies then the insurance policy pays out a sum
of money to the policyholder (such as a person'sfamily).
Insurance providing for the payment of a stipulatedamount to a designated beneficiary upon the death of
the insured.
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General Insurance:
All other types of insurance are called general
insurance or non-life insurance.Types:-
Marine Insurance
Fire Insurance
Liability Insurance Social Insurance
Other InsurancesDouble Insurance
ReinsuranceOver insurance
Under insurance
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Malhotra committee
In the beginning of the 1990s govt. of India, in the
light of the developments in the rest of the world decidedto globalize the Indian economy. A committee under the
chairmanship of MR. R.N. Malhotra former governor
RBI was set up for the insurance sector. These committee
submitted the report in January 1994. on the basis of
these report , the govt. of India passed insurance
regulatory and development authority bill,1999. The bill
aims to promote privatization in insurance sector.
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Rationale for Privatization of LifeInsurance :
Size of the Market
Enough for All companies
Low Penetration Ratio
Growth in Economy & Insurance BusinessGood Prospects for Rural & Social Sector
Funds for Development of Economy
The Regulatory Framework
More Products RequiredEmployment Generation
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FEATURES OFPRIVATEISATION SCHEME
ENTRY OF PRIVATE SECTOR
ENTRY OF FOREIGN INVESTOR
INSURANCE REGULATORY AUTHORITY
CONTROLLER OF INSURANCE
SHARE CAPITAL
RURAL AND WEAKER SACTION
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Life insurance corporationLIC was established on sep. 1,1956, under an act
passed by the parliament with capital of Rs 5(cr.). It
was established with following objectives:- Spread life insurance much more widely in rural
areas.
Maximize mobilization of peoples saving
Conduct business with good faith Meet the various life insurance need of the
community that would arise in changingenvironment.
Promote amongst all agents and employees of thecorporation a sense of pride and job satisfactionthrough achieving corporate objectives.
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Social responsibilities of lic
Financial assistance in the progress of ruralelectrification scheme in the country
Advance loan for water supply and seweragedisposal for rural and urban areas.
The corporation has been investing more than 75%of its annual accretions in social oriented sectors.Its help to improve the quality of life of the peoplethrough better basis amenities.
Financial assistance for expansion of powerproject and development of sugar corporation.
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Organization set up of lic
AUTHORITY
RESPONSIBIL
ITY
AS ON 31-03-2003
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Life Insurance:-
LIC of India
HDFC Standard Life Insurance Co. Ltd.
Max New York Life Insurance Co. Ltd.
ICICI Prudential Life Insurance Co. Ltd.Birla Sun Life Insurance Co. Ltd.
Reliance Life Insurance Co. Ltd.
Tata AIG Life Insurance Co. Ltd.
SBI Life Insurance Co. Ltd.
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General Insurance:-
New India Assurance Co. Ltd.
United India Assurance Co. Ltd.
National Insurance Co. Ltd.
Oriental Insurance Co. Ltd.Royal Sundaram Alliance Insurance Ltd.
Reliance General Insurance Co. Ltd.
Allianz Bajaj General Insurance
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Regulator of insurance
Before , the insurance act 1938 regulate the insurance
sector. In 1993 govt. of India realize for changes in the act due to
nationalized so they appointed a committee under thechairmanship of former Governor of RBI, Sh. R.N.
MALHOTRA. These committee submitted the report inJanuary 1994. in 1999 the report become an act known asINSURANCE REGULATORY AND DEVELOPMENTAUTHORITY ACT 1999.
The act has the power to direct, advice, caution,
investigate, search, authorize, register, and liquidate theinsurance companies.