GENERAL INSURANCE CORPORATION OF INDIA

OBJECTIVE OF THE STUDY

OBJECTIVES

The major objective behind doing this project is to get a clear view about how General insurance

corporation of India came into existence, is organized and managed, its objectives, lending

terms and conditions, lending purposes, challenges faced and tackled.

LIMITATIONS

The study of the project is limited to the GIC RE.

It renders the limited information provided by the officials, books and websites.

Time, length and depth of the study were limited in making the project to the

requirement of Mumbai University.

METHODOLOGY OF THE STUDY

The data for this project is obtained in two ways- primary source and secondary source.

PRIMARY SOURCE DATA

The primary source data for this project has been collected by visiting the Head office of General Insurance Corporation of India located at Churchgate, Mumbai: 400 020.

SECONDARY SOURCE DATA

Secondary data for this project has been gathered through various books, newspapers and

internet.

1: INSURANCE

1.1 Introduction

Insurance is a form of risk management primarily used

to hedge against the risk of a contingent, uncertain loss.

Insurance is defined as the equitable transfer of the risk of a

loss, from one entity to another, in exchange for payment. An

insurer is a company selling the insurance; the insured, or

policyholder, is the person or entity buying the insurance

policy. The amount to be charged for a certain amount of

insurance coverage is called the premium. Risk management,

the practice of appraising and controlling risk, has evolved as a discrete field of study and

practice.

The transaction involves the insured assuming a guaranteed and known relatively small loss in

the form of payment to the insurer in exchange for the insurer's promise to compensate

(indemnify) the insured in the case of a financial (personal) loss. The insured receives a contract,

called the insurance policy, which details the conditions and circumstances under which the

insured will be financially compensated.

Insurance may be described as a social device to reduce or eliminate risk of life and

property. Under

the plan of insurance, a large number of people associate themselves by sharing risk, attached to

individual. The risk, which can be insured against include fire, the peril of sea, death, incident, &

burglary. Any risk contingent upon these may be insured against at a premium commensurate

with the risk involved. Insurance is actually a contract between 2 parties whereby one party

called insurer undertakes in exchange for a fixed sum called premium to pay the other party

happening of a certain event.

Insurance is a contract whereby, in return for the payment of premium by the insured, the

insurers pay the financial losses suffered by the insured as a result of the occurrence of

unforeseen events.

With the help of insurance, large number of people exposed to a similar risk makes

contributions to a common fund out of which the losses suffered by the unfortunate few, due to

accidental events, are made good.

Insurance in India

The insurance sector in India has come a full circle from being an open competitive market to

nationalization and back to a liberalized market again. Tracing the developments in the Indian

insurance sector reveals the 360 degree turn witnessed over a period of almost two centuries.

1.2 A brief history of the Insurance sector

The business of life insurance in India in its existing form started in India in the year

1818 with the establishment of the Oriental Life Insurance Company in Calcutta.

Some of the important milestones in the life insurance business in India are:

1912: The Indian Life Assurance Companies Act enacted as the first statute to regulate the life

insurance business.

1928: The Indian Insurance Companies Act enacted to enable the government to collect

statistical information about both life and non-life insurance businesses.

1938: Earlier legislation consolidated and amended to by the Insurance Act with the objective of

protecting the interests of the insuring public.

1956: 245 Indian and foreign insurers and provident societies taken over by the central

government and nationalized. LIC formed by an Act of Parliament, viz. LIC Act, 1956, with a

capital contribution of Rs. 5 crore from the Government of India.

The General insurance business in India, on the other hand, can trace its roots to the Triton

Insurance Company Ltd., the first general insurance company established in the year 1850 in

Calcutta by the British.

Some of the important milestones in the general

insurance business in India are:

1907: The Indian Mercantile Insurance Ltd. set up, the

first company to transact all classes of general insurance

business.

1957: General Insurance Council, a wing of the Insurance Association of India, frames a code of

conduct for ensuring fair conduct and sound business practices.

1968: The Insurance Act amended to regulate investments and set minimum solvency margins

and the Tariff Advisory Committee set up.

1972: The General Insurance Business (Nationalization) Act, 1972 nationalized the general

insurance business in India with effect from 1st January 1973.

107 insurers amalgamated and grouped into four companies viz. the National Insurance

Company Ltd., the New India Assurance Company Ltd., the Oriental Insurance Company Ltd.

and the United India Insurance Company Ltd. GIC incorporated as a company.

1.3 INDIAN INSURANCE INDUSTRY:

Insurance industry, as on 1.4.2000, comprised mainly two players: the state insurers:

 

Life Insurers:

Life Insurance Corporation of India (LIC)

 General Insurers:

General Insurance Corporation of India (GIC)  (with effect from Dec'2000, a National

Reinsurer)

GIC had four subsidiary companies, namely (with effect from Dec'2000) these subsidiaries have

been de-linked from the parent company and made as independent insurance companies.

1. The Oriental Insurance Company Limited

2. The New India Assurance Company Limited,

3. National Insurance Company Limited

4. United India Insurance Company Limited .

The entire general insurance business in India was nationalized by General Insurance Business

(Nationalization act), 1972(GIBNA). The Government of India (GOI), through nationalization

took over the shares of 55 Indian insurance companies and the undertaking of 52 insurers

carrying on general insurance business.

General Insurance Corporation of India was formed in the pursuance of Section 9 (1) of GIBNA.

It was incorporated on 22 November 1972 under the companies act, 1956as a private company

limited by shares.GIC was formed for the purpose of superintending, controlling and carrying on

the business of the general insurance.

As soon as GIC was formed, GOI transferred all the shares it held of the general insurance

companies to GIC. Simultaneously, the nationalized undertakings were transferred to Indian

insurance companies. After a process of mergers among Indian insurance companies, four

companies were left as fully owned subsidiary companies of GIC (1) National Insurance

Company limited (2) The New India Assurance company limited (3) The Oriental Insurance

Company limited (4) United India Insurance company limited.

The next landmark happened on 19 April 2000, when the insurance regulatory and development

authority act, 1999 (IRDAA) came into force. This act also introduced amendment to GIBNA

and the insurance act 1938. An amendment to GIBNA removed the exclusive privilege of GIC

and its subsidiaries carrying of general insurance in India.

In November 2000, GIC is renotified as the Indian Reinsurance and through administrative

instruction, its supervisory role over subsidiaries was ended.

With the general insurance business (nationalization) Amendment Act 2002 came into force

from March 21 2002 GIC ceased to be the holding company of its subsidiaries. There ownership

was vested with Government of India.

General Insurers

Public

o National Insurance

o New India Assurance

o Oriental insurance

o United India Insurance

o Agriculture Insurance Company of India Ltd

o

Private

o Bajaj Allianz General Insurance

o ICICI Lombard General Insurance

o IFFCO-Tokio General Insurance

o Reliance General Insurance

o Royal Sundaram Alliance Insurance

o TATA AIG General Insurance

o Cholamandalam General Insurance

o Export Credit Guarantee Corporation

o HDFC Chubb General Insurance

o Star Health and Allied Insurance Company Ltd

2: General Insurance

2.1 WHAT IS GENERAL INSURANCE?

General Insurance provides much-needed protection against unforeseen events such as

accidents, illness, fire, burglary etc. Unlike Life Insurance, General Insurance is not

meant to offer returns but is a protection against contingencies. Almost everything that

has a financial value in life and has a probability of getting lost, stolen or damaged can be

covered through General Insurance policy.

Property (both movable and immovable), vehicle, cash, household goods, health,

dishonesty and also one’s liability towards others can be covered under general insurance

policy. Under certain Acts of Parliament, some types of insurance like Motor Insurance

and Public Liability Insurance have been made compulsory.

With the opening up of the insurance industry to the private sector, the need for a strong,

independent and autonomous Insurance Regulatory Authority was felt. As the enacting of

legislation would have taken time, the then Government constituted through a

government resolution an Interim Insurance Regulatory Authority pending the enactment

of a comprehensive legislation.

The Insurance Regulatory and Development Authority Act, 1999 is an act to provide for

the establishment of an Authority to protect the interests of holders of insurance policies,

to regulate, promote and ensure orderly growth of the insurance industry and for matters

connected therewith or incidental thereto and further to amend the Insurance Act,

1938, the Life Insurance Corporation Act, 1956 and the General insurance Business

(Nationalization) Act, 1972 to end the monopoly of the Life Insurance Corporation of India

(for life insurance business) andGeneral Insurance Corporation and its subsidiaries

(for general insurance business).

2.2 Overview of General Insurance in India

General insurance in India is a union subject which means that an insurance business can only be set up under the guidelines of the central government of India. Unlike many other businesses that could be set up under the guidelines of the particular state where the business is being set up, an insurance business can only be established under the guidelines of the union government of India. 

Although the history of insurance in India dates back to as far as1818 the industry has a long way to go in India, in order to develop and evolve to the levels of its counterparts in the west. But the potential of this industry is massive in a country of India’s size especially when we consider the fact that a small country like the UK has over 800 insurance companies doing profitable business in that country. 

With the near double digit growth of the Indian economy resulting from deregulation of vital sectors there is a growing demand to allow further increases in the equity of foreign companies from the present 26 %. In fact the 26 % equity holding for foreign companies was considered to be a major breakthrough in deregulation in 1999 when the government finally broke the siege of the domestic interest groups represented mainly by the unions. 

Nearly everything with a financial value and a probability of getting lost, stolen or damaged can be covered through a general insurance policy. General insurance provides much-needed protection against unforeseen events such as accidents, illness, fire and burglary. General Insurance does not offer cash returns but is a protection against contingencies, quite unlike life insurance. 

2.3 INFORMATION TECHNOLOGY IN GENERAL INSURANCE

SECTOR

There is a evolutionary change in the technology that has revolutionized the entire insurance

sector. Insurance industry is a data-rich industry, and thus, there is a need to use the data for

trend analysis and personalization.

With increased competition among insurers, service has become a key issue. Moreover,

customers are getting increasingly sophisticated and tech-savvy. People today don’t want to

accept the current value propositions, they want personalized interactions and they look for more

and more features and add ones and better service

The insurance companies today must meet the need of the hour for more and more personalized

approach for handling the customer. Today managing the customer intelligently is very critical

for the insurer especially in the very competitive environment. Companies need to apply

different set of rules and treatment strategies to different customer segments. However, to

personalize interactions, insurers are required to capture customer information in an integrated

system.

With the explosion of Website and greater access to direct product or policy information, there is

a need to developing better techniques to give customers a truly personalized experience.

Personalization helps organizations to reach their customers with more impact and to generate

new revenue through cross selling and up selling activities. To ensure that the customers are

receiving personalized information, many organizations are incorporating knowledge database-

repositories of content that typically include a search engine and lets the customers locate the all

document and information related to their queries of request for services. Customers can hereby

use the knowledge database to manage their products or the company information and invoices,

claim records, and histories of the service inquiry. These products also may be able to learn from

the customer’s previous knowledge database and to use their information when determining the

relevance to the customers search request.

There is a probability of a spurt in employment opportunities. A number of web-sites are coming

up on insurance, a few financial magazines exclusively devoted to insurance and also a few

training institutes being set up hurriedly. Many of the universities and management institutes

have already started or are contemplating new courses in insurance. Life insurance has today

become a mainstay of any market economy since it offers plenty of scope for garnering large

sums of money for long periods of time. A well-regulated life insurance industry which moves

with the times by offering its customers tailor-made products to satisfy their financial needs is,

therefore, essential if we desire to progress towards a worry-free future.

3: GENERAL INSURANCE CORPORATION OF INDIA

3.1 INTRODUCTION

The General Insurance Corporation of India (GIC), a

public sector enterprise, was also the largest non-life

insurance company and one of the largest financial

institutions in India. GIC used to sell non-life

insurance products and related services. In 2001, GIC reported a gross direct premium1income of

Rs 107.72 billion.

By April 2002, GIC had a net worth of Rs 23 billion. GIC had been operating through its four

subsidiaries - National Insurance Company Limited, New India Assurance Company Limited,

Oriental Insurance Company Limited and United India Insurance Company Limited till

December 2000. GIC and its subsidiaries had a network of more than 4,208 offices in India and

their customer interface included agents, development officers and employees at its branch,

divisional and regional offices of its four subsidiaries. The company had a workforce of 85,000.

GIC also operated in the international markets in more than 30 countries, either through branches

or subsidiaries. GIC offered a variety of non-life insurance policies in the fire, marine, theft, and

other miscellaneous segments. It also offered health insurance through its Mediclaim policy.

While some of the policies offered by GIC, like motor insurance, were mandatory, others were

designed exclusively for specific segments - for instance, the rural insurance, which included

insurance cover for huts, cattle and livestock, hens and crops. In November 2000, with the

liberalization of the insurance industry, GIC became a national reinsurer - the official body for

undertaking reinsurance business for all private and government organizations in the insurance

industry.

Many private players had entered the general insurance market, which led to a significant

increase in competition. Competition was expected to be more intense in the non-life segment

than the life segment, as the term of the non-life policies was very short, and customers could

switch between companies. Based on the recommendation of the consultants - PriceWaterhouse

Coopers and MP Chitale - all the subsidiaries of GIC were restructured, in December 2000, as

independent insurance companies. At the same time, the General Insurance Public Sector

Association3 was formed to deal with the common issues related to the four subsidiaries. After

the restructuring, New India Assurance Company, one of the four subsidiaries of GIC, became

India's largest non-life insurer.

3.2 HISTORY

The entire general insurance business in India was nationalized by the Government of

India (GOI) through the General Insurance Business (Nationalization) Act (GIBNA) of 1972. 55

Indian insurance companies and 52 other general insurance operations of other companies were

nationalized through the act.

The General Insurance Corporation of India (GIC) was formed in pursuance of Section 9(1) of

GIBNA. It was incorporated on 22 November 1972 under the Companies Act, 1956 as a private

company limited by shares. GIC was formed to control and operate the business of general

insurance in India.

The GOI transferred all the assets and operations of the nationalized general insurance

companies to GIC and other public-sector insurance companies. After a process of mergers and

consolidation, GIC was re-organized with four fully owned subsidiary companies: National

Insurance Company Limited, Assurance Company Limited, Oriental Insurance Company

Limited and United India Insurance Company Limited.

GIC and its subsidiaries had a monopoly on the general insurance business in India until the

landmark Insurance Regulatory and Development Authority Act (IRDA Act) of 1999 came into

effect on 19 April 2000. This act also amended the GIBNA Act and Insurance Act of 1938. The

act along with the amendments ended the monopoly of GIC and its subsidiaries and liberalized

the insurance business in India.

In November 2000, GIC was renotified as India's Reinsurer, but its supervisory role over its

subsidiaries was ended. This was followed by the General Insurance Business (Nationalization)

Amendment Act of 2002. Coming into effect from 21 March 2003, this amendment ended GIC's

role as a holding company of its subsidiaries. The ownership of the subsidiaries was transferred

to the Government of India, which in turn divested its stake in the companies through listings on

Indian stock exchanges.

As a result of these reforms, GIC became the sole Re-Insurer in India, and is now called GIC

Re. Indian insurance companies are required by law to cede 10% of every policy value to GIC

Re, subject to some limitations and exceptions. GIC Re has diversified its operations and is now

emerging as an important Re-Insurer in SAARC countries, Southeast Asia, Middle

East and Africa. GIC Re has also expanded its international operations through branches in

London and Moscow.

GIC Re has a rating of A- (Excellent) from A. M. Best for its financial strength.

Vision

To be a leading global reinsurance and

Risk solution provider

Mission

To achieve our Vision by

-Building long term mutually beneficial relationship with business partners

-Practicing fair business ethics and values

-Applying “state- of –the- art” technology, processes including enterprise risk management and

Innovative solutions

-Developing and retaining highly.

Core Value

-Trust and mutual respect

-professional excellence

-integrity and transparency

-commitment

-responsive service

3.3 The policies which are provided by the GIC

1) Rajrajeshwari Mahila Kalyan Yojana Policy

Policy called ‘Raj Rajeshwari Mahila Kalyan Yojana’ offering security to women in the age group

of 10 to 75 years irrespective of their occupation was introduced w.e.f. 19th October, 1998. Specially

designed to protect the welfare of women mainly in rural and semi-urban areas.

Insurer: National Insurance Company

End user: Women of rural and semi-urban areas.

Scope of Cover

DEATH

1.       Of Husband in case of married women Compensation Rs.25, 000/- to the wife. (Death of

married women not covered)

2.       of unmarried Women Rs.25, 000/- to the nominee, legal heir.

3.       Death of married woman not covered.

 PERMANENT TOTAL DISABLEMENT OF THE INSURED WOMEN ONLY

 1.       Permanent Total Disablement Rs.25, 000/-

 2.       Loss of one limb of one eye or loss of two limbs or both eyes Rs.25, 000/-

 3.       Loss of one limb/sight in one eye Rs.12, 500/-

 DEATH OR DISABILITY BY ACCIDENT WOULD INCLUDE death and P.T.D. arising out

of:

 1.       Slipping /falling off mountainous terrain.

 2.       Biting by (a) Insects (b) Snakes, (c) Animals

 3.       Drowning/Washing away by (a) Floods, (b) Landslides, (c) Rockslides (d) Earthquake, (e)

Cyclone, (f) Other Convulsions of nature/calamities

 4.       Murder

5.       Terrorist activities

6.       Any other accidental causes

  DEATH IN CASE OF WOMEN (it also includes death and or P.T.D.)

Caused by

1.       Surgical Operations such as

 2.       Sterilization

 3.       Caesarian

 4.       Hysterectomy

 5.       Cancer Operations arising from removal of breasts

 6.       Child Birth, not beyond a period of seven days from the date of surgical operations.

 Age: 10 years to 75 years

Premium Rating

@ Rs.15/- per woman per annum for Basic Cover

 @ Rs.23/- per woman per annum for Combined cover.

Rajrajeshwari Mahila Kalyan Policy is provided by all the subsidiary government companies-

Oriental Insurance, New India Assurance, United India Insurance, National India Insurance in all

the states of the country.

2) Bhagyashree Child Welfare Policy

Insurer: National Insurance Company

End user: Schools, colleges and any other educational institutions can avail of this scheme for

the benefit of the girl students studying there.

Policy provides protection to the girl child in the event of death of either or both the parents.

Scope of Cover

1.      for child in the age group of 0 to 18 years; and age

of parents below 60 years.

2.       Fixed sum insured of Rs.25, 000/- premium Rs.15/-

p.a.

3.       Insurance protection is not for the girl child but for

her parents; however, benefit will accrue to the child.

4.       Death of parent/s would include death arising out of or traceable to slipping and/or falling

from mountainous terrain; biting by insects, snakes and/or animals; drowning or washing away

in floods, landslides, rockslides, earthquake, cyclone and/or natural calamities; rape, murder and

terrorist activities covered; any other accidental causes;

5.       Death of mother of the child caused by surgical operations such as

 a)       Sterilization

b)       Caesarean,

c)       Removal of uterus and removal of breast/s due to cancer,

d)       At the time of child birth are also covered provided that death occurs within a period of

seven days from the date of operation; Death by Rape attempts.

 6.       In case of death of either or both the parents due to an accident as above, sum Insured will

be deposited in the name of the insured girl child and she will get benefit as unde

AGE BENEFITS PAYABLE TO

1 to 5 years Rs. 1,200 p.a. surviving parents or guardian for looking after the need of the

child

6 to 11 years Rs. 1,200 p.a. surviving parent or guardian if the girl is admitted in school

and expenses are incurred on her education

12 to 17 yrs Rs. 2,400 p.a. surviving parent or guardian if the girl child is admitted in

school and the expenses are incurred on her education

18 years Balance in credit to the insured girl child

 7.       In the event of discontinuation of studies between 6 and 17 years, the Scholarship will not

be paid; instead, on completion of 18 years the Balance amount in here credit will be paid to her as

lump sum.

8.       In the case of death of the girl child before attaining the age of 18 years, Balance amount

standing to the credit of the girl child would be paid to the surviving parent or guardian.

 Note: One girl child below the age of 18 in a family could be covered. Policies can be issued

individually or as a group.

3) UNIVERSAL HEALTH INSURANCE SCHEME –For BPL Families

Oriental Insurance Company has been nominated by Govt.

of India to provide Universal Health Insurance Scheme to

the people who are below poverty line in the States of

Delhi, Haryana, Himachal, J & K, Punjab, Rajasthan,

U.P., and Uttaranchal & Chandigarh (UT).

Scope of Cover: This policy has three covers as under:

1. Medical reimbursement: The Policy provides

reimbursement of hospitalization expenses uptoRs.30;

000/- to an individual/family with sub limits (Maximum

per illness Rs.15000/-. The benefit of the family will

operate on floater basis i.e. the total reimbursement of Rs.30; 000/- can be availed of individually

or collectively by members of the family.

2. Personal Accident Cover: Coverage for Death of the Earning Head of the family due to

accident: Rs.25, 000/-.

3. Disability Cover: If the earning head of the family is hospitalized due to an accident/illness

compensation of Rs.50/- per day will be paid per day of hospitalization up to a maximum of 15

days after a waiting period of 3 days.

Age limit: 3 months to 65 years.

Category Premium Subsidy by Payable GOI

For an individual Rs.165/-per annum Rs. 200/-

For a family up to 5 Rs.248/- per annum Rs. 300/-(Including the first 3dependant children)

For a family up to 7 Rs.330/- per annum Rs. 400/-(Including the first 3dependent children and

dependent parents)

Main Exclusions:

All pre-existing diseases and diseases contracted during the first 30days from the commencement

date of the policy.

1. Some of the diseases such as Cataract, Benign Prostatic Hypertrophy, Hysterectomy,

Hernia, Hydrocele, Piles, Sinusitis, and Congenital Internal Disease are not covered in the

first year of the policy.

2. Corrective, cosmetic or aesthetic dental surgery or treatment.

3. Cost of spectacles, contact lens and hearing aid.

Claim Settlement: The Claims are to be settled by a Third Party Administrator (TPA)

mentioned in the schedule or by the Insurance Company and to be made cashless as far as

possible through listed hospitals.

4) Rural Policies

Rural policies provide wide policies to the rural areas. They cover a vast area of the rural areas.

These policies are provided by all the four subsidiary companies and are applicable in all the

states of the country. They are as following-

CATTLE INSURANCE

Cattle Insurance was governed under Market Agreement as devised by GIC and the rates, terms,

conditions etc. all were applicable to all the four Insurance Companies. However, w.e.f May

2003, it is no longer under Market Agreement. This policy covers indigenous cross bred and

exotic cattle owned by private owners, various financial institutions, dairy farms, cooperatives,

corporate dairies etc. The word cattle include Milch,

Cows and Buffaloes calves and heifers, stud bulls,

bullocks and he-buffaloes and mithuns. Age group is

specified for all the animals. The evaluation of the

animal is done by a veterinary surgeon.

CALF HEIFER REARING INSURANCE SCHEME

The coverage under this policy is meant for calves/heifers from one day

to 32 months. The valuation depends upon the age of the

cow and is fixed according the age of the calf. All terms

and conditions applicable to cattle are applicable here

also. Minimum coverage is taken from 12 months

however this is not an annual policy.

SHEEP AND GOAT INSURANCE

This scheme is also governed under Market Agreement.

Policy provides indemnity to indigenous cross-bred and exotic sheep and goat against death due

to accident (including fire, lightening, flood, cyclone, famine, strike, riot and civil commotion)

and disease. Earthquake and landslide covers are also provided.

Standard and common exclusions apply as per Cattle Policy.

Animals are identified by means of small brass buttons ear tags.

Animals under scheme category enjoy certain benefits in

premium rate and claim procedure.

CAMEL INSURANCE

The camels are covered against death due to accident or disease

as per Standard Cattle Insurance Policy. The maximum S.I. is

restricted to Rs.3000/-.

PIG INSURANCE

All indigenous, cross-bred and exotic pigs are covered however under scheme category exotic

animals are not covered. The age group is from 4 months to 3 years. The coverage is against

death due to accident or disease.

Exclusions as per Cattle Policy apply here also. Permanent total disablement, breeding and

furrowing risks are not covered. Vaccination in applicable diseases is compulsory. Evaluation

depends upon the age of the animal. Animals are identified by means of small brass buttons ear

tags.

HORSE, MULE, DONKEY, PONY, YAK INSURANCE

The Coverage is as per Standard Cattle Policy. However the age group is restricted to 2 years to

8 years.

POULTRY INSURANCE

This is also governed by Market Agreement, amongst all the four subsidiary

companies. The policy shall provide indemnity against death of birds due to

accident (including fire, lightning, flood, cyclone, strike, riot and civil

commotion and terrorism) or diseases contracted or occurring during the period

of insurance. The word Poultry includes layers, broilers and hatchery birds,

which are exotic and cross-bred. Indigenous and non-descript birds will not

be insured.

GRAMIN ACCIDENT INSURANCE

APPLICABILITY

The Insurance can be granted to any person between the age group of 10 to 70 years irrespective

of his occupation, income etc.

BENEFITS

(A) Death due To Accident Rs. 10,000/-

(B) Total irrecoverable loss of use of 2 limbs or Rs. 10,000/- one eye and one limb due to

accident

(C) Total irrecoverable loss of one eye or one limb Rs. 5,000/-

(D) Permanent total disablement due to accident Rs.10, 000/-

EXCLUSIONS

Company shall not be liable for:

i). Compensation under more than one of the sub clauses (A),

(B), (C) & (D) in respect of same injury/disablement.

ii). Payment of compensation in respect of

injury/disablement directly or indirectly arising out of or

contributed to by or traceable to any disability existing on the

date of issue of the policy.

iii). Death/injury/disablement of the insured from:

(a) Intentional self injury, suicide or attempted suicide.

(b) Whilst under the influence of intoxicating liquor or drugs.

(c) Directly or indirectly caused by insanity.

(d) Arising or resulting from the insured committing any breach of law with criminal intent.

iv). Compensation arising out of war and allied perils.

v.)Death or bodily injury arising out of ionizing radiation or contamination by radioactivity from

any source whatsoever.

Policy is available on long-term basis also and is also subject to group discount and long-term

discount.

5) JANATA PERSONAL ACCIDENT POLICY

Brief Description:

We all in our day to day life are exposed to the risks of

accidents. Despite all possible precautions accident do occur.

This may result into disablement or loss of limbs or sometimes

even death. To give relief to the insured or its family, this

scheme was devised.

Covered Risks:

This policy provides compensation in the event of death or

permanent disablement or loss of limbs or sight in eyes.

Major Exclusions:

Intentional self injury, suicide or attempted suicide, Accident while the insured in under the

influence of intoxicating liquor or drugs, loss caused by insanity, loss due to breach of law with

criminal intent, War and allied perils, nuclear radiation.

6) HUT INSURANCE

APPLICABILITY – This insurance applies only to those huts used for dwellings and

constructed in rural areas with financial assistance from Banking/ Cooperative / Government

Institutions. It can also apply to a selected area or cluster of huts for which proposal should be

referred to H.O.

SCOPE OF COVER – Against loss or damage due to fire, (including fire resulting from

explosion and short circuiting), lightning, and explosion of boiler or gas used for domestic

purpose only, earthquake, flood, inundation, storm, tempest, cyclone and other allied perils, riot

and strike damage, malicious damage, aircraft and impact damage.

SUM INSURED – The maximum sum insured will be Rs.6000/-of which Rs.5000/- can be for

structure and Rs.1000/- for contents. However, it should be noted that the sum insured on the

structure should be so fixed that it is not more than 20% of the financed or subsidy amounts or

market value of structure whichever is less, not exceeding Rs.5000/-.

PREMIUM – Rs.3/- per thousand on the sum insured. However, under a policy the premium

should not be less than Rs.30/-

Above mentioned rural policies are designed by government to cover the risk of the rural

population. These policies are specially designed to provide the risk coverage in all the states of

the country. There is a wide range of rural policies which are offered by Oriental Insurance, New

India Assurance, National Insurance & United India Insurance.

7) KISAN CREDIT CARD-PAIS

This is a Personal Accident Insurance Master Policy covering all the Kisan Credit Card holders.

This will include the holders of KCC issued by the District Central Co-op. Banks, RRBs and

commercial Banks throughout India. This scheme will cover all the KCC holders against Death

or Permanent disability resulting from accidents caused by external, violent and visible means

and occurring within the geographical jurisdiction of India. This policy will cover the KCC

holders up to the age of 70 years and whose names are declared by the Banks and in respect of

whom the premium is paid by the Bank to the Insurance Company for a maximum benefit of

Rs.50, 000/- in case pf (i) Accidental Death, (ii) Permanent total disability

(iii) Loss of two limbs or two eyes or one limb and one eye and Rs.25, 000/-

in case of loss of one limb or one eye (subject to exclusion).

The Master Policy shall remain valid for a period of three years effective

from April 2001 and any modification/alteration shall be made at the end of

three years after review of the premium and claims experience. If the claim

experience exceeds 70%, the premium shall be suitably loaded. The policy

can be issued for one year or three years period by charging Rs.15/- for

annual policy and Rs.45/- for three years period. Service Tax is waived for this policy. The

participating Banks will pay premium to designated Insurance Company on Flagship Company

basis.

Health policies

Insurer: General Insurance Corporation through its four subsidiaries: Oriental Insurance, New

India Assurance, National Insurance Company, United India Insurance.

Group Mediclaim Policy

Brief Description:

Mediclaim Insurance is a cover which takes care of medical expenses following

Hospitalization/Domiciliary Hospitalization of the Insured in respect of the following situations:

(A) In case of a sudden illness (B) In case of an accident (C) In case of any

Surgery which is required in respect of any disease which has arisen during the policy period.

The major benefit for taking a Group Mediclaim policy is that the insured gets a Group discount;

hence the premium per person is lower.

Covered Risks:

This cover is a hospitalization cover and reimburses the medical expenses incurred in respect of

covered disease /surgery while the insured was admitted in the hospital as an in patient. The

cover also extends to pre- hospitalization and post- hospitalization for periods of 30 days and 60

days respectively

Major Exclusions:

Any pre-existing disease, any expense incurred during first 30 days of cover except injury due to

accident, all expenses incurred in respect of any treatment relating to pregnancy and child birth.

Treatment for Cataracts, Benign prostatic hypertrophy, Hysterectomy, Menorrhagia or

Fibromyoma, Hernia, Fitula of anus, Piles, Sinusitis, Asthma, Bronchitis, All Psychiatric or

Psychosomatic disorders are excluded from the scope of the cover.

8) Personal Accident - Group

Brief Description:

We all in our day to day life are exposed to the risks of accidents. Despite all possible

precautions accidents do occur. This may result into disablement or loss of limbs or sometimes

even death. To cater to this need insurers has devised an insurance cover, known as Personal

Accident Insurance. This policy provides compensation in the event of insured sustaining

injuries, solely and directly from an accident caused by violence, visible and external means,

resulting into death or disablement be it temporary or permanent. This policy is also available to

a Group of Persons and is known as Group Personal Accident Policy. This policy can be granted

for restricted hours of Duty and not for all the 24 hours of the days and nights) at a reduced

premium also. The Central Government bears the entire premium cost in respect of the scheme.

During the year 1998-99, a total number of 8,128

claims involving an amount of Rs. 1.84 crores were

settled.

Covered Risks:

This policy provides compensation in the event of

insured sustaining injuries, solely and directly from an

accident.

Major Exclusions:

Intentional self injury, suicide or attempted suicide,

Death or disablement resulting from child birth and pregnancy; Accident while the insured is under

the influence of intoxicating liquor or drugs; War and allied perils.

9) Jan Arogya Bima Policy

Brief Description:

This policy provides for Hospitalization and Domiciliary hospitalization for a premium as low as

Rs 70/- for a adult male or female and Rs 50/- for each dependent son/daughter not exceeding 25

years of age. The benefits are up to Rs 5000/- per person per annum without any inner limits.

This insurance is available to persons between the age of 5 years and 70 years. Children between

the age of 3 months and 5 years of age can be covered provided one or both the parents are

covered concurrently. The scheme which

is primarily meant for the larger segment

of the population, who cannot afford the

high cost of medical treatment, was

introduced w.e.f. 12th August, 1996.

Covered Risks:

This cover is a hospitalization cover and

reimburses the medical expenses

incurred in respect of covered disease /surgery while the insured was admitted in the hospital as

an in patient. The cover also extends to pre- hospitalization and post- hospitalization for periods

of 30 days and 60 days respectively

Major Exclusions:

Any pre-existing disease, any expense incurred during first 30 days of cover except injury due to

accident, all expenses incurred in respect of any treatment relating to pregnancy and child birth.

Treatment for Cataracts, Benign prostatic hypertrophy, Hysterectomy, Menorrhagia or

Fibromyoma, Hernia,Fitula of anus ,Piles, Sinusitis, Asthma, Bronchitis, All Psychiatric or

Psychosomatic disorders are excluded from the scope of the cover.

Health policies are one of the most popular policies of government general insurance sector.

These policies provide a big amount of premium to the insurance companies. Health insurance as

it is different from other segments of insurance business is more complex because of serious

conflicts arising out of adverse selection, moral hazard, and information gap problems. Health

insurance is typically annual and has to be renewed yearly. Policy, which is not renewed in time

lapses and a new policy, has to be taken out.

Shri Ashok Kumar Roy Chairman-cum-Managing Director (officiating)

Mr. Rakesh Singh Mr. M. V. Nair

Mr. S.B. MathurMr. G. Srinivasan

Mr. S.K. Kapoor Dr Sunil Gupta

3.4 Structure of GIC

GIC's main role is to set broad policies to influence and manage the general insurance industry. It

functions as a holding company, not as a subsidiary. This means that GIC doesn't sell insurance

products, but maintains control over other companies that do sell insurance products through the

four subsidiary companies it formed. The only products the GIC sells are insurance policies to

the aviation industry, which was a part of government's share of the general insurance industry

prior to the passage of GIA. The four subsidiary companies are known as the Oriental Insurance

Company Limited, United India Insurance Company Limited, National Insurance Company

Limited, and New India Assurance Company. In addition to these, GIC also formed the Asset

Management Company that's responsible for managing the GIC Mutual Fund, GIC Housing

Finance, and Export Credit Guarantee Corporation.

Reinsurance

The only reinsurance provider in India is GIC. It provides reinsurance to the country's major

insurance companies, thereby underwriting their risk and losses. In fact, every insurance

company must award 20 percent of its reinsurance business to GIC. Its reinsurance role has

expanded internationally over the years, and now it sells policies to other countries in Africa,

Southeast Asia, and the Middle East, among others.

Insurance Regulatory and Development Act (IRDA)

In 1999, the Indian Parliament passed another bill called the Insurance Regulatory and

Development Act (IRDA), which opened up the general insurance industry to private companies

and established investment guidelines GIC insurers must follow. The IRDA allows private

companies to sell products in India, essentially deregulating the general insurance industry. The

only restriction placed on private, foreign-owned companies is they're limited to holding just 26

percent of the market share. This move has greatly increased competition within the general

insurance industry market, and has forced GIC to revamp its organizational structure and

business approaches to accommodate these changes. In addition to opening up the general

insurance industry market, the IRDA also stipulates that GIC insurers must diversify their

investments to provide greater security.

Status

India's recent economic boon and improved standard of living of its people has increased the

demand for insurance products. By lifting the ban imposed by GIA that nationalized the general

insurance industry, the Indian government is hopeful that greater competition will make

insurance products more widely available, and thus help support the country's economic growth.

2010-2011

2010 2011 2010 2011

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