Risk and Insurance Management
Subject(s): Management
ISBN 9789393665492
 Published Date
  Pages 562

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Description

This book Risk and Insurance Management is designed as per the syllabus of various Universities and the Federation of Insurance Institutes. It provides insight into the operational policies, practices and issues relating to the insurance business, with the latest trends in this sector. The book has been divided into 13 parts containing 48 chapters. It covers nature and causes of Risks, Handling of Risks, Insurance Business, Essentials of Contract of Insurance, Life Insurance Business, Role of Life Insurance Corporation of India, Role of Development officers and Insurance Intermediaries, General Insurance Business, Marine Insurance Contract, Fire Insurance Contract, Miscellaneous Insurance Business, Role of Deposit Insurance Corporation and Employee State Insurance Corporation and IRDA.

COVER
HALFTITLE PAGE
TITLE PAGE
COPYRIGHT PAGE
CONTENTS
PREFACE
PART I NATURE AND CAUSES OF RISKS
CHAPTER 1 CONCEPT OF RISK: AN OVERVIEW
Introduction
• Meaning and Definition of Risk
• Definition of Perils and Hazards
• Classification of Hazards
• Meaning of Uncertainty
• Difference Between Risk and Uncertainty
• Meaning of Certainty and Safety
• Risk vs. Safety
• The Degree of Risk (Risk Attitude)
Causes of Risks
• Natural Causes of Risks
• Causes of Business Risks
• Causes of Risks in Finance
• Causes of Risks in Human Forces
• Causes of Risks in Economic Forces and Government Policies
• Causes of Risks in Development of Science and Technology
• Causes or Sources of Political Risks
Dangers of Uncontrolled Risks
Characteristics of Insurable Risks
Review Questions
CHAPTER 2 IMPORTANT CLASSIFICATION OF RISKS
Introduction
Classification of Risks
• Financial and Non-financial Risks
• Static and Dynamic Risks
• Fundamental and Particular Risks
• Pure and Speculative Risks
• On the Basis of Economic Risks
• On the Basis of Business Risks
• On the Basis of Human Risks
• On the Basis of Portfolio Risks
• Other Risks
Review Questions
PART II HANDLING OF RISKS
CHAPTER 3 METHODS OF HANDLING RISKS
Introduction
Methods of Handling Risks
• Prevention of Risks (or) Avoiding of Risks
• Reduction of Risks
• Shifting of Risks (or) Transferring of Risks
• Acceptance of Risks
• Spreading of Risks
Review Questions
CHAPTER 4 NATURE AND SCOPE OF RISK MANAGEMENT
Introduction
• Definition of Risk Management
• Observation from the Definition
• Features of Risk Management
• Importance of Risk Management
• Risk Management Objectives
• Benefits or Advantages of Risk Management
• Limitations or Disadvantages of Risk Management
Process of Risk Management
• Planning for Risks
• Risk Identifications
• Risk Analysis–Evaluation or Estimation of Risks
• Risk Assessment
• Taking Corrective Decision
• Risks Evaluation
• Organising the Importance of Risk Management
• Risks Monitoring
• Purpose of Selection of Risk
• Sources of Risks
• Risk Identification
Principles of Risk Management
• Introduction
• Principles of Risk Identification
• Principles of Risk Analysis
• Principles of Risk Assessmnet
• Principles of Taking Corrective Decision
• Principles of Evaluation
• Principles of Alternative Course of Action
• Principles of Risk Control
• Principles of Risk Retention
• Principles of Risk Transfer
Review Questions
CHAPTER 5 ANALYSIS OF BUSINESS RISKS
Introduction
• Definition of Business Risks
Nature of Business Risks
Causes of Business Risks
• Risks Caused by Changes in Market Conditions
• Risks Caused by Changes in Consumer/Human Behaviour
• Risks Caused by Changes in Government Policies
• Risks Caused by Poor Promotion
Methods of Handling Business Risks
• Avoiding (or) Preventing Business Risks
• Reduction of Business Risks
• Suggestions for Reduction of Business Risks
• Shifting or Dividing of Business Risks
• Accepting or Assuming Unavoidable Business Risks
Review Questions
CHAPTER 6 ENTREPRENEURIAL BUSINESS RISK MANAGEMENT
Definitions
• Entrepreneur
• Entrepreneurship
• Difference between Entrepreneur and Entrepreneurship
• Meaning of Risk and Uncertainty in Entrepreneurial Business
Risk Categories in Entrepreneurial Business
• Strategic Risks
• Structural Risks
• Competitive Risks
• Business Cycle Risks
• Customer Related Risks
• Resources Related Risks
• Key Risk Indicators in Entrepreneurial Business
Theories of Entrepreneurial Business Risks
• Risk-Bearing Theory of Profit in Entrepreneurial Business
• Uncertainty Bearing Theory of Profit in Entrepreneurial Business
Entrepreneurial Risk Management
• Introduction
• Definition of Enterprise Risk Management
Steps Involved in Entrepreneurial Risk Management Process
Methods of Handling Risks
• Attempt to Eliminate the Risk
• Attempt to Reduce the Risk
• Transfer the Risks
• Accept the Risks
• Risk Taking Ability of Entrepreneurs
Review Questions
CHAPTER 7 RISK ANALYSIS IN PORTFOLIO INVESTMENT
Introduction
• Definition of Portfolio
• Investment Portfolio
• Portfolio Management
• Basic Principles of Portfolio Investment
Distribution of Portfolio Investment Media
• Direct Investment Alternatives
• Indirect Investment Alternatives
• Time Value of Money
Risk and Return Relationship
• Meaning of Risks in Portfolio Investments
Risks in Portfolio Investment
• Systematic Risk (Market Risk)
• Unsystematic Risk (Financial Risk)
• Graphic Representation of Systematic Risk vs. Unsystematic Risk
• General Causes of Risk in Portfolio Management
Unsystematic Risk and Diversification
• Meaning of Unsystematic Risk
• Meaning of Diversification
• Forms of Diversification
• Principles of Diversification
• Methods of Diversification
Systematic Risk and Beta Analysis
• Meaning of Beta
• Equation
• Acceptance Rule
• Significance of Beta Analysis
• Limitations of Beta Analysis
Review Questions
CHAPTER 8 MANAGEMENT OF OPERATIONAL RISKS AND CREDIT RISKS
Introduction
Operational Risks
• Definition
Risks Category by Causes and Examples of Operational Risk
Principles of Management of Operational Risk
• Components of Operational Risk Management in Banks
Credit Risks
• Definition
• Causes of Credit Risks
• Objectives of Risk Management on Credit Risk
• Dimensions of Credit Risk Management
Principles of Credit Risk Management
Requisities of Efficient Risk Mangement on Capital
Review Questions
CHAPTER 9 BASEL II ON CREDIT RISKS AND OPERATIONAL RISKS MANAGEMENT
BASEL II – Background
BASEL I
BASEL Committee
• Main Objectives of BASEL II
• Business Benefits of BASEL II
BASEL II and Three-Pillar Approach
• First Pillar (Minimum Capital Requirements)
• Second Pillar (Supervisory Review Process)
• Third Pillar (Market Discipline)
Key Factors to Consider for Implementation of BASEL II
• Current Data Collection and Modeling Capabilities
• Risks Management Practices
• Handling of Risk Control Strategies
• Business Size
• Risks Types and Appropriate Measurements
• Specific Business
• Market Conditions
Review Questions
CHAPTER 10 ENVIRONMENTAL RISK MANAGEMENT
Introduction
• Meaning and Definitions
Sources or Causes of Environmental Risk
• Emission to Air or Air Pollution
• Discharges to Water or Water Pollution
• Land or Soil pollution
• Acquition or Ownership of Environmental Risks (Especially Contaminated Land from Industrial Units)
• Noise Pollution
• Oil Pollution
Aims of Environmental Risk Management
• Prevention or Source Reduction of Pollution
• Recycling of Wastes
• Treatment of Wastes
• Disposal or Release of Wastes
• Adherence to Legislations
Characteristics of Successful Environmental Risk Management
• Benefits of Environmental Risks Management
Process of Environmental Risk Management
• Formulating the Environmental Policy
• Identification of Possible Environmental Risks
• Evaluation of Environmental Impact
• Responding to Environmental Risks
• Monitoring and Control of Environmental Risks
• Risk Communication by Reports
Approaches for Environmental Risk Management
• Management Based on Standards
• Management Based on Best Practicable Means
Suggestions for Protection and Improvement of the Environment
Review Questions
PART III INSURANCE BUSINESS
CHAPTER 11 NATURE OF INSURANCE BUSINESS
Meaning and Definition of Insurance
Main Features of an Insurance Contract
• Essentials of Valid Insurance Contract
Characteristics of Insurance Contract
• Difference between Insurance Contract and Wagering Agreement
Functions of Insurance
Importance of Insurance
Benefits of Insurance
• Benefits to Society
• Benefits to Business
Kinds of Insurance Organizations
• Self Insurance
• Individual Insurer
• Partnership Insurer
• Joint Stock Companies
• Mutual Companies
• Co-operative Insurance Organizations
• Lloyd’s Association or Underwriters
• State Insurance
• Life Insurance Corporation of India
• General Insurance Corporation of India
• Employee State Insurance Corporation
• Deposit Insurance Corporation
• Government Companies
Role of Insurance in the Development of Commerce and Industry
• Uncertainty of Business Loss is Reduced
• Protection from the Risks of Natural Calamities
• Wealth of the Society is Protected
• Protection of the Institution from the Death of Keymen
• Increase of Credit Worthiness
• Welfare of Employees
• Business Efficiency is Increased with Insurance
• Economic Growth of the Country
• Reduction in Inflation
• Important Services of Insurance
Scope of Insurance Business
Review Questions
CHAPTER 12 RE-INSURANCE AND DOUBLE INSURANCE BUSINESS
Re-insurance
• Meaning and Definition
• Chart of Re-insurance
• Implication of Re-insurance
• Causes of Re-insurance
• Advantages of Re-insurance
• Liability of Re-insurer
• Important Concepts of Re-insurance
Characteristics of Re-insurance
Types of Re-insurance
• Proportional Re-insurance
• Non-proportional Re-insurance
Double Insurance
• Meaning
• Implications of Double Insurance
Over Insurance
External Insurance and Internal Insurance
• External Insurance
• Internal Insurance
Review Questions & Mini Cases
CHAPTER 13 CLASSIFICATION OF INSURANCE
Introduction
Broad Categories of Insurance
Classification on the Basis of Practical Point of View
• Business Point of View
• Risks Point of View
• Development Point of View
Types of Insurance
• Life Insurance
• Marine Insurance
• Fire Insurance
• Motor Vehicle Insurance
• Personal Accident Insurance
• Fidelity Guarantee Insurance
• Crop Insurance
• Burglary Insurance
• Cattle Insurance
• Cash-In-Transit Insurance
• All Risks (Jewellery and Insurances) Insurance
• Liability Insurance
• Sickness Insurance
• Livestock Insurance
• Property Insurance
• Aviation Insurance
• Engineering Insurance
• Health Insurance
• Householder’s Insurance
• Personal Accident Social Security Scheme
• Rural Scheme
• Personal Insurance
• Social Insurance
• Disablement Insurance
• Workmen Compensation Insurance
• Package Insurance
• Social Security Insurance
• Maternity Insurance
• Unemployment Insurance
• Old Age Insurance
• Re-insurance
• Double Insurance
• Industrial Risks Insurance
• Pedal Cycle Insurance
Review Questions
CHAPTER 14 PRIVATIZATION OF INSURANCE BUSINESS
Introduction
• Meaning
Background of Privatization
Performance of Public Sector
Defects or Criticism of Public Sector
Ways of Privatization
• Contribution of Private Sector
• Role of Government in Promoting Private Sector
• Liberalization Required for Privatization
• Effect of Globalization
Historical Background of Insurance
• Insurance Growth in 17th and 18th Century
• History of Insurance in India
Privatization of Life Insurance Business
• Private Life Insurers Operating In India
• Performance of Private Life Insurance
Privatization of General Insurance Business
Reforms of Insurance Sector and IRDA
Conditions for Success of Private Insurers
Review Questions
PART IV ESSENTIALS OF CONTRACT OF INSURANCE
CHAPTER 15 PRINCIPLES AND DOCUMENTS OF INSURANCE CONTRACT
Introduction
Essential Elements of a Contract of Insurance
• Nature of Contract
• Utmost Good Faith
• Insurable Interest
• Indemnity
• Cause Proxima
• Contribution
• Risk Must Attach
• Mitigation of Loss
• Subrogation
• Terms of Policy
Insurance Documents
• Proposal Forms
• Policy Forms
• Cover Note
• Certificate of Insurance
• Endorsements
Review Questions & Mini Cases
PART V LIFE INSURANCE BUSINESS
CHAPTER 16 ESSENTIALS OF LIFE INSURANCE BUSINESS
Life Insurance
• Introduction
• Definition
• Difference between Insurance and Assurance
• Laws Relating to Life Insurance
Essential Features of Life Assurance
• Elements of a Valid Contract
• Insurable Interest
• Utmost Good Faith
• Warranties
• Assignment and Nomination
• Cause is Certain
• Premium
• Terms of Policy
• Return of Premium
Procedure for Effecting Life Insurance
• Selection of Policy
• Filling up a Proposal Form
• Proof of Age
• Medical Examination
• Agent’s Confidential Report
• Acceptance of Proposal
• Payment of First Premium
• Commencement of Risk
• Issue of Policy
• Alteration
• Renewal Notice
• Bonus Notice
Review Questions & Mini Cases
CHAPTER 17 CLASSIFICATION OF LIFE INSURANCE POLICIES
Life Insurance Policies
Classification of Policies
• Policies According to Duration
• On the Basis of Premium Payment
• On the Basis of Participation in Profits
• On the Basis of Number of Persons Assured
• On the Basis of Methods of Payment of Policy Amount
• Money Back Policies
• Special Plans
• Group Insurance Schemes
• Partnership Insurance
• Employer-Employee Insurance
• Pension Plans
Shopkeepers Insurance Policy
Review Questions
CHAPTER 18 ASSIGNMENT AND NOMINATION OF LIFE POLICIES
Assignment
• Meaning and Procedure
• Conditions for a Valid Assignment
Nomination of Life Policy
• Difference between Assignment and Nomination
• Surrender Value
• Paid Up Value
• Difference between Surrender Value and Paid Up Value
• Days of Grace
• Revival (or) Discontinued (or) Lapsed Policies
• Types of Revival Schemes
• Loans on Policies
• Proof of Age
• Proof of Death
• Suicide by the Insured
• Payment of Claims
Review Questions & Mini Cases
PART VI ROLE OF LIFE INSURANCE CORPORATION OF INDIA
CHAPTER 19 LIFE INSURANCE CORPORATION OF INDIA (LIC)
Introduction
• Aims of LIC
• Nationalisation and LIC
• Organization Structure
Life Insurance Administration
• (Organisational Structure)
• Advantages of Life Insurance
• Important Functions
Role of LIC in National Economy
• Investment
• Underwriting
• Disbursing Loans
• Subscribing to Debentures and Bonds
• Socially Oriented
• Share Holding
• Control
• Mutual Fund
• Boosting Industrial Growth
• Claims and Settlement
Investment of Funds
• Principles of Investment
• Procedure for Valuation of Investment
Progress of Life Business of LIC
Review Questions
CHAPTER 20 MARKETING OF LIFE INSURANCE BUSINESS
Introduction
• Definition of the Term ‘Service’
Concept of Insurance Market
Characteristics of Life Insurance Services
• Intangibility
• Heterogeneity
• Inseparability
• Changing Demand
• Objectives of Life Insurance Marketing
Life Insurance Marketing Mix
• Elements of Life Insurance Marketing Mix
4 C’s of LIC Marketing
• Formula of 4 C’s
• Importance of Life Insurance Marketing
• Market Segmentation in Insurance Business
• Criteria for Segmentation
• Major Segmentation Variables (Parameters)
• Distribution Channels in Life Insurance Business
• Customer Delights in Insurance Marketing
• Determinants of Customer Delights
Customer Relationship Marketing in Insurance (CRM)
• Meaning
• CRM Offers/Benefits
• Steps in Establishing a CRM Program
Scope of Life Insurance Marketing
Review Questions
CHAPTER 21 WORLD LIFE INSURANCE MARKET
Introduction
Share of World Insurance Market
• Insurance Operations in USA
• UK Scenario
• Life Insurance in Japan
• Other Asian Countries
• Performance of Global Life Insurance (1995 –2001)
• Global Life Insurance (1995–2001)
• Global Life Insurance (1995–2001)
• Insurance Density (Per Capita Premium) of Selected Countries
Review Questions
CHAPTER 22 LIC AND FINANCIAL SERVICES
Advances against Life Insurance Policies
• Points in Favour
• Drawbacks
LIC Housing Finance Limited
• Organization and Capital Resources
• Objectives of LIC Housing Finance Ltd.
• Housing Scheme Loans
• Performance of LIC Housing Finance Ltd. (1999–2000)
LIC Mutual Funds
• Meaning and Definition
• Classification of Mutual Funds
• Mutual Funds in India
• LIC Mutual Fund (LICMF)
• Importance of LIC Mutual Funds
Types of LIC Mutual Funds
• Benefits of Mutual Fund Schemes
• Progress in LIC Mutual Funds
Factors which Determine the Mutual Funds
Information Technology In LIC
• Meaning
• IT Revolution in India
• Information Technology in LIC
• Objectives of Information Technology in LIC
• System of Modules
Review Questions
PART VII ROLE OF DEVELOPMENT OFFICERS AND INSURANCE INTERMEDIARIES
CHAPTER 23 ROLE OF DEVELOPMENT OFFICER
Introduction
Importance of Development Officer
Duties of Development Officer
• Appointing Agents
• Training of Agents
• Motivating Agents
• Fixing the Targets
• Duties of Communication
• Field Supervision
• Achieving the Targets
Qualities of a Successful Development Officer
Review Questions
CHAPTER 24 ROLE OF INSURANCE INTERMEDIARIES
Introduction
Insurance Brokers
• Types of Insurance Brokers
• Functions of Insurance Brokers
Corporate Insurance Agents
• Bancassurance
Third Party Administrators (Health Services)
Meaning and Definition of Agents
Recruitment and Selection of Agents
• Mandatory Training for Insurance Intermediaries
• Training of Agents
• Duties or Roles of Insurance Agents
• Code of Conduct for Agents
• Rights of Agents
• Remuneration of Agents
• Termination of Agents
Essential Qualities Required for a Successful Agent
Review Questions
CHAPTER 25 BANCASSURANCE
Meaning of Bancassurance
• Necessity to Enter Insurance
Origin of Bancassurance
• Bancassurance in India
• Bancassurance Alliance in India
Types of Bancassurance
• With Risk Participation
• Without Risk Participation
Benefits of Bancassurance
• Benefit to the Banks
• Benefits to the Insurance Company
• Benefits to the Customer
Distribution Channels of Bancassurance
• Career Agents
• Special Advisors
• Salaried Agents
• Platform Bankers
• Setup/Acquisition of Agencies or Brokerage Firms
• Direct Marketing
• Internet
• E-Brokerage
Guidelines for Bancassurance
• RBI Guidelines
• IRDA Guidelines
Challenges for Bancassurance
Review Questions
PART VIII GENERAL INSURANCE BUSINESS
CHAPTER 26 GENERAL INSURANCE BUSINESS AND ROLE OF GIC OF INDIA
General Insurance in India
• History
• Law Relating to General Insurance
General Insurance Business (Nationalisation) Act 1972
• Objectives of the Act
General Insurance Corporation of India (GIC)
• Establishment of GIC
• Sources of Funds
• GIC with its Subsidiaries
• Organization Structure of GIC
• Functions of GIC
• General Insurance Products (Policies)
The Changing Scenario of General Insurance Business
• Progress of General Insurance Business
• Privatization of General Insurance Business
Review Questions
PART IX MARINE INSURANCE CONTRACT
CHAPTER 27 NATURE OF MARINE INSURANCE CONTRACT
Introduction
• Meaning and Definition of Marine Insurance
• Subject Matter of Marine Insurance
• Characteristics of Marine Insurance Contract
• Important Definitions
Contents of Marine Policy
Essential Elements of Marine Insurance
• Features of a General Contract
• Insurable Interest
• Utmost Good Faith
• Contract of Indemnity
• Principles of Subrogation and Contribution
• Warranties
• Warranty of Non-deviation
• Proximate Cause
• Assignment and Nomination of Policy
• Return of Premium
Double Insurance in Marine Insurance
Re-insurance in Marine Insurance Scheme
• Facultative Re-insurance
• Open Cover Re-insurance
• Re-insurance Treaties
Mutual Insurance in Marine Insurance
Procedure for Taking Out a Marine Policy
• Marine Insurance by Insurance Companies
• Lloyd’s Marine Insurance
Review Questions & Mini Cases
CHAPTER 28 MARINE INSURANCE POLICIES AND IMPORTANT CLAUSES
Marine Policy
• Contents of Policy
• Essentials of a Valid Marine Insurance Policy
Kinds of Marine Policies
• Voyage Policy
• Time Policy
•Voyage and Time Policy (or) Mixed Policy
• Valued Policy
• Unvalued Policy
• Floating Policy
• Wagering Policy
• Construction or Builder’s Risk Policy
• Open Cover Policy
• Port Risk Policy
• Named Policy
• Single Vessel and Fleet Policy
• Currency Policy
• Interest Policy
• Composite Policy
Important Clauses in Marine Policy
• Assignment Clause
• Lost or Not Lost Clause
• At and From Clause
• Transit Clause (or) Warehouse to Warehouse Clause
• Change of Voyage Clause (or) Deviation Clause
• Touch and Stay Clause
• Inchmaree Clause (or) Negligence Clause
• Running Down Clause
• Sue and Labour Clause
• Re-Insurance Clause
• Memorandum Clause
• Continuation Clause
• Perils of the Sea Clause
• Waiver Clause
• All Risks Clause (For All Risks Policy)
• Foreign General Average Clause (F.G.A.)
• Free of Capture and Seizure (F.C.S)
• Free of Particular Average Clause (F.P.A)
• Bottomry Bond
• Respondentia Bond
Review Questions & Mini Cases
CHAPTER 29 MARINE LOSSES AND ABANDONMENT
Introduction
Kinds of Marine Losses
• Total Loss
• Abandonment
• Partial Loss
• York-Antwerp Rules
• General Average Contribution
• Claims Documents
Rights of Insurer on Payments
Review Questions & Mini Cases
PART X FIRE INSURANCE CONTRACT
CHAPTER 30 NATURE OF FIRE INSURANCE CONTRACT
Introduction
Fire
• Causes of Fire
Subject Matter of Fire Insurance
Features of Fire Insurance
Fundamental Principles of Fire Insurance
• Contract of Indemnity
• Insurable Interest
• Contract of Good Faith
• Loss Through Fire
• A Contract from Year to Year
• Principles of Subrogation and Contribution
Fire Policy
• The Risk
Procedure for Taking Fire Insurance Policy
• Selecting the Insurance Company
• Filling Up the Proposal Form
• Submitting Evidence of Respectability
• Survey of the Property to be Insured
• Acceptance of Proposal
• Issue of Cover Note
• Issue of Policy
• Period of Fire Insurance
Review Questions
CHAPTER 31 TYPES OF FIRE INSURANCE POLICIES
Common Policies in Fire Insurance
• Specific Policy
• Valued Policy
• Average Policy
• Floating Policy
• Re-instatement Policy
• Declaration Policy
• Comprehensive Policy
• Consequential Loss Policy
• Adjustable Policy
• Rent Policy
• Transit Policy
• Builder’s Risk Insurance
• Excess Policy
• Sprinkler Leakage Policy
• Blanket Policy
• Maximum Value with Discount Policy
Double Insurance in Fire Insurance
Re-insurance in Fire Insurance
Assignment of Fire Policy
Payment of Claims
Average Clause in Fire Policy
Rights of the Insurer
Review Questions & Mini Cases
CHAPTER 32 FIRE INSURANCE CLAIMS
Introduction
Procedure for Fire Insurance Claim
Types of Losses due to Fire
• Claims for Loss of Stock
• Claim for the Loss of Profit
• Important Terms
• Steps in the Preparation of Claim under Loss of Profits
Review Questions & Mini Cases
PART XI MISCELLANEOUS INSURANCE BUSINESS
CHAPTER 33 AGRICULTURAL INSURANCE SCHEMES
Introduction
• Indian Crop Insurance
Crop Insurance Scheme
• Salient Features of Crop Insurance
• Basis of Indemnity
• Central Crop Insurance Fund
• State Crop Insurance Fund
• Advantages of Crop Insurance
• Practical Problems of Crop Insurance
• Operation of Crop Insurance Schemes
Agricultural Insurance Company
• Area Approach
• Schemes Approach
• Premium Rates
• Premium Subsidy
Agricultural Pumpset Insurance
• Important Exclusion
• Sum Assured
• Discounts
Horticulture / Plantation (Input) Insurance
• Horticulture Crops
• Plantation Crops
• Period of Insurance
• Premium Rates
Hut Insurance
• Individual
• Group / State Governments
• Salient Features
Rainfall Insurance
• Pilot Project on Rainfall Insurance
• Payment on Rainfall Insurance
• Varsha Bima Rainfall Insurance Scheme
• Problems of Rainfall Insurance
Review Questions
CHAPTER 34 CATTLE INSURANCE, POULTRY INSURANCE, LIVESTOCK INSURANCE, SHEEP AND GOAT INSURANCE
Introduction
• Age of Animals
Cattle Insurance Policy
• The Premium Rates
• Claim Procedure
• Exclusions
• Identification of Animal
Livestock Insurance
• Exclusions
Poultry Insurance
• Underwriting Consideration
• Claims
Sheep and Goat Insurance
Review Questions
CHAPTER 35 FIDELITY GUARANTEE INSURANCE AND PROPERTY INSURANCE
Fidelity Guarantee Insurance
• Meaning
• Scope
• Classification
• Types of Policies
• Procedure for Applying
• Rating
• Claims
Property Insurance
• Meaning
• Burglary Insurance
• Types of Policies
• Insurance of Money in Transit
Review Questions
CHAPTER 36 MOTOR VEHICLE, PERSONAL ACCIDENT, PEDAL CYCLE AND PLATE GLASS INSURANCE
Motor Vehicle Insurance
• Meaning and Definition
• Classification of Motor Vehicles
• Kinds of Policies
• Legal Necessity for Third Party Insurance
• Procedure for Motor Vehicle Insurance
• Settlement of Claims under Motor Vehicle Insurance
Personal Accident Insurance
• Definition
• Rating
• Classification of Occupation
• Proposal Form
• Claims
Pedal Cycle Insurance
Plate Glass Insurance
Missing Documents Indemnity
Review Questions
CHAPTER 37 HEALTH INSURANCE AND STUDENT SAFETY INSURANCE
Health Insurance
• Meaning
• Importance of Health Insurance
• Challenges of Health Insurance in India
Types of Health Insurance Policies
• Individual Mediclaim Policy
• Group Mediclaim Policy
• Jan Arogya Bima Policy
• Cancer Policy
• Bhavishya Arogya Policy
• Overseas Mediclaim Policy
• Videsh Yatra Mitra Policy
Student Safety Insurance
• Benefits under this Scheme
• Hospitalization Expenses
• Procedure for Issuing Student Safety Policy
Review Questions
CHAPTER 38 ENGINEERING INSURANCE
Introduction
Types of Policies
• Boiler Insurance Policy
• Engine Insurance Policy
• Electrical Plant Insurance Policy
• Lifting Machinery Insurance Policy
Aviation Insurance
• Types of Aircraft Policies
Machinery Breakdown Insurance
• Coverage of Machinery Breakdown Insurance
• Causes of Machinery Breakdown
• Sum Insured
• Period of Insurance
• Extension of Risk
Electronic Equipments Insurance
• Scope of Cover
• Types of Equipments to be Insured
• Insured Party
• Sum Insured
• Claim Settlement
Oil and Gas Insurance
• Various Perils in Oil and Gas Insurance
• Coverage of Risks
Satellite Insurance
• Types of Policies
• Liability to Compensate
Export Credit Insurance
• Introduction
• Kinds of Export Risks
• Credit Risks
• Reasons for Credit Risks
• Credit Risk Insurance and ECGC
• Credit Risk Insurance Policies
• Standard Policies
• Commercial Risks
• Political Risks
• Specific Policies
• Financial Guarantees
• Special Schemes
Review Questions
CHAPTER 39 PUBLIC LIABILITY INSURANCE, CATASTROPHE INSURANCE AND WAR (OR) EMERGENCY RISKS INSURANCE
Public Liability Insurance
• Introduction
Types of Public Liability Risk Insurance
• Industrial Risk Insurance
• Exclusions
• Industrial All Risks Insurance
• Non-Industrial Risks Insurance
Catastrophe Insurance
• Definition
• Causes of Catastrophe Risks
• Categories of Catastrophes
• Policies of Catastrophes
• National Flood Insurance Program
• Disaster Recovery Bonds
War (or) Emergency Risks Insurance
• Kinds of Emergency Risks
• Terms and Conditions of War or Emergency Risks Insurance Contract
Review Questions
CHAPTER 40 PRICING (PREMIUM) OF LIFE AND NON-LIFE INSURANCE BUSINESS
Introduction
• General Objectives of Insurance Pricing
• Factors to Consider for Calculation of Premium in Life Insurance
Types of Premium
• Net Premium
• Gross Premium
• Allocation of Expenses
• Determination of Percentage
• Methods of Loading
• Distribution of Expenses over the Period of Policy
• Payment of Premium
• Computation of Rate Fixation in Fire Insurance
• Classification
• Discrimination
• Fixing Rates or Schedule Rating
Calculation of Premium in Marine Insurance
• Return of Premium
Tariff Advisory Committee (TAC)
• High Level Body of TAC
• Regional Committee of TAC
• Classes of Insurance Governed by TAC
• Classes of Business Covered by Market Agreement
• Class of Risks used in Life Insurance
• The Tariff System in Practice
• Tariff for Marine Hull Insurance
• Minimum Premium Fixed by TAC
• Short Period Scales under Indian Motor Tariff
Review Questions
CHAPTER 41 ROLE OF ACTUARY IN INSURANCE BUSINESS
Definition of an Actuary
Appointment of an Actuary
Functions of an Actuary
• Evalvation of Insurance Plan
• Ensuring Solvency Position
• Adequate Required Margin
• Protect Policy Holders
• Commercial Decisions
• Duty to Attend Meetings
• Access to All Information
• Important Factors to be Considered
• Advice to Insurance Management
Duties of an Actuary in Life Insurance Business
Functions of an Actuary in General Insurance Business
• Additional Career Avenues
• Strategic Position of the Actuary
• Build up Mutual Benefits
• Key Player in Management Decisions
• Key Role in Making Insurance Products
Scope of an Actuary
Review Questions
CHAPTER 42 LEGAL FRAMEWORK OF INSURANCE
Indian Insurance Act, 1938
• Introduction
• The Salient Features of the Act
• 27—A
Life Insurance Corporation Act 1956
• Important Definitions
Essential Features
General Insurance Business (Nationalisation) Act, 1972
• Important Definitions
• Main Provisions
Consumer Protection Act, 1986
The Insurance Ombudsman
Marine Insurance Act, 1963
Review Questions
CHAPTER 43 CORPORATE GOVERNANCE IN INSURANCE COMPANIES
Introduction
Factors Affecting Corporate Governance
Corporate Governance and Financial Management in Insurance Companies ....
• Technical Risk
• Investment Risk
• Managing Financial Risks
• Good Corporate Governance through Financial Management
Role of Board and Audit Committee in Corporate Governance
• Board
• Audit Committee
• Investment Committee and Corporate Governance
Review Questions
PART XII ROLE OF DEPOSIT INSURANCE CORPORATION AND EMPLOYEES STATE INSURANCE
CHAPTER 44 DEPOSIT INSURANCE IN INDIA
Introduction
Deposit Insurance Corporation
• Objectives of the Deposit Insurance Corporation
• Capital
• Management
Deposit Insurance and Credit Guarantee Corporation
• Objectives
• Resources
• Management
Coverage and Mode of Operation of the Corporation
• Insurance Cover
• Payment of Claim
• Protected Deposits
• Guarantee Fees
• Guarantee Schemes
Review Questions
CHAPTER 45 THE EMPLOYEES STATE INSURANCE (ESI) ACT,
Introduction
• Important Definitions
• Administration of the Scheme
The Employee’s State Insurance Corporation
• Constitution of the Corporation
• Powers of the ESI Corporation
• Duties of the ESI Corporation
• The Standing Committee
• Medical Benefit Council
• Employees State Insurance Fund
• Purposes of ESI Funds
• Contribution
• Time and Period
• Rate of Contribution
• Rules Regarding Contribution
Types of Benefits Under the Act
• Sickness Benefit
• Maternity Benefit
• Disablement Benefit
• Dependant’s Benefit
• Medical Benefit
• Funeral Benefit
Review Questions
CHAPTER 46 MAJOR PLAYERS IN INDIAN INSURANCE INDUSTRY
Introduction
• Life Insurers
• Non-Life Insurers
Life Insurers
• Life Insurance Corporation of India
• LIC of India, International
• LIC Nepal
• Life Insurance Corporation Lanka Limited (LICL)
• SBI Life Insurance Company Limited
• HDFC Standard Life Insurance Company Limited
• Canara HSBC Oriental Bank of Commerce Life Insurance Company Limited
• ICICI Prudential Life Insurance Company Limited
• Tata AIG Life Insurance Company Limited
• AEGON Religare Life Insurance Company Limited
• DLF Pramerica Life Insurance Company Limited
• AMP Sanmar Assurance Company Limited/Reliance Life Insurance Company Limited
• Birla Sun Life Insurance Company Limited
• Bajaj Allianz Life Insurance Company Limited
• ING Vysya Life Insurance Company Limited
• OM Kotak Mahindra Insurance Company Limited
• Max New York Life Insurance Company Limited
Non–Life Insurers
• General Insurance Corporation of India
• Oriental Insurance Company Limited
• New India Assurance Company Limited
• United India Insurance Company Limited
• SBI General Insurance
• Export Credit Guarantee Corporation of India Limited
• HDFC ERGO General Insurance Company Limited
• Universal Sompo General Insurance Company Limited
• ICICI Lombard General Insurance Company Limited
• IFFCO-TOKIO General Insurance Company Limited
• TATA AIG General Insurance Company Limited
• Reliance General Insurance Company Limited
• Bajaj Allianz General Insurance Company Limited
• Royal Sundaram Alliance Insurance Company Limited
• Cholamandalam MS General Insurance Company Limited
Review Questions
CHAPTER 47 GROWTH OF LIFE AND NON-LIFE INSURANCE BUSINESS IN INDIA
Introduction
Factors Determining the Growth of Insurance Business
• Managerial Effectiveness
• Importance of SWOT Analysis
• Insurance Products
• Investor’s Choice
• Pricing of Products
• Market Segmentation and Market Penetration
• Generation of Income
• Customer Service
• Role of Distribution Channels
• Settlement of Claims
• Economic Environment
• Role of Technology
• Corporate Social Responsibility of the Insurer
• Insurance Marketing Research
Challenges for the Insurance Sector
• Cost of Development of Insurance Products
• Absence of Data
• Affordability
• Capital Shortage
• Re-insurance Support
• Regulatory Constraints
• Inadequate Institutional Sources
• Claim Management
• Economic Crisis
Insurance Marketing Opportunities
• Strong Consumerism due to Competition
• Regulatory Norms for Social Obligations
• Insurance Liberalisation
• Sharing of Managerial and Financial Expertise
• Innovative and Flexible Products
• Untapped Market
• Opportunity for Banks
Strategies for Insurance Markets
• Improve Overall Characteristics of Insurance Markets
• Better Cash Management
• Principles of Acceptance of Risks
• Innovative Underwriting
• Insurers Build a Brand Name
• Simplified Policy Documents
Growth (or) Performance of Life Insurance Business
• Growth in Number of Life Insurance Policies Issued
• Growth of Premium Collected by Life Insurance Companies (LIC and Private Life Insurers) (2001-02 to 2007-08)
• Growth of Assets in LIC from 1999-2000 to 2007-08
• Growth in Number of General Insurance Companies
• Growth in Number of Policies Issued by General Insurers
• Growth of Premium Collected by General Insurance Companies in India
Review Questions
PART XIII INSURANCE REGULATORY AND DEVELOPMENT AUTHORITY (IRDA)
CHAPTER 48 INSURANCE REGULATORY AND DEVELOPMENT AUTHORITY (IRDA)
Introduction
• Constitution of the IRDA
• Objectives of IRDA
• Duties and Powers of IRDA
• Role of IRDA in Appointment of Agents
• Regulation of Insurance Act 1938 for Duties and Powers of IRDA
Insurance Regulations
• Effects of Insurance Regulations
Excerpts from Insurance Regulatory and Development Authority (Appointed Actuary) Regulations, 2000
• Procedure for Appointment of Appointed Actuary
• Powers of Appointed Actuary
• Duties and Obligations of Appointed Actuary
• Absolute Privilege of Appointed Actuary
• Applicability to Re-insurance Business
Excerpts From Insurance Regulatory and Development Authority (Actuarial Report and Abstract) Regulations, 2000
• Requirements Applicable to Abstract and Statement
• Distribution of Surplus
• Returns on Assets
• Distribution of Surplus
• Principles Adopted in Distribution of Profits
• Composition of Surplus
Excerpts from Insurance Regulatory and Development Authority (Assets, Liabilities and Solvency Margin of Insurers) Regulations, 2000 ......
• Valuation of Assets
Valuation of Liabilities – Life Insurance
• Policy Options
• Valuation Parameters
• Applicability to Re-insurance
• Additional Requirements for Linked Business
• Additional Requirements for Provisions
• Statement of Liabilities
Review Questions
OBJECTIVE TYPE QUESTIONS AND KEYS
GLOSSARY
BIBLIOGRAPHY
INDEX

Dr. P Periasamy is Reader in the Department of Business Management, Erode Arts College (Autonomous), Erode. He has more than 25 years of teaching and research experience. He has contributed innumerable research papers published in various reputed journals. He has authored books like Financial Management, Insurance: Principles & Practice, Risk and Insurance Management and Working Capital Management.

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