HISTORY OF INSURANCE
01. The idea of insurance was mooted out during 14th century
02. Marine insurance is the oldest form of insurance throughout the world
03. Fire insurance and life insurance were subsequently undertaken by
insurers
04. Fire insurance originated in Germany during 16th century
05. Life insurance started in England during 16th century
06. The first life that was insured was of Mr. William Gybbons on
18.6.1653
07. The first registered office of life was in England with the name Hand
in Hand society in 1696
08. Life insurance was started during the year 1818 in Bengal Presidency
09. The name of the company was Orient Life Assurance Company
10. Bombay Life Assurance Company was started in 1823
11. Triton insurance company was commenced for general insurance in 1850
12. During 1871, Bombay Mutual Life Assurance Society was established
13. During 1874 Oriental Government Security Life Assurance Co Ltd was
established
14. The first company which transacted general insurance business was the
Indian Mercantile insurance company limited
15. During 1912, in order to regulate
insurance the Indian Life Assurance companies act was formulated
16. During the year 1928, the Indian Insurance companies act was enacted
17. During 1938, there were 176 insurance companies in India
18. The image of insurance was tainted on account of frauds during 1920
and 1930
19. Insurance act was passed during 1938
20. 245 Indian and foreign life insurers and provident societies were
under one nationalized corporation during 1956
21. Life Insurance Corporation was formed by an act of Parliament vide LIC
act 1956
22. The initial capital for LIC was Rs. 5 crore
23. During 1968, insurance act was amended to regulate investment and also
set up of tariff advisory committee
24. Non life insurance business/general insurance remained with private
sector till 1972
25. There were 107 companies involved in the business of general
operations
26. General Insurance business was nationalized in India as per General
Insurance Business (Nationalisation) act 1972 with effect from 1.1.1973
27. 107 private insurance companies were amalgamated and grouped into four
companies namely – National Insurance Company, New India Assurance Company,
Oriental Insurance Company and United India Insurance Company
28. The above companies were the subsidiaries of General Insurance Company
– GIC
29. Malhotra committee was formed during the year 1993 headed by former
Finance Secretary and RBI governor R N Malhotra
30. During the year 1999, IRDA act was passed and paved way for
privatization of insurance sector in India
31. During the year 2002, IRDA act and insurance act have been amended
PRESENT SITUATION
32. Insurance business in India can be classified into Life Insurance
business and General Insurance Business
33. LIC of India is taking care of life insurance business
34. General Insurance Corporation of India namely GIC Limited is taking
care of general insurance business
35. United India Insurance Company, Oriental Insurance Company, New India
Assurance Company and National Insurance Company are part and parcel of General
Insurance Corporation of India
36. Insurance sector in India was liberalized in March 2000 by the
formation of IRDA
37. IRDA means Insurance Regulatory and Development Authority
38. As on 2,2.2011, there were 23 life insurance companies and 24 non life
insurance companies in the market.
INSURANCE CONCEPTS
39. Insurance business can be divided in four classes namely: Life
Insurance, Fire insurance, Marine insurance and Miscellaneous insurance
40. Life insurers transact life insurance business
41. General insurers transact the rest
42. No composites are permitted as per law
43. The specific principles of insurance are – uberrima fida(utmost good
faith); insurable interest; indemnity; proximate clause; subrogation
44. The benefits of life insurance are – protection against untimely
death, saving for old age, encourage savings, initiates investment, credit
worthiness, social security, tax benefits.
45. Objectives of nationalization are –
·
To ensure general insurance business to the best
advantage to the community
·
To promote competition in the economy
·
To prevent monopoly growth and concentration of
wealth
·
To spread the activities over geograp0hical
frontiers
·
To innovate new products to suit the requirements
of the different sections of the population
·
To meet the social objectives by formulating
policies for weaker sections
46. The major recommendation of Malhotra committee are –
·
Insurance intermediaries
·
Surveyors
·
Product pricing
·
Rural insurance
·
Regulation of insurance business
·
Liberalisation
·
Investment
·
Restructuring of general insurance
·
Detariffing
47. Insurance Institute of India was established in 1955
48. The examinations conducted by Insurance Institute of India are –
·
The Inspector’s examination (general insurance)
·
Certificate of insurance salesmanship (agents)
·
Licentiate, associate and fellowship
·
Pre recruitment test to insurance agents
49. Persons who have insurance interest in different types of properties
are as detailed below:
·
Immovable properties
·
Movable properties
·
Business
·
Ships
·
Commencement of risk
·
Cause proxima
·
Payment of premium
·
Right to contribution
·
Mitigation of loss
50. The different classifications of insurance are –
·
Life insurance
·
Non life insurance – namely fire insurance
business, marine insurance business, miscellaneous insurance business
·
Retail insurance
·
Corporate insurance
·
Coinsurance
·
Universal insurance
·
Direct insurance
·
Reinsurance
51. The different acts connected with insurance:
·
Indian contract act 1872
·
The Insurance company act 1938
·
General Insurance Business (Nationalisation) act
1972
·
Life Insurance act 1956
·
IRDA act 1999
·
Consumer protection act 1986
·
Foreign exchange maintenance act 1999
·
Motor vehicles act 1988
·
Marine Insurance act 1963
·
Married women’s property act 1874
52. Actuary is a technical expert who combines an understanding of the
risks involved in insurance
·
He also understands the mathematical techniques
to develop insurance products to manage these risks
·
He advises on pricing the insurance products
·
He calculates the reserves to be held for meeting
the financial risks of the insurance products
·
IRDA has made it compulsory for any life
insurance company to appoint an actuary
·
Without actuary insurance companies cannot carry
on their life insurance business
53. Essential elements of a valid contract are:
·
Offer and acceptance
·
Intention
·
Consideration
·
Capacity of parties
·
Free consent
·
Lawful object
·
Agreement not declared valid
·
Certain
·
Legal formalities
54. Kinds of contract are:
·
Voidable contract
·
Void agreement
·
Void contract
·
Illegal agreement
·
Express contract
·
Implied contract
·
Executed contract
·
Executor contract
·
Unilateral contract
·
Bilateral contract
55. The various types of life insurance policies are:
·
Term insurance
·
Whole life policy
·
Endowment
·
Health insurance
·
Joint life policy
·
With profit
·
Without profit
·
Double accident benefit
·
Annuity policy
·
Policies for women
·
Pension insurance
·
Postal life insurance
·
Rural insurance plans
·
Group life insurance
·
Insurance policies for children
·
Money back policy
·
Unit Linked Policy
56. Term insurance offers pure risk cover without any element of saving
for a given term. No benefits are available to the policyholder till his death
57. Whole life – the premium is payable for the lift time of the assured
or for a lesser period. Sum assured is payable only on the death of the assured
58. Endowment plans
·
This is considered to be the most popular plan of
life assurance.
·
It cover the life of the assured in the event of
his early death
·
It also provides for repayment of a lump sum to
the assured if he survives the date of maturity
59. Money back:
·
It provides life insurance covers
·
Periodical payments are also paid to the assured
·
The policyholder need not wait to get the returns
till the date of maturity
60. Children’s assurance plan: The life of a child can be covered from the
age of 7. Once the child becomes a major he can continue the policy
61. ULIPs: it is called Unit Linked Insurance Policy
·
It provides a combination of risk cover and
investment
·
The dynamics of the capital market have a direct
bearing on the performance of the ULIPs
·
The investment risk is generally borne by the
investor
·
A wide range of funds are offered to suit one’s investment
objectives, risk profile and time horizons
·
Different funds have different risk profiles
·
The potential for returns also varies from fund
to fund
62. The common types of funds available under ULIP are – equity funds;
income, fixed interest and bond funds; cash funds and balanced funds
63. Equity funds – primarily invested in company stocks with the general
aim of capital appreciation
64. The risk category in the case of equity funds is found to be medium to
high
65. Income, fixed interest and bond funds – invested in corporate bonds,
government securities and other fixed income instruments and the risk category
is found to be medium
66. Cash funds – Sometimes known as money market funds; amount is invested
in cash, bank deposits and money market instruments. The risk category is found
to be low
67. Balanced funds – Combination of equity investment with fixed interest
instruments. The risk category is found to be medium
68. Non life insurance products-
·
Personal accident
·
Workmen compensation
·
Fire, marine and motor insurance
·
Group and health insurance
69. General Insurance products are:
·
Fire insurance
·
Marine (cargo) insurance
·
Marine (hull) insurance
·
Motor insurance
·
Aviation insurance
·
Engineering insurance
·
Miscellaneous insurance
70. Marine insurance policies are:
·
Hull insurance
·
Cargo insurance
·
Freight insurance
·
Liability insurance
71. Various classes of marine insurance are:
·
Voyage policies
·
Time policies
·
Mixed policies
·
Valued policies
·
Unvalued policies
·
Floating policies
·
Named policies
·
Single vessel and float policies
·
Currency policies
72. Various fire insurance policies are:
·
Valued policy
·
Valuable policy
·
Specific policy
·
Floating policy
·
Average policy
·
Excess policy
·
Declaration policy
·
Adaptable policy
·
Maximum value with dissent policy
·
Reinstatement policy
·
Comprehensive policy
·
Consequential loss policy
·
Sprinkler leakage policy
73. Paid up value = (Number of years premium paid/policy term) x sum
assured + (bonus/1000) x sum assured
74. Surrender value = (surrender value factor x paid up value)/100
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