INSURANCE

REGULATORY BODY,
DEVELOPMENT, POLICIES,
PRACTICES, DEVELOPMENT OF
LIFE AND GENERAL INSURENCE

PRESENTED BY:
MAHANTESH, DEEPA, PRIYA, PANKAJ,
ABHAYANTH, KALLESHAPPA.
 INSURANCE
 Insurance = Collective bearing of Risk.
 Insurance, whether life or non-life,

provides people with a reasonable

degree of security and assurance that
they will be protected in the event of a
calamity or failure of any sort.
 Basic Human trait is to be averse to the

idea of risk taking.

 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
 REGULARITY BODY
 As per the section 4 of IRDA Act' 1999,
Insurance Regulatory and Development
Authority (IRDA, which was constituted by
an act of parliament) specify the
composition of Authority.
 The Authority is a ten member team

consisting of 

    (a)    a Chairman; 

    (b)    five whole-time members; 
    (c)    four part-time members, 

(all appointed by the Government of India)

  Mission of IRDA as stated in the act is
"to protect the interests of the
policyholders, to regulate, promote
and ensure orderly growth of the
insurance industry and for matters
connected therewith or incidental
thereto."
 In 2010, the Government of India

ruled that the Unit Linked Insurance

Plans (ULIPs) will be governed by IRDA,
and not the market regulator Securities
and Exchange Board of India.
 DUTIES, POWER&
FUNCTION OF IRDA
 Section 14 of IRDA Act, 1999 lays down the
duties, powers and functions of IRDA.

1. Subject to the provisions of this Act and

any other law for the time being in force,
the Authority shall have the duty to
regulate, promote and ensure orderly
growth of the insurance business and re-
insurance business.
 Without prejudice to the generality of the
provisions contained in sub-section (1),
the powers and functions of the Authority
shall include, issue to the applicant a
certificate of registration, renew, modify,
withdraw, suspend or cancel such
registration;
 protection of the interests of the policy

holders in matters concerning assigning

of policy, nomination by policy holders,
insurable interest, settlement of
insurance claim, surrender value of policy
and other terms and conditions of
contracts of insurance;
 ADVISORY COMMITEE
 IRDA consists of a Chairman and some
permanent as well as part time members. The
regulations, however, are enacted under the
guidance of a statutory advisory committee. The
advisory committee consists of following
individuals and ex-officio authorities:
 Chairman: Hari Narayana is the current
Chairman of IRDA.
 Full-time Members: Currently, they are Mr. K K
Srinivasan (Nonlife Member), Sri G Prabhakara
(Life Member), Dr R Kannan(Member, Actuary)
and Sri R.K. Nair (Member, F & I). There is
provision for a panel of other members and part
time members.
INSURANCE POLICIES
 In insurance, the insurance policy is
a contract (generally a standard form
contract) between the insurer and the
insured, known as the policyholder, which
determines the claims which the insurer
is legally required to pay. In exchange for
payment, known as the premium, the
insurer pays for damages to the insured
which are caused by covered perils under
the policy language.
 FEATURES
 Insurance contracts are generally
considered contracts of adhesion.
 Insurance contracts are unilateral.
 Insurance contracts are governed by the

principle of utmost good faith which

requires both parties of the insurance
contact to deal in good faith.
Parts of an insurance contract
 Declarations, Definitions, Insuring
agreement,
Exclusions, Conditions, Endorsements.
Development of life insurance
 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 Kolkata.
 In 1914, the Government of India started

publishing returns of Insurance Companies

in India. The Indian Life Assurance
Companies Act, 1912 was the first statutory
measure to regulate life business being
transacted in India
 Milestone of Life Insurance  in India
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
MAJOR LIFE INSURANCE POLICIES
 Endowment Policy
 Whole Life Policy
 Term Life Policy
 Money-back Policy
 Joint Life Policy
 Group Insurance Policy
 Loan Cover Term Assurance Policy
 Pension Plan or Annuities
 Unit Linked Insurance Plan
Major Life Insurance Companies

 Aviva Life Insurance

 Bajaj Allianz
 Birla S un Life Insurance
 HDFC Standard Life Insurance
 ICICI Prudential
 ING Vysya
 Kotak Mahindra
 LIC
 Max New York Life Insurance
 Metlife India Insurance
 Reliance Life Insurance
 SBI Life Insurance
 Shriram Life Insurance
 Tata AIG Life Insurance
Development of general insurance
 General Insurance provides much-needed
protection against unforeseen events such
as accidents, illness, fire, burglary et al.
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.
Major insurance policies that are
covered under General Insurance are:

 Health Insurance
 Motor Insurance
 Travel Insurance
 Home Insurance
  In 1907, the Indian Mercantile Insurance
Ltd. was established and was the first
company to transact all classes of general
insurance business.
 In 1957, General Insurance Council (GIC),
a wing of the Insurance Association of
India was established The General
Insurance Council framed a code of
conduct for ensuring fair conduct and
sound business practices across Non-Life
or General insurance sector.
   General Insurance Business
(Nationalization) Act in 1972, general
insurance business was nationalized which
came into effect from 1st January, 1973 .
 The IRDA opened up the Indian insurance
market in August 2000 by inviting
application for registration proposals.
Foreign companies were allowed entry
into Indian insurance sector with an upper
ceiling on ownership of up to 26%
participation.
 From 2000 onwards, IRDA has framed
various regulations for carrying on
insurance business to protection of Indian
policyholders’ interests including the
registration of Life & Non-Life (General)
Insurance companies. Just recently, the
FDI (Foreign Direct Investment) in Indian
Insurance Companies has been increased
up to 50%.