Upload
vinay-jaiswal
View
244
Download
0
Embed Size (px)
Citation preview
8/4/2019 Gen Ins - Pillai
1/28
General Insurance
8/4/2019 Gen Ins - Pillai
2/28
What is General Insurance?
Includes fire insurance, marine insurance, motor insurance & health
and accident insurance
Has evolved with evolution of business & lifestyle of human beings
Covers everything from space expeditions to voice of famous
singers
8/4/2019 Gen Ins - Pillai
3/28
Types - General Insurance
General insurance
Insurance
of property
Insurance
of persons
Liability
insurance
Special
Risks
Building
Motor vehicles
Aircraft
Machinery Factories
Ships
Live-stocks
Furniture
Cash
Personal
Accidents
Disability
Health relatedrisks
Public liability
Product
liability
Professionalindemnities
Loss of skills
Space
expeditions
Exploration ofpoles & jungles
8/4/2019 Gen Ins - Pillai
4/28
Importance of general insurance in economy
General insurance companies pool together huge amounts to cover
business related risks, which, eventually gets invested in building
economic infrastructure of the country
Protects the capital employed in the industry
Removes all queries & fears associated with several business risks,
making it possible to carry out certain economic activities
Encourages entrepreneurial expansion of the economy
Makes foreign trade possible almost in totality Rural insurance schemes provide necessary financial protection to
the rural economy
8/4/2019 Gen Ins - Pillai
5/28
Fire Insurance
8/4/2019 Gen Ins - Pillai
6/28
What is fire insurance?
Fire insurance is a contract to indemnify the insured for destruction
of or damage to property or goods, caused by fire or other specified
perils, during a specified period, in return for payment of a
premium in lumpsum or by instalments
Fire insurance is governed by a tariff under the Tariff Advisory
Committee(TAC)
Property that can be covered under fire insurance includes
Building Machinery
Equipments
Accessories
Goods
Raw materials Electrical installations of a bldg
Residential houses
Furnitures & fittings
Pipelines located outside & inside the bldg
8/4/2019 Gen Ins - Pillai
7/28
Standard Fire & Special Perils policy
The perils specified in the policy can be grouped as:-
Fire Perils Fire
Explosion / implosion
Aircraft damage
Lightning. Storm, cyclone, tempest, hurricane, tornado & flood
Subsidence & landslide including rock slide
Social Perils Riot, strike, malicious damage
Terrorism (the optional cover)
Other perils Impact damage
Bursting or overflowing of water tanks & pipes
Leakage from Automatic Sprinkler installation
Missile testing operation
Bush fire
8/4/2019 Gen Ins - Pillai
8/28
A typical fire policy does not cover
5% of each claim resulting from operation of lightning /storm/
tempest/ flood/ inundation/ subsidence & landslide covered under thepolicy
Loss, destruction or damage caused by war
Loss, destruction or damage due to nuclear hazard
Loss, destruction or damage caused by pollution
Loss, destruction or damage to unset precious stones or works of art,manuscripts, drawings stamps, coins or paper money and the like foran amount exceeding Rs 10000/-
Loss or damage to the stocks in cold storage caused by change intemperature
Loss, destruction or damage to any electrical/electronic appliances,fixture or fitting caused due to over-running/excessive pressure/self-heating or leakage of electricity
Contd..
8/4/2019 Gen Ins - Pillai
9/28
A typical fire policy does not cover
Expenses incurred on
Architects,Surveyors & Cosulting Engineers fees and
Debris removal
following a loss, destruction or damage to insured property in excess
of 3% & 1% of the claim amount respectively
8/4/2019 Gen Ins - Pillai
10/28
General conditions in a fire policy
The policy will become void in case of non-disclosure of material facts
or misrepresentation
Cancellation of the policy is possible by either party
Notice of loss or damage should be given to the insurer immediately &
the claim should be submitted within 15 days
All notices should be given in writing
The insurer has a right to enter & take possession of the building or
premises where the loss has occurred, remove or salvage the insured
property
If the claim is fraudulent, the insured will lose all the benefits under thepolicy
The insurer has a right to replace, re-instate the property lost or
damaged instead of paying for the loss or damage
8/4/2019 Gen Ins - Pillai
11/28
General conditions in a fire policy
An insured is expected to insure his property to the fullest extent of its
value, otherwise average clause will be applied & insured will get
proportionate amount of loss or damage
In case of one or more policies covering the same property for the
same hazard, all policies will contribute the claim in the proportion of
sum assured If the loss or damage is caused by a third party, the insured is required
to help the insurer to recover the loss from the third party responsible
for the loss or damage
8/4/2019 Gen Ins - Pillai
12/28
8/4/2019 Gen Ins - Pillai
13/28
Fire insurance procedure & documentation
3. Policy
Is the final contract between the insured & the insurer
Is a stamped document
Contains the details of the contract with relevant schedules & rates
4. Claim
Is a form prescribed by the insurer which contains the name &
address of the insured, policy number, date, time, place & cause
of fire, details of the property damaged etc..
5. Survey report
Is a report submitted by the surveyor to the insurance company
giving the details of cause of the fire, event of loss, value of
salvage, expenses etc..
8/4/2019 Gen Ins - Pillai
14/28
Fire insurance procedure & documentation
Surveyor is appointed by the insurance company to assess the
loss of the policy. He has to give the amount of extent of loss
incurred in the policy
On the basis of the survey report, the insurance claim is settled
with the insured
8/4/2019 Gen Ins - Pillai
15/28
Marine Insurance
8/4/2019 Gen Ins - Pillai
16/28
Marine insurance is a contract of insurance under which the insurerundertakes to indemnify the insured against losses incidental to
marine adventure which may cover loss or damages to the ship, cargo,
freight, vessels or any other subject of a marine adventure
The object of marine insurance is to make good losses exposed to
seafarers due to sea conditions, war, pirates, weather, spoilage etc..
The legal framework of marine insurance is provided by Marine
Insurance Act, 1963
Marine insurance comprises of
Cargo Insurance: Provides insurance cover for loss/damage togoods during transit by rail, road, sea or air
Hull Insurance: Provides insurance cover for carrier of the goods
What is Marine Insurance?
8/4/2019 Gen Ins - Pillai
17/28
Depends on the type of contract of sale
Who can buy a marine insurance policy?
Type of contract Responsibility for insurance
Free On Board
(F.O.B. Contract) Seller is responsible till the goods are placed on board the
ship
The buyer is responsible thereafterFree On Rail(F.O.R. Contract) Same as above Mainly relevant to internal transactions
Cost, Insurance &
Freight
(C.I.F. Contract)
Apart from the same obligations in C& F, the seller
must procure cargo marine insurance against the
buyer's risks of goods during the carriage
Seller arranges for insurance & pays the premium
Cost & Freight
(C&F Contract) Seller is responsible till the goods are placed on board the
ship & also pays for the carriage of goods to the named
destination
The buyer is responsible thereafter
8/4/2019 Gen Ins - Pillai
18/28
A contract of marine insurance comprises of Policy form: contains details like name of insured, details of shipment,
sum insured etc..
Clauses: specifies the risks covered, risks excluded and other terms &
conditions of insurance
For inland transit, clauses drafted by the Tariff Advisory Committee
are used
For export/import policies, theInstitute Cargo Clauses (I.C.C) are
used
Structure of Marine Policies
8/4/2019 Gen Ins - Pillai
19/28
Institute Cargo Clauses (C)Risks covered:
Fire or explosion
Vessel or craft being stranded, grounded, sunk or capsized
Discharge of cargo at a port of distress
General Average Sacrifice
Jettison
Overturning or derailment of land conveyance
Collision or contact of vessel, craft or conveyance with any externalobject other than water
Institute Cargo Clauses (Sea)
8/4/2019 Gen Ins - Pillai
20/28
Institute Cargo Clauses (B)
These clauses cover the following risks in addition to thosementioned in ICC ( C ):
Earthquake, volcanic eruption or lightning
Washing overboard
Entry of sea, lake or river water into vessel, conveyance, liftvan or placeof storage
Total loss of any package lost overboard or dropprd whilst loading orunloading from vessel
Institute Cargo Clauses (A)
These clauses cover all risks of loss or damage to the subject matterinsured. However, these losses need to caused by accidentalcircumstances only
8/4/2019 Gen Ins - Pillai
21/28
General Exclusions
All three sets of clauses contain general exclusions. The mostimportant exclusions are:
Loss caused by wilful misconduct of the insured
Ordinary leakage, wear & tear
Loss caused by inherent vice/nature of the subject matter. For eg:
perishable commodities like fruits, vegetables, etc.. may deteriorate withoutany accidental cause
Loss caused by delay
Deliberate damage by the wrongful act of any person*
Loss arising from insolvency of the owner/operator of the vessel
Loss /damage due to inadequate packing War & kindred perils*
Strikes, riots, lock-out, civil commotions & terrorism*
* Can be covered at extra premium
8/4/2019 Gen Ins - Pillai
22/28
Duration of cover
Defined in the Transit Clause The cover extends from the time the goods leave the exporters warehouse,continues during the ordinary course of transit until they are delivered
to the importer warehouse at the named destination
or
to any intermediate warehouse used by the importer for
storage/distribution
or
on expiry of 60 days after discharge from the vessel at the final port ofdischarge
whichever occurs first
8/4/2019 Gen Ins - Pillai
23/28
Crop Insurance
8/4/2019 Gen Ins - Pillai
24/28
Meaning
In India, the agriculture sector engages 72% of the total population. It
has a very high dependence on weather as only 35% of the area isirrigated. The majority of cultivators are uneducated and not fully
aware of the scientific and technologically advanced farm practices
A typical farmer is totally at the mercy of the monsoon. What happens
if there are floods or a drought or a pest attack? What if there is a crop
failure or a crash in prices?
Agriculture crop insurance cannot increase productivity or be a source
of finance, but it can play a role in enhancing both. Crop insurance,
essentially, indemnifies the cultivator against shortfall in crop yield
The government of India introduced the Comprehensive CropInsurance Scheme in 1985 through the General Insurance Corporation
which was later renamed National Agricultural Insurance Scheme
(NAIS) from1999-2000. The Agriculture Insurance Company (AIC)
was constituted to cater to the requirement of agriculture insurance.
8/4/2019 Gen Ins - Pillai
25/28
Meaning
Objectives of crop insurance
Stabilising agricultural production or the farmers income by reducing
adverse effects resulting from crop losses due to natural hazards
Encouraging farmers to adopt improved technologies that can lead to
increased production and more efficient use of inputs
Better credit rating, required for the increased flow of crop loans to thefarmers
Concept of crop insurance is over two decades old in India
The failure of crop insurance as a concept is attributed mainly tolack of awareness in the rural areas
There were no takers for crop insurance, until it was mademandatory and linked to farm credit
8/4/2019 Gen Ins - Pillai
26/28
Bancassurance
8/4/2019 Gen Ins - Pillai
27/28
Meaning
Distribution of insurance plans through banks
Banks have to obtain prior approval of IRDA for acting as
corporate agent.
Helps insurers acquire new customers by leveraging banks
client base
A bank can tie up with only one life insurer and one general
insurer. However, the risk liability is borne entirely by the
insurer
8/4/2019 Gen Ins - Pillai
28/28
Benefits of Bancassurance
Benefits to bank
Extra income in the form
of commissions
Offering account-holders
more products helps
strengthens theirrelationship
Benefits to insurer
Helps expand customer
base
Broader customer base
can help offer products
at marginally lowerpremiums