CONCEPT OF INSURANCE
AN INTRODUCTION TO INSURANCE
INTRODUCTION
MEANING OF INSURANCE
DEFINITION OF INSURANCE
FUNCTIONAL DEFINITIONS
CONTRACTUAL DEFINITIONS
FUNCTIONS OF INSURANCE
(1) PRIMARY FUNCTIONS
(a) Provides Protection
(b) Ensures Certainty
(c) Evaluates Risk
(d) Collective Risk-Sharing
(2) SECONDARY FUNCTIONS
(a) Preventing Loss
(b) Provides Capital
(c) Improves Efficiency
(d) Ensures Welfare of Society
(3) OTHER FUNCTIONS
(a) Savings and Investment Tool
(b) Medium of Earning Foreign Exchange
(c) Risk-Free Trade
Chapter-3
NATURE OF INSURANCE
(i) Sharing of Risk and its Transfer
(ii) Co-operative Mechanism
(iii) Valuation of Risk
(iv) Payment made at Certain Contingency
(v) Amount of Payment
(vi) Large Number of Persons Insured
(vii) Insurance is not a Charity or Gambling
(viii) Establishment of a Welfare State
Chapter-4
HISTORICAL DEVELOPMENT OF INSURANCE
ORIGIN OF INSURANCE
(i) Marine Insurance
(ii) Fire Insurance
(iii) Life Insurance
(iv) Miscellaneous Insurance
DEVELOPMENT OF INSURANCE IN INDIA
Investmen and Recent Developments
Government Initiatives
Chapter-5
KINDS OF INSURANCE
(1) Life Insurance
(2) Health Insurance
(3) Liability Insurance
(4) Property Insurance
(5) Auto Insurance
(6) Disability Insurance
(7) Home Insurance
(8) Casualty Insurance
(9) Rural Insurance
(10) Credit Insurance
(11) Travel insurance
PRINCIPLES OF INSURANCE
(1) BASIC PRINCIPLES
(a) Principle of Co-operation
(b) Theory of Probability
(2) GENERAL PRINCIPLES
(a) Offer and Acceptance
(b) Legal Consideration
(c) Competency or Capacity to Contract
(d) Free Consent
(e) Legal Object
(f) Limitation of Time
(3) SPECIFIC OR CONTRACTUAL PRINCIPLES
(a) Uberrima fides (Utmost Good Faith)
Landmark Case: Smt. Krishna Wanti Puri v. Life Insurance Corporation of India
Landmark Case: Smt. Dipashri v. Life Insurance Corporation of India
(b) Insurable Interest
(i) Insurable Interest and the Life Insurance
(ii) Insurable Interest and the Fire or Accidental Insurance
(iii) Insurable Interest and the Marine Insurance
(iv) Terms and Conditions of Insurance Policy
(v) Interpreting Insurance Documents
(vi) Ambiguous Clauses (Contra Proferentem Rule)
(c) Principle of Causa Proximo (Proximate Cause)
Landmark Case: Pink v. Fleming
(i) Accident
(ii) Suicide
(iii) War-risk
(d) Principle of Indemnity
(e) Principle of Subrogation
(i) Burden of Proof
(ii) Time Limit
(4) MISCELLANEOUS PRINCIPLES
(a) Principle of Contribution
(b) Principle of Return of Premium
(a) Return of Part Premium
(b) Return of Total Premium
(c) Legal Principles
(d) Auxiliary Principles
(a) Contract of Indemnity
(b) Contract of Adhesion
(c) Conditional Contract
(d) Aleatory Contract
(e) Unilateral Contract
Chapter-2
THE PREMIUM
MEANING AND DEFINITION OF PREMIUM
MODE OF PAYMENT OF PREMIUM
(1) Payment at Branch Office
(2) Payment through Banks or Agents
(3) Payment through Website
(4) Electronic Clearing System (ECS)
(5) Credit Card Standing Instruction
(6) Bill Desk
(7) Easy Bill Outlet
(8) Drop Box
GRACE PERIOD
RETURN OF PREMIUM
(a) Return of Part Premium
(b) Return of Total Premium
Chapter-3
MEANING OF RISK
CHARACTERISTICS OF RISK
(1) Large number of similar exposure units
(2) Definite loss
(3) Accidental loss
(4) Large loss
(5) Affordable premium
(6) Calculable loss
(7) Limited risk of catastrophically large losses
SCOPE OF RISK
Principle of Causa Proximo
Principle of Contribution
ELEMENTS OF RISK
(1) In Life Insurance
(i) Age
(ii) Physical Condition
(iii) Personal History and Present Habits
(iv) Family History
(v) Occupation
(vi) Place of Residence
(vii) Race and Nationality
(2) In Property or Fire Insurance
(i) Construction of Property
(ii) Usage of Property
(iii) Location of Property
(iv) Preventive Measures
(3) In Marine Insurance
(i) Management of Cargo Vessel
(ii) Quality of the Vessel
(iii) Construction, Class and Nationality of the Vessel
(iv) Natural Hazards and Topography
ALTERATION OR CHANGE IN RISK
Chapter-4
INSURANCE REGULATORY AND DEVELOPMENT AUTHORITY OF INDIA
INTRODUCTION
SALIENT FEATURES OF IRDA
(1) To establish the Regulatory Authority and to end the Monopoly of LIC & GIC
(2) Composition of Regulatory Authority
(3) Establishment of Insurance Advisory Committee
(4) Registration and Cancellation of Insurance Companies
Registration (Section 3)
Cancellation or Suspension of Registration [Sections 3(4) to (5-E)]
Requirements as to Capital (Section 6)
DUTIES AND FUNCTIONS OF IRDA
POWERS OF IRDA
Power to make regulations (Section 26)
Rules and regulations to be laid before Parliament (Section 27)
POWERS OF CENTRAL GOVERNMENT
Power of Central Government to issue directions (Section 18)
Power of Central Government to supersede Authority (Section 19)
Furnishing of returns, etc. to Central Government (Section 20)
Power of Central Government to make Rules (Section 24)
Chapter-5
INSURANCE INTERMEDIARIES
INTRODUCTION
(1) INSURANCE AGENTS
(A) Licensing Provisions
(B) Code of Conduct for Insurance Agents
(2) OTHER INSURANCE INTERMEDIARY
NOMENCLATURE OF THE INSURANCE BROKER
CODE OF CONDUCT FOR INSURANCE BROKERS
MAINTENANCE OF ACCOUNT, RECORDS etc.
ONLINE SALES, TELEMARKETING AND DISTANCE MARKETING
(3) INSURANCE SURVEYORS AND LOSS ASSESSORS
(A) Licensing Provisions
(B) Duties and Responsibilities
(C) Code of
PART—III
LIFE INSURANCE
DEFINITION OF LIFE INSURANCE
NATURE AND SCOPE OF LIFE INSURANCE
KINDS OF LIFE INSURANCE
(1) Term Insurance Policy
(2) Whole Life Policy
(3) Endowment Life Policy
(4) Money Back Policy
(5) Annuities and Pension
FORMATION OF LIFE INSURANCE CONTRACT
(1) FUNDAMENTAL PRINCIPLES
(a) Agreement
(b) Competency or Capacity to Contract
(c) Free Consent
Landmark Case-Mithoolal Nayak V. v. Life Insurance Corporation of India
Landmark Case-Kasim Ali Bulbul v. New India Assurance Co. Ltd.
Landmark Case-Life Corporation of India v. Asha Goel
(d) Legal Consideration
(e) Lawful Object
(2) INSURABLE INTEREST
Insurable Interest and Life Insurance
(1) Insurable Interest in one’s own life
(2) Insurable Interest in other’s life
Chapter-2
EVENTS INSURED IN LIFE INSURANCE
INTRODUCTION
The Principle of Causa Proximo
Accident
Suicide
War-risk
CIRCUMSTANCES AFFECTING THE RISK
THE CIRCUMSTANCES
(i) Age 96
(ii) Physical Condition
(iii) Personal History and Present Habits
(iv) Family History
(v) Occupation
(vi) Place of Residence
(vii) Race and Nationality
SOURCES OF RISK INFORMATION
(i) Proposal
(ii) Medical Examination
(iii) Agent’s Remarks
(iv) Inspections Report
(v) Medical Information Bureau
Chapter-4
AMOUNTS RECOVERABLE UNDER LIFE POLICY
(a) Maturity of the Policy
(b) Happening of Certain Event
(c) Bonus
(d) Share in the Profits
(e) Surrender Value
(f) Paid-up Value
PERSONS ENTITLED TO PAYMENT
(i) Payee
(ii) Assured Himself
(iii) Assignee or Assignment
(iv) Nominee or Nomination
(v) Legal Heirs
(vi) Appointee
SETTLEMENT OF CLAIM AND PAYMENT OF MONEY
DEATH CLAIM
Intimation of Death
Documents required
Additional documents required
Settling the claim
MATURITY CLAIM
Settling the claim
MACHINERY FOR REDRESSAL OF GRIEVANCES—THE 1998 RULES
Chapter-7
LIFE INSURANCE CORPORATION OF INDIA
ABOUT LIFE INSURANCE CORPORATION OF INDIA (LIC)
ESTABLISHMENT OF LIC
Establishment and incorporation of Life Insurance Corporation of India (Section 3)
Constitution of the Corporation (Section 4)
Capital of the Corporation (Section 5)
OBJECTIVES OF LIC
FUNCTIONS OF LIC
Functions of the Corporation (Section 6)
Power to impose conditions, etc. (Section 6-A)
COMPENSATION OF INSURANCE BUSINESS
Compensation for acquisition of controlled business (Section 16)
FIRST SCHEDULE
PART A
PART B
PART C
EXCLUSIVE PRIVILEGES OF LIC
Corporation to have the exclusive privilege of carrying on life insurance business
(Section 30)
Exclusive privilege of Corporation to cease (Section 30 A)
Exception in the case of insurance business in respect of persons residing outside India (Section 31)
PART—IV
MARINE INSURANCE
CONCEPT OF MARINE INSURANCE
INTRODUCTION
DEFINITION OF MARINE INSURANCE
ORIGIN AND HISTORICAL DEVELOPMENT OF MARINE INSURANCE
The Origin of Marine Insurance
Historical Development of Marine Insurance
Global Development
Development in India
NATURE AND SCOPE OF MARINE INSURANCE
Chapter-2
CLASSIFICATION OF MARINE INSURANCE
(1) There are four types of Marine Insurance
(2) Types of Marine Insurance Policies
Chapter-3
ASSIGNMENT OF MARINE INSURANCE POLICY
CONTENTS OF INSURANCE POLICY
What policy must specify
Contract must be embodied in policy
Signature of insurer
Construction of terms in policy
ASSIGNMENT OF POLICY
When and how policy is assignable
Assured who has no interest cannot assign
DOUBLE INSURANCE
Chapter-4
PRINCIPLES OF MARINE INSURANCE
(1) Principle of Utmost Good Faith (Uberrima fides).
(2) Principle of Insurable Interest.
(3) Principle of Indemnity.
(4) Principle of Proximate Cause (Causa Proxima).
(5) Principle of Subrogation.
Implied conditions as to commencement of risk (Section 44)
Alteration of port of departure (Section 45)
Sailing for different destination (Section 46)
Change of voyage (Section 47)
Deviation (Section 48)
Several ports of discharge (Section 49)
Delay in voyage (Section 50)
Excuse for deviation and delay (Section 51)
Chapter-6
INTRODUCTION
Excluded Losses or the Losses not regarded as ‘Perils of the Sea’
Chapter-7
Included and excluded losses (Section 55)
Partial and total loss (Section 56)
Actual total loss (Section 57)
Missing Ship (Section 58)
Effect of trans-shipment etc. (Section 59)
Constructive total loss defined (Section 60)
Effect of constructive total loss (Section 61)
Notice of abandonment (Section 62)
Effect of abandonment (Section 63)
PARTIAL LOSSES (INCLUDING SALVAGE AND GENERAL AVERAGE
AND PARTICULAR CHARGES)
Particular average loss (Section 64)
Salvage charges (Section 65)
General average loss Section 66)
Chapter-8
MEASURES OF INDEMNITY
Extent of liability of insurer for loss (Section 67)
Total loss (Section 68)
Partial loss of ship (Section 69)
Partial loss of freight (Section 70)
Partial loss of goods, merchandise, etc. (Section 71)
Apportionment of valuation (Section 72)
General average contributions and salvage charges (Section 73)
Liabilities to third parties (Section 74)
General provisions as to measure of indemnity (Section 75)
Particular average warranties (Section 76)
Successor loss (Section 77)
Suing and Labouring Clause (Section 78)
RIGHTS AND REMEDIES OF INSURER ON PAYMENT
Right of Subrogation (Section 79)
When premium is payable (Section 54)
RETURN OF PREMIUM
Enforcement of Return (Section 82)
Return by agreement (Section 83)
Return for failure of consideration (Section 84)
NATURE AND SCOPE OF PUBLIC LIABILITY INSURANCE ACT
INTRODUCTION
NATURE AND SCOPE OF PUBLIC LIABILITY INSURANCE ACT, 1991
OBJECT OF THE ACT
Chapter-2
SPECIFIC PROVISIONS OF PUBLIC LIABILITY
INSURANCE ACT
Certain Reliefs based on No Fault Principle (Section 3)
Duty of Owner (Section 4)
Verification and Publication of Accident (Section 5)
Application for Claim (Section 6)
Award of Relief (Section 7)
Establishment of Environmental Relief Fund (Section 7A)
Other Rights to Claim Compensation (Section 8)
Power to Call for Information (Section 9)
Power of Entry and Inspection (Section 10)
Power of Search and Seizure (Section 11)
Power to give Directions (Section 12)
Power to make Application to Courts for restraining Owner from handling Hazardous Substances (Section 13)
Penalty for Contravention (Section 15)
Offences by Companies (Section 16)
Offences by Government Departments (Section 17)
PART—VI
INSURANCE OMBUDSMAN
Chapter-1
THE INSURANCE OMBUDSMAN SCHEME
INSURANCE OMBUDSMAN
INSURANCE OMBUDSMAN RULES, 2017
APPENDICES
1. THE INSURANCE ACT, 1938
2. INSURANCE REGULATORY AND DEVELOPMENT AUTHORITY ACT, 1999
3. THE PUBLIC LIABILITY INSURANCE ACT, 1991
4. THE INSURANCE LAWS (AMENDMENT) ACT, 2015
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