Escolar Documentos
Profissional Documentos
Cultura Documentos
• Introduction
• Insurance in India
Malhotra Committee
Mukherjee Committee
IRDA Bill
• Opportunities
• Conclusion
Introduction
Insurance may be described as a social device to
reduce or eliminate risk of life and property.
Under the plan of insurance, a large number of
people associate themselves by sharing risk,
attached to individual. The risk, which can be
insured against include fire, the peril of sea, death,
incident, & burglary. Any risk contingent upon these
may be insured against at a premium commensurate
with the risk involved.
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whereby one party called insurer undertakes in exchange for a fixed sum called
premium to pay the other party happening of a certain event.
With the help of insurance, large number of people exposed to a similar risk
makes contributions to a common fund out of which the losses suffered by the
unfortunate few, due to accidental events, are made good.
Insurance in India
The insurance sector in India has come a full circle from being an open
competitive market to nationalization and back to a liberalized market again.
Tracing the developments in the Indian insurance sector reveals the 360 degree
turn witnessed over a period of almost two centuries.
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 Calcutta.
Some of the important milestones in the life insurance business in India are:
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.
The General insurance business in India, on the other hand, can trace its roots to
the Triton Insurance Company Ltd., the first general insurance company
established in the year 1850 in Calcutta by the British.
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Some of the important milestones in the general insurance business in India are:
1907: The Indian Mercantile Insurance Ltd. set up, the first company to transact
all classes of general insurance business.
1968: The Insurance Act amended to regulate investments and set minimum
solvency margins and the Tariff Advisory Committee set up.
107 insurers amalgamated and grouped into four companies viz. the National
Insurance Company Ltd., the New India Assurance Company Ltd., the Oriental
Insurance Company Ltd. and the United India Insurance Company Ltd. GIC
incorporated as a company.
Source: www.tourindia.com
Insurers
Life Insurers:
General Insurers:
GIC had four subsidiary companies, namely (with effect from Dec'2000) these
subsidiaries have been de-linked from the parent company and made as
independent insurance companies.
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3. National Insurance Company Limited
4. United India Insurance Company Limited.
As soon as GIC was formed, GOI transferred all the shares it held of the general
insurance companies to GIC. Simultaneously, the nationalized undertakings
were transferred to Indian insurance companies. After a process of mergers
among Indian insurance companies, four companies were left as fully owned
subsidiary companies of GIC (1) National Insurance Company limited (2) The
New India Assurance company limited (3) The Oriental Insurance Company
limited (4) United India Insurance company limited
The next landmark happened on 19 April 2000, when the insurance regulatory
and development authority act, 1999 (IRDAA) came into force. This act also
introduced amendment to GIBNA and the insurance act 1938. An amendment to
GIBNA removed the exclusive privilege of GIC and its subsidiaries carrying of
general insurance in India.
General Insurers
Public
o National Insurance
o New India Assurance
o Oriental insurance
o United India Insurance
o Agriculture Insurance Company of India Ltd
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Private
The GIC has a quarter of a million agents. It has more than 2,500 branches,
30million individual and group insurance policies and assets of about USD
1,800 million at market value (at the end of 1999). It has been suggested that the
GIC should close 20-25% of its nonviable branches (Patel, 2001). The GIC has
so far been the holding company and re-insurer for the state-run insurers. It
reinsured about 20% of their business.
Malhotra Committee
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be opened for private-sector competition, and ultimately, foreign private-sector
competition. It also investigated the level of satisfaction of the customers of the
LIC. Curiously, the level of customer satisfaction seemed to be high. The union
of the LIC made political capital out of this finding.
The following are the purposes of the committee. (a) To suggest the structure of
the insurance industry, to assess the strengths and weaknesses of insurance
companies in terms of the objectives of creating an efficient and viable insurance
industry, to have wide coverage of insurance services, to have a variety of
insurance products with a high quality service, and to develop an effective
instrument for mobilization of financial resources for development. (b) To make
recommendations for changing the structure of
the insurance industry, for changing the general policy framework etc. (c) To
take specific suggestions regarding LIC and GIC with a view to improve the
functioning ofLIC and GIC. (d) To make recommendations on regulation and
supervision of the insurance sector in India. (e) To make recommendations on
the role and functioning of surveyors, intermediaries like agents etc. in the
insurance sector. (f) To make recommendations on any other matter which are
relevant for development of the insurance industry in India.
Mukherjee Committee
Immediately after the publication of the Malhotra Committee Report, a new
committee (called the Mukherjee Committee) was set up to make concrete plans
for the requirements of the newly formed insurance companies.
Recommendations of the Mukherjee Committee were never made public. But,
from the information that filtered out it became clear that the committee
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recommended the inclusion of certain ratios in insurance company balance
sheets to ensure transparency in accounting. But the Finance Minister objected.
He argued (probably on the advice of some of the potential entrants) that it could
affect the prospects of a developing insurance company.
After the report of the Malhotra Committee came out, changes in the insurance
industry appeared imminent. Unfortunately, instability in Central Government,
changes in insurance regulation could not pass through the parliament.
The dramatic climax came in 1999. On March 16, 1999, the Indian Cabinet
approved an Insurance Regulatory Authority (IRA) Bill that was designed to
liberalize the insurance sector. The bill was awaiting ratification by the Indian
Parliament.
However, the BJP Government fell in April 1999. The deregulation was put on
hold once again.
An election was held in late 1999. A new BJP-led government came to power.
On December 7, 1999, the new government passed the Insurance Regulatory and
Development Authority (IRDA) Act. This Act repealed the monopoly conferred
to the Life Insurance Corporation in 1956 and to the General Insurance
Corporation in 1972.The authority created by the Act is now called IRDA. It has
ten members. New licenses are being given to private companies (see below).
IRDA has separated out life, non-life and reinsurance insurance businesses.
Therefore, a company has to have separate licenses for each line of business.
Each license has its own capital requirements (around USD24 million for life or
non-life and USD48 million for reinsurance).
On July 14, 2000, the Chairman of the IRDA, Mr. N. Rangachari set forth a set
of regulations in an extraordinary issue of the Indian Gazette that detail of the
regulation.
Regulations
The first covers the Insurance Advisory Committee that sets out the rules and
regulation.
The second stipulates that the "Appointed Actuary" has to be a Fellow of the
Actuarial Society of India. Given that there has been a dearth of actuaries in
India with the qualification of a Fellow of the Actuarial Society of India, this
becomes a requirement of tall order. As a result, some companies have not been
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able to attract a qualified Appointed Actuary (Dasgupta, 2001). The IRDA is
also in the process of replacing the Actuarial Society of India by a newly formed
institution to be called the Chartered Institute of Indian Actuaries (modeled after
the Institute of Actuaries of London).Curiously, for life insurers
the Appointed Actuary has to be an internal company employee, but he or she
may be an external consultant if the company happens to be anon-life insurance
company.
Third, the Appointed Actuary would be responsible for reporting to the IRDA a
detailed account of the company.
Fourth, insurance agents should have at least a high school diploma along with
training of 100 hours from a recognized institution. More than a dozen
institutions have been recognized by the IRDA for training insurance agents
Fifth, the IRDA has set up strict guidelines on asset and liability management of
the insurance companies along with solvency margin requirements. Initial
margins are set high (compared with developed countries). The margins vary
with the lines of business (for example, fire insurance has a lower margin than
aviation insurance).
Sixth the disclosure requirements have been kept rather vague. This has been
done despite the recommendations to the contrary by the Mukherjee Committee
recommendations.
Seventh, all the insurers are forced to provide some coverage for the rural sector.
(1) In respect of a life insurer, (a) five percent in the first financial year; (b)
seven percent in the second financial year; (c) ten percent in the third financial
year; (d) twelve percent in the fourth financial year; (e) fifteen percent in the
fifth year (of total policies written direct in that year).
(2) In respect of a general insurer, (a) two percent in the first financial year; (b)
three percent in the second financial year; (c) five percent thereafter (of total
gross premium income written direct in that year).
Three days before the deadline that the IRDA had set upon itself (October 25,
2000), it issued three companies with license papers:
(1) HDFC Standard Life. This will be jointly set up by India's Housing
Development Finance Company - the largest housing finance company in India
and the Scotland based Standard Life.
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(3) Reliance General Insurance. This company is fully owned by Mumbai
based Reliance Industries which has operations in textile, petrochemicals, power
and finance industries.
(1) Max New York Life. It is a partnership between Delhi based pharmaceutical
company Max India and New York Life; the New York based Life Insurance
Company.
To date (end of April 2001), the following companies have thus been granted
licenses: ICICI -Prudential, Reliance General, Reliance Life, Tata-AIG General,
HDFC Standard Life, Royal-Sundaram, Max-New York Life, IFFCO-Tokio
Marine, Birla-SunLife, Bajaj-Allianz General, Tata-AIG Life, ING-Vyasa,
Bajaj-Allianz Life, SBI Cardiff Life
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Bajaj Allianz General Insurance Co. Ltd. 6.15
ICICI Lombard General Insurance Co. Ltd. 8.04
IFFCO Tokio General Insurance Co. Ltd. 4.00
National Insurance Co.Ltd. 17.11
United India Insurance Co. Ltd. 17.11
The New India Assurance Co. Ltd. 20.15
The Oriental Insurance Co. Ltd. 17.02
Reliance General Insurance Co. Ltd. 0.75
Royal Sundaram Alliance Insurance Co. Ltd 2.17
Tata AIG General Insurance Co. Ltd. 2.89
Cholamandalam MS General Insurance Co. Ltd. 1.22
HDFC-Chubb General Insurance Co. Ltd. 0.89
Export Credit Guarantee Corporation Ltd. 2.50
Agriculture Insurance Co. of India Ltd. n.a.
In these stats there are gross premium underwritten of both private and
public general insurance companies. We can see that the gross total premium of
public companies is almost double of private insurance companies. In private
sector the leader is ICICI- Lombard followed by Bajaj-Allianz and Reliance
General, where in Public sector the leader is New India Insurance.
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Royal 48.52 542.66 33.78 407.04 33.32
Sundaram
50.68 686.96 49.91 540.16 27.18
Tata-AIG
91.33 803.59 14.61 144.67 455.46
RelianceGeneral
74.39 1070.28 67.96 779.11 37.37
IFFCO-Tokio
201.78 2803.34 113.83 1468.47 90.90
ICICI-Lombard
147.18 1621.44 97.87 1164.91 39.19
Bajaj Allianz
13.96 170.17 17.10 177.18 -3.96
HDFC CHUBB
24.07 282.71 14.87 209.14 35.18
Cholamandala
m 379.45 4505.60 377.34 4198.39 7.32
Oriental
Source: IRDA
The second month of the detariffed regime in the current calendar year shows
that the premium growth rate in February 2007 is an impressive 22.4 percent,
though it falls short of the January 2007 growth of 25.6 percent. The new players
have achieved a market share of about 35 percent in the February premium G V
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Rao volumes, though this falls a little short of the 37 percent market share they
had recorded in January 2007. The market grew its February renewal premium
from Rs.1551 crore to Rs.1899 crore. The established players have contributed
Rs.106 crore to the increase, while the new players have added Rs.242 crore.
National Insurance, as was seen in its January 2007 performance; is the leading
player in its group, adding Rs.51 crore to the accretion. Among the new players,
ICICI-Lombard leads with an accretion of Rs.88 crore followed by Reliance
with Rs.76 crore. Other players that have made significant accretions to
February 2007 premium are:
Bajaj-Allianz with Rs.49 crore, United India with Rs.28 crore and Oriental with
Rs.26 crore. New India, as it did in January 2007, has slowed its growth
momentum, by keeping its accretion in February to Rs.2 crore; in January 2007
its premium accretion was Rs.8 crore.
The premium growth trends of the first two months of the calendar year show
that among the new players the growth pursuing players are ICICI-Lombard,
Reliance and Bajaj-Allianz. Among the established players the growth-hunt is
led by National Insurance followed by Oriental and United India.
The premium achievement up to February 2007 is Rs.22, 669 crore, with the
established players having recorded Rs.14, 688 crore and the new players
Rs.7981 crore. To put this performance in perspective, one should highlight that
for the financial year 2005/06 the premium was Rs.20, 360 crore, with the
established players having completed Rs.14, 997 crore and the new players
Rs.5360 crore. The growth rate up to February 2007 is 23.7 percent, down by
0.2 percent from the level at January 2007.
ICICI—Lombard leads the growth list with a massive accretion of Rs.1334 crore
followed by Reliance with Rs.648 crore and Bajaj-Allianz with Rs.456 crore.
Oriental with Rs.400 crore and United India with Rs.322 crore are the others on
the growth path.
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Period of
Previous year
Royal
Sundaram 57.37 600.03 52.31 459.35 30.63
Source: IRDA
Policy called ‘Raj Rajeshwari Mahila Kalyan Yojana’ offering security to women in
the age group of 10 to 75 years irrespective of their occupation was introduced
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w.e.f. 19th October, 1998. Specially designed to protect the welfare of women
mainly in rural and semi-urban areas.
Scope of Cover
DEATH
2. Loss of one limb of one eye or loss of two limbs or both eyes Rs.25, 000/-
4. Murder
5. Terrorist activities
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Caused by
2. Sterilization
3. Caesarian
4. Hysterectomy
6. Child Birth, not beyond a period of seven days from the date of surgical
operations.
Premium Rating
Policy provides protection to the girl child in the event of death of either or both
the parents.
Scope of Cover
1. For child in the age group of 0 to 18 years; and age of parents below 60
years.
3. Insurance protection is not for the girl child but for her parents; however,
benefit will accrue to the child.
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4. Death of parent/s would include death arising out of or traceable to
slipping and/or falling from mountainous terrain; biting by insects, snakes
and/or animals; drowning or washing away in floods, landslides, rockslides,
earthquake, cyclone and/or natural calamities; rape, murder and terrorist
activities covered; any other accidental causes;
a) Sterilization
b) Caesarean,
d) At the time of child birth are also covered provided that death occurs
within a period of seven days from the date of operation; Death by Rape
attempts.
1 to 5 years Rs. 1,200 p.a. surviving parents or guardian for looking after
the need of the child
8. In the case of death of the girl child before attaining the age of 18 years,
Balance amount standing to the credit of the girl child would be paid to the
surviving parent or guardian.
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Note: One girl child below the age of 18 in a family could be covered. Policies
can be issued individually or as a group.
Main Exclusions:
1. All pre-existing diseases and diseases contracted during the first 30days
from the commencement date of the policy.
2. Some of the diseases such as Cataract, Benign Prostatic Hypertrophy,
Hysterectomy, Hernia, Hydrocele, Piles, Sinusitis, and Congenital
Internal Disease are not covered in the first year of the policy.
3. Corrective, cosmetic or aesthetic dental surgery or treatment.
4. Cost of spectacles, contact lens and hearing aid.
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Claim Settlement: The Claims are to be settled by a Third Party Administrator
(TPA) mentioned in the schedule or by the Insurance Company and to be made
cashless as far as possible through listed hospitals.
Rural Policies
Rural policies provide wide policies to the rural areas. They cover a vast area of
the rural areas. These policies are provided by all the four subsidiary companies
and are applicable in all the states of the country. They are as following-
CATTLE INSURANCE
Cattle Insurance was governed under Market Agreement as devised by GIC and
the rates, terms, conditions etc. all were applicable to all the four Insurance
Companies. However, w.e.f May 2003, it is no longer under Market Agreement.
This policy covers indigenous cross bred and exotic cattle owned by private
owners, various financial institutions, dairy farms, cooperatives, corporate
dairies etc. The word cattle include Milch, Cows and Buffaloes calves and
heifers, stud bulls, bullocks and he-buffaloes and mithuns. Age group is
specified for all the animals. The evaluation of the animal is done by a
veterinary surgeon.
The coverage under this policy is meant for calves/heifers from one day to 32
months. The valuation depends upon the age of the cow and is fixed according
the age of the calf. All terms and conditions applicable to cattle are applicable
here also. Minimum coverage is taken from 12 months however this is not an
annual policy.
CAMEL INSURANCE
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The camels are covered against death due to accident or disease as per Standard
Cattle Insurance Policy. The maximum S.I. is restricted to Rs.3000/-.
PIG INSURANCE
All indigenous, cross-bred and exotic pigs are covered however under scheme
category exotic animals are not covered. The age group is from 4 months to 3
years. The coverage is against death due to accident or disease.
Exclusions as per Cattle Policy apply here also. Permanent total disablement,
breeding and furrowing risks are not covered. Vaccination in applicable diseases
is compulsory. Evaluation depends upon the age of the animal. Animals are
identified by means of small brass buttons ear tags.
The Coverage is as per Standard Cattle Policy. However the age group is
restricted to 2 years to 8 years.
POULTRY INSURANCE
This is also governed by Market Agreement, amongst all the four subsidiary
companies. The policy shall provide indemnity against death of birds due to
accident (including fire, lightning, flood, cyclone, strike, riot and civil
commotion and terrorism) or diseases contracted or occurring during the period
of insurance. The word Poultry includes layers, broilers and hatchery birds,
which are exotic and cross-bred. Indigenous and non-descript birds will not be
insured. All
The Insurance can be granted to any person between the age group of 10 to 70
years irrespective of his occupation, income etc.
BENEFITS
(A) Death due To Accident Rs. 10,000/-
(B) Total irrecoverable loss of use of 2 limbs or Rs. 10,000/- one eye and one
limb due to accident
(C) Total irrecoverable loss of one eye or one limb Rs. 5,000/-
(D) Permanent total disablement due to accident Rs.10, 000/-
EXCLUSIONS
Company shall not be liable for:
i. Compensation under more than one of the sub clauses (A), (B), (C) & (D) in
respect of same injury/disablement.
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ii. Payment of compensation in respect of injury/disablement directly or
indirectly arising out of or contributed to by or traceable to any disability
existing on the date of issue of the policy.
iii. Death/injury/disablement of the insured from:
(a) Intentional self injury, suicide or attempted suicide.
(b) Whilst under the influence of intoxicating liquor or drugs.
(c) Directly of indirectly caused by insanity.
(d) Arising or resulting from the insured committing any breach of law with
criminal intent.
iv. Compensation arising out of war and allied perils.
v. Death or bodily injury arising out of ionizing radiation or contamination by
radioactivity from any source whatsoever.
Policy is available on long-term basis also and is also subject to group discount
and long-term discount.
Covered Risks:
This policy provides compensation in the event of death or permanent
disablement or loss of limbs or sight in eyes.
Major Exclusions:
Intentional self injury, suicide or attempted suicide, Accident while the insured
in under the influence of intoxicating liquor or drugs, loss caused by insanity,
loss due to breach of law with criminal intent, War and allied perils, nuclear
radiation.
HUT INSURANCE
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SCOPE OF COVER – Against loss or damage due to fire, (including fire
resulting from explosion and short circuiting), lightning, and explosion of boiler
or gas used for domestic purpose only, earthquake, flood, inundation, storm,
tempest, cyclone and other allied perils, riot and strike damage, malicious
damage, aircraft and impact damage.
PREMIUM – Rs.3/- per thousand on the sum insured. However, under a policy
the premium should not be less than Rs.30/-
Above mentioned rural policies are designed by government to cover the risk of
the rural population. These policies are specially designed to provide the risk
coverage in all the states of the country. There is a wide range of rural policies
which are offered by Oriental Insurance, New India Assurance, National
Insurance & United India Insurance.
This is a Personal Accident Insurance Master Policy covering all the Kisan
Credit Card holders. This will include the holders of KCC issued by the District
Central Co-op. Banks, RRBs and commercial Banks throughout India. This
scheme will cover all the KCC holders against Death or Permanent disability
resulting from accidents caused by external, violent and visible means and
occurring within the geographical jurisdiction of India. This policy will cover
the KCC holders up to the age of 70 years and whose names are declared by the
Banks and in respect of whom the premium is paid by the Bank to the Insurance
Company for a maximum benefit of Rs.50, 000/- in case pf (i) Accidental Death,
(ii) Permanent total disability (iii) Loss of two limbs or two eyes or one limb and
one eye and Rs.25, 000/- in case of loss of one limb or one eye (subject to
exclusion).
The Master Policy shall remain valid for a period of three years effective from
April 2001 and any modification/alteration shall be made at the end of three
years after review of the premium and claims experience. If the claim experience
exceeds 70%, the premium shall be suitably loaded. The policy can be issued for
one year or three years period by charging Rs.15/- for annual policy and Rs.45/-
for three years period. Service Tax is waived for this policy. The participating
Banks will pay premium to designated Insurance Company on Flagship
Company basis.
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Health policies
Insurer: General Insurance Corporation through its four subsidiaries: Oriental
Insurance, New India Assurance, National Insurance Company, United India
Insurance.
surgery which is required in respect of any disease which has arisen during the
policy period. The major benefit for taking a Group Mediclaim policy is that the
insured gets a Group discount; hence the premium per person is lower.
Covered Risks:
This cover is a hospitalization cover and reimburses the medical expenses
incurred in respect of covered disease /surgery while the insured was admitted in
the hospital as an in patient. The cover also extends to pre- hospitalization and
post- hospitalization for periods of 30 days and 60 days respectively
Major Exclusions:
Any pre-existing disease, any expense incurred during first 30 days of cover
except injury due to accident, all expenses incurred in respect of any treatment
relating to pregnancy and child birth. Treatment for Cataracts, Benign prostatic
hypertrophy, Hysterectomy, Menorrhagia or Fibromyoma, Hernia,Fitula of
anus,Piles, Sinusitis, Asthma, Bronchitis, All Psychiatric or Psychosomatic
disorders are excluded from the scope of the cover.
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Group of Persons and is known as Group Personal Accident Policy. This policy
can be granted for restricted hours of Duty and not for all the 24 hours of the
days and nights) at a reduced premium also. The Central Government bears the
entire premium cost in respect of the scheme. During the year 1998-99, a total
number of 8,128 claims involving an amount of Rs. 1.84 crores were settled.
Covered Risks:
This policy provides compensation in the event of insured sustaining injuries,
solely and directly from an accident.
Major Exclusions:
Covered Risks:
This cover is a hospitalization cover and reimburses the medical expenses
incurred in respect of covered disease /surgery while the insured was admitted in
the hospital as an in patient. The cover also extends to pre- hospitalization and
post- hospitalization for periods of 30 days and 60 days respectively
Major Exclusions:
Any pre-existing disease, any expense incurred during first 30 days of cover
except injury due to accident, all expenses incurred in respect of any treatment
relating to pregnancy and child birth. Treatment for Cataracts, Benign prostatic
hypertrophy, Hysterectomy, Menorrhagia or Fibromyoma, Hernia,Fitula of
anus,Piles, Sinusitis, Asthma, Bronchitis, All Psychiatric or Psychosomatic
disorders are excluded from the scope of the cover.
Health policies are one of the most popular policies of government general
insurance sector. These policies provide a big amount of premium to the
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insurance companies. Health insurance as it is different from other
segments of insurance business is more complex because of
serious conflicts arising out of adverse selection, moral hazard,
and information gap problems. Health insurance is typically
annual and has to be renewed yearly. Policy, which is not
renewed in time lapses and a new policy, has to be taken out.
Salient Features
The policy is a Personal Accident policy covering accident benefits for a
capital sum insured of Rs.1 lakh for each member of the family while in travel
within the country.
The plan covers domestic travel by Rail, Road, Waterways or Air within the
country for a period of 60 days. The plan also covers travel by use of own
conveyance.
The policy covers loss or damage (due to fire, Storm, tempest, hurricane,
flood, inundation, riot, strike, terrorism, malicious damage, accident, theft or
burglary) of accompanied baggage up to a certain limit.
The compensation provided for loss of each article is limited to Rs.500, unless
specifically declared. The policy also provides for emergency expenses up to
Rs.1000 incurred in connection with an accident.
Premium
No. of 1 2 3 4 5 6 7 8
persons
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Service tax @ 5% extra.
Requirements
Completed proposal furnishing the date of journey in particular. Value of each
piece of baggage should be declared, if same exceeds Rs.500.
Recommendations
While in travel, one is more exposed to personal accidents, and he/she can be
covered for Rs.1 lakh sum insured, without reference to any other Personal
Accident policies; age or income.
Salient Features
There are two types of plans under the Overseas Mediclaim Policy:
1. Overseas Mediclaim Insurance -A(World wide travel excluding USA and
Canada)
2. Overseas Mediclaim Insurance - B (World wide travel including USA and
Canada.)
3. Overseas Mediclaim Insurance - E (For corporate Frequent Traveler
providing world wide coverage)
OMP -E is an annual policy issued for one year. The insured is covered for a
maximum of 180 days abroad, irrespective of number of visits. However
maximum number of days under each visit is limited to 60 days.
Requirements
Completed proposal form after passport and Visa (where necessary) is
obtained in case of the proposer being hypertensive, ECG reports from
cardiologist should be filed and basing on the same, the pre-existing condition
may be excluded from the scope of benefits
Recommendations
It is mandatory in some Western countries for a visitor to their country to be
covered by a Health Insurance Policy. In its absence, he may run the risk of
repatriation or quarantining in the airport itself
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foreign currency allowances allowed by the host Country can be conserved as
the premium is paid in Rupees in home country
The Claim procedure is very simple. The policy document that the insured
carries with him contains full details of the claim settling agencies. The
insured has to just get in touch with the Agency and they take over the
responsibility of dealing with the respective Hospitals/Authorities who then
undertake to settle the bills directly with the hospitals.
All of the above policies are implemented in all the states of the country and are
determined by IRDA. All the four subsidiary companies of GIC- Oriental
insurance company ltd., New India Assurance company ltd., United India
Insurance Corporation ltd. and National Insurance Company ltd. follow the
schemes that are determined by the IRDA.
o The Pravasi Bhartiya Bima Yojana, 2006 provides for an insurance cover
of a minimum sum of Rs. 5.00 lakhs payable to the nominee/legal heir in
the event of death or permanent disability of any Indian emigrant who
goes abroad for employment purpose after obtaining emigration
clearance from the concerned Protector of Emigrants (POE).
o In the case of death, besides the cost of transporting the dead body, the
cost incurred on the one-way airfare of one Attendant shall also be
reimbursed by the Insurance Company.
o If a worker is not received by the employer on his arrival to the
destination abroad or there is any substantive change in Employment
Contract to his disadvantage or if the employment is pre-maturely
terminated within the period of employment for no fault of the emigrant,
the Insurance Company shall reimburse one way economy class airfare
provided the grounds of repatriation are certified by the concerned Indian
Mission/Post.
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o In cases where the repatriation is arranged by the Indian Mission/Post,
the Insurance Company shall re-imburse the actual expenses to the
concerned Indian Mission/Post.
o The Insured person shall be reimbursed actual one way economy class
airfare by the Insurance Company if he falls sick or is declared medically
unfit to commence or continue working and the service contract is
terminated by the Foreign Employer within twelve months of taking the
insurance.
o The Insurance Policy shall be valid for a minimum period of two years or
the actual period of contract, whichever is longer.
o The Insurance Policy shall also provide medical cover of a minimum of
Rs. 50,000/- as cash-less hospitalization and/or reimbursement of actual
medical expenses of the insured emigrant workers on grounds of
accidental injuries and/or sickness/ailments/diseases occurring during the
period of insurance whether in India or in the country of his employment.
o An insured person shall be covered for a minimum sum of Rs. 25,000/-
in connection with the legal expenses incurred by him in any litigation
relating to his/her employment.
o The Insurance Policy shall also provide maternity benefits, subject to a
minimum cover of Rs. 20,000/- in case of women emigrants. In case of
medical treatment in the country of employment, the maternity benefits
would be provided if the requisite documents are certified by the
concerned Indian Mission/Post.
o The family of emigrant worker in India consisting of spouse and two
dependent children up to twenty one years of age shall be entitled to
hospitalization cover in the event of death or permanent disability of the
insured person for a maximum amount or Rs. 25,000/- per annum.
o The Insurance Companies shall charge fair and reasonable premium.
Service tax will be charged as applicable.
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The New India Assurance Co. Ltd. 16.02.2006
The National Insurance Co. Ltd. 28.02.2006
Beneficiaries of Pravasi Bharatiya Bima Yojana (PBBY) 2003 can also opt for
Pravasi Bhartiya Bima Yojana, 2006
Going through the state government general insurance there are only four states
where state government is also providing the insurance policies. These states are
Maharashtra, Kerala, Gujarat and Rajasthan. In all the other states the general
insurance government policies are provided by the GIC and its four subsidiary
companies.
In Accident Insurance Business, private sector players have almost 53% market
share with ICICI Lombard as the lead player. Public sector players constitute
about 47% market value with New India as the leading player followed by
United India.
These policies provide a helping hand to the person who faces problem due to
some unforeseen event or accident. Going through the marketing aspect the
insurance company has to prepare the product in determining its success in the
market.
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Insurance Regulatory and Development Authority (IRDA).
The market share of new players continued to stay at 35% in the current fiscal,
up from 26% last year. While 35% was contributed by the eight private players
and remaining 65% came from the four public sector players — New India,
Oriental Insurance, National Insurance and United India.
Market leader New India grew business by 10% to Rs 3,337.1 crore in April-
November, the highest premium collection by any company during the period.
Clocking 13.6% growth, Oriental Insurance collected Rs 2,647.8 crore in
premium, while National Insurance witnessed a mere 5.06% growth in business
at Rs 2,311.6 crore during the period. United India increased premium
collection by 12.3% to Rs 2,093 crore.
The government policies are popular among the masses especially in the rural
areas. The four subsidiary companies of government are one of the leading one
in general insurance sector. Government companies gather a big share in the
market. In this context health policies are one of the most popular policies.
These policies are implemented in all over India. Health is the biggest source of
premium in the insurance sector.
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2. The policies provided by the government are basically provided
as a source of political mileage for the party in power to convince
the mass.
3. Since these policies are provided by the government and basically
at the national level ,so they cover a wide area with a huge
population which gives the policies a better stage to explore and
cover a big part of the market.
The policies which are offered by the government are being implemented from
several years. But after the liberalization the scene is changing. Now new
companies are entering the general insurance sector, most of them come from
large corporate groups. Due to the entry of these private sector units the
government policies are loosing there depth in market and day-by-day they have
to face challenges from there strong competitors.
The highest paid employees of the public sector, the estimated half-a-million
employees of the nationalized insurance companies, are characterized by small
productivity, utter ignorance of the basic principles of the insurance business,
endemic corruption, gross indiscipline and sheer laziness.
There are some challenges which are faced by the Government general insurance
policies are-
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Allianz, Lombard General, AIG, AMP and Sun Life among others. Innovative
products, smart marketing and aggressive distribution have enabled fledging
private insurance companies to sign up Indian customer faster than anyone
expected. According to estimates, private insurance companies collectively to
have a 10% share of the non-life insurance market.
Negligence of rural sector- Rural India is a target market for many players in
the financial sector, and insurance companies are no exception. While public
sector insurance companies boast that they have already captured this area, the
extent of penetration of the insurance majors into rural India is not yet clear.
Rural market in India is neglected as most of the policies are designed to meet
the needs of the urban population and they are not properly promoted in rural
market. Most products being offered today to rural market are very often urban
products, offered to the rural market with some tweaking in features. There is
major challenge for insurance companies and policy makers to increase the
awareness levels among rural population, so that they may view insurance
policies as a risk management tool. Traditionally rural households have
addressed their risk protection in various forms: from the joint family, investing
in gold, land and other assets. Most insurance policies that rural customers are
familiar with have been sponsored or subsidized by the government, the legacy
of this past is that rural people do not fully see insurance as a risk sharing
mechanism through contributions in premium. There is need for sufficient
investment by public institutions to bring about a change in the perception of
Insurance as a risk mitigation instrument and enhance the awareness levels on
various insurance products and how they work in principle. The field staff and
the agents of the GIC and its four wholly owned subsidiary companies have
seldom bothered to venture out into the rural hinterland to sell crop or any other
personal line insurance. Given the woeful lack of penetration of the rural market
by the GIC subsidiaries, it is hardly surprising that a growing number of farmers
across the country are resorting to the extreme remedy of suicide when their
usually uninsured crops fail.
High rate of premium- Most of the policies that are offered by the government
are made for the middle class group but the premium rates are quite high which
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do not meet the affordability of the customers. Low premium rates in one area
necessitate higher premium elsewhere.
Returns are low- There are number of government policies provided in market
which are said to be designed for the welfare of the customers and often it is
claimed that these policies are made to make the life easier of the customers but
most of the time the returns is not provided to them in way they are expressed.
In most of the cases the returns are low which do not meet the expectations of
the customers.
Political view- Most of the policies that are provided by the government are
implemented to gain political mileage for the party in power. These policies are
implemented but they do not provide the cover most of the time as they are
promised. There is a need for improvement here. The customers must be
provided by the policies which is really issued for there welfare and also for the
welfare of the society. Corruption is also a big obstacle in the government
insurance business.
Above are the challenges which are coming in way of the government general
insurance business. After the liberalization there can be seen an intense decrease
in the profitability and business of the government general insurance policies.
The new private companies are providing the policies which appear to be a big
threat to the government policies, so there is need to face the above challenges
and try to overcome them to regain its position in the insurance sector.
Today hardly 20 per cent of the population in India is insured and insurance
premium (life as well as non-life) account for just 2 per cent of GDP as against
the G-7 average of 9.2 per cent. Consequently, the fear that new companies will
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displace public companies is misplaced. There is room for more for not only the
existing companies but also for any number of competitors.
In China, insurance premium accounted for just over 1 per cent of China's GDP
in 1995 but in the four years since the market has been liberalized (albeit
partially), spending on insurance has grown at a compound annual rate of 33 per
cent. It is not just foreign companies alone that have grown but also the national
PICC as well. The story is no different in S Korea. There, the opening of the
sector saw the Big Six domestic players, who initially controlled the entire
market, increase their business from 7 to 37 trillion won by 1997. Meanwhile
foreign companies were not able to capture more than a miniscule 0.7 per cent of
the market.
Opportunities-
It must be emphasized that the opening of the insurance market is far from a bad
thing for nationalized insurers. With a strong presence, a wide network and
considerable brand equity, they are in a good position to tap the very same
segments profitably, while improving their product and service offerings. The
Indian company should Leverage information technology to service large
numbers of customers efficiently and bring down overheads. Technology can
complement or supplement distribution channels cost-effectively. It can also
help improve customer service levels considerably.
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Besides this, other areas can be focused to grow and survive in the Indian
Market
35
pension plan products. Further, insurance is one of the most important tax saving
instrument in the country.
The changing scenario, the strategy of the government owned four public sector
General Insurance Companies is crucial to the market as the four public players
have a major hold. For instance, the four players collected a premium of Rs
1427.9 crores.
GIC has already identified the areas that need to be activated and given a shape
through the four subsidiary companies. Foremost is the area of providing health
insurance services. A change in the GIC Act will enable the corporation to float
a joint venture company for health insurance. Other areas that the GIC is looking
at are savings-linked insurance products and use of alternate distribution
channels including bancassurance. Also in progress is the co-ordination of all
foreign operations of the group.
Banc assurance
Bancasssurance has a bright future for the distribution of insurance products.
So far banc assurance has grown fairly well with banks taking advantage of
their extensive branch networks that give the insurers access to a large client
base. In order to participate in banc assurance activities, a number of banks
have registered as corporate agents. This means that they may distribute
insurance products for an insurer through their extensive branch networks in
return for the payment of commission. So government has a better option to
widen its service area and product efficiency.
Insurer Bank
Direct Marketing and Internet
Until recently most direct business was promoted by development officers
who were remunerated by insurers partly by salary and partly by
commission. These officers were being phased out in anticipation of brokers
and other intermediaries taking over much of their business. Out of a total
population of 1.07 billion, just over 21 million people are estimated to be
Internet users in India. Most insurers do not regard the Internet as a major
distribution channel for some while. This area is one of the most demanding
areas in the insurance industry, which is one of the basic reason of the
decline of government policies. So, there is a need of bringing the net based
work system in the business through which there a lot can be offered in the
general insurance sector.
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These are some of the marketing strategies that are applied by the private
insurance companies; government should work in these areas which is also
the demand of the time. In this era customers need the product which is
presented to them in an attractive way and also stands on their expectations.
Most of the policies that are provided by the government are not
implemented in a better way. But the term of effective marketing is one of
the biggest factor and area of improvement in government business.
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are realistic in the rural conditions and are made to meet the needs of the
customers in rural area.
Conclusion-
The problem with the public sector today is that this is doing a lot of third party
insurance, which is a loss making business. In this era of globalization there is a
basic need of products which are the most profitable and more friendly to the
customers. There are many policies which are provided by the government and
very successful among the masses. But still in India about 80% of human beings
and major natural resources have yet not been insured in globalization era.
Bibliography:
www.google.com
www.oicl.co.in
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www.uiicl.com
www.nicl.co.in
www.irda.com
www.bimaonline.com
www.tourindia.com
moia.gov.in
www.ciionline.org
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