Accounts and Finance Process at Fututre Generaly Life Insurance

7/28/2019 Accounts and Finance Process at Fututre Generaly Life Insurance

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TABLE OF CONTENT:

Preface

Introduction

Introduction about topic

Profile of the Company

Introduction to the Industry

Objectives of the study

Scope and Importance of the study

Research Methodology

Data Analysis and Interpretation

Findings

Conclusion

Recommendations and Suggestions

Bibliography

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PREFACE

I have pleasure to bring out this document incorporating my views on Finance

Management; especially highlighting the General Insurance term base of Accounts

and Financial Procedure

FINANCE became a subject of study in almost all universities besides the

management institution worldwide. The project consists of comprehensive

discussion of the elements that go to make up the Financing Management. This

project report is prepared pursing my research project of MBA. The project is a

part of my academic curriculum.

The information provided in this project is derived with reference from various

books, internet sites & professional guidance from people related to this field.

I confirm that this particular project is true to best of my knowledge.

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INTRODUCTION

This project was undertaken for Future Generali India Insurance Company Ltd.

(Delhi-Zonal Office) with the topic Accounts and Finance Process in General

Insurance Company.

In this research study, I have to know the accounting procedure of a general

insurance company. Besides this I have to also understand the revenue budget

preparation.

The organization with whom I did my training was Future Generali India Insurance

Company Ltd. It was a great experience to be associated with such an organization

as it helped me to enhance my skills and provided me knowledge about the various

tasks I underwent. It gave me a good industry exposure for this period which

would definitely prove to be very useful at the time of placements. The project

that I had worked upon in my training provided me a lot of scope to learn, right

from the basics, about the General Insurance.

The project that I had been working on in my training was titled Accounts and

Finance Process in General Insurance Company.

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REVENUE ACCOUNTING

THE CHARTERED ACCOUNTANT 12 JUNE 2004 permit an insurer shall

prepareRevenue Accounts separately forfire, marine and miscellaneousinsurance

business and separateschedules shall be prepared for Marine Cargo, Marine- Other

thanMarine Cargo and the following classes of miscellaneous insurance business

under miscellaneous insurance and accordingly application of AS-17 Segment

Reporting- shall stand modified.

1. Motor

2. Workmens Compensation/ Employers Liability3. Public/Product Liability

4. Engineering

5. Aviation

6. Personal Accident

7. Health Insurance

8. Others

The most important accounting and financial functions in a general insurance

company are:-

Premium Accounting

Commission/Brokerage Accounting

Claims Accounting

Accounting of Expenses of Management

Co-Insurance Accounting

Re-insurance Accounting

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Investment Accounting

Accounting of Foreign operations

Premium Accounting:-

In case of Tariff business such as fire insurance, motor insurance etc., the

premium is charged as per tariff.

In case of non-tariff business the premium is charged as per the guideline rates

fixed by the respective technical departments of Head Office of the insurer with

certain discretion to the operating offices while underwriting such business.

According to section 64VB of the Insurance Act,1938; no risk can be assumed

by an insurer unless premium is received in advance Recently, in addition to

collection of premium by

CASH DEPOSIT

CHEQUE

DEMAND DRAFT

BANK GUARANTEE

IRDA has permitted to collect the premium by other manner of receipt of

premium such as credit card/Debit card/E transfer etc.

However, the same has to be collected before assumption of the risk.

Applicable service tax (at present 8%) has to be collected on taxable premium

and deposited with the respective excise authorities within prescribed time

limit.

Sometimes, same business is shared by more than one insurer as desired by the

insured.

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The lead insurer has to collect the full premium along with service tax on the

full premium.

However, only own share of premium is accounted as premium and the balance

is shown as amount due to other co-insurers.

A policy stamp is required to be affixed as per the provisions of the Stamp Act

and has to be accounted properly by debiting policy stamp expenses.

A premium register is generated in the system on daily basis. As seen earlier, as

per IRDA Regulation, the premium has to be recognized as income over the

contract period or the period of risk, whichever is appropriate.

Most of the general insurance policies are annual contracts and hence the

earned premium is worked out by 1/365 method. Where the same is not

practicable, the same is worked out either 1/24 or 1/12 method.

At the end of the financial year, the unearned premium is compared with the

reserve for unexpired risks as required under section 64V (1) (ii) (b) of the

Insurance Act, 1938 and the shortfall if any is accounted as unearned premium.

1. ACCOUNTING OF COMMISSION/BROKERAGE:

Commission/brokerage is paid at different rates on different classes of

insurance business.

No commission/ brokerage is paid on certain classes of business.

Commission/ brokerage becomes payable as soon as business is underwritten.

However, the same is paid on monthly basis.

The applicable service tax on commission is deducted by the insurer and paid to

the excise authorities.

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TDS is deducted as per provisions of Income Tax Act and deposited in Govt.

account within prescribed time limit.

In case of cancellation of a policy due to cheque dishonor or any other reason,

commission/brokerage payable is reversed or recovered if already paid to the

agent/broker.

2. CLAIMS ACCOUNTING:-

Claims outgo is the major outgo of an insurance company.

A claim processing is done by the respective technical department and approved

by the competent authority.

The payment and accounting of the claims is done by the accounts department.

In case of claims on policies involving co-insurance arrangements, the full

amount of claim is paid by the lead insurer, but only own share of claim is

accounted as claims cost and the balance is shown as amount recoverable from

the co-insurers.

Where a claim is reported but not settled by the end of the financial year, an

adequate provision is made for such outstanding claims.

At the end of each financial year, as required by IRDA the actuarial valuation of

the claims liability of an insurer is made by the appointed actuary, and the

shortfall, if any is provided as IBNR/IBNER.

3 .EXPENSES OF MANAGEMENT

For managing insurance business certain administrativeexpenses are incurred

suchas-

Employees remuneration andwelfare benefit,

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Managerial remuneration,travel & conveyance etc.,

Rent, rate and taxes,

Repairs, printingand stationery,

Communication, legal and professional charges,

Medical fees, auditors fess & expenses,

Advertisement and publicity,

Interest and bank charges, depreciation, and others.

These expenses are first aggregated and then apportioned to each class of business

viz. Fire, Marine and Miscellaneous revenue account on a reasonable and equitable

basis.

Any major expenses (Rs. 5 lacs or in excess of 1% of net premium, whichever

is higher) are required to be shown separately.

Section 40C of the Insurance Act, 1938 prohibits an insurer to spend as

expenses of management in excess of the limits prescribed in the Act.

An adequate provision for outstanding expenses is made in the accounts at the

end of the financial year.

A provision for leave encashment, gratuity etc. at the end of each financial year

is made on actuarial basis.

4. CO-INSURANCE:-

As seen earlier, the lead insurer has to collect the full premium along with

service tax and pay the same to the respective excise authorities.

The lead insurer accounts its own share as premium and balance is shown as

payable to other co-insurers.

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Similarly in case of claim, the entire claim amount is paid by the lead insurer to

the policy holder, but only his own share is accounted as claims expense and the

balance is shown as amount due from the coinsurer.

Lead insurer also recovers certain percentage of the co insurers share for

managing co-insurance arrangement as a leader.

Coinsurance accounts are settled as per the agreement between the coinsurers.

Usually, there is a provision for charging of interest for delayed settlement of

accounts.

At the end of each financial year, provision for outstanding claims, if any is

communicated by the lead insurer and balance confirmation certificates are

exchanged by all co-insurers.

5 INVESTMENT ACCOUNTING:-

Investments are assets held by an insurer for earning income by way of

dividends, rent and interest or for capital appreciation or for other benefits to

the insurer.

An insurance company makes investment, apart from earning income, to

comply with the statutory requirements and also for meeting any unforeseen

contingences and claims.

There are two main sourcesof investing funds viz., surplus funds arising out of

the business and income from interest and dividends on existing investments.

Section 27B, 27C and 27D of the Insurance Act, 1938 lays down certain norms

for investment of the funds by an insurance company.

Earlier we have seen the procedure to determine the value of investments as laid

down in the IRDAs Regulations for preparation of financial statements.

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Further IRDA has also issued detailed guidelines under IRDA (investment)

(amendment) Regulations, 2001 for making investments by the insurer.

IRDA prohibits any investment abroad out of policyholders funds.

Accounting entries for investments are involved for buying/selling investments,

receipts / accrued and outstanding of interest, dividends, rent, and recording

impairments, write off and write down of certain investments.

6 FOREIGN OPERATIONS:-

Foreign branch accounts are mergedwith the Indian operations of aninsurer to

present global financialposition.

In addition to the Indian requirements, these offices have to comply with the

local laws forpreparation of financial statementsand get the accounts audited

by thelocal qualified auditors or the Indianfirms of auditors, as the case my be.

These accounts which are prepared in local currencies are converted inIndian

currency as per AS11 andmerged with Indian accounts.

7. CONSOLIDATION:-

The accounts of a large insurancecompany having number of offices inIndia

and abroad are consolidated atthe head office of the company.

The accounts prepared by the operating offices in India are audited by the

branch auditors.

These are consolidatedat various regional/ zonaloffices and the consolidated

accountsfor the whole region are submitted tohead office.

At head office, separate accounts are prepared for the re-insurance and

investment operations.

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If the company has foreign branches, their accounts audited by the local

statutory auditors or the central statutory auditors are converted in Indian

currency and merged with the Indian accounts.

Further, following special provisions/ reserves are made only at head office

while preparing final accounts-

(a) Unexpired Risk Reserve: - Most of the general insurance policies are annual

policies, which are issued through out the year. Thus at the financial year end,

there is unexpired liability under various policies which may occur during the

remaining term of the policy beyond the year end and for which the entirepremium is accounted as income.

Section 64V(1)(ii)(b) of the Insurance Act, 1938 has provided certain percentage

of net premium as Reserve for unexpired risks, as seen earlier, which is a

compulsory minimum requirement.

In addition to this, if unearned premium exceeds such reserve for unexpired risks,

calculated as per the provisions of the Act, the difference is to be accounted as

unearned premium.

(b) Provision for terminal benefits of the employees:- Every year provision for

leave encashment, gratuity etc. payable to the employees on super annuation is

made on actuarial basis at the head office.

(c) Reserve for Bad and Doubtful Debts: - After doing age-wise Analysis of the

debtors, a suitable provision is made at head office of an insurer.

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(d) Provision for taxation: - Tax liability of an insurance company is governed by

the special provisions contained in section 44 of the Income tax Act. Adequate

provision for tax liability( including wealth tax) is made at head office.

(e) Provision for proposed dividend: - An adequate provision is made for

Proposed dividend as per the board resolution at head office.

(f) IBNR/IBNER provision:-It is made as suggested by the appointed actuary by

increasing the outstanding claims reserve.

Thus the central accounts department at head office is responsible for the

consolidation of all regional office accounts (where the accounts of various

operating offices are consolidated), reinsurance accounts, investment accounts

and foreign operation accounts.

The consolidation is done with the help of suitable consolidation software. Fire

revenue account, Marine revenue account, Miscellaneous revenue account,

Profit and Loss account and Balance Sheet along with 15 schedules is prepared

as per formats given in the Part V of the IRDA Regulations for the financial

statements.

The final accounts are audited by the statutory auditors appointed by the

shareholders (by C&AG in case of a Govt. company) and presented in the

Annual General Meeting for approval.

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ORGANIZATIONAL STRUCTURE

AT FUTURE GENERALI

Departments at the Zonal Office of Future Generali at South Zone

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Manager

Accounts &Finance

Operation Claims Marketing H.R.

CorporateOffice-Mumbai

RegionalOffice-

North Zone

RegionalOffice-

East Zone

RegionalOffice-

West Zone

RegionalOffice-

South Zone

Branch/Divisionaloffice



Branch/Divisional office

Branch/Divisional office


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FUNCTIONS OF THE FINANCE DEPARTMENT

1) Management of the financial resources for meeting the corporations programs

of operations and capital expenditure including investment of surplus fund if

any.

2) Ensuring uniform financial and accounting policies and procedures, to the

extent possible, in the division.

3) Establish and maintain a system if financial scrutiny and internal checks and

render advice on financial matters, including examining of feasibility studies

and detailed project reports.

4) Establish and maintain an appropriate system of Budgetary Control and MIS

(Management Information System) for different levels of the Management.

5) Carry out periodical / special studies with a view to control costs, reduce

expenditure, economy in administrative expenditure, and improve efficiency to

maximize profitability of the corporation.

6) Maintain the revenue accounts, cost accounts and other relevant books andrecords in accordance with the various statutory and other requirements.

7) Advise on corporate cash planning, investment policy and return to the

Company.

8) Ensuring that the Corporation acts in all financial and accounting matters as per

approved policies of the companies within the framework of Government

policy for public enterprises.

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GUIDING PRINCIPLES FOR FINANCIAL

CHEQUES AND ACCOUNTING

The Principles for financial checks and accounting to be followed by the Finance

Department and by other departments shall among other things include the

following:

1) That there is provision of funds for expenditure in accordance with the

approved budget of the corporation or by re-appropriation under delegated

powers.

2) That any expenditure is committed/incurred or any liability involving

expenditure is created only after the proposed expenditure has been sanctioned

by general or special approval of an authority to which the power has been duly

delegated in this behalf. If the sanction is for a limited period, expenditure

beyond that period should be admitted only after obtaining fresh sanction.

3) That all necessary prerequisites before an expenditure is incurred such as

preparation of estimates, calling of tenders, acceptance of tenders etc. are

observed as per procedures.

4) That the authorities to who power has been delegated to incur expenditure shall

be responsible for control of expenditure against the corresponding sanction.

That the payments made for work done, supplies made or services rendered

shall be as per legal obligations and in accordance with the agreements entered

into by the corporation5) Payments shall be made to proper persons against acknowledgements so that a

second claim against the corporation for the same transaction is ruled out.

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6) Those proper books of accounts and records shall be maintained in accordance

with the statutory requirements in respect of income and expenditure of the

company and such income and expenditure shall be classified properly.

7) That all moneys due are regularly recovered and checked against demand and

that moneys received are duly bought into the companys books of accounts.

8) Those proper accounts of companys property, assets, stores, spares etc. shall be

maintained and any loss or shortage of money or stores or other property caused

by theft, pilferage, and defalcation or otherwise shall be promptly brought to the

notice of the concerned authorities.

9) That the property and assets of the company whether movable or

immovable shall be periodically verified and reconciled with the books of

accounts of the company to ensure that the books represent the correct position.

10) That the expenditure conforms to the general principles of financial

propriety and is justified on the ground of economical viability or

administrative prudence.

11) That the expenditure conforms to the relevant provisions of the Companys

Act, Memorandum of Association and the Articles of Association of the

company.

12) That the directives issued from time to time by the company regarding

financial scrutiny, internal check, economy in the expenditure or any other

allied matters shall be fully adhered to.

13) All regulations, orders or instructions which are of financial nature or having

financial implications shall be issued only after due scrutiny by the G.M.

(Finance) at the Head Office or the Head of Finance at the units concerned.

14) Every employee who is entrusted with the physical custody of the cash,

assets, materials, or other valuables belonging to the Corporation shall be

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responsible to render a proper account of such cash, assets, materials or other

valuables as and when required to do so.

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COMPANY PROFILE

FUTURE GENERALI = FUTURE GROUP + GENERALI GROUP

Future Generali is an insurance joint venture headquartered in Mumbai, India

between the Italy-based Generali Group and the India-based Future Group.

Future Generali, a joint venture between Future Group and Generali Spa, has

started operations on Oct. 24, 2007. The commencement of its India operations in

the life and non-life insurance business space through Future Generali India Life

Insurance company and Future Generali India Insurance Company. Future group

holds 74% each in both the companies. With Rs. 115 Crore each, the two

companies have a 50:50 representation in both the boards.

The Generali Group, founded in 1831 in Trieste, Italy, is one of the most

significant participants in the global insurance and financial products market and is

ranked as the 30th largest company in the world by Fortune (2007). The Groups

Parent and principal operating Company Generali is Assicurazioni Generali,

market leader in Italy, founded in 1831 in Trieste. Generali is the largest

corporation in Italy.

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http://www.futuregenerali.in/Corporate/Index.aspxhttp://www.futuregenerali.in/Corporate/Index.aspxhttp://www.futuregenerali.in/Corporate/Index.aspxhttp://www.generali.com/generalicom/home.do?&idItem=1071&idSezione=1070&idLanguage=ENhttp://www.futuregenerali.in/Corporate/Index.aspxhttp://www.futuregenerali.in/Corporate/Index.aspxhttp://www.generali.com/generalicom/home.do?&idItem=1071&idSezione=1070&idLanguage=ENhttp://www.futuregenerali.in/Corporate/Index.aspx


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Characterized from the outset by a strong international outlook and now presence

in 40 countries through 315 subsidiaries, 113 insurance companies and 126

financial and real estate companies, Generali has consolidated its position among

the world's leading insurance operators, and has grown its importance in western

Europe, the Companys principal area of operation, with significant market shares

in Germany, France, Austria, Spain and Switzerland. In recent years, the Group has

made a remarkable return to central-eastern European markets and has set up

offices in the principal markets of the Far East, among which China and India.

In the last decade, the Group has widened its product offerings from only insurance

to include the entire range of financial services and asset management. It has more

than 350,000 shareholders and over 66,000 employees. It is one of the largest

insurance groups and the largest Bancassurer in Europe.

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WORLD WIDE OPERATIONS OF GENERALI

The Generali Group has experience dating back over almost two centuries, and

with its recognized financial strength and consolidated partnerships with major

international reinsurers, operates in all classes of property and casualty insurance,

from mass risks (like Auto TPL or Personal Injuries) to highly complex industrial

plants, from simple policies for family protection to extensive contracts satisfying

multinational companies complex needs.

Generali provides coverage to individuals, protecting their incomes and optimizing

their savings, through life insurance products, individual and group pension

schemes. In this field Generali can offer highly sophisticated solutions to

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Generali

Europe America AsiaEuropeEurope

Italy

France

Austria

Switzerland

Spain

Poland

Czech Rep

Slovakia

Slovenia

Croatia

Romania

Hungary

Serbia

Ukraine

UnitedKingdom

Greece

Ireland

Portugal

Turkey

Guernsey

Argentina

Panama

Colombia

Ecuador

Guatemala

USA

Mexico

China

Dubai

India

Israel

Philippines

Thailand

Hong Kong

Netherlands

Germany Bulgaria Belgium Brazil


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multinational companies through a specialized structure, namely GEB (Generali

Employee Benefits) located in Brussels. Assicurazioni Generali is ranked as AA

by Standard & Poor (19.10.2006).

The Objectives:-

The Group's strategic objectives are as follows:

To become leader in Europe in terms of profitability by focusing on core

insurance business and through selective expansion in high-potential

markets.

To stimulate growth in our client base of retail customers and small and

medium-sized business sectors, by utilising multiple brands and a

multifaceted distribution strategy that focuses on agent networks.

The Future Group is a diversified conglomerate with presence in multiple

consumer-centric businesses like retail, consumer finance, capital, insurance,

media, brands and logistics. The groups flagship enterprise, Pantaloon Retail

(India) Limited, Indias leading organized retailer, owns and manages multiple

retail formats including Pantaloons, Big Bazaar, Central, Food Bazaar, Home

Town, among others.

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http://www.pantaloon.com/http://www.pantaloon.com/


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With its width and depth of merchandise, it captures almost the entire consumption

basket of the Indian consumer. Headquartered in Mumbai, the company operates

over 5 million square feet of retail space, has more than 450 stores in different

formats across 40 cities in India and employs over 18,000 employees.

Pantaloons Retail was awarded the International Retailer of the Year 2007 by the

worlds largest retail trade association, US-based National Retail Federation

(NRF). It was also the recipient of the Emerging Market Retailer of the Year at the

World Retail Congress held in Barcelona in March 2007.

Future Capital Holdings, the groups financial arm, focuses on asset managementand consumer credit. It manages assets worth over USD1 billion that are being

invested in developing retail real estate and consumer-related brands and hotels.

The group has recently launched a consumer credit and financial supermarket

format, Future Money.

Future Group companies include Indus League Clothing, Galaxy Entertainment,

Future Media India Limited, Futurebrands India Limited and its online initiative is

led through futurebazaar.com

The groups joint venture partners include Italian insurance major, Generali,

French company ETAM group, US-based stationery products retailer, Staples Inc,

Middle East based Axiom Communications and UK-based Lee Cooper and Alpha

Airports. Its Indian joint venture partners include Talwalkers, Liberty Shoes and

Blue Foods.

Future Groups vision is to deliver Everything, Everywhere, Every time to Every

Indian Consumer in the most profitable manner. One of the core values at the

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Future Group is Indian-ness and its corporate credo is Rewrite rules, Retain

values.

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Network

Line of Business Formats

FASHION

FOOD

GM

HOME

COMMUNICATIONS

LEISURE & ENTERTAINMENT

HEALTH, BEAUTY & WELLNESS

FINANCE


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INTRODUCTION TO INSURANCE

WHAT IS INSURANCE?

The business of insurance is related to the protection of the economic values of

the assets. Every asset has a value. The asset would have been created through

the efforts of the owner. The asset is valuable to the owner, because he expects to

get some benefits from it. The benefit may be an income or some thing else. It is

a benefit because it meets some of his needs. In the case of a factory or a cow,the product generated by is sold and income generated. In the case of a motor car,

it provides comfort and convenience in transportation. There is no direct income.

Every asset is expected to last for a certain period of time during which it will

perform. After that, the benefit may not be available. There is a life-time for a

machine in a factory or a cow or a motor car. None of them will last forever. Theowner is aware of this and he can so manage his affairs that by the end of that

period or life-time, a substitute is made available. Thus, he makes sure that the

value or income is not lost. However, the asset may get lost earlier. An accident

or some other unfortunate event may destroy it or make it non-functional. In that

case, the owner and those deriving benefits there from, would not have been

ready. There is an adverse or pleasant situation. Insurance is a mechanism that

helps to reduce the effect of such adverse situations.

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HISTORY OF INSURANCE

The business of insurance started with marine business. Traders, who used

to gather in the Lloyds coffee house in London, agreed to share the losses to

their goods while being carried by ships. The losses used to occur because of

pirates who robbed on the high seas or because of bad weather spoiling the

goods or sinking the ship. The first insurance policy was issued in 1583 in

England. In India, insurance began in 1870 with life insurance being

transacted by an English company, the European and the Albert. The first

Indian insurance company aw the Bombay Mutual Assurance Society Ltd,

formed in 1870. This was followed by the Oriental Life Assurance Co. in

1874, the Bharat in 1896 and the Empire of India in 1897.

Later, the Hindustan Co-operative was formed in Calcutta, the United India

in Madras, the Bombay Life in Bombay, the National in Calcutta, the New

India in Bombay, and the Jupiter in Bombay and the Lakshmi in New Delhi.These were all Indian companies, started as a result of the Swadeshi

Movement in the early 1900s by the year 1956, when the life insurance

business was nationalized and the Life Insurance Corporation of India (LIC)

was formed on 1st September 1956, there were 170 companies and 75

provident fund societies transacting life insurance business in India. After

the amendments to the relevant laws in1999, the L.I.C. did not have the

exclusive privilege of doing life insurance business in India. By 31/03/2002,

eleven new insurers had been registered and had begun to transact life

insurance business in India.

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IN INDIA

The Insurance premium as a % of GDP in 2005 increased to 3.14% and is

set to touch 4% in 2006. (Source Lifeline 26th Dec 2006)

The Life Insurance Industry has grown by 27% p.a. over the last 5 years and by

about 62% in the first eleven months of 2006 -07 ( April 06 to Feb 2007) LIC has

75.2% of the market share and the Pvt. Players have 24.8 . The Insurance premium

as a % of GDP in 2005 increased to 3.14% and is set to touch 4% in 2006

21 companies operating in India:

13 private sector companies multiline (JV with foreign insurer)

4 public sector companies multiline

2 private sector companies health

2public sector specialty companies

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PURPOSE & NEED OF INSURANCE

Assets are insured, because they are likely to be destroyed, through

accidental occurrences. Such possible occurrences are called perils. Fire,

flood, breakdowns, lightning, earthquakes, etc, are perils. If such perils can

cause damage to the asset, we say that the asset is exposed to that risk. Perils

are the events. Risks are the consequential loses or damages. The risk to an

owner of a building, because of the peril of an earthquake, may be a few

lakhs or a few crores of rupees, depending on the cost of the building and the

contents in it. The risk only means that there is a possibility of loss or

damage. The damage may or may not happen. Insurance is done against the

contingency that it may happen. There has to be an uncertainty about the

risk. Insurance is relevant only if there are uncertainties. If there is no

uncertainty about the occurrence of an event, it cannot be insured against. In

the case of a human being, death is certain, but the time of death isuncertain. In the case of a person who is terminally ill, the time of death is

not uncertain, through not exactly known. He cannot be insured.

Insurance does not protect the asset. It does prevent its loss due to the peril. The

peril cannot be avoided through insurance. The peril can sometimes be avoided,

through better safety and damage control management. Insurance only tries to

reduce the impact of the risk on the owner of the asset and those who depend onthat asset. It only compensates the losses- and that too, not fully.

Only economic consequences can be insured. If the loss is not financial,

insurance may not be possible. Examples of non-economic losses are love

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affection of parents, leadership of managers, sentimental attachments to

family heirlooms, innovative and creative abilities, etc.

HOW INSURANCE WORKS

The mechanism of insurance is very simple. People who are exposed to the

same risks come together and agree that, if anyone of them suffers a loss, the

others will share the loss and make good to the person who lost. All people

who send goods by ship are exposed to the same risks, which are related to

water damage, ship sinking, piracy, etc. those owning factories are notexposed to these risks, but they are exposed to different kinds of risks like,

fire, hailstorms, earthquakes, lightning, burglary, etc. like this, different

kinds of risks can be identified and separate groups made, including those

exposed to such risks. By this method, the heavy loss that anyone of them

may suffer (all of them may not suffer such losses at the same time) is

divided into bearable small losses by all. In other words, the risk is spread

among the community and the likely big impact on one is reduced to smaller

manageable impacts on all.

If a Jumbo Jet with more that 350 passengers crashes, the loss would run

into several crores of rupees. No airline would be able to bear such loss. It is

unlikely that many Jumbo Jets will crash at the same time. If 100 airline

companies flying Jumbo Jets, come together into an insurance pool,

whenever one of the Jumbo Jets in the pool crashes, the loss to be borne by

each airlines would come down to a few lakhs of rupees. Thus, insurance is

a business of sharing.

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There are certain principles, which make it possible for insurance to remain

a fair arrangement. The first is that it is difficult for any one individual to

bear the consequences of the risks that he is exposed to.

It will become bearable when the community shares the burden. The second

is that the peril should occur in an accidental manner. Nobody should be in a

position to make the risk happen. In pother words, none in the group should

set fire to his assets and ask others to share the costs of the damage. This

would be taking unfair advantage of an arrangement put into place to protect

people from the risks they are exposed to. The occurrence has to be random,

accidental, and not the deliberate creation of the insured person.

The manner in which the loss is to be shared can be determined before-hand.

It may be proportional to the risk that each person is exposed to. This would

be indicative of the benefits he would receive if the peril befell him. The

share could be collected from the members after the loss has occurred or the

likely shares may be collected in advance, at the time of admission to the

group. Insurance companies collect in advance and create a fund from whichthe losses are paid.

The collection to be made from each person in advance is determined on

assumptions. While it may not be possible to tell beforehand, which person

will suffer, it may be possible to tell, on the basis of past experiences, how

many persons, on an average, may suffer losses. The following two

examples explain the above concept of insurance.

Example-1

In a village, there are 400 houses, each valued at Rs. 20,000. Every year, on

the average, 4 houses get burnt, resulting into a total loss of Rs. 80,000. If all

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the 400 owners come together and contribute Rs. 200 each, the common

fund would be Rs. 80,000. This would be enough to pay Rs. 20,000 to each

of the 4 owners whose houses got burnt. Thus, the risk of 4 owners is spread

over 400 house-owners in the village.

Example-2

There are 1000 persons who are all aged 50 and are healthy. It is expected

that of these, 10 persons may die during the year. If the economic value of

the loss suffered by the family of each dying person is taken to be Rs.

20,000, the total loss would work out to Rs. 2,00,000. If each person in the

group contributed Rs. 200 a year, the common fund would be Rs. 2,00,000.

This would be enough to pay Rs. 20,000 to the family of each of the ten

persons who die. Thus the risks in the case of 10 persons are shared by 1000

persons.

THE BUSINESS OF INSURANCE

Insurance companies are called insurer. The business of insurance is to (a)

bring together persons with common insurance interests (sharing the same

risks), (b) collect the share or contribution (called premium) from all of

them, and (c) pay out compensations (called claims) to those who suffer.

The premium is determined on the same lines as indicated in the examples

above, but with some further refinements.

In India, Insurance business is classified primarily as life and non-life or

general. Life Insurance includes all risks related to the lives of human beings

and general insurance covers the rest. General insurance has three

classifications viz., Fire (dealing with all fire related risks), Marine (dealing

with all transport related risks and ships) and Miscellaneous (dealing with all

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others like liability, fidelity, motor, crop, personal accident, etc). Personal

accident and sickness insurance, which are related to human beings, is

classified as non-life in India, but is classified as life, in many other

countries. What is Non-Life in India is termed Property and Casualty in

some other countries.

The functions of Insurance can be bifurcated into two parts:

1. Primary Functions

2. Secondary Functions

3. Other Functions

The primary functions of insurance include the following:

Provide Protection - The primary function of insurance is to provide protection

against future risk, accidents and uncertainty. Insurance is actually a protection

against economic loss, by sharing the risk with others.

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Collective bearing of risk- Insurance is a device to share the financial loss of few

among many others. Insurance is a mean by which few losses are shared among

larger number of people. All the insured contribute the premiums towards a fund

and out of which the persons exposed to a particular risk is paid.

Assessment of risk - Insurance determines the probable volume of risk by

evaluating various factors that give rise to risk. Risk is the basis for determining

the premium rate also

Provide Certainty - Insurance is a device, which helps to change from uncertainty

to certainty. Insurance is device whereby the uncertain risks may be made more

certain.

The secondary functions of insurance include the following:

Prevention of Losses - Prevention of losses cause lesser payment to the assured by

the insurer and this will encourage for more savings by way of premium. Reduced

rate of premiums stimulate for more business and better protection to the insured.

Small capital to cover larger risks - Insurance relieves the businessmen from

security investments, by paying small amount of premium against larger risks and

uncertainty.

Contributes towards the development of larger industries - Insurance provides

development opportunity to those larger industries having more risks in their

setting up. Even the financial institutions may be prepared to give credit to sick

industrial units which have insured their assets including plant and machinery.

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The other functions of insurance include the following:

Means of savings and investment - Insurance serves as savings and investment,

insurance is a compulsory way of savings and it restricts the unnecessary expenses

by the insured's For the purpose of availing income-tax exemptions also, people

invest in insurance.

Source of earning foreign exchange - Insurance is an international business. The

country can earn foreign exchange by way of issue of marine insurance policies

and various other ways.

Risk Free trade - Insurance promotes exports insurance, which makes the foreign

trade risk free with the help of different types of policies under marine insurance

cover.

PRODUCTS OF FUTURE GENERALI

Retail

1. Motor-Future Secure Motor Insurance

2. Home -Future Generali Home Suraksha

Corporate

1. Fire -Standard Fire and Special Perils Policy

2. Loss Of Profits (Consequential Loss) Policy

3. Industrial All Risk

4. Engineering Insurance

Erection All Risk Insurance

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Contractors All Risk Insurance

Boilers and Pressure Plant Insurance

Machinery Breakdown Insurance

Electronic Equipment Insurance

Contractors Plant and Machinery Insurance

Machinery Loss of Profit

5. Marine Cargo Insurance

6. Accident & Health

Group Health Policy

Group Personal Health Policy

Retail Motor

Future Secure Motor Insurance

A Comprehensive Motor Insurance Cover in addition to the mandatory third-party

cover also protects the car owner from financial losses, caused by loss or damage

or theft of the vehicle.

Third party legal liability: protects you against any legal liability arising out of

the use of your vehicle, towards third parties resulting in

Any bodily injury/ death of a person

Any damage caused to the property

Loss or damage to your vehicle: The policy covers you against any loss or

damage caused to the vehicle or its accessories due to the following natural and

man made calamities.

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Sum insuredThe vehicles are insured at a fixed value called the Insureds

Declared Value (IDV). IDV is calculated on the basis of the manufacturers listedselling price of the vehicle (plus the listed price of any accessories) after deducting

the depreciation for every year as per the following rates.

If the price of any electrical and / or electronic item installed in the vehicle is not

included in the manufacturers listed selling price, then the actual value (after

depreciation) of this item can be added to the sum insured over and above the IDV.

Additional covers at extra cost/Discounts-

1. Personal accident cover

2. Additional Legal liabilities:

3. Bonus and Discounts -

No Claim Bonus: If you do not make a claim during the policy period, a No

Claim Bonus (NCB) is offered on renewals. This discount can go as high as

50%. (NCB will only be allowed provided the policy is renewed within 90

days of the expiry date of the previous policy.)

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Age of the vehicle% of

Depreciation

Not exceeding 6 months 5%

Exceeding 6 months but not exceeding 1 year 15%Exceeding 1 year but not exceeding 2 years 20%

Exceeding 2 years but not exceeding 3 years 30%




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Transfer of NCB: You can transfer full benefits of No Claim Bonus when

you shift your motor insurance policy to another company.

Anti theft devices: In case you have installed an ARAI approved anti theft

device in your vehicle, you get a discount of 2.5 % on the OD Premium to a

maximum of Rs. 500.

FUTURE GENERALI HOME SURAKSHA

Section I Protection Against Standard Fire & Special Perils

Covers-On the happening of any insured event as provided for hereunder arising

during the Policy Period and notified as prescribed, We will make payment asprovided for under each Cover but only up to the Sum Assured as specified in the

Schedule against each Cover or each sub-limit of the Sum Assured, as the case

may be.

Protection of Your Contents against Standard Fire & Special Perils

Contents (Excluding Valuables)

We will indemnify you in respect of loss of or damage to the Contents on the first

loss basis in the Insured Premises specified in the Schedule against perils

mentioned below:

Fire:

Lightning

Explosion / Implosion:

Aircraft Damage:

Riot, Strike and Malicious Damage

Storm, Cyclone, Typhoon, Tempest, Hurricane

Tornado, Flood and Inundation:

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Impact Damage: Loss of or visible physical damage or destruction caused to the

property insured due to impact by any Rail/ Road vehicle or animal by direct

contact not belonging to or owned by:

Subsidence and Landslide including Rock slide: Loss, destruction or damage

directly caused by Subsidence of part of the site on which the property stands or

Land slide/Rock slide excluding:

The normal cracking, settlement or bedding down of new structures

The settlement or movement of made up ground

Coastal or river erosion

Defective design or workmanship or use of defective materials

Demolition, construction, structural alterations or repair of any property or

groundwork or excavations

Bursting and/or overflowing of Water Tanks, Apparatus and Pipes.

Missile testing operations.

Leakage from Automatic Sprinkler Installations, excluding loss, destruction or

damage caused by

Repairs or alterations to the buildings or premises

Repairs, Removal or Extension of the Sprinkler Installation

Defects in construction known to the Insured.

Bush Fire, excluding loss, destruction or damage caused by Forest Fire.

Earthquake Fire and Shock

Section II Protection against Burglary & Theft

Protection of Your Contents against Burglary and Theft

Contents (Excluding Valuables)

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We will indemnify you in respect of loss of or damage to the insured premises

and/or the Contents on the first loss basis in the Insured Premises specified in the

Schedule caused by actual or attempted Burglary and or Theft.

Burglary, housebreaking, theft, larceny or any such attempt or any omission of

any kind of any person in any malicious act.

General Conditions Applicable

Due Observance

Reasonable Care

Contribution

Subrogation

Fraud- Policyshall be void and all claims or payments hereunder shall be

forfeited in case of making fraud.

Cancellation- This Policy may be cancelled by you at any time by giving at

least 14 days written notice to us. We will refund premium on a pro-rata

basis by reference to the time cover is provided, subject to a minimum

retention of premium of 25%. No refund of premium shall be due on

cancellation if the Insured has made a claim under this Policy.

Dispute Resolution -Any and all disputes or differences, which may arise

under or in relation to this Policy, shall be referred to arbitration and to a

sole arbitrator to be appointed in accordance with Arbitration and

Conciliation Act, 1996, within a period of 30 days of either us or you giving

notice in this regard.

Notices- Any and all notices and declarations for the attention of us shall be

submitted in writing and shall be delivered to the address specified in the

Schedule .

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Governing Law- The construction, interpretation and meaning of the

provisions of this Policy shall be determined in accordance with Indian law.

Territorial Limits- Our liability to make any payment shall be to make

payment within India and in Indian Rupees only.

Reinstatement after settlement of a claim- All sums which may from time

to time be paid by way of indemnity under this Policy in any one Period of

Insurance shall be accounted in diminution of the Total Sum Insured so that

in case of any subsequent event giving rise to a claim occurring during the

same period the total amount payable during that period by the Company

shall not in any case exceed the Total Sum Insured.

Renewal Clause- This Policy may be renewed by mutual consent every year

and in such event, the renewal premium shall be paid to US on or before the

date of expiry of the Policy or of the subsequent renewal thereof.

Standard Fire and Special Perils Policy

Scope of Cover- The Insurance Policy broadly covers losses due to fire, lightning,explosion and implosion, aircraft damage, riot, strike, malicious damage and

terrorism, storm, tempest, flood and inundation, impact damage, subsidence and

landslide/rockslide, bursting and/or overflowing of water tanks, apparatus and

pipes, missile testing, leakage from automatic sprinkler installations and bush fire.

Main Exclusions- The Insurance Policy does not cover the first Rs.10,000 (or as

applicable) of each and every claim. Losses arising out of war and allied perils,

theft, willful act or gross negligence, loss of earnings, loss to bullion, documents,

currency etc. for an amount exceeding Rs. 10,000, unless expressly stated.

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Sum Insured- Property can be insured on depreciated cost (market value) or

replacement cost basis. In order to get full protection, insurance on reinstatement

(replacement) basis is recommended.

Premium-Premium rate depends on various factors such as construction of

building, occupancy, protection, claim ratio, etc

Excess- 5 % of every claim (subject to minimum of Rs.10,000 ) resulting from

Lightning, Storm, Tempest, Flood and Inundation, Subsidence and Landslide.

For other perils Rs.10,000/-

Main Extensions

Earthquake (Fire & Shock)

Spontaneous Combustion

Deterioration of stocks in cold storage

Impact Damage due to own vehicles

Omission to insure additions

Architect, Surveyors & Consulting engineers fees in excess of 3 % of claim

amount

Debris removal in excess of 1 % of claim amount.

Loss of Profits (Consequential Loss) Policy

Business Interruption: Fire Loss of Profit

Fire Insurance is concerned with CAPITAL LOSS following destruction of

Building, Plant & Machinery, Stock in Process, Finished goods. Fire Loss of Profit

insurance is concerned with LOSS OF EARNINGS consequent upon the capital

loss as also any increase in cost of working incurred to minimize the loss of

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earnings. Only with both Fire & Fire Loss of Profit insurance FULL

PROTECTION is obtained

Scope of Coverage:-If the building or other property of the business be destroyed

or damaged by the perils covered under the Fire Policy and the business carried on

by the Insured at the premises in consequences thereof be interrupted or interfered

with then the Insurer will pay to the Insured. Amount of loss resulting from such

interruption or interference in accordance with the provisions of the policy.

Definitions under FLOP:

Turnover - The money paid or payable to the Insured for goods sold and

delivered and for services rendered in course of the business at the premises.

Insureds loss - Net Profit and Standing Charges on the Turnover lost.

(Termed as Gross profit)

Net Profit - The profit before tax

VARIABLE Charges : These are expenses that vary in proportion with the

rise or fall in Turnover

STANDING Charges : These are expenses that remain FIXED

IRRESPECTIVE of the rise or fall in Turnover.

Policy Period is the period within which if a indemnifable loss occurs it will

be admissible as a claim. It is invariably 12 months.

Indemnity Period - is the maximum period of Interruption for which the

Insurers would respond and has to be selected by an Insured.

Basis of arriving at the Sum Insured:-Sum insured represents the annual GROSS

PROFIT. This can be arrived at by any one of the following method.

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Addition Method

Gross Profit = Net Profit + Standing Charges

Under this method standing charges to be insured are to be listed.

Difference Method

Gross Profit = Turnover - Variable Expenses

Inadequacy of Sum Insured will proportionately reduce the loss payable.

Industrial All Risk

Eligibility Criteria- Sum Insured should be more than Rs.100 Crores at one

location and many locations can be clubbed together.

Policy Structure

Section I - Material Damage which includes Fire & Allied perils, theft,

Burglary, Machinery Breakdown, Boiler Explosion, Electronic equipment,

etc

Section II - Business Interruption - Fire Loss of Profit and Machinery Loss

of Profit (MLOP is optional).

Coverage-IAR is an all Risk policy subject to specified exclusions in the policy.

Wording is as par with international wordings.

Sum Insured- Sum Insured for fixed asset should be Reinstatement value of the

property whereas stocks value should be on the market value under material

damage section. Under business interruption section sum insured must be

equivalent to gross profit.

Cover is subject to under insurance. Under insurance block-wise/item-wise up to

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15% is ignored.

In the event of claim, no depreciation on parts with limited life or Total Loss.

Rating-Follow the rating pattern of Standard fire & special perils, engineering

insurance and business interruption cover as per the erstwhile tariff.

Excess-Material Damage Section: 5% of the claim amount subject to minimum of

Rs.5 lacs for each & every loss.

Business Interruption: 3 days gross profit subject to minimum of Rs.5 Lacs.

Engineering Insurance

Erection All Risk Policy



Machinery Loss of Profit Insurance (MLOP)

Contractors All Risk Insurance



Erection All Risks Policy -Erection All Risks (EAR) policy provides coverage for

Erection of mechanical and Electrical plants. Interest of Suppliers/Manufacturers,

Contractors, Subcontractors can be recorded in the policy.

Scope of cover-This policy covers risks associated with storage, assembly/erection

and testing of Plant and Machinery. EAR insurance provides comprehensive cover.

All perils are covered unless specifically excluded. Cover incepts from the time of

unloading of the first consignment at the project site and terminates on completion

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of testing or handing over of the project to the Principal, or the period chosen,

whichever is earlier.

Sum Insured-Sum to be insured is the completely erected value of the plant and

machinery inclusive of freight, custom duty and cost of erection.

Premium-Premium depends on various factors such as type, protection,

experience of contractors, duration of the project, period of testing, etc.

Main Extension-Policy can be extended on payment of additional premium to

cover

Escalation

Clearance and Removal of Debris

Third Party Liability

Maintenance

Damage to Owners Surrounding Property

Express Freight

Additional Customs Duty

Holiday and Overtime rates and Wages

Contractors All Risks Insurance

Scope of cover-Contractors all risk Policy covers the risk of accidental physical

loss or damage in respect of the contract works, during the execution of a civil

project. CAR insurance provides an all risk cover. All perils are covered unless

specifically excluded.

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Cover- incepts from the commencement of work or after unloading of first

consignment at project site, whichever is earlier and terminates on handing over of

works to the principal or expiry of policy, whichever is earlier.

Sum Insured-The Sum insured shall be the fully completed value of the contract

works inclusive of all materials, wages, freights, and custom duty and materials or

items supplied by the principal.

Premium-Premium depends on factors like type, contractors experience, duration

of the project, etc.

Main Extension-Main policy can be extended on payment of additional premium

to cover

Third Party Liability.

Owners Surrounding Property.

Escalation.

Maintenance Cover.

Clearance and Removal of Debris.

Contractor's Plant and Machinery.


Coverage-Steam Generating Boilers both fixed and unfixed against the risk of

Explosion or Collapse.

Exclusions

Loss or damage due to fire and allied perils.

War and nuclear risks.

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Loss arising out of overload, experiment or test.

Gradual developing flaws, defects, cracks or partial fractures.

Failure of individual tubes.

Explosions/ Collapse due to facts, existing at the time of commencing

insurance, known to the insured.

Consequential losses.

Willful Negligence.

Damage by Chemical explosion except in recovery boilers and waste heat

boiler.


Scope of Cover-The Insurance Policy broadly covers loss due to all kinds of

accidental, electrical and mechanical breakdowns due to internal and external

causes. Cover is granted during the time the machinery is in operation or rest or in

the process of dismantling, overhauls or during subsequent re-erection at the same

premises.

Significant Exclusions-The Insurance Policy does not cover loss and/or damage

from Fire and allied perils, Theft, overloading experiments, wilful acts or gross

negligence, gradually developing flaws and deterioration from normal use.

Sum Insured-Value proposed for insurance should be equal to new replacement

cost including Freight, Erection Cost, Customs Duty, if any.

Premium-Rate of premium depends upon the type of machinery and other factors.

Discounts are offered in respect of stand-by facility, availability of spares and

favourable claims experience, subject to rules laid down in the Tariff.

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Excess-Policy is subject to a compulsory Excess, which depends upon the value of

machinery.

Main exclusion:

Faulty Design

Defective material or casting

Bad workmanship

Manufacturing defects

Mechanical / electrical breakdown or derangement of erection machinery &

equipment Consequential losses


Scope of cover-Cover operates when the insured property is at work or at rest or

being dismantled for the purpose of cleaning/overhauling or during subsequent re-

erection.

The Policy provides coverage for:

Material damage to electronic equipment

Cost of external data media, including cost of reconstruction of data under

Section II, as also increased cost of working under Section III. While

Section I is compulsory, Section II and Section III are optional.

Sum Insured

Section I: New Replacement cost of the insured property including Freight,

Erection cost, Customs Duty, if any.

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Section II: Cost of restoring the external data media by replacing lost or damaged

data media by new material and lost information.

Section III: Sum Insured should represent the hiring charges per hour for a

substitute equipment for ensuring continued data processing for the period of

indemnity specified, including personnel and transportation charges.

Significant Exclusions- Wear & tear, War, willful act or willful negligence,

Aesthetic defects and consequential loss.


Contactors Plant & Machinery policy covers construction equipment like cranes,

excavators etc.

Scope of cover-Contactors Plant & Machinery policy covers loss or damage to the

contractors property due to any cause that is accidental and external in nature.

Sum Insured-Sum Insured of each item of machinery shall be the present dayreplacement cost. Sum insured is computed from replacement cost including

freight, cost of erection and custom duty, if any.

Premium-Premium depends on various factors such as type of equipment, location

of operation, etc.

Main Exclusions

Electrical or mechanical breakdown

Wear and tear, rust, corrosion

Willful act or willful negligence

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Loss/damage for which supplier/ manufacturer is responsible

Consequential loss

Policy s subject to deductible excess as stipulated therein

Machinery Loss of Profits (MLOP)

Modern machinery loss of profits insurance is a suitable means of meeting the

increasing need on the part of industry for comprehensive tailor made insurance

protection from the consequences of business interruption.

MLOP insurance provides cover for the actual loss of profits sustained as a result

of a business interruption caused by material damage identifiable under machinery

insurance.

Sum Insured-The sum insured is made up of the operating profit and the standing

charges (fixed) in the course of twelve successive calendar months. (i.e. normally

the business year)

Scope of Coverage:-Coverages are the same as under machinery breakdown

insurance. If the loss is admitted under machinery insurance, MLOP will be

triggered subject to availability of cover.

Premium rates are broadly determined from the following factors:

The general and the specific technical risk of the machinery to be insured.

The moral and technical hazard relating to the user.

The effect of machinery breakdowns on the operating profit and standing

charges (factor of relative importance)

The reserve facilities and spare parts available.

The possibilities of loss minimization

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The general economic and political conditions.

Indemnity Period-This represents the maximum time for which an insurer is

liable for the loss of profit. Generally period limit is three, six, nine or twelve

months.

Time Excess-Time excess is a number of days of interruption which has to be

borne by the insured in the event of loss and is based on type of machineries,

business insured, relative factors, etc.

Marine Cargo Insurance

The Marine Cargo Insurance policy covers your goods, freight and other interests

against loss or damage to goods whilst being transported by rail, road, sea and/or

air under a contract of affreightment.

Different policies are available depending on the type of coverage required ranging

from an ALL RISK cover to a restricted Accident only cover whilst the goods are

in transit. This policy is freely assignable and is basically an agreed value policy.

Significant Exclusions-This Policy does not cover loss or damage due to willful

misconduct, ordinary leakage, insufficient/unsuitable packing, delay,

insolvency/financial default of owners, inherent vice, war, strike, riot and civil

commotion.

Premium-Rate depends on factors like nature of cargo, scope of cover, packing,

mode of conveyance, Destination and routes, and past claims experience

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Types of Policies

Specific policy to cover single consignment

Marine Open Policy for frequent dispatches within the country. These

arrangements are valid for one year.

Marine Open Cover for frequent dispatches out side the country (imports

and exports). These arrangements are valid for one year.

Marine Sales Turnover policy

The following are covered under this policy

Imports + Customs Duty (Actual or Deemed / Contingent) +

Domestic purchase of raw materials, consumables & stores +

Any number of inter factory / inter-depot / to & fro job worker movements

+

Exports (FOB/CIF) +

Domestic sales of finished goods

Temporary storage of finished goods

Temporary storage cover at intermediate locations like job workers / C & F

premises etc.

Advantages of a sales Turnover policy -

Sizeable saving in premium which is charged only on your sales turnover.

Seamless cover with all movement of goods automatically covered.

No hassles of submitting periodical declaration of movements to the insurer.

Only monthly sales figures need to be submitted.

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Premium on full annual sales turnover need not be paid in advance. Facility

for payment of premium on half-yearly / quarterly basis.

Accident & Health

Group Health Policy

Group Personal Accident Policy

Group Health Policy

Health is wealth. Well being is an overall feeling of being in good health and being

in control of yourself, your situation and your finances. There is a lot you can do to

ensure your well-being. But life, unfortunately, follows no fixed plan. Sudden

illness or bodily injury can sometimes leave you financially hurt and highly

stressed. This is where Health Insurance steps in. It is an insurance that takes care

of your medical expenses or treatment expenses and ensures quality health care for

you. Now is the time to insure yourself and your family against rising health-care

costs. In this world of uncertainty nobody is sure when ones dear one will fall

victim to diseases and need hospitalization. This policy certainly helps you to get

out of the financial trauma caused by hospitalization and protects you and your

family in case you need expensive medical care.

Scope of Cover

Medical insurance covers almost everything- from the time you step into the

hospital to the time you are discharged. The normal costs that are covered

are room and boarding expenses, nursing expenses, fees for the surgeon,

anesthetist, medical practitioner and consultant, fees for specialists, charges

for anesthesia, blood, oxygen and the operation theatre, charges for surgical

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appliances, medicines and diagnostic materials and charges for X-rays,

dialysis, chemotherapy, medicines and so on.

Cashless facility eliminating the entire trouble of documentation and direct

settlement of your bills directly with the hospital.

Related expenses during pre-hospitalization period and post hospitalization

period up to 30 days and 60 days respectively.

In case of additional premium paid Maternity Benefit can be availed.

Less than 24 hours hospitalization for specified procedures like Dialysis,

Chemotherapy, Radio therapy, Eye Surgery, Dental Surgery, Lithotripsy

(Kidney stone removal), D. & C. Tonsillectomy are covered.

Advantages

Family Floater

Cashless Hospitalization facility

Large Hospital Network of more than 4000 Hospitals across India

Innovative covers offered

Fast & Efficient Settlement of claims

Main Exclusions

Any Pre-existing condition or any complication arising from it

Treatment/surgeries for Cataract, Benign Prostatic Hypertrophy,

Hysterectomy for Menorrhagia or Fibromyoma, Hernia, Hydrocele,

Congenital Internal diseases/defect, Fistula in anus, piles, Sinusitis and

related disorders during the first year of the policy.

Suicide, attempted suicide

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Cosmetic surgeries for aesthetic purpose, circumcision unless medically

required.

Under the influence of drugs, alcohol & other intoxicants

Participation in felony, riots, war etc.

Exposure to nuclear, radioactive materials

HIV or sexually transmitted diseases

Sum Insured- The sum insured is based on the Age, Plan opted.

Premium-Based on age, sum insured opted, plan and Risk Class. Premium

inclusive of service tax as applicable.

Age Group- for Self & Spouse 21yr. to 70 yr.

Children Birth to 21 yr.

Group Personal Accident Policy

Accidents can happen to anyone anywhere. They come unasked for and leave animprint on our lives for years to come. The Value of Human Life and Sufferings

can not be measured with money, but with a view to provide some relief to the

injured person or members of his family in the event of an unfortunate accident, we

have designed an insurance cover, known as Personal Accident Insurance.

Scope of Cover-The plan covers the risks of

Accidental Death

Permanent Total Disablement

Permanent Partial Disability

Temporary Total Disablement.

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Additional Benefits include

Accidental Medical Expenses: In case of accidental hospitalization the

compensation is reimbursed up to 40% of the valid Personal Accident claim

max up to 5, 00,000.

Hospital cash allowance: A daily allowance of Rs 1000 for each completed

day of hospitalization maximum up to 30 days during the policy period.

Child Education Support: In case of Accidental Death and permanent total

disability, 1% of sum insured is paid towards your childrens education

benefit.

Funeral Expenses: An amount of 1% of the sum insured up to maximum of

Rs 10000 is reimbursed for Funeral expenses.

Main Exclusions

Any existing disablement prior to the inception of the policy

Suicide, attempted suicide

Serving in military, armed forces

Under the influence of drugs, alcohol & other intoxicants

Participation in felony, riots, war etc.

Exposure to nuclear, radioactive materials

Self exposure to needless perils

Loss due to child birth or pregnancy

Act of terrorism.

Sum Insured- The sum insured is based on the monthly income and the

occupation.

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Premium- Based on age, occupation (class), sum insured & benefits opted.

Premium inclusive of service tax as applicable.

Age Group- for Self & Spouse -21 yr. to 70 yr.

Children 1yr to 21 yr.

Occupation considered is Class I and II

Occupational Classes-

Class I: - Accountants, Doctors, Lawyers, Architects, Consulting Engineers,

Teachers, Bankers, Persons engaged in administrative functions, Persons primarily

engaged in occupations of similar hazard.

Class II: - Builders, Contractors and Engineers engaged in superintending

functions only. Veterinary Doctors, paid drivers of motor cars and light motor

vehicles and persons engaged in occupations of similar hazard and not engaged in

manual labour. All persons engaged in manual labour (Except those falling underGroup III) Cash Carrying Employees, Garage and Motor Mechanics, Machine

Operators, Drivers of trucks or lorries and other heavy vehicles, Professional

Athletics and Sportsmen, Woodworking Machinists and persons engaged in

occupations of similar hazard.

Class III:- Persons Working in underground mines, explosives, magazines,

workers involved in electrical installation with high tension supply, Jockeys,

Circus personnel, Persons engaged in activities like racing on wheels or horseback,

big game hunting, mountaineering, winter sports, skiing, ice hockey, ballooning,

hand gliding, river rafting, polo and persons engaged in occupations/activities of

similar hazard.

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Disclaimer- This is only a summary of the product features. The actual benefits

available are as described in the policy, and will be subject to the policy terms,

conditions and exclusions. Please seek the advice of your insurance advisor if you

require any further information or clarification.

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OBJECTIVES OF THE STUDY

To understand the accounts and finance process in general insurance

company.

To improve the accounting process if required.

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SCOPE:

In the General Insurance, Accounting concept is not limited to the activities

of finance department.

Cooperation with the Marketing department, Operation department and

Claim Department in Accounting of Insurance policies.

IMPORTANCE:

Maximum utilization of the existing facilities for improving efficiencyand increasing effectiveness,

Earn a reasonable rate of return.

Helps in developing long-term corporate plan.

To prepare the revenue budget for short-term period.

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RESEARCH METHODOLOGY ADOPTED

Research can be defined as the careful investigation or inquiry especially through

search for new facts in any branch of knowledge

Research Methodology is a way to systematically solve the research problem. In it

we study the various steps that are generally adopted in studying the research

problem STUDY OF ACCOUNTING AND FINANCE PROCESS

This research study has to be undertaken to know because for the proper and

efficient working of an organization it is necessary that the employees be also of

the same potential.

Research Approach: Information obtained from different department

Type of Research Design-

Descriptive Research

The research study is descriptive in nature. To study the accounts andfinance process in a general insurance company there was no primary data

available to study.

Types of Data - Secondary Data

Secondary data was also collected through various sources like newspapers, books,

magazines, Internet, annual report of company ,websites (both published &

unpublished) etc. and used for certain aspects of the research like current working

scenario, pros and cons of the working and other information.

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SOURCES OF SECONDARY DATA

1. Software used by the company

Regional/Branch Offices :

FG Connect

Policy Asia

Head Office :

Sun System

2. Literature provide by Finance Department of Future Generali

3. Internet

4. Text books

5. Intranet of the Future Generali

Research instrument -

The Observation Method : Under the observation method, the information is

sought by way of Investigator s own direct observation without asking for the

respondent hence data are collected on the banks of observation no talk take place

GEOGRAPHICAL AREA COVERED

The geographical area covered is:

1. Future Generali Delhi Zonal Office.

2. Branches connected with the Zonal Office.

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Accounting Process in Future Generali

Receipting of Premium Amount

Creation of end of Day Report

Cash Management System

Cheque Dishonor

Float Accounts

Claims Accounting

Commission & Brokerage

Refunds

Payments

Maintain Petty Cash

Capital Expenditure Accounting

Receipting of Premium Amount:-

Type of collection.

Client S

Accounts and Finance Process at Fututre Generaly Life Insurance

Documents

Transcript of Accounts and Finance Process at Fututre Generaly Life Insurance