life insurance its business & operation

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Business And Operation

Presented by:Sudhir Kumar


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Life InsuranceLife insurance or life assurance is a contract between thepolicy owner and the insurer, where the insurer agrees to

pay a designated beneficiary a sum of money upon theoccurrence of the insured individual's or individuals' deathor other event, such as terminal illness or critical illness.

INDIA is the 5th largest market in Asia by premiumfollowing Japan, Korea, China and Taiwan.


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Beginning of Life Insurance1818: Life Insurance came to India from England. Oriental Life Ins.was the 1st Insurance company in India.

1870: om ay Mutual Life ssurance ociety, the first Indian lifeinsurance company started its usiness.

1912: The Indian Life ssurance Companies ct enacted as the firststatute to regulate the life insurance usiness.

ince then, the insurance sector in India has come a full circle fromeing an open competitive market to nationalization and ack to a

li eralized market again.

1956: LIC formed y an ct of Parliament, viz. LIC ct, 1956, with acapital contri ution of Rs. 5 crore from the Government of India.


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Types of Life InsuranceLife Insurance

Whole Life Coverage

Temporary Term Insurance Permanent Life Insurance

Universal Life Coverage Accidental Death

Limited- PayEndowment


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IRDA Act 1999y Under this Act an Insurance Regulatory and

Development Authority has been set up.

y

This is a corporate body established for the purposeand objects as set out in the explanation to the title.

y The Authority replaces Controller under InsuranceAct 1938.

y The first schedule amends Insurance Act 1938.

y It states that if Authority is superseded by CentralGovernment, the Controller of Insurance may beappointed till such time as Authority isreconstituted.


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Role of IRDAy To issue certificate of registration, renew, withdraw, suspend or cancel

such registration.

y To protect the interest of policyholders/insured in the matter of

insurance contract with the insurance company.

y To specify requisite qualification, code of conduct and training forinsurance intermediaries and agents.

y To promote and regulate professional organizations connected with theinsurance and reinsurance business.

y To undertake inspection, conduct enquiries and investigationsincluding audit of insurers and insurance intermediaries.

y To regulate investment of funds by the insurance companies.

y To adjudicate dispute between insurers and intermediaries of insurance.


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Companies in the business


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FDIyAt Present FDI Capital in Pvt. Sector is limited to 26%

y The government is likely to reintroduce the Insurance

Bill which proposes to increase the FDI cap in privatesector insurance companies from 26 per cent to 49 percent.

y Since the opening up of the insurance sector in India,

the industry has received FDI to the tune of US$ 525.6million till 2 9.


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ReRe--insuranceinsurancey Reinsurance is purchased by an insurance company

(insurer) from a 'reinsurer' as a means to transfer risk

(loss or losses). The reinsurer and the insurer enterinto a reinsurance agreement which details the basis inwhich the reinsurer will pay the insurer's losses (excessof loss or proportional).


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Functions

RISK TRANSFER INCO E S OOTHING

SURPLUS RELIEF REINSURERS EXPERTIES


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Top 10 Global Reinsurers

Rank CompanyNet Premiums

($ billions)

1 unich Re 24,2182 Swiss Re 23,2 2

3 Berkshire Hathaway Re 11,577

4 Hannover Re 8,9 7

5 Lloyd's of London 7,950

6 SCOR 6,948

7 Everest Re Group 3,8758 PartnerRe 3,689

9 Transatlantic Holdings 3,633

10 CE Te pest Reinsurance 3,405


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life insurance its business & operation

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