Summer Training Report On

Organizational Structure of The New India Assurance Company

Submitted to Panjab University in Partial Fulfillment of the Degree of Masters of Commerce (2010-2012)

Submitted by: Sundeep Singh Roll No. M. Com 2nd Semester G. G. D. S. D College, Sector 32, Chandigarh

Preface
For a long time, I have worked on this project which is a part of the course of the Degree of Masters of Commerce.

This study has been conducted to know the organizational structure of The New India Assurance Company and to learn the basic aspects of the insurance sector.

This research has proved very beneficial for me as it provides practical knowledge about the working of The New India Assurance Company. I am happy that I got a chance to study such a meaningful topic.

This project has been really very interesting, satisfying, inspiring and academically rewarding.

Acknowledgement
I feel deeply indebted towards Mr. Surinder Sidhu who guided me during the making of this project. I extend my sincere thanks to all the staff members of The New India Assurance Company for providing a very hospitable and helpful work environment and making my summer training an exciting phase.

My heartfelt gratitude to my Project Guide, Dr. Amit Mohindroo, who showed a lot of flexibility and openness during the making of this project. I sincerely thank him for lending his precious time towards my project.

I would also like to thank all the people who gave me tons of information required for the project. Without their help, it would not have been possible to complete this project.

Certificate of Originality
This is to certify that the Research Project titled Organizational Structure of The New India Assurance Company submitted to Panjab University in Partial Fulfillment of the Degree of Masters of Commerce (2010-2012) is a bonafide and authentic work carried by Sundeep Singh, Roll No. - , under my supervision and guidance.

No part of this project has been submitted for the award of any other degree, diploma or other similar titles.

Dr. Amit Mohindroo (Project Guide)

Contents

Chapter 1 : Introduction to Company Chapter 2 : Introduction to Insurance Chapter 3 : Insurance Terminology Chapter 4 : Branches of Insurance Chapter 5 : Fire Insurance Chapter 6 : General Rules & Regulations in Fire Insurance Chapter 7 : Motor Insurance Chapter 8 : General Rules & Regulations in Motor Insurance Chapter 9: Bibliography

Chapter 1 Introduction to Company

Introduction to Company
New India Assurance is currently the largest General Insurance Company in India based in Mumbai. It is one of the five Public Sector insurance companies in India. Established by Sir Dorab tata in 1919, New India was the first fully Indian owned insurance company in India. There were nearly 150 insurance firms in India including ones from France, the UK and America. These were operated through managing agencies in India largely held by Indian business houses. New India is a leading global insurance group, with offices and branches throughout India and various countries abroad. The company services the Indian subcontinent with a network of 1,130 offices, comprising 26 Regional offices, 366 Divisional offices and 738 Branches. With approximately 25,000 employees, New India has the largest number of specialist and technically qualified personnel at all levels of management, who are empowered to underwrite and settle claims of high magnitude New India has historically been a frontrunner in several diverse fields of business and industrial activity. New India are lead underwriters of India's Space programn1e having insured several INSAT and other, satellites. New India are pioneers in Engineering insurance, Financial risks insurance and are now offering customized Risk Management solutions to our corporate clients in the Private and public Sectors in Power, Telecom,

Petrochemicals, Steel and Automobile industries New India's foreign operations started with the establishment of an office in London in 1920. An international presence was built up by New India as a direct writing Company in 23 countries spanning 5 continents. It increased its reach and capacity, for reinsurance facilities for all classes of business.

Starting way back in the 1920s, New India's UK operations have now taken deep root. New India is party to one of the oldest reinsurance treaties in the UK market. Through participation in Aviation and Marine Hull underwriting, New India has, over a period of time, strengthened its market presence. In 1980's with the establishment of a full-fledged branch to underwrite UK Business, it has extended its UK operations, authorized by the Department of Trade and industry The New India commenced its Japan operations in 1950, and now: operates through 8 branches. The Japanese operation covers 35% of the Companys overseas premium income. Previously it was a subsidiary of the General Insurance Corporation of India (GIC). But as GIC became a reinsurance company as per IRDA Act 1999, all of its four primary insurance subsidiaries (New India Assurance, United India Insurance, Oriental Insurance and National Insurance) got autonomy.

Foreign Operations In respect of the number of offices abroad and the premium earned from foreign operations, the company is way ahead of other general insurance companies in India.

Core Insurance Platform The company tied up with TCS BaNCS to provide core insurance platform across all its office, for which it had signed a deal for Rs.160 crores with TATA Consultancy Services. This was to ensure its operations to be efficient, flexible and integrated. The project is known as CWISS or Centralized Web based Insurance System Solution.

International Rating The company has been rated A- (Excellent) in respect of its financial strength by A.M. Best Company.

Awards J.D Power Asia Pacific part of McGraw Hill Companies has ranked New India Assurance Company Ltd, the highest in satisfying auto insurance customers. The award relates to 2011 India Auto Insurance Customer Satisfaction Index Study wherein out of a 1000 point scale, the company scored 804.

Offices The company with its corporate office in Mumbai has been operating with about 26 Regional Offices, 395 Divisional Offices, 591 Branches, 27 Direct Agent Branches and 23 Extension Counters in the year 2009-2010.The number of Regional Offices of the company in the year 2011 stood at 28. With numerous other offices down the hierarchy like Divisional Offices, Branch Offices, Direct Agents Branches, Micro Offices spread over the length and breath of the country.Centralised claim processing offices called Claims Hub are being operated from 29 locations. Its overseas offices for the year 2009-2010 consisted of 19 Branches, 7 Agencies, 4 Associate companies and 3 Subsidiary companies spread over 23 countries

Pioneers First company to set up an Aviation Insurance Department in 1946. First company to handle the Hull Insurance requirements of the Indian Shipping Fleet. First company to establish its own Training School. First company to introduce the concept of 'Model Office Training'. First company to create department in Engineering insurance. Pioneer in Satellite insurance

Companys Mission To develop general insurance business in the best interest of the community. To provide financial security to individuals, trade, commerce and all other segments of the society by offering insurance products and services of high quality at affordable cost Companys Values Highest priority to customer needs. High standards of public conduct. Transparency in operations

Chapter 2 Introduction to Insurance

Introduction to Insurance

Insurance in broad terms may be described as a method of sharing financial losses of few from a common fund that are equally exposed to the same loss. Insurance is a risk management technique primarily used to hedge against the risk of a contingent, uncertain loss that may be suffered by those individuals or entities who have an insurable interest in scarce resources, by transferring the possibility of this loss from one interested person, persons, or entity to another. The scarce resources referred to here fall into three divisions: human resources, financial resources, and capital, or tangible resources. In the context of insurance, scarce resources are also known as "exposures," because they are "exposed" to perils, those things, or forces, which cause destruction or reduction, in the usefulness, or value, of an exposed resource. Human resources are thus exposed to perils such as illness or death; financial resources to legal judgements that may result from negligent acts, and capital resources to physical perils such as fire, theft, windstorm, and vandalism, to name but a few. A hazard is the cause of a peril. It is that thing or condition which increases the likelihood of a peril. Thus perils and hazards are identified by the exposure that they threaten. For example a slippery roadway could be viewed as a financial hazard, capital hazard, or human hazard by automobile owners, and rightly so, since this condition increases the likelihood of an automobile accident that might result in an unfavorable legal judgement, automobile damage, and bodily injury.

In the context of commercial trade, insurance is further defined as the equitable transfer of the risk of a loss, from one entity to another, in exchange for consideration, payment, in the form of a risk premium. The insurance premium develops at an actuarily-determined rate. This rate is a factor used to determine the amount of premium to charge for a certain limit, and type, of insurance on the scarce resource. The premium can further be viewed as a guaranteed, known, relatively small financial loss to the insured, paid to the insurer, in exchange for the insurer's promise to compensate (indemnify) the insured in the case of a loss to the insured resource(s). The insured receives a contract, called the insurance policy, which details the conditions and circumstances under which the insured will be indemnified.

Example  Say 1000 motor cars valued @ 300000/- are observed over a period of five years. On an average say per year two are total loss by accident. Then the total annual loss would be Rs.600000. If the loss is to shared by all the thousand owners then they have to contribute Rs.600/ The loss experience will be established by taking the past experience, geographical area in which the vehicles are used and density of traffic.

IMPORTANT ELEMENTS INVOLVED IN THE CONCEPT OF INSURANCE

 The PERIL (risk)  Subject matter of insurance.  The financial loss.  Subject matter is property, human life, machinery, goods etc.,  Peril is fire, storm, burglary, earth quake, injury, explosion etc.,  Financial loss is normally defined before the contract is signed.

PRINCIPLES OF INSURANCE : There are three principles of insurance.

y Insurability y Legal y Indemnification

Principle Of Insurability: Risk which can be insured by private

companies typically shares seven common characteristics:

1. Large number of similar exposure units: Since insurance operates through pooling resources, the majority of insurance policies are provided for individual members of large classes, allowing insurers to benefit from the law of large numbers in which predicted losses are similar to the actual losses. Exceptions include Lloyd's of London, which is famous for insuring the life or health of actors, sports figures and other famous individuals. However, all exposures will have particular differences, which may lead to different premium rates.

2. Definite loss: The loss takes place at a known time, in a known place, and from a known cause. The classic example is death of an insured person on a life insurance policy. Fire, automobile accidents, and worker injuries may all easily meet this criterion. Other types of losses may only be definite in theory. Occupational, for instance, may involve prolonged exposure to injurious conditions where no specific time, place or cause is identifiable. Ideally, the time, place and cause of a loss should be clear enough that a reasonable person, with sufficient information, could objectively verify all three elements.

3. Accidental loss: The event that constitutes the trigger of a claim should be fortuitous, or at least outside the control of the beneficiary of the insurance. The loss should be pure, in the sense that it results from an event for which there is only the opportunity

for cost. Events that contain speculative elements, such as ordinary business risks or even purchasing a lottery ticket, are generally not considered insurable.

4. Large loss: The size of the loss must be meaningful from the perspective of the insured. Insurance premiums need to cover both the expected cost of losses, plus the cost of issuing and administering the policy, adjusting losses, and supplying the capital needed to reasonably assure that the insurer will be able to pay claims. For small losses these latter costs may be several times the size of the expected cost of losses. There is hardly any point in paying such costs unless the protection offered has real value to a buyer.

5. Affordable premium: If the likelihood of an insured event is so high, or the cost of the event so large, that the resulting premium is large relative to the amount of protection offered, it is not likely that the insurance will be purchased, even if on offer. Further, as the accounting profession formally recognizes in financial accounting standards, the premium cannot be so large that there is not a reasonable chance of a significant loss to the insurer. If there is no such chance of loss, the transaction may have the form of insurance, but not the substance. (See the U.S. Financial Accounting Standards Board standard number 113)

6. Calculable loss: There are two elements that must be at least estimable, if not formally calculable: the probability of loss, and the attendant cost. Probability of loss is generally an empirical exercise, while cost has more to do with the ability of a

reasonable person in possession of a copy of the insurance policy and a proof of loss associated with a claim presented under that policy to make a reasonably definite and objective evaluation of the amount of the loss recoverable as a result of the claim.

7. Limited risk of catastrophically large losses: Insurable losses are ideally independent and non-catastrophic, meaning that the losses do not happen all at once and individual losses are not severe enough to bankrupt the insurer; insurers may prefer to limit their exposure to a loss from a single event to some small portion of their capital base. Capital constrains insurers' ability to sell earthquake insurance as well as wind insurance in hurricane zones. In the U.S., flood risk is insured by the federal government. In commercial fire insurance it is possible to find single properties whose total exposed value is well in excess of any individual insurer's capital constraint. Such properties are generally shared among several insurers, or are insured by a single insurer who syndicates the risk into the reinsurance market.

Legal Principles: When a company insures an individual entity, there are

basic legal requirements. Several commonly cited legal principles of insurance include:

1.

Indemnity the insurance company indemnifies, or compensates, the insured in the case of certain losses only up to the insured's interest.

2.

Insurable interest the insured typically must directly suffer from the loss. Insurable interest must exist whether property insurance or insurance on a person is involved. The concept requires that the insured have a "stake" in the loss or damage to the life or property insured. What that "stake" is will be determined by the kind of insurance involved and the nature of the property ownership or relationship between the persons.

3. Utmost good faith the insured and the insurer are bound by a good faith bond of honesty and fairness. Material facts must be disclosed.

4. Contribution insurers which have similar obligations to the insured contribute in the indemnification, according to some method.

5. Subrogation the insurance company acquires legal rights to pursue recoveries on behalf of the insured; for example, the insurer may sue those liable for insured's loss.

6.

Causa proxima, or proximate cause the cause of loss (the peril) must be covered under the insuring agreement of the policy, and the dominant cause must not be excluded.

7.

Principle of loss minimization - In case of any loss or casualty, the asset owner must attempt to keep the loss to a minimum, as if the asset was not insured.

Principle Of Indemnification: To "indemnify" means to make

whole again, or to be reinstated to the position that one was in, to the extent possible, prior to the happening of a specified event or peril. Accordingly, life insurance is generally not considered to be indemnity insurance, but rather "contingent" insurance (i.e., a claim arises on the occurrence of a specified event). There are generally two types of insurance contracts that seek to indemnify an insured:

1. an "indemnity" policy, and 2. a "pay on behalf" or "on behalf of policy. The difference is significant on paper, but rarely material in practice An "indemnity" policy will never pay claims until the insured has paid out of pocket to some third party. Under the same situation, a "pay on behalf" policy, the insurance carrier would pay the claim and the insured (the homeowner in the above example) would not be out of pocket for anything. Most modern liability insurance is written on the basis of "pay on behalf" language. An entity seeking to transfer risk (an individual, corporation, or association of any type, etc.) becomes the 'insured' party once risk is assumed by an 'insurer', the insuring party, by means of a contract, called an insurance policy. Generally, an insurance contract includes, at a minimum, the following elements: identification of participating parties (the insurer, the insured, the beneficiaries), the premium, the period of coverage, the particular loss event covered, the amount of coverage (i.e., the amount to be paid to the insured or beneficiary in the event of a loss), and exclusions (events not covered). An insured is thus said to be "indemnified" against the loss covered in the policy.

When insured parties experience a loss for a specified peril, the coverage entitles the policyholder to make a claim against the insurer for the covered amount of loss as specified by the policy. The fee paid by the insured to the insurer for assuming the risk is called the premium. Insurance premiums from many insured are used to fund accounts reserved for later payment of claims in theory for a relatively few claimants and for overhead costs. So long as an insurer maintains adequate funds set aside for anticipated losses (called reserves), the remaining margin is an insurer's profit.

Effects of Insurance
Insurance can have various effects on society through the way that it changes who bears the cost of losses and damage. On one hand it can increase fraud, on the other it can help societies and individuals prepare for catastrophes and mitigate the effects of catastrophes on both households and societies.

Insurance can influence the probability of losses through moral hazard, insurance fraud, and preventive steps by the insurance company. Insurance scholars have typically used morale hazard to refer to the increased loss due to unintentional carelessness and moral hazard to refer to increased risk due to intentional carelessness or indifference. Insurers attempt to address carelessness through inspections, policy provisions requiring certain types of maintenance, and possible discounts for loss mitigation efforts. While in theory insurers could encourage investment in loss reduction, some commentators have argued that in practice insurers had historically not aggressively pursued loss control measures - particularly to prevent disaster losses such as hurricanes - because of concerns over rate reductions and legal battles. However, since about 1996 insurers began to take a more active role in loss mitigation, such as through building codes.

Chapter 3 Insurance Terminology

Insurance Terminology
Insurance : It is a system by which the losses suffered by a few are spread over many, exposed to similar risks. Insurance is a protection against financial loss arising on the happening of an unexpected event.

General Insurance: Accidents... illness... fire... financial securities are the things you'd like to worry about any time. General Insurance provides you the much-needed protection against such unforeseen events. Unlike Life Insurance, General Insurance is not meant to offer returns but is a protection against contingencies. Under certain Acts of Parliament, some types of insurance like Motor Insurance and Public Liability Insurance have been made compulsory.

Covered under insurance : Almost everything that has a financial value in your life and has a probability of getting lost, stolen or damaged, can be covered through insurance. Property (both movable and immovable), vehicle, cash, household goods, health, dishonesty and also your liability towards others can be covered.

Cover oneself immediately: Accidents and mishaps can occur anytime and anywhere. It is important to identify the risks faced and insure oneself against these at the earliest.

Premium: Premium is the fixed amount of sum paid over the period by the insured to the insurance company to take insurance policy and to complete the contract of insurance.

Risk: Risk can be defined as the unforeseen element which may impede your progress in achieving the objective. In insurance jargon they term RISK as an uncertainty regarding loss or what is termed as a FORTUITOUS risk. Concept of chance and risk can be expressed in a single mathematical term called Probability.

Claims: Claims and loss handling is the materialized utility of insurance; it is the actual "product" paid for. Claims may be filed by insured directly with the insurer or through brokers or agents. The insurer may require that the claim be filed on its own proprietary forms, or may accept claims on a standard industry form, such as those produced by ACORD. Insurance company claims departments employ a large number of claims adjusters supported by a staff of records management and data entry clerks. Incoming claims are classified based on severity and are assigned to adjusters whose settlement authority varies with their knowledge and experience. The adjuster undertakes an investigation of each claim, usually in close cooperation with the insured, determines if coverage is available under the terms of the insurance contract, and if so, the reasonable monetary value of the claim, and authorizes payment. The policyholder may hire their own public adjuster to negotiate the settlement with the insurance company on their behalf. For policies that are complicated, where claims may be complex, the insured may take out a separate insurance policy add on, called loss recovery insurance, which covers the cost of a public adjuster in the case of a claim.

Adjusting liability insurance claims is particularly difficult because there is a third party involved, the plaintiff, who is under no contractual obligation to cooperate with the insurer

and may in fact regard the insurer as a deep pocket. The adjuster must obtain legal counsel for the insured (either inside "house" counsel or outside "panel" counsel), monitor litigation that may take years to complete, and appear in person or over the telephone with settlement authority at a mandatory settlement conference when requested by the judge. If a claims adjuster suspects under-insurance, the condition of average may come into play to limit the insurance company's exposure. In managing the claims handling function, insurers seek to balance the elements of customer satisfaction, administrative handling expenses, and claims overpayment leakages. As part of this balancing act, fraudulent insurance practices are a major business risk that must be managed and overcome. Disputes between insurers and insureds over the validity of claims or claims handling practices occasionally escalate into litigation (see insurance bad faith).

Proposal form for buying Insurance: Insurance is a contract between the insured and the insurer. The proposal form is the basis of contract and it contains all the required information for the preparation of the policy which is a contract document.

Underwriting and investing: It is the consideration of material fact to asses the risk and
to take the decision whether to accept the risk for insurance contract and if so at what rate of premium

Deductible: The amount, which the insured has to bear in all cases and this amount is first, deducted from the total assessed payable claims amount before determining insurance company's liability.

Reinsurance: It is an arrangement by which insurance companies spread their risk with other underwriters or reinsurance companies called Reinsurance.

Chapter 4 Branches of Insurance

Branches of Insurance

y Life Insurance

y General Insurance: It covers-

1. Fire Insurance 2. Marine Insurance 3. Health Insurance 4. Motor Insurance

Life Insurance
Life insurance means insuring your life to save for the future of your family. If you have family members depending on your income you may invest in life insurance. This is a contract between you and your insurance company where your insurer agrees to pay a certain amount of money to your beneficiary in the event of your death .policies protect individuals against the risk of life .Life Insurance policies not only protects the insureds family against his death but also provides a good means to avail tax benefit, avail loans from banks and acts, as a good saving tool to meet future needs.

Genral Insurance
General insurance means managing risk against financial loss arising due to fire, marine or miscellaneous events as a result of contingencies, which may or may not occur. General insurance protects the property and casualty by covering losses from disasters and accidents thereby protecting from property damage and liability, providing the means for victims to resume their lives and businesses and contribute to the economy. This sector covers almost everything related to property, vehicle, cash, household goods, health and also one's liability towards others.

Marine Insurance
Marine insurance and marine cargo insurance cover the loss or damage of ships at sea or on inland waterways, and of cargo in transit, regardless of the method of transit. When the owner of the cargo and the carrier are separate corporations, marine cargo insurance typically compensates the owner of cargo for losses sustained from fire, shipwreck, etc., but excludes losses that can be recovered from the carrier or the carrier's insurance. Many marine insurance underwriters will include "time element coverage in such policies, which extends the indemnity to cover loss of profit and other business expenses attributable to the delay caused by a covered loss. Marine insurance further includes: Marine Cargo: Marine cargo policy provides protection to the goods loaded on a ship against all perils between the departure and arrival warehouse. Therefore, marine cargo covers carriage of goods by sea as well as transportation of goods by land.

Marine Hull: Marine hull policy provides protection against damage to ship caused due to the perils of the sea. Marine hull policy covers three-fourth of the liability of the hull owner (ship-owner) against loss due to collisions at sea.

Health Insurance
The policy provides for reimbursement of Hospitalization/Domiciliary hospitalization expenses for illness/disease suffered or accidental injury sustained during the policy period. The policy pays for expenses incurred under the following heads:

a) Room, Boarding Expenses in the Hospital/Nursing Home b) Nursing Expenses. c) Surgeon, Anesthetist, Medical Practioner, Consultants, Specialist Fees d) Anesthesia, Blood, Oxygen, Operation Theatre Charges. Surgical Appliances, Medicines and Drugs, Diagnostic Materials and X-Ray, Dialysis, Chemotherapy, Radiotherapy, Cost of Pacemaker, Artificial Limbs and Cost of organs and similar expenses.

. The Liability in respect of all claims admitted during the period of insurance shall not exceed the Sum Insured for the person as mentioned in the schedule. The company will pay through the Third Party Administrator named in the Schedule of the policy. The company will pay through the Third Party Administrator named in the schedule of the policy to the hospital / nursing home or the insured Person reasonable and necessary expenses incurred in respect of medical / surgical treatment.

Reimbursement is allowed only when treatment is taken in a hospital or nursing home which satisfies the criteria specified in the policy. ( Note : The policy defines TPA as one who is licensed by the IRDA and is engaged for a fee by the company for the provision of health The criteria refer to registration with the local authorities or provision of number of in-patient beds, operation theatre and qualified doctors and nursing staff round the clock.

Expenses on Hospitalization for minimum period of 24 hours are admissible. However, this time limit is not applied to specific treatment I.e. Dialysis,

Chemotherapy, Radiotherapy, Eye Surgery, Dental Surgery, Lithotripsy (Kidney stone removal). D&C, Tonsillectomy taken in the Hospital / Nursing Home and the insured is discharged on the same day; the treatment will be considered to be taken under Hospitalization Benefit. This time limit will also not apply if the treatment is such that it necessitates procedures involving specialized infrastructural facilities of a hospital and due to technological advances hospitalization is required for less than 24 hours only.

Chapter 5 Fire Insurance

Fire Insurance
y

Fire Insurance is governed by All India Fire Tariff effective from 31.3.2001 issued by Tariff Advisory Committee, a Statutory Body. The Standard Fire and Special Perils Policy covers all properties on land (excluding cost of land), moveable or immoveable, at various locations against named perils. Special Types of Policies are designed for Stocks (declaration and floater), Building, Plant & Machinery keeping in mind the nature of property, proposers' requirements and basis of indemnification. Long Term Policies available for Dwellings with suitable discounts in premium. Policy can be extended to cover certain additional perils and expenses at additional premium. Certain perils can be deleted with discount in premium rates. Discount in premium available for good claims experience for sum insured more than Rs. 50 crores in one location and for installation of fire extinguishing appliances. Concept of "one risk one rate" for all properties in an Industrial or Manufacturing Complex, for administrative convenience of the proposer.

Properties that are covered:

All moveable/ immoveable properties of the proposer on land (excluding those in transit) broadly categorised as follows:

i.

Building (including plinth and foundations, if required): Whether completed or in course of construction (excluding the value of land). Interiors, Partitions and Electricals.

y y

ii.

Plant & Machinery, Equipments & Accessories (including foundations, if required) Bought Second hand. Bought New Obsolete Machinery

y y y

iii.

Stocks: Raw Material Finished Goods In process In trade belonging to Wholesaler, Manufacturer and Retailer.

y y y y

iv.

Other Contents such as Furniture, Fixtures and Fittings Cables, Pipings Spares, Tools and Stores Household goods etc.

y y y y

i.

Specific Items such as bullion, unset precious stones, curios, work of arts, manuscripts, plans, drawings, securities, obligations or documents, stamps, coins or paper money, cheques, books of accounts, computer system records, explosives.

Expenses Covered:
The policy automatically covers the following expenses incurred following loss / damage / destruction of a covered property as a result of the operation of an insured peril.

i. ii.

Architects, Surveyors and Consulting Engineers' Fees upto 3 % of the claim amount. Expenses incurred for removal of debris to clear the site upto 1 % of the claim amount.

Exclusions Applicable:
a. Losses/ Expenses not covered: i. 5% of each and every claim subject to minimum of Rs. 10,000 resulting from Lightning, STFI and Subsidence and Landslide including Rockslide and Rs. 10,000 in respect of all other perils.

ii.

Expenses incurred on Architects, Surveyors' Consultant Engineers fees and Debris Removal in excess of 3% and 1% of claim amount respectively.

iii.

Loss of earnings, loss by delay, loss of market or other consequential or indirect loss or damage of any kind.

b. Perils not covered: i. ii. iii. War and allied perils Ionising radiations and contamination by radioactivity Pollution or Contamination

c. Properties not covered: i. ii. iii. Items like manuscripts etc. unless specifically declared. Cold storage stocks due to change of temperature. Loss / damage/ destruction of any electrical and/or electronic machine,apparatus, fixture or fitting arising from over running, excessive pressure, short circuiting, arcing, self heating or leakage of electricity, from whatever cause including lightning. iv. Loss / damage / destruction of Boilers, Economisers or other Vessels in which steam is generated machinery or apparatus subject to Centrifugal force, by its own explosion/ implosion.

Location of Risk:
i. The proposer shall describe all locations where the properties are built or installed or stored or kept at the inception ii. iii. Any change of location of risk shall be covered on intimation of such change. Change of ownership in the insured property shall be intimated so that the new owner may be covered be means of suitable endorsement. iv. Any material change in the location of risk, trade or manufacturing activities shall be intimated to the insurer so that the changes are endorsed to offer continuous cover.

Period of Coverage:
i. ii. Fire Policy is an annual policy, generally, renewable each year. Long Term policy (for a minimum period of three years) can be considered for covering "dwellings" only with suitable discounts in premium. iii. Cover for STFI and RSMTD perils can be considered during currency (where they are deleted at inception by choice) in special circumstances. iv. Policy can be cancelled at any time during the currency with suitable refund of premium for the unexpired period.

Deletion of Perils at the inception: STFI and RSMTD perils can be deleted at the inception of the policy for which suitable reduction in package premium rate is allowed.

Add on covers: In addition to the perils/ expenses covered, the proposer can opt to seek cover in respect of the following perils/ expenses at inception or during currency of the policy on payment of additional premium:

Perils: Loss/ damage/ destruction of the property caused by

Deterioration of Stocks in Cold Storage premises due to power failure following damage due to an insured peril

y y

Forest Fire Impact Damage due to Insured's own Vehicles, Fork lifts and the like and articles dropped therefrom

y y y y y y

Spontaneous Combustion Omission to insure additions, alterations or extensions Earthquake (Fire and Shock). Spoilage material damage cover. Leakage and contamination cover. Temporary removal of stocks.

Expenses:

Architects , Surveyors and Consulting Engineer's Fees (in excess of 3% claim amount)

y y y y

Debris Removal (in excess of 1% of claim amount) Loss of rent. Insurance of additional expenses of rent for alternative accommodation. Start up Expenses.

Policy Taker: Any person / firm / organisation / institution who may suffer financial loss in the event of operation of insurable perils may insure such property under the fire policy. They may be broadly categorised as under :

1. Owners of Building and contents such as house hold articles, furniture etc. 2. Shop Keepers. 3. Educational/ Research Institutions. 4. Hotels, Boarding and Lodgings, Hospitals, Clinics or such service providers. 5. Industrial and Manufacturing Firms. 6. Godown Keepers. 7. Bailees, Lessor, Lessee, Banks, Financial Institutions, Mortgagors, Mortgagees. 8. Traders in stocks. 9. Trustees, Charitable Institutions. 10. Transporters and C & F Agent.

Sum Insured Sum Insured of a property should represent the Market Value. Where more than one building (and contents) are insured under a single policy, block wise values shall be furnished in respect of Building, Plant & Machinery, Stocks and other contents. In case the value of a property increases due to factors like increase in prime cost, Exchange rate etc. during the currency of the policy, the corresponding sum insured may be increased on payment of proportionate premium.

Similarly, any reduction in sum insured during currency may be effected for which refund of premium will be allowed on short period basis .

Claim processing: If a misfortune befalls, leave the worry to us but please

Intimate such loss / damage immediately so that a Competent Surveyor may be deputed to minimise the loss. Give an account of all properties damaged or destroyed with estimated amounts having regard to their values as on the date and place of loss. Cooperate with surveyors by providing all the necessary documents for assessment of loss and establishing liability. Cooperate with the insurer in all their activities of entering the premises, taking possession of properties, their examining, sorting, removing or selling to your account, without prejudice. Inform particulars of all other insurances existing on the property at the time of loss.

Documents required by insurer for processing the claim : I. Common Documents for all claims under a Standard Fire and Special Perils Policy: 1. Certified True copy of the policy along with schedule and Endorsements/clauses. 2. Claim Form.

3. 4. 5.

Newspaper reports on the incident, if any. Photographs. Past claims experience.

II.

Fire Claims (additional documents) 1. Report of the Internal Committee constituted for the purpose of investigating the cause of fire. 2. 3. Fire Brigade Report. First Information Report / Letter of intimation to the Police Station duly endorsed / Police Panchnama. 4. 5. Forensic Laboratory Report on samples collected at affected site. Drug Inspector's Report on destruction of Drugs/ Pharmaceutical items (for claim on pharma products only). 6. 7. Final Investigation Report. Action taken on the suggestion of TAC/ LPA on loss minimisation of prevention.

III.

Flood Claims (additional documents):

Meteorological Report

IV.

Explosion Claims (additional documents):

Factory Inspector's Report or Report of Director of Industrial Safety and Welfare.

Chapter 6 General Rules & Regulations in Fire Insurance

General Rules & Regulations For Fire Insurance

 SECTION I These rules and regulations are applicable to all sections of this Tariff.

1. POLICY:

A. Only Standard Fire and Special Perils Policy ( Policy) with the permitted "Addon" covers (as appearing under Section VIII) if any, can be issued. Insurers may charge rates higher than those given under the Tariff. B. The wording of the policy shall be as shown in Section II of the Tariff. C. It is permissible to exclude Storm, Tempest, Flood, Inundation group of perils (STFI) and/or Riot, Strike, Malicious and Terrorism Damage perils (RSMTD) at inception of the Policy by deleting the relevant perils from the Policy. Reduction in premium rate may be allowed for such deletion (s) as shown under the relevant sections of the Tariff. D. Policy(ies) should be read together with proposal form, schedule, specification, endorsements, warranties and clauses as one contract for which suitable format's) may be devised by the insurers. E. Policy(ies) covering Buildings and/or contents shall show block wise separate amounts on (i) Building (ii) Machinery and accessories (iii) Stock and Stock-inProcess and (iv) Furniture and other contents.

F. Any risk, which has not been provided for in the Tariff, shall be referred to the Committee for rating. A provisional premium rate of Rs. 2.50 per mille shall be charged in such cases for covering the risk.

2. VALUED POLICIES: Valued Policy(ies) can only be issued for properties whose Market Value cannot be ascertained. eg: Curios, Works of Art, Manuscripts, Obsolete machinery and the like subject to the valuation certificate being acceptable to the insurers.

3. LONG-TERM POLICIES: Policies for a period exceeding 12 months shall not be issued except for "Dwellings".

4. MID-TERM COVER: Generally, it is not permissible to grant mid-term cover for STFI and/or RSMTD perils. The following provisions shall apply, where such covers are granted mid-term:

Insurers must receive specific advice from the insured accompanied by payment of the required additional premium. Cover shall commence 15 days after the receipt of the premium. The premium rates as under shall be charged on short period scale( as per Rule 7) on full sum insured for the balance period i.e.. upto the expiry of the policy.

5. MINIMUM PREMIUM : Minimum premium shall be Rs. 100/- per policy. For tiny sector Rs. 50/-

6. PARTIAL INSURANCE : It is not permissible

A) to issue a policy covering certain portions only of a building. Not-withstanding this, the plinth and foundations or the foundation only of a building may be excluded.

B) to issue a policy covering only specified machinery ( except Boilers), parts of machine or accessories thereof housed in the same block/ building.

Note: Where portions of a building and /or machinery therein are with different ownership, it is permissible for each owner to insure separately, but to the full extent of his interest on the building and/or machinery therein. In such cases, the Insured's interest shall be clearly defined in the policy.

7. RATES FOR SHORT PERIOD INSURANCE : Policies for a period of less than 12 months shall be issued at the rates set out hereunder:

For a period not exceeding15 days

10% of the Annual rate

- do-

1 month

15% of the Annual rate

-do-

2 months

30% of the Annual rate

-do-

3 months

40% of the Annual rate

-do-

4 months

50% of the Annual rate

-do-

5 months

60% of the Annual rate

-do-

6 months

70% of the Annual rate

-do-

7months

75% of the Annual rate

-do-

8 months

80% of the Annual rate

-do-

9 months

85% of the Annual rate

For a period exceeding

9 months

The full Annual rate

8. LOADING FOR "KUTCHA" CONSTRUCTION : Buildings) having walls and/or roofs of wooden planks/thatched leaves and/or grass/hay of any kind/bamboo/plastic cloth/asphalt cloth/canvas/tarpaulin and the like shall be treated as 'Kutcha' construction for rating. An additional rate of Rs.4.00%o shall be charged for such building's) and/ or contents thereof.

9. RULES FOR CANCELLATIONS : For Cancellation of insurance

a) at the option of the Insured Retention of premium shall be at Short Period Scale b) at the option of the insurer Refund of premium shall be on pro-rata basis

Note: In case a policy is cancelled on account of a Government Order or on completion of a "Building in course of construction" or where Buildings are demolished, pro-rata refund of premium may be allowed.

10. MID-TERM INCREASE IN SUM INSURED : Allowed on pro-rata basis

11. DECLARATION POLICIES : To take care of frequent fluctuations in stocks/ stock values, Declaration Policy(ies) can be granted subject to the following conditions:

a) The minimum sum insured shall be Rs 1 crore. b) Monthly declarations based on the average of the highest value at risk on each day or highest value on any day of the month shall be submitted by the Insured latest by the last day of the succeeding month. If declarations are not received within the specified period, the full sum insured under the policy shall be deemed to have been declared. c) Reduction in sum insured shall not be allowed under any circumstances. d) Refund of premium on adjustment based on the declarations/ cancellations shall not exceed 50% of the total premium.

e) The basis of value for declaration shall be the Market Value unless otherwise agreed to between insurer and insured. f) It is not permissible to issue declaration policy in respect of I. II. III. Insurance required for a short period. Stocks undergoing process. Stocks at Railway sidings. .

14. CLAIMS EXPERIENCE DISCOUNT : Only the risks rateable under Sections IV, V, VI & VII of this tariff shall be eligible for claims experience discount. Claims experience discount can be considered on the basis of:

(a) incurred claims ratio of the preceding three policy periods and

(b) the incurred claims ratio of all the policies covering the Insured's interest on the principle of one risk -one rate.

Incurred claim ratio for the preceding 3 policy periods

Discount( % )

Upto 5 %

15

Above 5% & upto 10%

10

Above 10% & upto 15%

15. FIRE EXTINGUISHING APPLIANCES DISCOUNT : The discounts as per the scale given below may be granted by the Insurers to protected blocks of the risks ratable under Sections III, IV, V, VI and VII of the Tariff (except for Floater and/or Floater Declaration Policy(ies) subject to the following:

A. System shall be erected and tested as per the relevant Regulations of the TAC and certificate from Professional's) / Professional agency(ies) confirming the efficacy of the system and its compliance with the rules shall be submitted by the Insured. B. The installation shall be maintained in efficient working order at all times and annual maintenance contract with an external agency shall be in force.

Type of installation

Discount (%)

a) Hand Appliances & Trailer Pumps/ Fire Engines

2.5

b) Hand Appliances & Hydrant System

c) Hand Appliances & Sprinkler / Fixed Water Spray System

7.5

d) Hand Appliances + Hydrant System & Sprinkler/ Fixed Water Spray System10

16. RATING OF RISKS IN MULTIPLE OCCUPANCY INDUSTRIAL ESTATE : Risks in Multiple Occupancy Industrial Estate shall be rated `Per se'. If the entire building of the Industrial Estate is insured under one sum insured, a rate of Rs. 1.50%o shall be chargeable to 'building'.

17. SILENT RISK:

A. Factories where no manufacturing /storage activities are carried out. Rate- Rs. 1.00%o B. Factories which go silent for 30 days or more. Retention of the premium shall be based on the appropriate storage / silent risk rate of Re.1.00%o whichever is higher.

18. COMPUTATION OF RATE : The following sequence shall be adopted for computation of the rate :-

1. Basic Rate

2. Reduction in rates for deletion of STFI and/or RSMTD perils, if opted out.

3. Tariff extra for `Kutcha' Construction , if applicable.( to be applied on 1-2)

4. Discount for claims experience (to be applied on 1-2+3)

5. Discount for FEA on protected blocks (to be applied on 1-2+3)

Various sections Under Fire Tariff

SECTION I : GENERAL RULES AND REGULATIONS

SECTION II : STANDARD FIRE AND SPECIAL PERILS POLICY (MATERIAL DAMAGE)

SECTION III : DWELLINGS, OFFICES, HOTELS, SHOPS ETC

SECTION IV: INDUSTRIAL/MANUFACTURING RISKS

SECTION V : UTILITIES LOCATED OUTSIDE THE INDUSTRIAL/ MANUFACTURING RISKS (STAND ALONES) RULE

SECTION VI : STORAGE RISKS OUTSIDE THE COMPOUND OF INDUSTRIAL / MANUFACTURING RISKS

SECTION VII: TANK FARMS/ GAS HOLDERS OUTSIDE THE COMPOUND OF INDUSTRIAL/ MANUFACTURING RISKS

SECTION VIII : 'ADD-ON' COVERS

Chapter 7 Motor Insurance

Motor Insurance
Highlights

This policy covers all types of vehicles plying on public roads such as:Scooters &Motorcycles Private cars All types of commercial vehicles Motor Trade (vehicles in show rooms and garages) As per the Motor Vehicles Act, 1988 it is mandatory for every owner of a vehicle plying on public roads, to take an insurance policy, to cover the amount, which the owner becomes legally liable to pay as damages to third parties as a result of accidental death, bodily injury or damage to property. A Certificate of Insurance must be carried in the vehicle as a proof of such insurance.

Two types of covers are available: Liability only policy: This covers third party liability for bodily injury liability and / or death and property damage. Personal Accident cover for Owner-driver is also included.

Package policy: This cover loss or damage to the vehicle insured in addition to (1) above.

No- claim discounts are available on renewal of policy, ranging from 20% to 50%, depending upon the type of vehicle and the number of years for which no claim has been made.

Scope of Policies Liability Only policies:

The policy covers the vehicle owner's legal liability to pay compensation for: Death or bodily injury to a third party person Damage to third party property Liability is covered for an unlimited amount in respect of death or injury and damage to third party property for Rs.7.5 lacs under Commercial vehicle and private and Rs. 1 lakh for Scooters / Motor Cycles.

Package Policy:
In addition to the coverage under liability only, this policy covers loss or damage to the insured vehicle and its accessories due to: Fire, explosion, self-ignition or lightning. Burglary, housebreaking or theft. Riot and Strike. Malicious Act. Terrorist Act. Earthquake (Fire and Shock) Damage. Flood, Typhoon, Hurricane, Storm, Tempest, Inundation, Cyclone and Hailstorm. Accidental external means. Whilst in transit by road, inland waterway, lift, elevator or air. By landslide/Rockslide

The policy also pays for towing charges from the place of accident to the workshop upto a maximum limit of Rs.300/- for Scooters/Motorcycles and Rs.1500/- for cars and commercial vehicles. It is also permissible to opt for higher towing charges subject to payment of extra premium.

A restricted cover is also available covering the risk of Fire and/or Theft only, in addition to the compulsory cover granted under "Liability Only Policy". However the same is not available in case of vehicle ratable under Class D, Tariff for Miscellaneous and special types of vehicles

Exclusions under Package Policy

Wear and tear, breakdowns Consequential loss Loss when driving with invalid driving license or under the influence of alcohol. Loss due to war, civil war, etc. Claims arising out of contractual liability. Use of vehicle otherwise than in accordance with `limitations as to use ' (e.g. private car being used as a taxi)

Rating depends upon the following factors:

IDV Cubic capacity Geographical zone Age of the vehicle GVW of in case of commercial vehicles Add on Covers

Add on covers: The policy can be extended to cover the following risks on payment of
additional premium:

1. Loss or damage to accessories fitted in the vehicle such as stereos, fans, airconditioners etc. 2. Personal accident cover under private car policies for: a. passengers b. paid driver 3. Legal liability to employees. 4. Legal liability to non-fare paying passengers in commercial vehicles.

Selection of The Sum Insured: The sum insured of a vehicle in a Motor Policy
is referred to as the I.D.V., which stands for Insured's declared value. In case of theft of vehicle or if the vehicle is totally damaged and beyond repairs in an accident, the claim amount payable will be determined on the basis of the IDV. The IDV of the vehicle is to be fixed on the basis of manufacturer's listed selling price of the brand and model of the vehicle proposed for insurance at the commencement of insurance / renewal and adjusted for depreciation as per schedule.IDV of vehicle which is beyond 5 years of age and of obsolete models of the vehicles (i.e. models which the manufacturers have discontinued to manufacture) is to be determined on the basis of an understanding between insurer and insured.

Procedure to Claim: In the event of an incident giving rise to a claim under the
policy, the following steps should be taken:

In case of accidental damage to the vehicle:

1. Immediate intimation to the nearest office, which will issue a Claim Form. 2. Claim Form duly filled in to be submitted along with copy of Registration Certificate and driving license of the driver of the vehicle at the time of accident as also estimate of repairs. 3. Vehicle will be surveyed by a Surveyor, appointed by the insurance company, who shall submit his report to the company. In case of a major damage to the vehicle, a spot survey, at the site of accident, would also be arranged by the company. 4. Final bills/cash memos are to be submitted duly signed by the insured. 5. Salvage of the damaged parts may be required to be deposited with the insurance company after approval of the claim.

In case of theft of the vehicle:

1. Lodge an F.I.R. with the police immediately. 2. Inform the policy issuing office with a copy of FIR. 3. Submit the Final Police Report as soon as it is received. 4. Extend full cooperation to the surveyor and/or investigator appointed by the company. 5. After approval of the claim by the company, get the Registration Certificate transferred in the name of the company, hand over the keys of the vehicle, submit a letter of Subrogation and Indemnity on stamp paper duly notarized.

In case of liability claim:

1. Inform insurance company immediately of any incident likely to give rise to liability claim. 2. On receipt of summons from Court, the same should be sent to the company immediately. 3. Claim Form duly filled in along-with copies of Registration Certificate, Diving License, FIR are to be submitted.

Chapter 8 General Rules & Regulations in Motor Insurance

GENERAL

REGULATIONS

GR.1. Insurance not provided for:

Motor Insurance in India cannot be transacted outside the purview of the India Motor Tariff unless specifically authorized by the TAC. For risks which have not been provided for in the tariff, reference should be made to TAC for advice thereon.

Motor Insurance includes Private Cars, Motorized Two Wheelers and Commercial Vehicles excluding vehicles running on rails.

GR.2. Proposal Forms: Proposal Form as specified in Section 5 of the INDIA MOTOR TARIFF is required to be submitted by the insured to the insurer before the commencement of cover and at renewal in case of material alteration. For change of IDV at each renewal, however, a fresh proposal is not necessary. Such changes may be advised by the insured to the insurer by a letter signed by the insured / insureds authorized signatory ( for companies / body corporate) and sent to the insurer by recorded delivery. In case of change of insurer, a fresh proposal is required to be submitted to the new insurer. The insurers may include additional questions in the proposal form for their information and use.

GR.3. Policy Forms: Policies insuring Motor Vehicles are to be issued only as per the Standard Form(s) given in Section 6 of the INDIA MOTOR TARIFF.

A. Types of Policies: There are two types of Policies :

(i)

Liability Only Policy: This covers Third Party Liability for bodily injury and/ or

death and Property Damage .Personal Accident Cover for Owner-Driver is also included.

(ii) above.

Package Policy: This covers loss or damage to the vehicle insured in addition to (i)

GR.4. Extension of Geographical Area

The Geographical Area of Motor Policies may be extended to include

a) Bangladesh

b) Bhutan

c) Nepal

d) Pakistan

e) Sri Lanka

f) Maldives

as the case may be, by charging a flat additional premium, as stated below for a period not exceeding 12 months:

For Package Policy..... Rs.500/ per vehicle, irrespective of the class of vehicle. For policies other than Package PolicyRs.100/ per vehicle, irrespective of the class of vehicle.

For such extensions Endorsement IMT 1 is to be used.

Note: Such geographical extensions, however, specifically exclude cover for damage to the vehicle/ injury to its occupants/ TP liability in respect of the vehicle during air passage/ sea voyage for the purpose of ferrying the vehicle to the extended Geographical Area.

GR.5. Vintage Cars: Any car manufactured prior to 31-12-1940 and duly certified by the Vintage and Classic Car Club of India can be considered a Vintage car for the purpose of this tariff.

GR.6. Classic Cars: Any car manufactured after 31-12-1940, but before 31-12-1970, is considered as a Classic Car by the Vintage and Classic Car Club of India. There is however, no provision for special rating or cover for such vehicles under this tariff.

GR.7. Valued Policies:

Under an Agreed Value Policy a specified sum agreed as the insured value of the vehicle is paid as compensation in case of Total Loss/Constructive Total Loss of the vehicle without any deduction for depreciation.

It is not permitted to issue Agreed Value Policies under this tariff excepting for policies covering vintage cars as defined under 5 above.

For such policies, Endorsement IMT- 2 is to be used.

GR.8. Insureds Declared Value (IDV)

The Insureds Declared Value (IDV) of the vehicle will be deemed to be the SUM INSURED for the purpose of this tariff and it will be fixed at the commencement of each policy period for each insured vehicle.

The IDV of the vehicle is to be fixed on the basis of manufacturers listed selling price of the brand and model as the vehicle proposed for insurance at the commencement of insurance /renewal and adjusted for depreciation (as per schedule specified below). The IDV of the side car(s) and / or accessories, if any, fitted to the vehicle but not included in the manufacturers listed selling price of the vehicle is also likewise to be fixed.

GR.9. SCHEDULE OF DEPRECIATION FOR IDV: The schedule of age-wise depreciation as shown below is applicable for the purpose of Total Loss/ Constructive Total Loss (TL/ CTL) claims only. A vehicle will be considered to be a CTL, where the aggregate cost of retrieval and / or repair of the vehicle subject to terms and conditions of the policy exceeds 75% of the IDV. The depreciation for replacement of parts in partial loss claims will be as per a separate schedule specified under GR.9.

SCHEDULE OF DEPRECIATION FOR ARRIVING AT IDV

AGE OF THE VEHICLE

% OF DEPRECIATION FOR FIXING IDV

Not exceeding 6 months Exceeding 6 months but not exceeding 1 year Exceeding 1 year but not exceeding 2 years Exceeding 2 years but not exceeding 3 years Exceeding 3 years but not exceeding 4 years Exceeding 4 years but not exceeding 5 years

5% 15% 20% 30% 40% 50%

GR.10. Geographical Zones: For the purpose of rating, the whole of India has been divided into the following zones depending upon the location of the office of registration of the vehicle concerned.

For the purpose of rating, the whole of India has been divided into the following zones depending upon the location of the office of registration of the vehicle concerned.

(i) Private Cars/ Motorized Two Wheelers / Commercial Vehicles rateable under Section 4.C.1 and C.4.

Zone A:

Ahmedabad, Bangalore, Chennai, Hyderabad , Kolkata,

Mumbai, New Delhi and Pune.

y

Zone B:

Rest of India

(ii) Commercial Vehicles excluding vehicles rateable under Section 4. C.1 and C.4.

y y y

Zone A Zone B Zone C

Chennai, Delhi / New Delhi, Kolkata, Mumbai All other State Capitals Rest of India

GR.11. Period of Insurance:

Unless specifically stated otherwise, premiums quoted in the Schedules under various Sections of the India Motor Tariff are the premiums payable on policies issued or renewed for a period of twelve months. No policy is permitted to be issued or renewed for any period longer than twelve months. It shall, however, be permissible to extend the period of insurance under the policy for any period less than twelve months, for the purpose of arriving at a particular renewal date or for any other reasons convenient to the insured, by payment of extra premium calculated on pro-

rata basis, provided such policies are renewed with the same insurer immediately after the expiry of such an extension. All such extensions will require attachment of the following Warranty to the policy.
y

"In consideration of the premium for this extension being calculated at a pro-rata proportion of the annual premium, it is hereby declared and agreed by the insured that upon expiry of this extension, this policy shall be renewed for a period of twelve months, failing which the difference between the extension premium now paid on pro rata basis and the premium at short period rate shall become payable by the insured.

GR.12. Display of Premium

(a)

In case of a Package Policy, the Own Damage and the Liability components of

premium are required to be displayed separately in the Policy Schedule.

(b)

Similarly, all permissible loadings on /discounts from tariff rates are required to be

displayed separately in the policy schedule.

(c)

The Own Damage as well as the Liability components of premium are required to be

rounded off to the nearest rupee, separately.

GR. 13. Computation of Premium: The premium payable on a policy is required to be calculated in accordance with the Premium Computation Tables appearing in the Tariff. For applicable discounts / loadings, if any, reference is also to be made to the relevant GRs as well as regulations contained in the specific section(s) of the Tariff while computing premium.

GR.14. Payment of Premium: The full premium is required to be collected before commencement of cover. It is not permissible to collect premium in installments.

GR.16. Minimum Premium: The minimum premium applicable for vehicles specially designed or modified for use of the blind, handicapped and mentally challenged persons will be Rs.25/- per vehicle. For all other vehicles, the applicable minimum premium per vehicle will be Rs.100/-.

GR.17. Change of Vehicle:

A vehicle insured under a policy can be substituted by another vehicle of the same class for the balance period of the policy subject to adjustment of premium, if any, on pro-rata basis from the date of substitution.

Where the vehicle so substituted is not a total loss, evidence in support of continuation of insurance on the substituted vehicle is required to be submitted to the insurer before such substitution can be carried out.

GR.18. Vehicles Subject to Hire Purchase Agreement:

Policies and Certificates of Insurance are to be issued in the name of Hirer only and issuance in the joint names of the Hirer and Owner is prohibited. If Owner's interest is to be protected it should be done by the use of Endorsement IMT - 5.

For the purpose of the Personal Accident cover for the Owner-Driver granted under the policy, the insured named in the policy will continue to be deemed as the Ownerdriver subject to conditions of the policy relating to this cover.

GR.19. Vehicles Subject to Lease Agreement

Policies and Certificates of Insurance are to be issued in the name of Lessee only and issuance in the joint names of the Lessee and Lessor is prohibited. If Lessors interest is to be protected, it should be done by the use of Endorsement IMT - 6.

For the purpose of the Personal Accident cover for the Owner-Driver granted under the policy, the insured named in the policy will continue to be deemed as the Ownerdriver subject to conditions of the policy relating to this cover.

GR.20 Vehicles Subject to Hypothecation Agreement

Policies and Certificates of Insurance are to be issued in the name of Registered Owner only and issuance in the joint names of the Registered Owner and Pledgee is prohibited. If Pledgees interest is to be protected, it should be done by the use of Endorsement IMT - 7.

For the purpose of the Personal Accident cover for the Owner-Driver granted under the policy, the registered owner named in the policy will continue to be deemed as the Owner- driver subject to conditions of the policy relating to this cover.

GR.21. Certificate of Insurance

A Certificate of Insurance for a Motor Vehicle is to be issued only in FORM 51 in terms of Rule 141 of Central Motor Vehicle Rules 1989. (Refer Section 6 of the India Motor Tariff).

GR.22. Cancellation and issuance of fresh Certificate of Insurance

Following any changes in the policy during its currency, affecting the information shown on the Certificate of Insurance, the Certificate of Insurance is required to be returned to the Insurer for cancellation and a fresh Certificate incorporating the changes is to be issued.

Information regarding change of number of Engine and/ or Chassis of the vehicle, is required to be intimated to the insurer immediately for effecting necessary changes in the policy, provided such changes are duly endorsed on the Registration Certificate. The Certificate of Insurance is also required to be returned immediately for issuance of fresh Certificate of Insurance incorporating the changes.

GR.23. Discount for Vintage Cars

Private Cars certified by the Vintage and Classic Car Club of India as Vintage Cars will be eligible for 25% discount on Own Damage Premium.

For mid-term certification as Vintage Car pro-rata proportion of the tariff discount for the unexpired period of the policy is to be allowed.

GR.24. Discount for Anti-Theft Devices

Vehicles (other than those covered under Motor Trade policies) fitted with anti-theft devices approved by Automobile Research Association of India (ARAI), Pune and whose installation is duly certified by any of the Automobile Associations mentioned in GR.28 above are eligible for a discount of 2.5% on the OD component of premium subject to a maximum of Rs. 500/-.

For mid-term installation of anti-theft device approved and certified as above in the vehicle insured, pro rata proportion of the premium discount calculated as per tariff provision for the unexpired period of the policy is to be allowed.

GR.25. Prohibition of mid-term inclusion/cancellation of extra benefits

Mid-term inclusion/cancellation of extra benefits shall not be permitted more than once during the currency of a policy.

GR.26. Concessions for Specially Designed / Modified Vehicles for the Blind, Handicapped and Mentally challenged persons : In case of vehicles specially designed / modified for use of blind, handicapped and mentally challenged persons, a discount of 50% may be allowed on the Own Damage premium in respect of both privately owned vehicles and vehicles owned and used by institutions engaged exclusively in the services of the blind, handicapped and mentally challenged persons. The discount is to be allowed only in respect of such vehicles, which have been suitably endorsed in the Registration Certificate by the RTA concerned.

GR. 47. Submission of Statistics

y

To enable the TAC to evaluate the efficacy, adequacy and justification of this tariff and to consider whether or not provisions of the tariff require review / rationalization and to facilitate such review / rationalization based on actual underwriting experience of the Motor portfolio it is imperative that the insurers furnish detailed and dependable statistics on various aspects of this tariff relating to terms of cover limitations exceptions and pricing thereof.

To facilitate data collection and its periodical submission to TAC under provisions of Section 64 UE of Insurance Act 1938 extensive statistical codes as provided under Section - 8 of this tariff has to be made use of.

Chapter 9 Bibliography

Bibliography
Books

 General Insurance IC-34  Annual Report 2009-10  Kotler Philip, Marketing Management

Important Websites

 www.newindia.co.in  www.IRDA.com

Magazine  Outlook Express  Business Today

News Paper

 Times of India  Economic Times  Hindustan Times