Life insurance

Difference between life insurance and fire insurance and Marine Insurable interest Suicide Surrender value Nomination

WHAT IS INSURANCE CONTRACT ?

The Insurance contract is contract between
the insurer and insured. It is an voluntary and conditional contract between the two parties. Insurer indemnifies the risk of the insured in consideration of certain amount
Contract by Insurer Insurer gets Premium Undertakes to pay money
Upon death of Insured /Expiry Date Payment in lump sum or installme nts

PARTIES TO INSURANCE CONTRACT

Insurer Insured

Saif Ali had a Life insurance for a 10 Million in MovieAny Guesses?

ESSENTIAL FEATURES OF INSURANCE CONTRACT

Two parties (Insurer and Insured). It must be in written document. Policy contains terms and condition of a contract. The policy contains the indemnity clause. It is an stipulation of consideration in shape of premium payable. It should be valid contract. Offer, acceptance and communication.

LEGAL PRINCIPLES OF INSURANCE CONTRACT

Good faith
Case Example :Balwaan proposal on Life Insurance got Declined by various Insurance Offices He goes to ABC Insurance and Does not Disclose the above Fact and said he was insured at ordinary rates, hence dint accept Judgment: Material Failure, Policy could set Aside

Insurable Interest
Example : Balwaan cannot insure Akhoys house without insurable Interest If Balwaan has mortgaged Akhoys house, he can Insure to protect against any Damages

 Law of Indemnity Anupam Insured house against Fire. He agreed to sell house to Avinash Before sale Completion- House caught Fire Anupam got money from Insurer and Avinash both as per contracts Judgment : Any answers or guesses?

Proximity of cause

Ship insured against damage by Enemy action. It got damaged by a Storm or a Whale Judgment: NO damage could recovered

 Mitigation of loss Example : A has got Car Insurance , hence he doesnt maintains it in proper condition and drives rough, taking Insurance claim for Granted

Subrogation

A insured furniture with M, As Wife destroyed Furniture. M indemnified S, then M wanted to proceed against Ss wife. Can he Recover?

Contribution

A insured house for 10000 with X, 20000 with y House Damaged 12000 loss X pay 4000, y pay 8000 If y pay 12000, he can recover from X 4000 Xs Distribution (10000/30000)*12000 = 4000 Ys Distribution (20000/30000)*12000 = 8000 RiskPremium of Insurance = Risk Less risk- less premium No Risk= return premium

WHO CAN BE INSURER ?

According to section 2(a) of the Insurance Act insurer means : An individual. An unincorporated body of individual. Body corporate incorporated under any laws in force in India or under the Indian Companies Act, 1913 and carrying on the business of insurance in India. An Indian insurance company, which is registered as per the provision of the Companies Act, 1956. An association of partnership firm registered under the provision of Indian Partnership Act,1932.

CONT..
Any agency permitted or sanction to undertake the insurance business either under Section 30 of Life Insurance Act of India, or Section 18 and 19 of General Insurance Act. But does not include any type of agent either appointed under any Act or any insurance business recognized by law and included Government Company and a provident society as defined in Section 65 of Insurance Act.

OTHER ISSUES..
Reinsurance
Double Insurance.

STANDARD TYPES IN INSURANCE POLICIES

Life Insurance Policy
General Insurance Policy: General insurance. Fire insurance. Marine insurance. (Voyage policy, Time policy). Motor vehicle insurance. Health insurance.

REGULATION OF INSURANCE BUSINESS

IRDA Act, 1999. Legislation of all the private and government corporations engaged in the insurance business. The Act contains six chapters and three schedules. Schedules contains the amendments made to the Insurance Act, 1938 and Life Insurance Act, 1956 and General Business Insurance Act, 1972. Objectives: To protect the policies holders. To regulate the Insurance Industry.

DUTIES OF REGULATORY AUTHORITY

Duty to protect the interest of policy holder.

Duty to regulate and promote Insurance business (Section 14).

Duty to maintain proper accounts and other relevant records.

Duty to audit the accounts and rectify the defects.

Duty to submit reports and presenting it to the Central Govt.

Duty to follow the directions of central Government.

POWERS AND FUNCTIONS OF REGULATORY AUTHORITY

Authority has a administrative power of Insurance Industry.

Power to appoint the staff and officers.

Power to regulate investment of funds by insurance companies.

Power to control and regulate rates and terms and conditions. Power to issue a certificate and cancel the registration. Power to call information from insurances undertakings.

Thank

You