The insurance ombudsman scheme was established through a Government of India notification dated 11th November 1998 under section 114(1) of the Insurance Act of 1938. The purpose of establishing the insurance ombudsman is to quickly dispose of the grievances of the insured customers and to reduce their problems concerning such grievances settled out of the…
The IRDA (Micro-insurance) Regulations 2005 is designed for insurance policies intended for the protection of economically weaker sections of society, with affordable insurance products to help them cope with and recover from financial losses. All micro-insurance policies are reckoned for fulfillment of social obligations and where a micro-insurance policy is issued in a rural area…
Group Insurance Scheme is life insurance or Health Insurance protection for groups of people in the same contract. This scheme is ideal for employers to cover their employees and retired employees. Also, informal groups like Cultural Associations, societies, etc. can go for group insurance for their members. These plans may be in the form of…
Reinsurance is a process whereby one entity (the reinsurer) takes on all or part of the risk covered under a policy issued by an insurance company in consideration of a premium payment. In other words, it is a form of insurance cover for insurance companies. The guiding principle of the regulatory framework in India is…
Distribution of insurance is handled in several ways. The most common is through the use of insurance intermediaries. Insurance intermediaries serve as the critical link between insurance companies seeking to place insurance policies and consumers seeking to procure insurance coverage. The IRDAI has issued various specific regulations to govern individuals and entities that can represent…
IRDAI in the year 2011 introduced the Insurance Repository (IR) system to provide policyholders a facility to keep insurance policies in electronic form and to undertake changes, modifications, and revisions in the insurance policy with speed and accuracy to bring about efficiency, transparency, and cost reduction in the issuance and maintenance of insurance policies. Insurance…
The insurance industry of India has 57 insurance companies -24 are in the life insurance business, while 34 are non-life insurers. Among the life insurers, LIC is the sole public sector company. There are six public sector insurers in the non-life insurance segment. In addition to these, there is a sole national re-insurer namely General…
Insurance is a legal agreement between an insurer (insurance company) and an insured (individual/legal entity), in which an insured receives financial protection from an insurer for the losses he may suffer under specific circumstances. In insurance policy, there are three important terms viz. Premium, Sum insured, Sum assured. Premium: The insured needs to pay a…
Insurance penetration and density are two metrics, that so often used to assess the level of development of the insurance sector in a country. These metrics are normally expressed in terms of US$. Insurance Penetration: Insurance penetration is measured as the percentage of insurance premiums to the GDP of the country. For instance, if a…
Privatisation and foreign direct investment (FDI) have been seen by policymakers, in India and abroad as key components of India’s reform program. Indian Parliament on 22 March 2021 passed the Insurance Amendment Bill 2021 to increase the foreign direct investment (FDI) limit in the insurance sector to 74% from 49%. With the Union Cabinet approving…