2The Great Fire of London. Sunday, 2nd Sept. to Wednesday, 5th Sept 1666Consumed13,200 houses,87 churches,most of the City authority buildingsgutted the medieval City of London inside the old Roman City WallDestroyed the homes of 70,000 out of 80,000 of the city’s inhabitants
3What is Fire Insurance ?“The business of effecting, otherwise than incidentally to some other class of business, contracts of insurance against loss by or incidental to fire, or other occurrence customarily included among risks insured against the fire insurance policies.” – Insurance Act, 1938.A fire insurance is a contract under which the insurer in return for a consideration (premium) agrees to indemnify the insured for the financial loss which the latter may suffer due to destruction of or damage to property or goods, caused by fire, during a specified period.The insurer is liable to make good the actual amount of loss not exceeding the maximum amount fixed under the policy.
4Fire'Fire' means the production of light and heat by combustion or burning.There is said to be a fire within the meaning of fire insurance when:There is actual ignition.The fire is purely accidental or fortuitous in origin so far as the insured is concerned.There must be something on fire which ought not to be on fire.
5Actual ignition No Claim without a Flame. The fire must result from actual ignition and the resulting loss must be proximately caused by such ignition.The damage should be occasioned by fire.Loss or damage caused by excessive fire heat cannot be included in ‘loss or damage fire’.Loss or damage must be either by ignition of article or property or premises or part thereof.If lightning causes ignition, there is actual ignition.If water causes damage when used to put out fire, Fire, and not water is the villain.
6Accidental or fortuitous Fire must be accidentalor magnitude of the fire must be accidental – eg. Cooking stove.The cause of fire is immaterial unless it as the deliberate act of the insured.It is immaterial whether the fire comes to the insured property or the insured property comes to the fire.
7Life assurance V Fire Insurance Fire/ Marine1.Contract for liquidated sum.A contract of indemnity.2.Event is certainEvent is uncertain3.Longer periodShort period – one year4.Insurable interest at the time of contractMarine: at the time of claim.Fire: at time of contract and claim5.Insurable interest cannot be measured in terms of moneyCan be measured in term of money.6.Facility of Surrender value.No such surrender7.Nomination facility availableOnly assignment is possible.8.Loan against the PolicyNo such facility.9.Premium paid in installments.Payment in lump sum10.Premium according to age.Premium according to risk.11.Life is the subject mater.Property or other assets.
8Types of Fire Insurance Specific PolicyValued PolicyAverage PolicyFloating policyReinstatement PolicyConsequential loss PolicyComprehensive policyA Blanket policy
9Specific PolicyThe insurer undertakes to make good the loss to the insured up to the amount specified in the policy.The value of property is not relevant in determining the amount of indemnity in case of a specific policy.Example:A building worth Rs.2,00,000 is insured against fire for Rs. 1,00,000.If the damage to the property is Rs.75,000 the insurer will get the full compensation.If damage is Rs.2,00,000, Rs. 1,00,000 is payable.
10Valued PolicyThe value declared in the policy is payable by the insured in the event of a total loss irrespective of the actual value of loss.The policy violates the principle of indemnity.The insurer has to pay a specified amount quite independent of the market or actual value of the property at the time of loss.So such a policy is very rarely issued.It may be issued only on artistic work, antiques and similar rare articles whose value cannot be determined easily.
11Sum Insured * Actual Loss Average PolicyUnder a fire insurance policy containing the ‘average clause’ the insured is liable for such proportion of the loss as the value of the uncovered property bears to the whole property.This principle applies if the property is underinsured.Example:House insured for Rs. 4,00,000 though its actual value is Rs.6,00,000.Part of the house is damaged in fire and the insured suffers a loss of Rs. 3,00,000The amount of compensation to be paid by the insurer is Rs. 2,00,000Claim Payable =Sum Insured * Actual Loss=400000*300000=200000Value of the Property6000
12Floating policyUsed for covering fluctuating stocks of goods held in different locations.With every transaction of sale or purchase, the quantities of goods kept at different places fluctuate.It is difficult for the owner to take a policy for a specific amount.The best way is to take out a floating policy for all the stocks of goods.
13Reinstatement Policy Also called ‘New for Old’ Policy Such policies avoid conflict of indemnity.The insurer has the right to reinstate or replenish the property destroyed instead of paying compensation to the insured in cash.It may be granted on building, machinery, furniture, fixture and fittings only.Restoration of damaged portion of the property to a condition substantially the same, but not better or more extensive than its condition, at the time of its renovation
14Consequential loss Policy Provides for loss of tangible and intangible properties.The insured may suffer a greater financial loss on account of dislocation of business caused by fire.e.g. close down business after fire for repair, to meet fixed expenses such as rent, salaries, taxes and other expenses as usual.Such considerable loss to the insured is not covered by the ordinary fire policy.In order to cover such loss by fire, the ‘Consequential Loss Policy’ has been introduced.The loss so suffered is separately calculated from the loss actually suffered.
15Comprehensive policy It is also known as ‘all insurance policy’. Covers the risks of the fire arising out of any cause that is civil commotion, lightening, riots, thefts, labor disturbances and strikes etc.‘Comprehensive’ does not mean that every type of risk is covered.There may be exclusions and limitations.
16Other types Blanket policy : Declaration policy: to cover all the fixed and current assets of an enterprise by one insurance.Declaration policy:Trader takes out a policy for the maximum value of stock which may be expected to hold during the year.At a fixed date each month, the insured has to make a declarationregarding the actual value of stock at risk on that date.On the basis of such declaration, the average amount of stock at risk in the year is calculated and this amount becomes the sum assured.Sprinklers leakage policy.It covers the loss arising out of waterleakage from sprinklers which are setup to extinguish fire.
17Add-on Covers Forest Fire Spontaneous combustion Deterioration of Stocks in cold storageEarthquake (Fire & Shock)TerrorismImpact damage due to Insured’s own Rail/ Road Vehicles, fork Lifts, Cranes, stackers and the like and articles dropped there from
18Rights of the InsurerRight to avoid the policy- in case of willful act and misrepresentation.Right of entry control over the property- on the happening of the event to take the possession of the property.Right of reinstatement- replace the assetRight of subrogation - entitled to all rights and remedies available to the insured after indemnifyingRight to contribution- when more than one policies are taken by the insured, loss will be shared with other insurers.Right to salvage - assured to hand over the salvage to the insurance company in case of loss to the property insured.
19Implied Conditions Existence of Property when policy is effected Insured Property must be property damagedInsurable interest from the time of commencement of risk and up to the completion of the contract.Observe good faith in disclosure, efforts to prevent and extinguish the fire with reasonable care.The subject matter of insurance should be described in the policy as to identify it clearly.Express conditions are described in the policy.
20Claims Notice in writing to the insurer. Evidence regarding loss by fire.Filing the prescribed form with all detailsInspection of loss by InsurerDouble insurance – contributionMore than one fire, total pay out will not exceed the insured amount.Waiver is the voluntary relinquishment of a known right. Insurer my pay as a waiver.
21Rate Fixation Rate calculation is made in following manner; Base rate for the class of property.Reduction in rates based on exclusion and add on covers.Extra tariff for hazardous assets.Discount is allowed for claim experience.Further discount is allowed for betterment of risk.Followings are to be considered on fixation of premiumType of insuredLocation of propertyStorage facility and other infrastructureAdditional premium on ‘add-on covers’ and discount on ‘exclusion’.
22Rate Fixation Three steps: Classification Discrimination Fixing or schedule rating.
23ClassificationThe risks are classified into various classes according to factors affecting fire risk.Construction of StructureOccupancyNature of flooringHeightFloor and Wall OpeningExposureLighting heating and powerPlace or situationProtectionTime of loss
24DiscriminationThe differentiation of the rates for individual risks in a particular class.Risks are differentiated from each other according to the merits and demerits of the individual risk.Equitable basis of ratting.
25Schedule RatingAn empirical standard for the measurement of relative quantity of fire hazard.It is based on the theory that the aggregate fire hazard of any risk is capable of ultimate analysis into its component factors to each of which could be assigned an appropriate chargeA standard or average premium is determined as a base for calculating the premium.The rate arrived at the is the net premium, which is just sufficient to meet all the losses in that particular risk.This is loaded with expenses to arrive at the gross premium or office premiumAverage Fire Rate R =Total Loss*100Total Values of insurance
26Tariff RatingFire insurance business is governed by the tariffs formulated by the Tariff Advisory committeeTAC is a statutory body established under the provisions of The Insurance (Amendment ) Act 1968.TAC control and regulate the rates, advantages, terms and conditions offered in respect of general insuranceTariffs provide rates for almost all classes of riskalso provide rules and regulations for the business and standard form of wordings for the contract.Regional committees at Delhi, Calcutta Chennai, Mumbai.Each region has its own Tarff applicable to risks in in its territorial jurisdiction.Tariffs are determined based on principles of rate fixation.
27DocumentsProposal Form- contains details of proposer, type of coverage, details of subject matter, sum insured, insured declaration/authentication, risk inspection report.Cover note- is issued pending issue of policy covers proposer’s detail, sum insured, details of risk covered, premium detail, date of issue and validity, date of commencement and expiry of cover, authentication, warranties and clauses.Policy document- must follow the format prescribed by the tariff. Must contain all the information as contained in the cover note, and endorsement and alteration made to the policy.
29Marine Insurance - Defined A contract of Marine insurance is a contract whereby the Insurer undertakes to indemnify the assured, in manner and to the extent thereby agreed , against marine losses, that is to say, the losses incident to marine adventure.Section 2(13)A of The Insurance Act 1938:“Marine Insurance business” means the business of effecting contracts of insurance upon vessels of any description including cargoes freights and other interest which may be legally insured in or in relation to such vessels, cargoes and freights, goods, wares, merchandise and property of whatever description insured for any transit by land or water or both and whether or not including warehouse risks or similar risks in addition or as incidental to such transit and includes any other risks customarily included among the risks insured against in marine insurance polices.
30Marine Vs Fire Insurance 1.Freely Transferable.Only with the consent of insurer.2.Insurance can be for a subject matter ‘ lost or not lost ‘ : both the parties are ignorant of the safety or otherwise of the goods.Insurable interest should be available at the time of contract also.3.Short period or for a voyageOne year4.Insurable interest at time of loss.Also at time of contract5.A cretin Profit margin is also allowed in Claim.Claim for actual loss or insured amount whichever is low.6.Standard form of Policy prescribed by Law.No standard form prescribed.7.Moral responsibility of the cargo owner does not exist.Moral responsibility of insurer is an important aspect.
31Types of Marine Insurance Two broad categories - ocean marine insurance and Inland marine insurance.Ocean marine insurance is a form of transportation insurance. It is classified into 4 categories:Hull insurancecovers physical damage to the ship or vesselCargo insurancecovers the shipper of the goods if the goods are damaged or lost. Open cargo policy can be used for regular shipment. The open cargo policy has no expiration date and remains in force until it is cancelled.Protection and Indemnity (P&I) Insuranceprovides comprehensive liability insurance for property damage or bodily injury to third parties.Freight Insuranceindemnifies the ship owner for the loss of earnings if the goods are damaged or lost and are not delivered.
32Implied Warranties Seaworthiness of Ship. Legality of Venture At the commencement of the voyage or at each stage of voyage.Seaworthiness is relative term - suitability for the season, sea, etc.suitability and adequacy of her equipment, adequacy and experience of the officers and crew.Include cargo - worthinessLegality of VentureEg. Trading with enemy, violating national laws, smuggling, ventures prohibited by law.Non- deviationNo deviation and delay of voyage
33Classes of Policies 1. Voyage Policy insured against risk in respect of a particular voyage from a port of departure to the port of destinationcovers the subject matter irrespective of the time factor.not suitable for hull insurance as a ship usually does not operate over a particular route only.The policy is used mostly in case of cargo insurance.2. Time Policyfor specified period of time, usually not exceeding 12 months.generally used in connection with the insurance of ship.3. Mixed PoliciesIt is a mixture of voyage and time policies.for a certain time period and for a certain voyage or voyages,e.g., Kolkata to New York, for a period of one year.generally issued to ships operating on particular routes.
34Classes of Policies .. 4. Valued Policies The value of the subject matter is agreed between the insurer and the insured at the time of taking the insurance. It includesinvoice price of goodsfreight, insurance and other chargesten to fifteen percent margin to cover expected profits.5. Unvalued policythe value of subject matter insured has to be ascertained wherever the subject matter is lost or damaged.6. PPI PoliciesPolicy Proof of InterestHonored by the insurer even in absence of insurable interest.Issued on mutual understanding and is called honored polices.Since this is not legally enforceable, it is called wagering policies.
35Classes of Policies … 7. Floating Policy A merchant who is a regular shipper of goods can take out a ‘floating policy’ to avoid botheration and waste of time involved in taking a new policy for every shipment..It does not include the name of the ship and other details.the insured takes a policy for a huge amountThe other details are required to be furnished through subsequent declarations.The underwriter goes on recording the entries in the policy.When the sum assured is exhausted, the policy is said to be “fully declared” or “run off”.8. Block PolicyThis policy covers other risks also in addition to marine risks.A single policy known as block policy may be taken to cover all risks. E.g. when the goods are dispatched by rail or road transport for shipment, a single policy may cover all the risks from the point of origin to the point of destination.
36AssignmentA marine insurance policy may be transferred by assignment unless the terms of the policy expressly prohibit the same.The assignment may be made either by endorsement on the policy itself or on a separate document.The insured need not give a notice or information to the insurer or underwriter about assignment.In case of death of the insured, a marine policy is automatically assigned to his heirs.At the time of assignment, the assignor must possess an insurable interest in the subject matter insured.An insured who has parted with or lost interest in the subject matter insured can not make a valid assignment.After the occurrence of the loss also, the policy can be assigned freely to any person. The assignor merely transfers his own right to claim to the assignee.
37Marine LossesA loss arising in a marine adventure due to perils of the sea is a marine loss. Marine loss are classified into - Total loss and Partial Loss.Total Loss: implies that the subject matter insured is fully destroyed and is totally lost to its owner.It can be Actual total loss or Constructive total loss.Actual total losssubject matter is completely destroyed or so damaged that it ceases to be a thing of the kind insured.e.g. sinking of ship, complete destruction of cargo by fire, etc.Constructive total lossThe ship or cargo insured is not completely destroyed but is so badly damaged that the cost of repair or recovery would be greater than the value of the property saved.
38Marine Losses- Partial Loss A partial loss occurs when the subject matter is partially destroyed or damaged. Partial loss can be general average or particular average.General averagerefers to the sacrifice made during extreme circumstances for the safety of the ship and the cargo. This loss has to be borne by all the parties who have an interest in the marine adventure.e.g. A loss caused by Jettison must be shared by various parties.Particular averageloss arising from damage accidentally caused by the perils insured against. Such a loss is borne by the underwriter who insured the object damaged. e.g. If a ship is damaged due to bad weather the loss incurred is a particular average loss
39Insurable InterestInsurable interest in the subject-matter insured must exist at the time of the loss. It need not exist when the insurance policy is taken.Under marine insurance, the following persons are deemed to have insurable interest:a) The owner of the ship.b) The owner of the cargo.c) A creditor who has the security of the ship or cargo.d) The master and crew of the ship have insurable interest in respect of their wages.e) In case of advance freight, the person advancing the freight has an insurable interest if such freight is not repayable in case of loss.
40Policy ConditionsConditions are inserted into policy in the form of clauses:Hull clauses:Institute time ClausesIncorporated in Hull Policieslosses resulting from collision, standing, general average etc.All risks policy may be issued or certain risks may be excluded from the policy by inserting suitable clausesCargo Clauses:Institute Cargo clausesInsurance of goods, nature, extent, and scope of the insuranceAdditional marine perils are inserted through special clauses.Freight ClausesInstitute Freight clausesLoss of freight due to maritime perils which may be insured for a period or for a voyage.
41Description of the Clauses Assignment Clausefreely assignable and no notice is to be given to the underwriter.But for hull insurance, consent of underwriter is essentialLost or not lostThe merchant gets information of the shipment of his cargo very late after the sailing of the steamer and therefore, it is not known whether the subject matter was lost or not lost.The insurer undertakes to indemnify the insured whether subject matter was lost or not before the issue of the policy.At and from clauseApplicable for voyage policies insuring hull and freight.Determines the time when the actual risk commencesCover available while it is lying at the port of departure.If the policy contains ‘from’ only instead of ‘at and from’ , the risk commences from the time of departure of the ship and not earlier.Warehouse to warehouse clauseRisk commences form the specified place and continues to the specified place of destination named in the policy.The risk of land, craft transport and transshipment are covered under a single marine policy.
42Description .. Deviation, touch and stay cause Any departure form the specified course of the voyage or a customary course (if not specified in the policy) amounts to deviation.A deviation is different form the change of voyage.In change of voyage, the agreed upon destination is changed – intention to change the voyage is sufficient to end the liability of the underwriter.In deviation, there should be actual deviation. Once deviation has taken place, the risk ceases to attach for the rest of the voyage.Deviating is excused if it is caused by:It is caused by circumstances beyond the control of the master and his employer.It is necessary to comply with an express or implied warranty.It is necessary for the safety of the ship or subject matter insured.For the purpose of saving human life or aiding a ship in distress where human life may be in danger.Deviation caused by barratrous conduct of the master of the crew, if barratry be one of the perils insured against.
43Description .. Inchmaree Clause Named after a steamer called “Inchmaree’, in 1887, where claim was denied since the donkey pump of the steamer was damaged.This clause provide indemnity to the insured for damage to the hull or machinery resulting from the negligence of the master or crew or from explosion or latent defects.This clause is also inserted in cargo polices.Running Down ClausesAlso called collision clause and is included in hull polices.The amount of damage extends to include damage done by the vessel to other ship, her cargo and compensation for loss of employment in consequence of collision .Only three fourth of the liability is met by the insurer and rest is to be borne by the owner of the ship.
44Description .. Reinsurance clause Memorandum Clause Sue and Labour ClauseUnderwriters pay expenses in addition to the loss.Limitations of Expenses in the above clause:must be incurred for the benefit of the subject mater insured.Must be reasonableMust be incurred by the assured, his factors, his servants or assigns.incurred to avert or minimise a loss form a peril covered by the policy.Reinsurance clauseReinsurer is liable only for claims for which the insurer is legally liableAlteration in the original policy to be with consent of the reinsurer.Memorandum ClauseProvide minimum limit to the underwriters liability regarding claims for particular average by exempting him from such claims.Continuation clauseThe vessel continue to be covered even after completion of voyage under the policy at a pro rata premium to her port of destination.
45Marine cargo coverage Marine policy generally subject to: ICC – A, ICC B, ICC C( For sea transits)Inland Transit ( Rail/ Road)Clauses – AInstitute Cargo Clauses( Air Cargo)Extensions are:SRCCInstitute War clause,FOB
46Institute Cargo Clauses “C” Covers the following :Loss or damage to the subject- matter insured reasonably attributable to:Fire or explosionVessel or craft being stranded, grounded, sunk or capsizedOverturning or derailment of land conveyanceCollision or contact of vessel / craft or conveyance with any external object other than waterDischarge of cargo at the port of distress ii. Loss / damage to the subject –matter insured caused by:General Average sacrificeJettisonGeneral Average contribution and Salvage charges incurred to avoid loss from any cause (s) except those excludedLiability under “Both to Blame Collision” clause of contract of Affreightment
47Institute Cargo Clause “B” covers the aforesaid risks of ICC (C) andLoss / damage reasonably attributable to earthquake, volcanic eruption or lightning;Loss or damage caused byEntry of sea, lake, or river water into vessel, craft, lift van or place of storagetotal loss of any package lost overboard or dropped whilst loading into or unloading from vessel or craftGeneral Average contribution and Salvage charges incurred to avoid loss from any cause (s) except those excludedLiability under “Both to Blame Collision” clause of contract of Affreightment
48Institute Cargo Clause (A) Covers the following risksAll Risks of loss / damage to the cargo insured except those specifically excluded.General average and salvage charges incurred to avoid loss form any cause covered under the insurance.Liability under “Both to Blame Collision” clause of contract
49Exclusions Willful Misconduct of the Assured Ordinary Leakage, wear & tearInsufficiency of packingInherent viceDelay - even if delay is caused by a peril insuredInsolvency or financial default of owner manager charterer etcArising from use of nuclear weaponsMalicious damage-only in ICC-B&CUn-seaworthiness of vesselThis may be waived unless the assured or their servant is privy to such Un-seaworthiness or un cargo worthinessWar/capture seizure arrest/derelict minesCaused by strikers/resulting from strikes/terrorist.
50Return of PremiumThe premium is refundable under the following circumstances:By agreement in the policyImprovement of the character of insurance eg. Change of ship to safer routes, first class liner, good packing etcIf claim does not arise.Cancellation of policy due to change of ownership of the hull.Mutual cancellation of the policy.For reasons of equityNon attachment of risk.Undeclared balance in an open policyTotal failure of an apportionable part of the considerationWhen assured had no insurable interest throughout the life of policy.Insurer can cancel when there is unreasonable delay in commencing the voyage.Over insurance.
51What , if there is a Claim? Loss minimisation steps to be undertaken. A Prompt Notice of ClaimIf ship owner is also liable for any loss or damage, he or his agent is also entitle d to a written notice.Following documents are required at the time of claim:Policy or certificate of insurance.Bill of LadingInvoice of billCopy of Protest – certified before a counsel or notary public.Certificate of surveyAccount sale or bill of sale.Letter of subrogation.In case of total loss, notice of abandonment
53Export Credit Risk Exports Goods Services Credit Extending supplier credit: DP, DA, OARiskPossibility of non-payment of accounts receivables
54Types of Export Credit Risks ExchangeTransferLegalPoliticalExport Credit Risk
55Political RiskSome countries may experience major political instabilitydefaults on paymentsexchange transfer blockagesnationalizationconfiscation of propertyleading to…
56Credit risk Credit Risk The risk of Insolvency Default Fraud Unwillingness to accept the goods on the part of the buyerCredit riskAll resulting in…..
57Transfer Risk.. …arising from all/any of the above Weakness in economy of Buyer's country, viz. low reserves, BOP problemsFailure of Buyer's Bank affecting payment of outstandingsExchange or trade controls introduced in Buyer's country…arising from all/any of the above
58Transfer RiskWeakness in economy of Buyer's country, viz. low reserves, BOP problemsFailure of Buyer's Bank affecting payment of outstandingsExchange or trade controls introduced in Buyer's country
59Legal Risk Differences in law can be expected in overseas countries These may have an impact in such areas as:import procedurestaxationemployment practicescurrency dealingsproperty rightsthe protection of intellectual propertyagency/distributorship arrangements
60Export Credit Insurance Risks covered by export credit insurers:Commercial RiskInsolvency/ BankruptcyBreach of ContractPayment DefaultRefuse to take delivery of goodsPolitical Risk.
61Role of ECGCProviding credit insurance covers to exporters against loss in export of goods & servicesProviding export credit guarantees to banks & FI’s to enable exporters obtain better facilities from themProviding Overseas Investment Insurance to Exporters - Indian Entrepreneurs in Overseas Ventures (Equity/Loans)Maturity Factoring
62Standard Polices – Risks covered COMMERCIAL RISKSInsolvency of buyer/LC opening bankDefault of buyerRepudiation by buyerPOLITICAL RISKSWar/civil war/revolutionsImport restrictionsExchange transfer delay/embargoDiversion of Voyage Risk
63Country evaluationAssessment and evaluation of political risks associated with countries for the purpose of premium calculation, determining types of cover and terms of coverCountry reviews are taken up on a regular basis for up/down gradingCountry Underwriting involves assessment of a country’s ability and likelihood to honour its commitments undertaken both, as part of trade as well as sovereign debtThe country risk is evaluated on the basis of the politico-economic situation prevailing in a country
64Country Classification ECGC classifies the countries with the help of an objective scoring methodologyUnder the rating system followed, the weighted averages of scores on economic risk rating, political risk rating, past experience of ECGC, trade relations with India and experience with other credit insurers are calculated to arrive at the Country Risk IndicatorWhile underwriting the country risk, ECGC places the country either inOpen Cover ofRestricted coverThe basis for deciding on the type of cover and terms of cover is a host of economic and political factors
65Open Cover Countries Cover with No Restrictions Cover is offered usually on normal terms and conditions i.e. 90% cover, 4 months waiting period for ascertainment of loss and settlement of claims, etc.Currently ECGC places 195 countries under Open Cover
66Restricted Cover Countries Political and/or economic conditions are relatively deteriorating or have deterioratedlikelihood of payment delays or non-payment.Category 1: Countries for which revolving limits are approvedcove valid 12 month)ILCs opened or confirmed by banks listed in Banker’s almanac or by local banks whose reports are satisfactory. Cover will be 90%Normal cover of 90% on DP/DA terms subject to satisfactory report on the buyer20 countries under this categoryCategory 2: Countries where Specific Approval will be given on case to case basis on meritsValid for six monthsNormal waiting Period of 4 monthsOnly 7 countries - Afghanistan, Argentina, Cuba, East Timor, Iraq, North Korea, Somalia
67Restricted Cover Countries Options exercised to control risk in Restricted Cover countries:Reduce percentage of coverIncrease waiting period for the settlement of claimProvide cover against availability of government guarantee/confirmed ILCsPayment in convertible currencyFix country exposure limitFix transaction limit per exporter per buyerFix bank exposure limit
68Schemes for Exporters Short Term Cover: Payment within 180 days SCR or Standard Policy:cover risks in respect of all shipments on short term credit by exporters with anticipated annual turnover of > Rs.50 lacsTurnover Policy:variation of SCR policy with additional discounts and incentives to exporters who pay a premium of not less than Rs. 10 lacs per year.Small Exporters PolicySimilar to SCR Policy, but for exporters with anticipated annual turnover of Rs.50 lacs or lessSpecific Shipment Policy (Short term)To cover risks in respect of a specific shipment or shipments against a specific contractCommercial & PoliticalPolitical OnlyLC Commercial and Political
69Schemes for Exporters.. Exports (Specific Buyer Policy) To cover risks in respect of all shipment to one or a few buyersCommercial & PoliticalPolitical OnlyLC Commercial & PoliticalExports of Services PolicyTo cover the risks of insolvency and default and political risks for services renderedWithout Recourse Export maturity FactoringUndertaking to pay the amount due for a shipment on the maturity of the credit period.
70The Indian Health Scenario Total Expenditure on health in India is nearly 6% of the entire GDPGovernment spending is less than 25% against the average spending of % in other developing countries.Indian health insurance industry stands at INR 5,125 Crores with only a small Section of the total population (around 2%) being covered so far.CAGR of around 35 % (FY )Health Insurance industry in India is one of the fastest growing segments. Health Insurance - potential to become a Rs crores industry by 2012.No. of Elderly People in the Developing World will TRIPLE in 25yrs. (WHO)In India, the no. of people above 60 yrs is about 8% today. The t no. expected to hit 21% by (Asia Insurance Review)
72Health Insurance Plans PrivateSocialCommunity Based / Micro Insuranceoffered by Commercial OrganizationGovernment initiatedmanaged by Community / Groups
73Challenges Increase in health care costs High financial burden on the poorNeed for long term and nursing care for senior citizensIncreasing burden of new diseases and health risksDue to under funding, preventive and primary care and public health functions are yet to meet their objectives.
74Social / Government Schemes CGHS Schemes for Government EmployeesESIS SchemesRashtriya Swasthya Bima Yojana (RSBY)With participation of health insurerImplemented in 11 statesExtended to other section of populace other than BPLState Governments have also initiated several schemes where there is participation of Insurers to run the Scheme
75RSBY launched by Ministry of Labour and Employment, GOI. to provide health insurance for BPL families.Beneficiaries entitled to hospitalization coverage for most of the diseases up to Rs. 30,000/-Pre-existing conditions are covered. No age limit.Coverage extends to five members of the family - the head of household, spouse and up to three dependents.Beneficiaries need to pay only Rs. 30/- as registration feeCentral and State Government pays the premium.Insurer selected on the basis of a competitive bidding.Biometric smart card with fingerprints and photographs.Card can be used in any RSBY empanelled hospital in India.Can be split for individual members of migrant family.Cashless benefit in hospitals
76HEALTH INSURANCE The Individual Medishield Policy covers Hospitalisation Expenses & Domiciliary Hospitalisation (treatment at home in case patient is not in condition to be moved to hospital) incurred for treatment of disease / injury sustained during policy period
77COVERAGESHospitalization expenses including Room, Board, Nursing, Doctor’s fees, Cost of Medicines, Pathological Tests, etc.Pre-existing disease after 3 continuous claim free Policy years with the same insurer.Prosthetic Devices like Pacemaker, Artificial Limbs etc.Transplants including Donor’s treatment and cost of organs
78COVERAGESDaily Allowance for defraying miscellaneous expenses for the duration of HospitalizationDental surgery and treatment following an accidentPre-Hospitalization and Post Hospitalization expenses including authorized home nursing for 60 days each.Health check up after every block of 4 claim free years.Ambulance service expenses
79IMPORTANT POINTSHospitalization should be for a minimum period of 24 hours except for specific treatments such as eye surgery, lithotripsy, tonsillectomy etc.There is provision for Cumulative Bonus whereby Basic Sum Insured gets enhanced by 5% each year on renewal (maximum 50%) subject to no claims being lodged under the Policy.Family Discount is available for insuring two or more family members under the Policy.
80IMPORTANT POINTSSection 80 D benefit under Income Tax Act is available on Medishield premium paid by cheque for self and/or family (consisting of self, spouse, dependent children and dependent parents)There is a sub-limit under the Policy for Domiciliary Hospitalization where expenses of treatment at home are reimbursed under specified conditions.Limits are also specified under the Policy for daily Room/ICU/ITU rents, Ambulance Charges and Daily Allowance during Hospitalization
81GROUP MEDICLAIM INSURANCE THE COVER IS SAME AS IN INDIVIDUAL MEDICLAIM POLICY. CUMULATIVE BONUS IS NOT AVAILABLE AND MATERNITY COVER CAN BE GRANTED AT EXTRA PREMIUM.
82OTHER HEALTH POLICIESCANCER POLICY (CPAA): CAN BE GRANTED TO THE MEMBERS OF CANCER PATIENTS AID ASSOCIATIONCRITICAL ILLNESS INSURANCE POLICY IS ALSO AVAILABEL WHICH PAY ONLY IF SOME CRITICAL ILLNESS IS FOUND.OVERSEAS MEDICLAIM INSURANCE: PAYS MEDICAL EXPENSES IN RESPECT OF ILLNESS AND INJURY BY INDIAN RESIDENTS DURING THERE OVERSEAS TRIPS.EMPLOYMENT AND STUDY POLICIES HAS BEEN DESIGNED FOR INDIAN CITIZEN TEMPORARILY POSTED ABROAD AS STUDENT FOR PERSUING STUDIES.
84PERSONAL ACCIDENT INSURANCE What is coveredInjuries caused by an accidentPermanent partial/total disability due to accidentTemporary total disablement
85How much is the compensation Death – 100%of Capital Sum Insured (CSI)Loss ofSight of both eyesTwo limbs % of CSIOne limb and one eyeSight of one eye/ one limbHearing in both ears/speechPermanent total disablement – 100% of CSIOther permanent disablement – as assessed by a DoctorTemporary total disablement – 1% of CSI per week subject to a maximum of Rs. 6000/-
86CUMULATIVE BONUSTHE SUM INSURED WILL INCREASE BY 5% ON EVERY RENEWAL PROVIDED THE POLICY IS RENEWED WITHIN 30 DAYS OF EXPIRY . MAX ACCUMULATION IS 50 %
87SPECIAL FEATURES COVER IS ON WORLDWIDE BASIS PREMIUM IS BASED ON THE OCCUPATION OF THE PERSON.AGE LIMIT IS 5YEARS TO 70 YEARSFAMILY PACKAGE IS ALSO AVAILABLE WITH DISCOUNTED RATESGROUP POLICY CAN ALSO BE ISSUED FOR AN EXISTING GROUP.
88RATINGRATING IS BASED ON OCCUPATION OF THE PERSON. SO THE OCCUPATIONS ARE CLASSIFIED IN THREE RISK GROUP ACCORDING TO DEGREE OF HAZARDRISK GROUP-I: DOCTORS, LAWYERS, ARCHITECTS,TEACHERS,BANKERS ETC.RISK GROUP-II: BUILDERS, CONTRACTORS, ENGINEERS ETCRISK GROUP-III: WORKERS EMPLOYED IN UNDERGROUND MINES, EXPLOSIVE INDUSTRY JOKKIES, CIRCUS EMPLOYEES ETC.
90LIABILITY INSURANCEThe Liability Policies cover Insured’s legal liability to pay compensation to third parties fordeath, injury or property damage claims arising out of accidents in connection with insured’s businessfinancial loss claims arising out of errors and omissions caused in Insured’s professional or official activities
91VARIOUS TYPE OF POLICIES AVAILABLE COMPULSORY PUBLIC LIABILITY:An Act Policy providing immediate relief to persons affected by accidents occurring at applicable units.No fault Liability CoverCompulsory for all units handling hazardous substances with threshold limits defined in the act.
92COMPULSORY PUBLIC LIABILITY Fatal accident Rs 25,000/- per person.Permanent disability Rs 25,000/- per personPermanent partial disability on basis of percentage of disabilityTemporary partial disability fixed monthly relief of Rs 1000 per month upto max of 3 months
93COMPULSORY PUBLIC LIABILITY Actual medical expense up to Rs 12,500/-Damage to property Rs 6000/-Rate of premium is based on limit of indemnity and turnover.Every insurer has to pay the environment relief fund an amount equivalent the premium received by the insurer.
94PRODUCT LIABILITY Definition: Any tangible property (after it has left the custody or control of the Insured) which has been designed, manufactured, sold,supplied or serviced by the insured.
95LIABILITIES COVEREDPolicies shall cover all sums which the insured shall become legally liable to pay as damages in consequence ofaccidental death/ bodily injury or disease to Third partiesLoss of or damage to Third Party property arising out of any defect in the products manufactured and covered under the policy after such products have left the Insured’s premises
96RATINGThe rates of premium depends on the risk group, limit of indemnity and ratio of indemnity AOA to AOY. Exports can be covered as extension of the policy or a separate policy can also be issued
97Professional indemnity Policies are designed to provide insurance protection to the professionals against the legal liability to pay damages arising out of negligence in the performance of their professional duties. E.g. doctors, lawyers, architects
98DIRECTORS & OFFICER’S LIABILITY POLICY Policy is designed for directors & officers who hold position of trust and responsibility and may become liable to pay damages to shareholders, employees and creditors etc. for wrongful acts committed by them. The policy provides protection against the civil liability.
100ENGINEERING INSURANCE Contractors all riskErection all riskMarine cum erectionMachinery breakdownBoilers & pressure plantMachinery loss of profitsAdvance loss of profitsElectronic equipment policyDeterioration of stocks policy
101CONTRACTOR ALL RISKTHE POLICY IS DESIGNED TO PROTECT THE INTEREST OF CONTRACTOS AND PRONCIPLES IN RESPECT OF CIVIL ENGINEERING PRODUCTS. E.G BUILDING, BRIDGES, TUNNELS ETC
102ERECTION ALL RISKPOLICY IS DESIGNED TO COVER RISKS INVOLVED WITH ERECTION OF ELECTRICAL PLANT AND MACHINERY OR EQUIPMENT INVOLVING NO OR VERY LESS CIVIL WORK.
103MARINE CUM ERECTIONMARINE CUM ERECTION COVER POLICY STARTS FROM THE MOVEMENT THE EQUIPMENT LEAVES THE MANUFACTURERS WAREHOUSE WITHIN THE COUNTRY OR OVERSEAS AND CONTINUES DURING THE VOYAGE AND THERE AFTER DURING ERECTION, TESTING AND COMMISSIONING.
104MACHINERY BREAKDOWNPOLICY COVERS ELECTRICALS AND MACHANICAL EQUIPMENTS AGAINST UNFORSEEN AND SUDDEN PHYSICAL DAMAGES BY ANY CAUSE
105BOILER PRESSURE PLANTPOLICY COVERS THE BOILERS AND PRESSURE VESSELS AGAINST DAMAGE TO THE BOILER AND SURROUNDING POLICY OF THE ASSURED INCL THIRD PARTY LIABILITY. FIRE RISK IS EXCLUDED
106MACHINERY LOSS OF PROFIT POLICY IS DESIGNED TO REDUCE THE LOSSES OF THE INSURED INCURRED BECAUSE OF INERRUPTION OF BUSINESSES DUE TO MACHINERY BREAKDOWN. POLICY CAN ONLY BE ISSUED IN CONJUCTION WITH MACHINERY BREAKDOWN.
107ADVANCE LOSS OF PROFITALSO KNOWN AS DELAY IN START UP POLICY AND COVERS FINANCIAL CONSEQUENCES OF A PROJECT BEING DELAYED BECAUSE OF ACCIDENTAL DAMAGE TO THE PROJECT MATERIAL.
108DETERIORATION OF STOCKS COVERS THE RISK OF DETERIORATION OF STOCK FOLLOWING OF BREAKDOWN OF REFRIGERATION PLANT AND MACHINERY.
109ELECTRONIC EQUIPMENT POLICY THE POLICY COVERS 3 SECTIONS:SECTION-I: COVER APPLIES TO UNFORSEEN AND SUDDEN PHYSICAL LOSS RESULTING IN REPAIR OR REPLACEMENT OF EQUIPMENTSECTION-II: EXTERNAL DATA MEDIA COVERSECTION-III: INCREASED COST OF WORKING