IC-38 General cheat sheet
IC-38 General · Keep the key ideas within reach.
Insurance Fundamentals and Risk
Risk is uncertainty about loss; insurance transfers pure risk (only loss or no loss) from the insured to the insurer for a premium.
Insurable risk tests: large number of similar exposure units, accidental and unintentional loss, definite and measurable loss, calculable probability, non-catastrophic to the pool, and premium economically feasible.
Speculative risk (gain or loss, e.g. share trading) is not insurable; pure risk is.
Perils are causes of loss (fire, theft, flood); hazards increase the chance or severity of loss - physical, moral (dishonesty), and morale (carelessness).
Law of large numbers: as the number of independent similar exposures increases, actual loss experience converges on expected loss, making rates more stable.
Indemnity principle: the insured is restored to approximately the pre-loss financial position, never better off; it underpins sum insured, average, and subrogation.
Utmost good faith (uberrima fides) requires both parties to disclose material facts; breach by the insured allows the insurer to avoid the contract.
Insurable interest must exist at the time of loss in general insurance (for life insurance, at inception); without it the contract is void.
Insurance Contract and Principles
A contract needs offer, acceptance, consideration (premium), lawful object, and parties with capacity; insurance adds insurable interest and utmost good faith.
Material facts must be disclosed; facts need not be disclosed if they are of common knowledge, of law, or expressly waived by the insurer.
Non-disclosure or misrepresentation that induced the contract makes it voidable; innocent misrepresentation generally allows avoidance, fraudulent misrepresentation may also allow damages.
Proximate cause is the dominant, effective cause of loss; remote causes are ignored when determining whether the peril is covered.
Subrogation: after paying a claim, the insurer steps into the insured's legal rights against a negligent third party, limited to the amount paid.
Contribution applies when two or more policies cover the same loss on the same interest; each pays rateably, and no insurer pays more than its share.
Warranties are strict contractual promises; breach allows the insurer to repudiate liability even if the breach did not cause the loss (unless waived).
Utmost good faith duties continue during the policy term - material changes in risk must be disclosed.
Life Insurance Products
Term insurance pays a death benefit only if death occurs during the term; no maturity value, lowest premium per unit of cover.
Whole life insurance covers the whole of life and builds cash/surrender value; premiums are level and payable for life or a limited period.
Endowment insurance pays the sum assured on death or on survival to maturity, whichever occurs first.
Money-back (cash-back) policies pay survival benefits at intervals plus the full sum assured at maturity or on death.
ULIP premiums are split between risk cover and investment in funds; NAV-linked returns and charges (allocation, administration, mortality, fund management) apply.
Annuities are the reverse of life insurance: a lump sum is converted into periodic income for a chosen period or lifetime; immediate vs deferred, and life vs guaranteed annuities differ.
Riders (e.g. critical illness, accidental death, waiver of premium) extend cover for an extra premium and cannot exist without a base policy.
Premium depends on mortality (age, sex, health), interest rate assumed, expenses, and reserves; younger entry age means lower mortality cost.
General Insurance Products
Fire/standard fire and special perils policy covers fire, lightning, explosion, storm, flood, inundation, earthquake, riot, and malicious damage, with add-on covers available.
Marine cargo covers transit risks (perils of the sea, fire, jettison, piracy) and marine hull covers vessel damage; Institute Cargo Clauses A, B, C offer wide, intermediate, and restricted cover respectively.
Motor insurance: third-party liability is compulsory by law; own damage cover is optional; a package policy combines both.
Motor third-party liability includes death/bodily injury and property damage to third parties, with limits set by the Motor Vehicles Act.
Health insurance reimburses hospitalisation expenses or pays a fixed benefit; key terms include waiting period, pre-existing disease, sub-limits, and co-payment.
Personal accident insurance pays fixed benefits (death, disability, temporary total disability) regardless of actual expenses, unlike indemnity health cover.
Business interruption/consequential loss covers loss of profit and increased cost of working following an insured material damage loss.
Public liability covers legal liability to third parties for death, injury, or property damage; professional indemnity covers liability arising from professional negligence.
Underwriting, Rating, and Claims
Underwriting assesses and classifies risk to decide acceptance, terms, and premium; factors include age, occupation, health, claims history, and sum insured.
Rating bases: rates per mille (per thousand) of sum insured for fire/property; tariff or file-and-use rates for motor; age/health-based mortality for life.
No-claim bonus (NCB) in motor reduces premium for claim-free years, typically rising up to a maximum percentage; it is forfeited on a claim.
Deductible/excess is the first portion of each loss borne by the insured, reducing small claims and premium; a franchise means no claim is paid below the threshold.
Average clause reduces the claim proportionally if the sum insured is less than the value at risk: Claim = (Sum Insured / Value at Risk) × Loss.
Claims process: intimation, survey/assessment, documentation, verification, settlement or repudiation; the surveyor's report is key for large losses.
Salvage is the residual value of damaged property; the insurer may deduct or take salvage after settling a total loss.
Reinsurance transfers part of the risk from insurer to reinsurer (treaty or facultative) and protects solvency; coinsurance shares risk among insurers.
Regulation, Ethics, and Agent Conduct
IRDAI is the regulator; the Insurance Act 1938, IRDA Act 1999, and IRDAI regulations govern licensing, conduct, and solvency.
An insurance agent must hold a valid licence from IRDAI, meet training and examination requirements, and renew before expiry.
Agents must disclose commission and any conflicts of interest, and must not rebate commission or offer inducements to win business.
The agent must explain policy terms, exclusions, and conditions truthfully, and must not misrepresent benefits or make false promises.
Client confidentiality must be maintained; personal data may be used only for the stated insurance purpose.
Anti-money-laundering obligations: verify identity (KYC), monitor unusual transactions, and report suspicious activity to the principal officer.
Grievance redressal: insurers must have a Grievance Redressal Officer, and policyholders can escalate to IRDAI's IGMS and then the Insurance Ombudsman.
Code of conduct requires fair dealing, competence, and acting in the client's best interest; violations can lead to licence suspension or cancellation.
Taxation and Financial Planning
Life insurance premiums qualify for deduction under Section 80C of the Income Tax Act, subject to the overall 80C ceiling.
Health insurance premiums qualify for deduction under Section 80D, with higher limits for senior citizens; preventive health check-up costs fall within the limit.
Death benefits received by nominees/beneficiaries are generally exempt from income tax under Section 10(10D), subject to conditions on premium versus sum assured.
Maturity proceeds are exempt under 10(10D) only if the premium does not exceed the prescribed percentage of sum assured; otherwise the gain is taxable.
Section 80CCC covers pension plan contributions; Section 80CCD covers the National Pension System, within overall limits.
GST applies to general insurance premiums; life insurance premiums are largely exempt, but GST treatment varies by product and must be checked.
Financial planning steps: identify goals, assess risk profile, determine insurance needs, select products, implement, and review periodically.
Life insurance need is commonly estimated by the human life value method or the needs/income replacement method.
Customer Service and Sales Process
Sales process: prospecting, approaching, need identification, presentation, handling objections, closing, and after-sales service.
Needs-based selling matches cover to the client's actual exposure rather than pushing a product; suitability assessment is mandatory.
Prospecting sources include referrals, natural market, cold calls, networking, and digital leads; referrals generally yield the highest conversion.
Objection handling: listen fully, acknowledge the concern, clarify, respond with facts, and confirm resolution before proceeding.
Policy servicing includes premium reminders, address/nominee changes, renewals, endorsements, and claim assistance.
Persistency measures the proportion of policies retained; high persistency reflects good advice and service, and affects agent recognition.
Client communication should be clear, documented, and in the language the client understands; mis-selling is a conduct violation.
Lapse and revival: unpaid premiums may lapse a policy; revival within the allowed period usually requires arrears plus interest and fresh health evidence.
Insurance Documentation and Policy Terms
A proposal form records the insured's declarations and forms the basis of the contract; inaccurate answers can void the policy.
The policy schedule shows insured name, sum insured, premium, period, deductibles, and endorsements; it overrides general wording where specific.
Policy conditions: conditions precedent (e.g. disclosure, premium payment) must be met before liability attaches; conditions subsequent apply after a loss (e.g. notice, proof).
Exclusions list what is not covered (e.g. war, nuclear risks, intentional acts, wear and tear); some can be bought back by endorsement.
Endorsements are written amendments to the policy (change of address, sum insured, vehicle details) and must be signed/authorised.
A cover note is temporary evidence of insurance pending issue of the policy.
Claim documents typically include the claim form, policy copy, ID proof, invoices/bills, and police/FIR report where applicable.
Free-look period allows the policyholder to return a policy within the specified days of receipt for a refund, subject to deductions.
Insurance Business Environment
The insurance market includes life and non-life insurers, reinsurers, brokers, agents, bancassurance, and web aggregators, all regulated by IRDAI.
Bancassurance distributes insurance through bank branches; the bank acts as a corporate agent and must disclose the arrangement.
Insurance penetration is premium as a percentage of GDP; density is premium per capita - both are standard market indicators.
Foreign investment in Indian insurance is permitted up to the prescribed limit, subject to regulatory approval and Indian ownership conditions.
Distribution channels: individual agents, corporate agents, brokers, direct marketing, and online platforms; each has distinct licensing and conduct rules.
Solvency margin requires insurers to maintain assets over liabilities at the prescribed ratio, protecting policyholder interests.
Microinsurance and government schemes (e.g. crop, health, and accident schemes) extend cover to low-income and rural segments.
Technology (e-insurance accounts, digital KYC, online claims) is reshaping distribution and servicing while raising data-protection obligations.
Ethics and Professional Conduct
Fiduciary duty: the agent must place the client's interest above personal commission and recommend cover suited to the client's needs.
Integrity requires accurate disclosure of policy terms, exclusions, and limitations - never overstate benefits or hide conditions.
Confidentiality: client information must not be shared or used for purposes beyond the insurance transaction without consent.
Conflict of interest must be disclosed; the agent should not sell competing products without explaining the difference.
Fair competition: agents must not disparage competitors or make false comparisons to win business.
Professional competence: agents must keep knowledge current and decline cases beyond their expertise.
Transparency in remuneration: commission and fees must be disclosed on request, and rebating is prohibited.
Whistleblowing and reporting: suspected fraud or mis-selling should be reported to the insurer's compliance or principal officer.
Insurance Mathematics and Premium Calculation
Premium = risk premium (expected claims) + expense loading + contingency/profit margin; the gross premium is what the policyholder pays.
Expected claims = probability of loss × average loss amount, calculated over the exposure base (e.g. per mille of sum insured).
Mortality tables give the probability of death at each age; life premiums use mortality, interest, and expense assumptions.
Present value factors discount future benefits and premiums to the valuation date; a lower assumed interest rate raises the premium.
Level premium funding: higher early premiums build reserves to fund rising mortality cost in later years.
Loss ratio = incurred claims / earned premium; expense ratio = expenses / premium; combined ratio = loss ratio + expense ratio; below 100% indicates underwriting profit.
Average clause formula: payable = (sum insured / value at risk) × loss, capped at the sum insured.
Compound interest: A = P(1 + r/n)^(nt); used for savings and annuity accumulation illustrations.
Insurance Salesmanship and Communication
The sales interview stages: preparation, approach, fact-finding, presentation, objection handling, close, and follow-up.
Open questions gather information; closed questions confirm details; both should be used deliberately in fact-finding.
Features describe what a product is; benefits describe what it does for the client - presentations should lead with benefits tied to needs.
The FAB (Feature-Advantage-Benefit) structure links product attributes to client outcomes.
Common objections are price, need, timing, and trust; each is handled by clarifying the underlying concern before responding.
Closing techniques include the assumptive close, alternative-choice close, and summary close; all require an ethical basis.
Documentation of advice and client consent protects both parties and supports suitability requirements.
Follow-up after the sale builds trust, aids renewals, and generates referrals.
Insurance Claims Management
Claim intimation should be prompt; policy conditions specify notice periods, and late notice may prejudice the claim.
The insurer appoints a surveyor for losses above the prescribed threshold; the survey report assesses cause, extent, and admissibility.
Claim settlement must be within the timelines set by the regulator once all documents are received; delays require written reasons.
Repudiation must be communicated in writing with reasons and the grievance redressal route.
Total loss vs partial loss: total loss pays the sum insured (less salvage); partial loss pays the assessed damage less deductible.
Fraud indicators include exaggerated claims, staged incidents, and inconsistent documents; suspected fraud must be investigated and reported.
Subrogation and salvage rights transfer to the insurer after full settlement.
Claim settlement ratio = claims paid / claims received; it is a key service indicator for insurers.
Insurance Agency Management
An agent's licence is issued by IRDAI, valid for the prescribed period, and must be renewed before expiry to continue selling.
Agent training and examination requirements must be met before licensing; refresher training may be required.
Agents must maintain records of proposals, premiums collected, and client communications, and remit premiums promptly to the insurer.
Commission rates are regulated and differ by product line; rebating any part of commission is prohibited.
Persistency and claim experience influence agent performance evaluation and renewal of appointment.
Agents cannot act for more than the permitted number of insurers and must disclose all appointments.
Termination of agency requires return of documents and settlement of accounts; clients must be informed.
Code of conduct breaches can result in warnings, fines, suspension, or cancellation of the licence.
Life Insurance Underwriting
Life underwriting assesses mortality risk using age, sex, health history, occupation, hobbies, and family history.
Standard lives are accepted at ordinary rates; substandard lives are accepted with extra premium, exclusions, or reduced sum assured.
Medical examination requirements depend on age and sum insured; higher sums usually require full medicals.
Moral hazard indicators include adverse financial history, over-insurance, and reluctance to provide information.
Non-medical limits allow acceptance without medicals up to a specified sum insured for eligible ages.
Occupation classification: hazardous occupations attract extra premium or exclusions.
Financial underwriting checks that the sum assured is justified by income and needs, preventing over-insurance.
Declined or postponed cases must be communicated sensitively; the client may reapply after a change in circumstances.
General Insurance Underwriting
Property underwriting considers construction, occupancy, protection (fire-fighting), and exposure - the COPE factors.
Sum insured should reflect reinstatement value; underinsurance triggers the average clause at claim time.
Motor underwriting uses vehicle age, cubic capacity, zone, and claims history; NCB rewards claim-free years.
Marine underwriting considers cargo type, packing, route, carrier, and Incoterms; deck cargo and hazardous goods attract higher rates.
Liability underwriting assesses the nature of the business, turnover, past claims, and legal environment.
Deductibles and policy limits are used to control exposure and price risk.
Risk inspection and loss-prevention recommendations can reduce premium and improve risk quality.
Reinsurance and coinsurance are used for large or catastrophic exposures beyond the insurer's retention.
Insurance Marketing and Distribution
Distribution channels: individual agents, corporate agents, brokers, bancassurance, direct sales, and online aggregators.
Each channel has distinct licensing, disclosure, and commission rules under IRDAI regulations.
Bancassurance leverages bank relationships and branch networks but requires clear disclosure of the insurer-bank arrangement.
Digital marketing must comply with advertising and data-protection rules; claims must not be misleading.
Customer segmentation (age, income, life stage) guides product positioning and communication.
Referral marketing and relationship management are cost-effective acquisition methods for agents.
Persistency and customer satisfaction are key performance metrics alongside new business premium.
Complaints and mis-selling data influence regulatory scrutiny of distribution channels.
Insurance and Society
Insurance supports economic stability by pooling risk and reducing the financial impact of losses on households and businesses.
Insurance encourages loss prevention through risk surveys, safety incentives, and premium discounts.
Social security schemes and microinsurance extend protection to low-income and rural populations.
Insurance mobilises long-term savings that fund infrastructure and economic growth.
Compulsory insurance (motor third-party liability, some crop schemes) protects third parties and the public.
Insurance contributes to financial inclusion by bringing underserved groups into formal risk protection.
Natural catastrophes highlight the role of insurance in disaster recovery and the need for reinsurance and catastrophe models.
Ethical conduct by agents builds public trust, which is essential for market growth.
Insurance Terminology and Concepts
Sum insured is the maximum amount payable under a policy; sum assured is the amount guaranteed under a life policy.
Premium is the consideration paid for cover; it may be single, regular, or limited-payment.
Deductible/excess is the insured's share of each loss; a franchise is a threshold below which no claim is paid.
Indemnity restores the insured to the pre-loss position; benefit policies pay fixed amounts regardless of actual loss.
Reinsurance is insurance for insurers; retrocession is reinsurance of a reinsurer.
Cession is the portion of risk transferred to a reinsurer; retention is the portion kept.
Grace period allows premium payment after the due date without lapse; the free-look period allows cancellation after purchase.
Surrender value is the amount payable on early termination of a savings life policy; paid-up value applies when premiums stop but cover continues at a reduced level.
Insurance Regulation and Compliance
IRDAI regulates licensing, product approval, solvency, and market conduct for insurers and intermediaries.
The Insurance Act 1938 and IRDA Act 1999 are the primary statutes; IRDAI issues regulations and guidelines under them.
Solvency margin requirements protect policyholders by ensuring insurers hold sufficient capital against liabilities.
Product filing: most products are file-and-use, but certain categories require prior approval.
KYC and anti-money-laundering rules apply to all insurers and intermediaries.
Grievance redressal: insurers must maintain a Grievance Redressal Officer and comply with turnaround times; policyholders can approach the Insurance Ombudsman.
Advertising and sales material must be accurate, fair, and not misleading, and must comply with IRDAI guidelines.
Penalties for non-compliance include fines, suspension, and cancellation of licences.
Insurance and Technology
E-insurance accounts (demat policies) hold policies electronically and simplify servicing and claims.
Digital KYC and e-signatures speed up onboarding while requiring data-protection compliance.
Telematics and usage-based insurance price motor cover by driving behaviour and distance.
Insurtech enables instant quotes, automated underwriting, and faster claims through analytics and mobile apps.
Big data and analytics improve risk selection, fraud detection, and pricing accuracy.
Cybersecurity insurance covers data breaches and cyber extortion, reflecting new and growing exposures.
Blockchain and smart contracts are explored for claims automation and fraud reduction.
Data privacy laws require consent, purpose limitation, and secure handling of policyholder data.
Insurance Sales Ethics and Compliance
Suitability: recommend products that match the client's needs, risk profile, and affordability, documenting the rationale.
Disclosure: explain premiums, charges, exclusions, surrender terms, and lock-in periods before the sale.
No mis-selling: do not promise guaranteed returns, hide charges, or misrepresent policy features.
No rebating: offering part of commission or gifts to induce a sale is prohibited.
Confidentiality and data protection: client information must be used only for the intended purpose and kept secure.
Conflicts of interest must be disclosed; agents must not favour a product solely for higher commission.
Complaints and grievances must be handled promptly and escalated through the proper channels.
Record-keeping: maintain accurate records of advice, proposals, and client communications.
Insurance Customer Relationship Management
CRM builds long-term relationships through timely service, communication, and claim support.
Onboarding: explain the policy, provide documents, and confirm contact details and nominee information.
Renewal management: send reminders before due dates to prevent lapse and loss of benefits.
Claim assistance: guide clients through documentation and follow up on settlement status.
Feedback and complaint handling improve service quality and retention.
Persistency reflects relationship quality; regular reviews and need reassessment strengthen it.
Cross-selling and upselling should be based on genuine needs, not pressure.
CRM systems track interactions and help personalise service while respecting data privacy.
Insurance and Financial Planning
Financial planning identifies goals (education, retirement, protection) and matches products to them.
Life insurance provides protection and, in savings products, long-term accumulation with tax benefits.
Human life value and needs-based methods estimate the cover required to replace income.
Emergency funds and health cover are foundational before investment products.
Asset allocation should reflect risk tolerance, time horizon, and liquidity needs.
Annuities convert retirement savings into regular income and manage longevity risk.
Tax incentives under Sections 80C and 80D influence product choice but should not drive unsuitable sales.
Periodic review adjusts the plan as income, family, and goals change.
Insurance Claims and Fraud Prevention
Fraud indicators include staged accidents, inflated bills, multiple policies on the same risk, and inconsistent statements.
Early detection through data analytics and cross-checks reduces claim leakage.
Surveyors and investigators verify cause, extent, and admissibility of claims.
Policy conditions on notice, proof, and cooperation must be enforced consistently.
Fraud reporting to insurers and regulators is required; suspected fraud should be documented.
Whistleblower protections encourage reporting of internal fraud.
Customer education on honest claims and consequences of fraud supports ethical behaviour.
Claim settlement data and fraud trends inform underwriting and pricing.
Insurance Products and Riders
Riders extend base cover: critical illness, accidental death, waiver of premium, and hospital cash.
Riders cannot be purchased without a base policy and are subject to limits.
Unit-linked products combine protection with market-linked investment; charges reduce returns.
Participating policies share profits through bonuses (reversionary and terminal).
Group insurance covers members of an affinity group and is typically cheaper per member.
Microinsurance products are low-premium, low-sum-insured products for low-income segments.
Health products include indemnity, benefit (fixed), and critical illness covers with different claim bases.
Motor package policies combine own damage and third-party liability.
Insurance and Legal Aspects
An insurance contract is a contract of adhesion: the insurer drafts terms, and ambiguities are generally construed against the drafter.
Utmost good faith and insurable interest are legal requirements for enforceability.
Warranties and conditions must be complied with; breach may allow repudiation.
The Motor Vehicles Act makes third-party liability insurance compulsory.
Consumer protection law allows policyholders to seek redress for deficient service.
The Insurance Ombudsman provides a low-cost dispute resolution route within specified limits.
Limitation periods apply to legal claims; prompt action is required.
Data protection and privacy laws govern the handling of policyholder information.
Insurance and Risk Management
Risk management steps: identify, measure, control, finance, and monitor risks.
Risk control includes avoidance, reduction, and prevention; risk financing includes retention and transfer (insurance).
Insurance transfers pure risk; retention is appropriate for small, predictable losses.
Business continuity planning reduces the impact of catastrophic events.
Enterprise risk management covers operational, financial, strategic, and compliance risks.
Loss prevention and safety programmes reduce claims and premiums.
Reinsurance and catastrophe modelling manage large and correlated exposures.
Risk reviews should be periodic and updated for changes in exposure.
Insurance and Economics
Insurance pools risk and reduces the financial uncertainty faced by individuals and firms.
Premiums reflect expected losses plus expenses and profit; competition influences pricing.
Insurance penetration and density measure market development.
Insurance mobilises savings and supports capital formation.
Moral hazard and adverse selection affect insurance markets and require underwriting controls.
Catastrophic events can strain insurer solvency and reinsurance capacity.
Regulation balances market development with policyholder protection.
Insurance supports trade and investment by reducing uncertainty.
Insurance and International Practice
Reinsurance markets (e.g. Lloyd's) provide global capacity for large and specialist risks.
Incoterms define risk transfer points in international trade and affect marine cargo cover.
Institute Cargo Clauses A, B, and C provide wide, intermediate, and restricted cover.
Cross-border insurance is subject to local licensing and regulatory requirements.
International accounting and solvency standards (e.g. IFRS 17) affect reporting.
Global catastrophe events influence reinsurance pricing and capacity.
Currency and political risk are relevant to international exposures.
International practice emphasises disclosure, fair treatment, and consumer protection.
Insurance and Consumer Protection
Policyholders have the right to clear information, fair treatment, and prompt claim settlement.
Grievance redressal mechanisms include the insurer's Grievance Redressal Officer, IRDAI's IGMS, and the Insurance Ombudsman.
The free-look period allows cancellation of a policy within the specified days.
Mis-selling and rebating are prohibited and can lead to penalties.
Consumer protection law provides remedies for deficient service and unfair trade practices.
Transparency in charges, exclusions, and claim procedures is required.
Data privacy rights protect policyholder information.
Regulators monitor complaint data and take action against persistent violations.
Insurance and Business Interruption
Business interruption covers loss of profit and increased cost of working after an insured material damage loss.
The indemnity period is the maximum period for which loss of profit is payable.
Sum insured should reflect gross profit or turnover for the indemnity period.
Average applies if the sum insured is inadequate.
Increased cost of working covers expenses that reduce the loss of profit.
Contingent business interruption covers loss caused by damage at a supplier or customer premises.
Claims require proof of loss, accounts, and evidence of the interruption.
Business continuity planning reduces interruption losses.
Insurance and Liability
Public liability covers legal liability to third parties for death, injury, or property damage.
Product liability covers liability arising from defective products.
Professional indemnity covers liability from professional negligence.
Employers' liability covers work-related injury to employees.
Liability policies have limits per occurrence and in aggregate.
Legal defence costs may be covered within or in addition to the limit.
Liability underwriting considers the nature of the business, turnover, and claims history.
Compulsory liability insurance (e.g. motor third party) protects the public.
Insurance and Property
Property insurance covers damage to buildings, contents, and stock.
COPE factors (construction, occupancy, protection, exposure) guide underwriting.
Standard fire and special perils policies cover named perils; all-risks policies cover broader perils.
Reinstatement value vs market value affects the sum insured and claim settlement.
Average applies if the sum insured is less than the value at risk.
Add-on covers include terrorism, earthquake, and flood where available.
Loss prevention and fire protection reduce premiums.
Claims require proof of loss and survey assessment.
Insurance and Marine
Marine cargo covers goods in transit; marine hull covers vessels.
Institute Cargo Clauses A, B, and C provide wide, intermediate, and restricted cover.
Incoterms define when risk passes from seller to buyer.
General average: losses voluntarily incurred to save the adventure are shared proportionally.
Particular average: partial loss borne by the party whose goods are damaged.
Cargo cover may exclude deck cargo, inadequate packing, and inherent vice.
Marine underwriting considers route, cargo type, packing, and carrier.
Claims require bills of lading, invoices, and survey reports.
Insurance and Motor
Motor third-party liability is compulsory under the Motor Vehicles Act.
Own damage cover is optional and covers damage to the insured vehicle.
Package policies combine own damage and third-party liability.
No-claim bonus rewards claim-free years and is forfeited on a claim.
IDV (insured declared value) determines the maximum own damage claim.
Add-ons include zero depreciation, engine protection, and roadside assistance.
Claims require FIR for third-party injury and theft cases.
Motor underwriting considers vehicle age, cubic capacity, zone, and claims history.
Insurance and Health
Health insurance reimburses hospitalisation expenses or pays fixed benefits.
Key terms: waiting period, pre-existing disease, sub-limits, co-payment, and room-rent limits.
Cashless facility is available at network hospitals; reimbursement applies elsewhere.
Pre-existing diseases are typically covered after a waiting period.
Family floater policies cover the family under a single sum insured.
Critical illness policies pay a lump sum on diagnosis of a covered condition.
Health underwriting considers age, medical history, and lifestyle.
Claims require hospital documents, bills, and discharge summary.
Insurance and Agriculture
Crop insurance covers yield losses due to natural calamities, pests, and diseases.
Government schemes subsidise premiums for farmers.
Weather index insurance pays based on weather parameters rather than actual loss.
Livestock insurance covers death of animals due to accident or disease.
Agriculture insurance supports rural livelihoods and food security.
Underwriting considers crop type, region, and historical yields.
Claims require proof of loss and survey assessment.
Technology (remote sensing, drones) improves assessment and fraud detection.
Insurance and Catastrophe
Catastrophe risks are low-frequency, high-severity events (earthquakes, floods, cyclones).
Catastrophe models estimate potential losses using hazard, exposure, and vulnerability.
Reinsurance and catastrophe bonds transfer catastrophe risk.
Solvency regulation requires insurers to hold capital against catastrophe exposures.
Risk pooling and government schemes can extend cover.
Climate change increases the frequency and severity of some catastrophes.
Loss prevention and building codes reduce vulnerability.
Claims after catastrophes require rapid assessment and fraud control.
Insurance and Cyber Risk
Cyber insurance covers data breaches, ransomware, and cyber extortion.
Cover may include incident response, legal costs, and notification expenses.
Underwriting assesses security controls, data volume, and business dependence on IT.
Exclusions often include war, infrastructure failure, and prior known incidents.
Cyber risk is growing with digitalisation and remote work.
Incident response planning reduces losses.
Regulatory reporting requirements apply to data breaches.
Claims require forensic evidence and proof of loss.
Insurance and Climate Risk
Climate change increases physical, transition, and liability risks.
Physical risks include floods, cyclones, and heatwaves.
Transition risks arise from the shift to a low-carbon economy.
Insurers use climate models to assess and price risk.
Disclosure of climate-related financial risks is increasingly required.
Sustainable insurance practices support long-term resilience.
Public-private partnerships can address uninsurable climate risks.
Risk reduction and adaptation reduce losses.
Insurance and Digital Transformation
Digital tools enable online quotes, underwriting, and claims.
E-insurance accounts hold policies electronically.
Telematics and usage-based insurance price motor cover by behaviour.
Analytics improve risk selection and fraud detection.
Mobile apps improve customer engagement and service.
Cybersecurity and data privacy are critical.
Digital distribution expands reach but requires conduct safeguards.
Automation must be monitored for fairness and accuracy.
Insurance and Sustainability
Sustainable insurance integrates environmental, social, and governance factors.
Insurers can incentivise risk reduction through pricing and terms.
ESG disclosure is increasingly expected by regulators and investors.
Climate risk is a core sustainability issue for insurers.
Social inclusion through microinsurance and rural reach supports sustainability.
Governance and ethics are essential for trust.
Sustainable investment of premiums supports long-term returns.
Sustainability reporting is evolving.
Insurance and Governance
Corporate governance ensures accountability, transparency, and fair treatment.
Boards are responsible for risk management and compliance.
Internal controls and audits prevent fraud and errors.
Solvency and capital management protect policyholders.
Conduct risk management addresses mis-selling and complaints.
Whistleblower mechanisms support ethical behaviour.
Regulatory reporting and disclosure are mandatory.
Governance failures can lead to penalties and reputational damage.
Insurance and Ethics
Ethics guides decisions beyond legal minimums.
Integrity requires honesty in sales and claims.
Fairness requires equal treatment and transparent terms.
Confidentiality protects client information.
Accountability requires taking responsibility for actions.
Professional competence requires continuous learning.
Conflicts of interest must be disclosed and managed.
Ethical behaviour builds trust and market growth.
Insurance and Consumer Awareness
Policyholders should read the policy and understand exclusions.
Free-look period allows cancellation after purchase.
Grievance redressal routes include the insurer, IGMS, and Ombudsman.
Mis-selling can be reported to the insurer and regulator.
Premium payment receipts and policy documents should be retained.
Nomination ensures smooth claim settlement.
Renewals should be paid on time to avoid lapse.
Consumer education improves market conduct.
Insurance and Agency Practice
Agents must hold a valid licence and renew it on time.
Agents must disclose commissions and avoid rebating.
Client needs assessment is mandatory before recommending products.
Records of advice and proposals must be maintained.
Premium collected must be remitted promptly.
Agents must not act for more than the permitted number of insurers.
Termination requires return of documents and client notification.
Code of conduct breaches can lead to licence cancellation.
Insurance and Claims Service
Prompt intimation and documentation speed up claims.
Surveyors assess losses above the prescribed threshold.
Settlement timelines are regulated.
Repudiation must be in writing with reasons.
Grievance redressal is available if a claim is rejected.
Fraudulent claims must be investigated and reported.
Subrogation and salvage rights transfer after settlement.
Claim settlement ratio is a key service indicator.
Insurance and Market Conduct
Fair treatment of customers is a regulatory expectation.
Mis-selling and rebating are prohibited.
Advertising must be accurate and not misleading.
Complaints must be handled promptly.
Conflicts of interest must be disclosed.
Data privacy must be protected.
Regulators monitor conduct and take action.
Ethical conduct supports market growth.