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Insurance Laws and Practices

Notes (c) Dispute in regard to premium paid or payable in terms of the policy.
(d) Dispute on the legal construction of the policy in so far as such dispute relate to claims.
(e) Delay in settlement of claims.
(f) Non-issue of any insurance document to customers after receipt of premium.

The limit of an Ombudsman’s powers is at present prescribed as ` .20 lakhs. The insurance
Ombudsman Scheme is complementary to the regulatory functions of IRDA, which has been
mandated to take all necessary steps to protect the interest of the policyholders. The institution
of ombudsman has evoked a good deal of public appreciation as is evident from media reports
and performance appraisal made by the Authority.

14.2.1 Current Trends of the General Insurance Market

Let’s discuss about the current trends of the general insurance market. Despite there being over
30 players, the market is still under penetrated. In the general insurance sector, the penetration
level is just about 0.65%. The coming year will assume a significant position in the history of
Indian insurance industry. It denotes completion of a decade of open-market; ending of oligopoly
and entry of private sector insurance companies; and the regime of a new development oriented
regulatory authority—the IRDA (Insurance Regulatory and Development Authority).
The market continues to attract new capital; barring a handful of mega-risks, there is more than
adequate capacity to cover all the risks within the market. Post de-tariffing, competition for the
existing pie intensified and premium-rates in all classes took a dip. However, insurers are
chasing premium and booking losses and working up unviable combined ratios. It is felt that
the bottom has been reached and an upswing in the rates is inevitable.

At present, the general insurance market has 20+ players already and some more large
international ones are expected to enter shortly.

Notes Companies today are coming up with new ideas to stand out and they are offering
the existing and prospective customers, new technology platforms that would streamline
the business and would also be beneficial to them.

The industry is going through a challenging phase now because of the general economic
slowdown and this phase is expected to continue for some time. According to industry experts,
the market will grow by 18% a year and is expected to reach ` 900 billion by 2015.
Despite there being over 30 players (in both general and life), the market is still under penetrated.
In the general insurance sector, the penetration level is just about 0.65%. In India, the urban
market is the major contributor for general insurance. Though the rural market does not have
any significant contribution to this sector, it is growing rapidly over the past few years and is
slowly becoming a huge potential market for general insurance in India. To capture the rural
market, companies are adopting strategies to increase awareness levels among the people. This,
they are achieving through increasing the distribution levels and access points. Business
generation through multiple distribution channels is the main agenda for these companies.
Some of them are even adopting the cutting-edge technologies like e-marketing and institutional
marketing for deeper penetration in the rural market.

On the property and liability insurance segments—niche marketing and competition for small
and medium size companies would be the challenge for the next two years. Project-insurance
sector will continue to be the major work-horse; with continued economic development spurring

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