Page 249 - DCOM309_INSURANCE_LAWS_AND_PRACTICES

Insurance Laws and Practices

Notes It is expected that TPAs will bring some sort of regulation regarding standard and quality
of treatment, period of treatment and rates.

A system of grievance redressal has been built in the Authority supervised by one of its
senior officers.
Project-insurance sector will continue to be the major work-horse; with continued economic
development spurring investment in power sector, manufacturing and other industries,
roads and buildings.

Catastrophe risk management system has to become robust as the insurance spreads in
the semi-urban and rural areas.
Newer pricing methods need to be developed for commercial lines. Underwriters should
give up the old tariff-based approach and develop experience-based and actuarial-supported
models for pricing.

The recent development in the general insurance sector is the activities by the insurance
regulator. The IRDA has been very stringent and has been keeping a close-watch on the
functioning of all the insurance companies.

Online selling of insurance policies to discerning customers, who access the internet, will
gain momentum.

The Indian customers are demanding and expect best in class service levels so the entire
insurance industry will have to work towards becoming more customer-centric in the
areas of product development, policy issuance as well as claims settlement.

14.4 Keywords

Actuarial Service: Actuarial service refers to the method by which corporations determine,
assess and plan for the financial impact of risk.

Insurance Broker: An insurance broker sells, solicits, or negotiates insurance for compensation.
Insurance Policy: The printed form, which serves as the contract between an insurer and an
insured.

Investment Income: It refers to income coming from interest payments, dividends, capital gains
collected upon the sale of a security or other assets, and any other profit that is made through an
investment vehicle of any kind.

Micro-insurance: A micro-insurance plan provides protection to individuals who have little
savings and is tailored specifically for lower valued assets and compensation for illness, injury
or death.

14.5 Review Questions

1. Explore the meaning of actuarial service. Give some examples of what actually
actuaries do.
2. Discuss the policies and measures to develop insurance market.
3. Explain the research and development activities undertaken by the insurance companies.
4. Describe the concept of protection of interests of policyholders.
5. How will you monitor the investments of the insurers?

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