Page 290 - DCOM304_INDIAN_FINANCIAL_SYSTEM

Unit 13: Mutual Funds and Insurance Services

Limited and Raheja QBE General Insurance Company Limited that deal in various general Notes
insurance products and services.

Self Assessment

Fill in the blanks:

7. United India Insurance is a leading General Insurance Company with more than three
decades of experience in ..................... Insurance business.

8. IDBI Fortis Life Insurance Co Ltd is a joint venture between ..................... leading financial
conglomerates.
9. Future Generali is a joint venture between the India-based Future Group and the .....................
based Generali Group.
10. The Insurance Regulatory and Development Authority (IRDA) Act of 1999 deregulated the
insurance sector in India and allowed the entry of ..................... into the insurance sector.
11. Insurance is actually a contract between 2 parties whereby one party called insurer
undertakes in exchange for a fixed sum called ..................... .

13.9 Summary

 Mutual funds can be described as open-ended funds operated by an investment company
which raises money from shareholders and invests in a group of assets, in accordance with
a stated set of objectives.
 In return for the money they give to the fund when purchasing shares, shareholders
receive an equity position in the fund and, in effect, in each of its underlying securities.
 For most mutual funds, shareholders are free to sell their shares at any time, although the
price of a share in a mutual fund will fluctuate daily, depending upon the performance of
the securities held by the fund. Benefits of mutual funds include diversification and
professional money management.
 There are many types of mutual funds like Value stocks, Growth stock, Based on company
size, large, mid, and small cap, Income stock, Index funds, Enhanced index, Stock market
sector, Defensive stock, International, Real estate, Socially responsible, Balanced funds,
Tax efficient, Convertible, Junk bond, Mutual funds of mutual funds, Closed end, Exchange
traded funds, etc.

 Mutual funds have emerged as the best in terms of variety, flexibility, diversification,
liquidity as well as tax benefits.
 Besides, through MFs investors can gain access to investment opportunities that would
otherwise be unavailable to them due to limited knowledge and resources. MFs have the
capability to provide solutions to most investors' needs, however, the key is to do proper
selections and have a process for monitoring.
 The insurance sector in India has come to a full circle from being an open competitive
market to nationalisation and back to a liberalised market again.
 Tracing the developments in the Indian insurance sector reveals the 360-degree turn
witnessed over a period of almost two centuries.

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