INSURANCE LAW SYNOPSIS

Insurance is a business of risk but not a risky business

A.ARIVUNITHI
BA0130013

INTRODUCTION:

Generally speaking, the business of insurance is a business of risk. People buy insurance so as to
protect themselves from the costs of a catastrophically expensive possibility. By a simple
interpretation, insurance is a measure of risk management in our day-to-day life against the
possibilities of risks and uncertainties. Risk and uncertainty are incidental to life. Man may meet
an untimely death. He may suffer from accident, destruction of property, fire, sea perils, floods,
earthquakes and other natural calamities. Whenever there is uncertainty, and there is risk as well
as insecurity. It is to provide against risk and insecurity that insurance came into being. Insurance
does not avert or eliminate loss arising from uncertain events.

RESEARCH METHODOLOGY:

In this study, data is collected from primary and secondary sources.

Primary data:

I) INSURANCE REGULATIONS AND DEVELOPMENT AUTHORITY ACT, 1999

II) INSURANCE ACT 1938

Secondary data: This secondary data is from electronic journals, periodic reviews, articles and
other relevant literature. The study relies on a desk top review of the existing scholarly works to
collect secondary data in this area.

REVIEW OF LITERATURE:

1) Life Insurance in India: Opportunities, Challenges and Strategic Perspective by

Sadhak (2009) are a pioneering work on Indian Life Insurance Industry with a new
perspective. The book is a culmination result of research and practical experience for a
 number of years by an internationally acknowledged financial economist and practicing
manager with proactive and visionary thoughts.
2) Sumninder Kaur Bawa (2007) in his study entitled Life Insurance Corporation of
India: Impact of Privatization and Performance presents an in-depth analysis of LIC's
performance in respect of various indicators since the policy of liberalization was
introduced on the country. The productivity analysis of the corporation has been carried
out using different parameters.

RESEARCH OBJECTIVE:

 To study the problems and challenges of insurance companies in India.

 To trace out the role of government in the development of Insurance business.

RESEARCH QUESTIONS:

 How does insurance reduce risk?

 Whether insurance is a risky business or business of risk?

HYPOTHESIS:

The essence of the insurance business is the risk by undertaking to indemnify the insured against
loss or damage. They agree to pay the damages out of any accident by taking a chance that no
accident might happen. Motivation of the insurance business is that the premium would turn to
be the profit of the business incase no damage occurs. Such business of the insurance company
can be carried on only with the premium paid by the insured person on the insurance policy. The
only profit, if at all the insurance company makes, of the insurance of the insurance business is
the premium paid when no loss or damage occurs. But to ask the insurance company to bear the
entire loss or damage of somebody else without the company receiving a rupee towards premium
is contrary to principles of equity.
REFERENCES:

 Shriniwasan M.N. (2005) - Principles of Insurance Law Life - Fire - Marine - Motor And
Accident – Butterworth Wadwa, Nagpur
 Palande P. S. 2003) - Insurance in India: Changing Policies and Emerging Opportunities -
Response Publishing, Mumbai
 D.C. Srivastava , Shashank Srivastava - Indian Insurance Industry : Transition and
Prospects - New Century Publications, New Delhi
 D. Tripathy Rao (2000) – Life Insurance Business in India: Analysis and Performance -
http://www.jstor.org
 Ishmeet Gujral - Trends in the Indian Insurance Sector - http://www.chillibreeze.com