INSURANCE AWARENESS

For LIC ADO MAINS 2019

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INSURANCE AWARENESS

CONTENTS

I. HISTORY OF INSURANCE IN INDIA

1.1 Opening of Insurance Sector
1.2 Current Scenario of the Insurance Sector
II. WHAT IS RISK?
III. INSURANCE- AN INTRODUCTION
3.1 What is Insurance?
3.2 Principles of Insurance
3.3 Types of Insurance
IV. LAWS REGULATING INSURANCE SECTOR IN INDIA
V. ALL ABOUT IRDAI
5.1 Duties and Powers of IRDAI
VI. OTHER IMPORTANT INSTITUTIONS IN THE INSURANCE MARKET
VII. INSURANCE OMBUDSMAN
7.1 Power of Ombudsman
VIII. ALL ABOUT BANCASSURANCE
8.1 Types of Bancassurance
8.2 Bancassurance Regulations in India
IX. ALL ABOUT LIFE INSURANCE CORPORATION (LIC)
9.1 Various Products of LIC
X. GOVERNMENT INSURANCE SCHEMES
10.1 Pradhan Mantri Fasal Bima Yojana (PMFBY)
10.2 Pradhan Mantri Shram Yogi Maan-Dhan Yojana (PM-SYM)
10.3 Atal Pension Yojana (APY)
10.4 Pradhan Mantri Suraksha Bima Yojana (PM-SBY)
10.5 Pradhan Mantri Jeevan Jyoti Bima Yojana (PM – JJBY)
10.6 Pradhan Mantri Vaya Vandana Yojana (PM – VVY)
10.7 Pradhan Mantri Rojgar Protsahan Yojana (PM- RPY)
10.8 National Social Assistance Programme (NSAP)
XI. IMPORTANT INSURANCE GLOSSARY
XII. IMPORTANT INSURANCE CURRENT AFFAIRS (JANUARY-JULY)

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HISTORY OF INSURANCE IN INDIA

In India, insurance has a deep-rooted history. It finds mention in the writings
of Manu (Manusmrithi), Yagnavalkya (Dharmasastra) and Kautilya
(Arthasastra). Below is the timeline of the Life insurance industry of India:
1818: Establishment of Oriental Life Insurance Company (OLIC) in Calcutta
started the life insurance business in India.
1834: OLIC failed as an organisation.
1912: Life Assurance Companies Act passed; it was the first statutory
measure to regulate life business:
1914: Government of India started publishing returns of Insurance
Companies in India.
1928: Indian Insurance Companies Act was enacted to enable the
Government to collect statistical information about both life and non-life
business transacted in India by Indian and foreign insurers including provident
insurance societies.
1956: 19th January, 1956 the Life Insurance sector was nationalised and Life
Insurance Corporation came into existence in the same year. The LIC had
monopoly till the late 90s when the Insurance sector was reopened to the
private sector.

Important years in the General Insurance Industry:

1850: General Insurance in India has its roots in the establishment of Triton
Insurance Company Ltd, in the year 1850 in Calcutta by the British.
1907: Indian Mercantile Insurance Ltd, was set up. This was the first company
to transact all classes of general insurance business.
1957: Formation of the General Insurance Council.
1973: General insurance business was nationalized with effect from 1 st
January, 1973. 107 insurers were amalgamated and grouped into four
companies, namely National Insurance Company Ltd., the New India
Assurance Company Ltd., the Oriental Insurance Company Ltd and the
United India Insurance Company Ltd.
The General Insurance Corporation of India was incorporated as a
company in 1971 and it commence business on January 1st, 1973.
2018: Government had announced merger of National Insurance
Company, United India Insurance Company and Oriental India
Insurance Company in the Budget 2018, this is likely to complete by FY 20.

Opening of Insurance Sector

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The process of re-opening of the insurance sector began

in the early. In 1993, the Government set up a committee
under the chairmanship of RN Malhotra, former
Governor of RBI, to propose recommendations for reforms
in the insurance sector. The objective was to complement
the reforms initiated in the financial sector. The committee
submitted its report in 1994 and recommended that the private sector be
permitted to enter the insurance industry. Also, foreign companies be allowed
to enter by floating Indian companies, preferably a joint venture with Indian
partners.

Current Scenario of the Insurance Sector

As on December 2018, the insurance industry of India consists of 57
insurance companies of which 24 are in life insurance business and 33 are
non-life insurers. Among the life insurers, Life Insurance Corporation (LIC) is
the sole public sector company. Apart from that, among the non-life insurers
there are six public sector insurers. In addition to these, there is sole national
re-insurer, namely, General Insurance Corporation of India (GIC Re).
Government's policy of insuring the uninsured has gradually pushed insurance
penetration in the country and proliferation of insurance schemes.
Overall insurance penetration (premiums as % of GDP) in India reached 3.69
per cent in 2017 from 2.71 per cent in 2001.
According to IRDAI data, life and non-life premium income of
insurance companies have registered substantial growth in financial year
2019. Life and Non-Life insurance firms’, premium income grew 11% and
13% respectively in FY19.

WHAT IS RISK?
Before we understand what, is insurance? It’s imperative to understand first
what is Risks and Perils.
The possibility of loss or damage can be divided into two broad categories:
uncertainties and risks.
Uncertainties are the events, which cannot be foreseen. But risks can be
anticipated in the light of past experience.
‘Risk’ is a term that we use to refer to the chance of suffering a loss as a
result of mis-happenings like sudden illness, vehicles stolen, accidental
injuries, house and belongings destroyed by fire or death etc.

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The events that give rise to such risks are known as “Perils” for example
loss of belongings due to fire, so in this fire is the peril.

Types of Risks
Speculative Risk Risks relating to business judgment based on
speculation. Change in fashion, govt. policy
etc
Pure Risk Risks where the chance of loss is predictable
Property Risk Related to Loss of property.
Personnel Risk Related to life or health of the people
Financial Risk Related to financial transactions of the
business.
Marketing Risk Risk associated with marketing of goods

INSURANCE- AN INTRODUCTION
Financial consequences that arise due to the above-mentioned risks are
generally tackled by savings and investment. Apart from these “Insurance”
is another option.

What is Insurance?
Insurance is a financial tool specially designed to reduce the financial
impact of unforeseen events and create financial security. Insurance works
on the law of large numbers where contributions by many in the form of
premium paid will take care of the losses of a few. By paying a small
premium for covering a certain type of loss, you will be protected for a certain
sum of money that you will receive if you face that loss.
Insurance is considered one of the tools of social security for formal and
informal sectors and is largely carried out in two ways.
➢ The first way is known as Social Insurance. It is generally undertaken
by the Union or State governments. For example; Central government
recently started Pradhan Mantri Shram Yogi Mandhan Pension (PM –
SYM) for workers of unorganised sector.
• The fund for this purpose comes from a pool made up from taxes
or mandatory social security contributions/ cess.

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➢ The second way is through voluntary Private Insurance. In this any

individual or groups can buy insurance from an insurance company by
entering into a contract of insurance with the company.

Principles of Insurance
The main motive of insurance is cooperation. The important principle of
insurance are as follows:
❖ Law of Large Numbers:
The concept of insurance is based on "Law of Large Numbers",
the law simply means that the more the number of members who are
insured, the more likely it is that the actual result would be closer to the
expected (by the insurance company).

To understand it, let’s take an example:

Suppose a village has 1000 persons each of
age 60 and are healthy. Now it is assumed
that 10 persons may die during the year.
The economic value of the loss suffered by
the family of each is taken as Rs.20,000, so
net loss would be Rs.2, 00,000.
Now, if each member contributes
Rs.200/year, this would be enough to pay Rs.20,
000 to each. Now the questions arise what if the assumed number of 10
deaths by the insurance company turns out to be wrong or inaccurate
and the number of deaths turns out to be 15 or 5? What saves the
insurance company is this wonderful principle i.e. The Law of Large
numbers (read the definition above again).

❖ Insurable interest:

The insurable interest principle requires that the owner of a

particular insurance policy have an ownership interest in the
particular subject matter of the insurance policy.
For example, if a person has a house (called subject matter) then he
has some interest in his house i.e. If the house is damaged by fire, he
will suffer a financial loss (this is called interest) resulting from the fire.
But same cannot be said if his neighbour’s house, catches fire, he may
feel sympathetic for but would not have suffered a financial loss from
the fire. The absence of an insurable interest can make the insurance
policy in question null and void.

❖ Utmost good faith:

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Insurance contracts requires that both parties act with the utmost good
faith. This means that both parties must accurately and fully disclose all
material and relevant information. This not only ensures fairness, but
also helps insurance companies accurately price premiums for insurance
applicants.
❖ Principle of Indemnity:

The principle of indemnity means that the loss, and only the loss, is
compensated. At the same time, the insured should not be paid anything
more than the financial loss suffered by him. In other words, the insured
should not be able to make a profit out of the loss suffered.
The insurance contract is for compensating the person who experiences
a loss so that he is brought back to the same financial position as before
the loss.

❖ Subrogation:
Both principles of subrogation and contribution arise from the principle
of indemnity.
To under the concept of subrogation, consider the example:
Suppose person “A” sends his household goods worth Rs.1,00,000
through “B” Transports. During the transit, part of the goods got
damaged. The insurer say “C” assessed the loss and paid an amount of
Rs. 30,00,000 to Mr. Rajan as indemnity.
However, Mr. Rajan took up the matter against “B” Transports with the
court and received Rs.30,000 as per court’s order. Now, having already
received Rs.30,000 from the insurer, Mr. Rajan would be making a profit
of Rs.30,000.
In such situations, the insured’s right to claim from anywhere else (“B”
transports in this case) is taken over by the insurer.
This taking over of the insured’s right by the insurer is called
‘subrogation’ in insurance parlance. In other words, on payment of
the claim, the insured’s right to claim from anywhere else gets
‘subrogated’ to the insurer.

❖ Contribution:

To understand the concept of contribution, consider this example:

Person “A” had a insurance of Rs. 5,00,000 and he took full insurance

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for this car from two insurance companies. The car met an accident and
Mr. “A” claimed the amount of Rs. 5 Lakhs from both the companies.
Hence, Mr. “A” made a profit of Rs. 5 Lakhs which is against the principle
of indemnity in insurance.
The principle of contribution refers to the right of an insurer who
has paid a loss under a policy to recover a proportionate amount
from other insurers who are also liable for the loss. So, after
paying Rs. 5 Lakhs, the first company should get Rs. 2.5 lakhs from the
other company.

❖ Principle of proximate cause:

The word ‘proximate’ means ‘nearness’ or ‘closeness’. The concept

is that the cause that is ‘closest’ (in its effect) to the loss, is
considered to decide whether a claim is payable or not.
The closest cause is termed the “proximate cause”, and all other causes
as “remote”. If the proximate cause of loss is covered under the policy,
then only the claim becomes payable.

Example: Suppose a person meets an accident and was rushed to the

hospital. Being a person with a weak heart, he could not stand the shock
and died from heart failure. The insurance company declined the claim
saying it was the heart attack rather than the accident which had caused
his death. The court ruled that even though the immediate cause of
death may have been collapse of the heart, the proximate cause of death
was the accident and ordered the company to pay the claim. The above
example is a case of a key principle in insurance, known as proximate
cause.

TYPES OF INSURANCE
Insurance, which is based on a contract, are of many types. All other
insurance apart from Life insurance are called General
Insurance. A general insurance is a contract that offers financial
compensation on any loss other than death. It insures everything apart
from life.

1. Life insurance
Life insurance is a financial cover for a contingency linked with human
life, like death, disability, accident and retirement. Life insurance
products provide a definite amount of money in case the life insured dies
during the term of the policy or becomes disabled on account of an
accident.

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Some types of Life Insurance Policies:

❖ Term insurance: Under this plan, the sum assured is paid only
on the death of the insured during the period specified. There is
no maturity value in term insurance.
❖ Endowment assurance: In this, the sum assured is paid at the
end of the term as maturity or on the death of the insured during
the term of the policy. Money-back plans are endowment policies
with the provision for return of a part of the sum assured in
periodic instalments during the term and balance of sum assured
at the end of the term.
❖ Whole life insurance: It offers to pay the sum assured when the
life assured dies, no matter when the death occurs. There is no
fixed term for cover of death.
❖ Unit Linked Insurance Plans (ULIP): ULIPS are essentially life
insurance plans where the premiums are invested in the capital
markets and the returns are therefore linked to the performance
of the specific fund and the overall market.
• The fund choice is made by the customer and therefore the
investment risk is borne by the customer.
• The invested amount under ULIP offers tax deduction under
Section 80C, but gains are taxable.
• ULIPs have a mandatory lock-in of 5 years.

2. Health insurance
Health insurance covers expenses towards treatment of diseases and /
or injury. A health insurance policy could be either on an indemnity basis
which involves reimbursement of expenses up to a specified limit or on
a fixed benefit basis where the insurer pays a fixed amount of benefit
irrespective of what the expenses are.
• Normally, health insurance policies are not issued for less than
one-year period.

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3. Motor insurance
A Motor Insurance policy covers damage to the vehicle. Motor insurance
covers your vehicle, be it a motorcycle, a car or a lorry, in case of
accidents or theft.
Further, while driving a vehicle, it is possible that the vehicle hits
someone and causes death/ injury or damage to someone’s property. As
per the law, the owner of the vehicle is legally liable to pay
compensation.
As insurance is a contract, where the insurer and the insured are the two
parties involved, this liability can be to any other person, or in other
words, to any ‘third party’ to the contract. Hence, such liabilities are
generally called ‘third-party liabilities. Driving a motor vehicle without
third-party insurance is a punishable offence in terms of the Motor
Vehicles Act, 1988.
4. Travel insurance
Travel insurance offers insurance protection while one travels. It protects
the insured person and his family from domestic and international travel
related perils and losses like accidents, unexpected medical expenditure
during travel, baggage loss, interruption or delays in flights etc.

5. Pensions/ Annuities
A pension or an annuity is a fixed sum paid regularly to a person,
typically following retirement from working life. Insurance companies
allow people to create funds from their savings from which they can get
pension when they are old.
There are two types of annuities (pension plans).
❖ Immediate Annuity
In case of an immediate annuity, the annuity payment from the
insurance company starts immediately. Purchase price for the immediate
annuity is to be paid in in one instalment only.
❖ Deferred Annuity
Under deferred annuity policy, the person pays regular contributions to
the insurance company till the vesting/age date (retirement date). By
the time he retires he will have a sizeable fund with the insurance
company so that pension would be paid to him till the end of his life.

6. Group insurance
In group insurance, schemes are offered by insurance companies to
provide certain classes of individuals, the benefit of insurance coverage
at moderate cost.

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7. Marine Insurance

Marine insurance is an agreement (contract) by which the insurance

company (also known as underwriter) agrees to indemnify the owner of
a ship or cargo against risks, which are incidental to marine adventures.
Marine insurance that covers the risk of loss of cargo by storm known as
cargo insurance.
When the ship is the subject matter of insurance, it is known as hull
insurance. All marine insurance contracts are contracts of indemnity.

Types of Marine Insurance:

• Time Policy: This policy insures the subject matter for specified
period of time, usually for one year. It is generally used for hull
insurance or for cargo when small quantities are insured.
• Voyage Policy: This is intended for a particular voyage, without
any consideration for time. It is used mostly for cargo insurance.
• Mixed Policy: Under this policy the subject matter (hull, for
example) is insured on a particular voyage for a specified period
of time. Thus, a ship may be insured for a voyage between Mumbai
and Colombo for a period of 6 months under a mixed policy.
• Floating Policy: Under this policy, a cargo policy may be taken
for a round sum and whenever some cargo is shipped the
insurance company declares its value and the total value of the
policy is reduced by that amount. Such shipments may continue
until the total value of the policy is exhausted.

LAWS REGULATING INSURANCE SECTOR IN INDIA

The Government began to exercise some sort of control on insurance business
by passing the Life Insurance Companies Act and the Provident Fund
Act in the year 1912. Thereafter, based on the changing requirements of the
industry, a comprehensive legislation, The Insurance Act, 1938, was passed
followed by subordinate legislation including Insurance Rules, 1939. This
Insurance Act was further extensively amended in 1950 and thereafter in
1999 when the IRDAI Act, 1999 was introduced.

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Summary of Important Acts:

Act Year of Enactment

Life Insurance Companies Act 1912
Provident Fund Act 1912
Workman Compensation Act 1923
Insurance Act 1938
Employee State Insurance Act 1948
IRDAI Act 1999
Life Insurance Corporation (LIC) Act 1956
Marine Insurance Act 1963
General Insurance Business 1973
(Nationalisation) Act
Motor Vehicles Act 1988
Redressal of Public Grievances 1998
Rules (framed by Central Government
with regard to Insurance Ombudsman)

All ABOUT IRDAI

Insurance Regulatory and Development Authority (IRDA) was set up on the
recommendations of the Malhotra Committee (Retired Governor, Reserve Bank
of India).
IRDAI Act Passed in: 1999
Headquarters: Hyderabad, Telangana (moved from Delhi in 2001).

Structure of IRDAI
As per the section 4 of IRDAI Act' 1999, IRDAI is a ten-member team
consisting of
a. One Chairman; (current Chairman is Dr. Subhash C. Khuntia)
b. Five whole-time members (one each for different types of insurance i.e.
for life, non-life, finance and investment, actuary and distribution).
c. Four part-time members.
All the appointments are done by the Government of India.

DUTIES AND POWERS OF IRDAI

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Section 14 of IRDAI Act, 1999 lays down the duties, powers and
functions of IRDAI.
• Issue to the applicant (insurance company) a certificate of registration,
renew, modify, withdraw, suspend or cancel such registration.
• Protection of the interests of the policy holders in matters concerning
assigning of policy, nomination by policy holders, insurable interest,
settlement of insurance claim, surrender value of policy and other terms
and conditions of contracts of insurance.
• Specifying requisite qualifications, code of conduct and practical training
for intermediary or insurance intermediaries and agents.
• Specifying the code of conduct for surveyors and loss assessors.
• Promoting efficiency in the conduct of insurance business.
• Promoting and regulating professional organisations connected with the
insurance and re-insurance business.
• Levying fees and other charges for carrying out the purposes of this Act.
• Calling for information from, undertaking inspection of, conducting
enquiries and investigations including audit of the insurers,
intermediaries, insurance intermediaries and other organisations
connected with the insurance business.
• Specifying the form and manner in which books of account shall be
maintained and statement of accounts shall be rendered by insurers and
other insurance intermediaries.
• Regulating investment of funds by insurance companies, maintenance of
margin of solvency.
• Adjudication of disputes between insurers and intermediaries or
insurance intermediaries.
• Supervising the functioning of the Tariff Advisory Committee.
• Specifying the percentage of premium income of the insurer to finance
schemes for promoting and regulating professional organisations.
• Specifying the percentage of life insurance business and general
insurance business to be undertaken by the insurer in the rural or social
sector.

Other Important Institutions in the Insurance Market

In addition to the insurers, there are other institutions which are operating in
the Indian insurance market.
Intermediaries and other Distribution Channels
• Intermediaries involved in distribution of insurance products are agents
(individual, corporate and micro-insurance), brokers, web aggregators,
Common Service Centres.
• Intermediaries like surveyors and loss assessors are involved in claim
assessment of general insurance.

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• Specialized intermediaries for health services called Third Party

Administrators (TPAs) operate in Health insurance for issuance of policy
cards, for organizing cash less treatment facility through network of
hospitals, handling and settlement of claims.
• Insurance Repositories are intermediaries introduced recently to
electronically maintain data of insurance policies for ease in storage,
retrieval and servicing of insurance policies.

INSURANCE OMBUDSMAN
In case a grievance of a policyholder is not redressed by the insurer, alternate
grievance redressal mechanism is provided for in the insurance sector through
the institution of Insurance Ombudsman set up under the Redressal of Public
Grievance Rules, 1998.
Office of Insurance Ombudsman created by: Government of India
Established on: November 11, 1998
Purpose: Quick disposal of the grievances of the insured customers and to
mitigate their problems involved in redressal of those grievances.
Ombudsman is appointed by: The governing body of insurance council. The
council does appointment based on the recommendations of the committee
comprising of Chairman, IRDA, Chairman, LIC, Chairman, GIC and a
representative of the Central Government.
Terms of office:
Appointed for a term of three years or till the incumbent attains the age of
sixty-five years, whichever is earlier. Re-appointment is not permitted.
Territorial jurisdiction of Ombudsman:
The governing body has appointed twelve Ombudsman across the country
allotting them different geographical areas as their areas of jurisdiction.
The offices of the twelve insurance Ombudsman are located at (1) Bhopal, (2)
Bhubaneswar, (3) Cochin, (4) Guwahati, (5) Chandigarh, (6) New Delhi, (7)
Chennai, (8) Kolkata, (9) Ahmedabad, (10) Lucknow, (11) Mumbai, (12)
Hyderabad.

Power of Ombudsman:
Insurance Ombudsman has two types of functions to perform (1) conciliation,
(2) Award/Judgment making.
Ombudsman's powers are restricted to insurance contracts of value not
exceeding Rs. 30 lakhs.
The insurance companies are required to honour the awards/
judgments passed by an Insurance Ombudsman within three months.

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Important points for lodging complaint:

The complainant must lodge the complaint in writing to the insurance
ombudsman of the jurisdiction under which the office of the insurer falls.
Before lodging a complaint:
• Complainant should have made a representation to the insurer named
in the complaint and the insurer either should have rejected the
complaint or the complainant have not received any reply within a
period of one month.
• The complaint is not made later than one year after the insurer had
replied. The same complaint on the subject should not be pending
with before any court, consumer forum or arbitrator.
Recommendations of the Ombudsman
After the grievance is settled the Ombudsman shall
sent the copies of the judgment to complainant and
the insurance company concerned not later than one
month.
If the complainant accepts recommendations, he will
send a communication in writing within 15 days of the
date of receipt accepting the settlement.
If the policy holder is not satisfied with the award of the Ombudsman, he can
approach other venues like Consumer Forums and Courts of law for redressal
of his grievances.

ALL ABOUT BANCASSURANCE

The term “Bancassurance” which is a
combination of two words, Bank and
Insurance describes mutual relationship between
insurance companies and bank and it is well known
as Bank Insurance Model (BIM).
The insurance company aims to sell insurance
related products with the help of bank sales channel
by making agreement between bank and insurance company in
order to get mutually benefitted. This would allow insurance company to sell
their products to customer base of the bank.
Indian government accepted “bancassurance” under 1949 Bank
Regulations Act.

Types of Bancassurance
Bancassurance is categorized mainly into two types-
Risk free participation

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The banks will serve as agents for insurance companies and earn profits in the
form of referral income in order to mobilize insurance business. The profits
which are gained by selling insurance products are transferred to insurance
companies and referral amount in turn will be transferred to banks.
Participation with risk
The bank subsidiaries will act as distribution channels in selling insurance
products and they are under the control of banks which have shares and banks
will earn huge profits in return but risk factor is high because banks will bear
entire responsibility if there is loss reported.

Bancassurance Regulations in India

In India banking and insurance sectors are regulated by two different entities.
The banking sector is governed by Reserve Bank of India and the insurance
sector is regulated by Insurance Regulatory and Development Authority
(IRDA). Following are the important guidelines for bancassurance:
• The bank net worth should be at least 500 crores.
• The Capital to risk assets ratio should be minimum 10 percent.
• Performance of subsidiaries (if any) should be satisfactory and there
should have been net profit for at least 3 consecutive years.
• Banks cannot become brokers, as regulations require brokers to be
exclusively engaged in insurance broking.
• Foreign Direct Investment limit in Insurance sector is 49%.
• There is a restriction of up to 26% for global companies to hold minority
equity.

Bancassurance Models
The bancassurance models are mainly based on classification which is
mentioned below.
I. Product based
II. Structure based
III. Bank referrals

ALL ABOUT LIFE INSURANCE CORPORATION (LIC)

The Parliament of India passed the Life Insurance Corporation Act on:
19th of June 1956
Life Insurance Corporation of India was created on: 1st September,
1956
The objective was: Spreading life insurance much more widely and in
particular to the rural areas with a view to reach all insurable persons in the
country, providing them adequate financial cover at a reasonable cost.

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LIC's slogan in logo: “योगक्षेमम्‌ वहाम्यहम्‌” (Yogakshemam Vahaamyaham)

(meaning in English: giving what one lacks and protecting what one has).
The words have been taken from “Bhagvad Gita” (9th chapter).

Structure of LIC
Corporate Office (Headquarter): Mumbai
Zonal Offices: 8 (Kolkata, Patna, Chennai, Hyderabad, Mumbai, Delhi, Kanpur
and Bhopal)
Divisional Offices: 113
Branches: 2048
The LIC's executive board comprises of one Chairman and four Managing
Directors.
Chairman: M.R. Kumar
Managing Directors: B. Venugopal, Hemant Bhargava, Vipin Anand and T.
C. Susheel Kumar.

Various Products of LIC

Aam Aadmi Bima Yojana (AABY)
Ministry of Finance, Government of India merged Social Security Schemes viz.,
Aam Aadmi Bima Yojana (AABY) and Janashree Bima Yojana (JBY).
Merged scheme was renamed as: "Aam Aadmi Bima Yojana" and came into
effect from January 01, 2013
Eligibility Criteria:
i. Age: 18 – 59 years
ii. The member should normally be the head of the family or one earning
member of the below poverty line family (BPL) or marginally above
the poverty line under identified vocational group/rural landless
household.
Premium requirement:
The premium to be charged initially under the scheme will be Rs.200/- per
annum per member for a cover of Rs.30,000/-, out of which 50% will be
subsidized from the Social Security Fund.
I. Insurance Plans
a. Endowment Plans
b. Whole-life Plans (Jeevan Umang Policy)
c. Money Back Plans
d. Term Assurance Plans
e. Rider

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II. Special Plans

III. Pension Plans
a. Jeevan Nidhi
b. Jeevan Akshay
c. Jeevan Shanti
d. Pradhan Mantri Vaya Vandana
IV. Unit Plans
V. Micro Insurance Plans
a. Mirco Bachat
b. Jeevan Mangal
c. Bhagya Lakshmi Plan
VI. Withdrawal Plans
VII. Health Plans
a. Jeevan Arogya

GOVERNMENT INSURANCE SCHEMES

Pradhan Mantri Fasal Bima Yojana (PMFBY)
Launched on: April, 2016
PMFBY subsumed earlier insurance schemes viz. National Agriculture
Insurance Scheme (NAIS), Weather based Crop Insurance scheme and
Modified National Agricultural Insurance Scheme (MNAIS).
Premiums to be paid by Farmers: Premium: 2% Kharif crops, 1.5% for Rabi
crops and 5% for horticulture crops.
The difference between premium and the rate of insurance charges payable by
farmers is provided as subsidy and shared equally by the centre and state.
The scheme is mandatory for farmers who have taken bank loans from
banks and is optional for farmers who have not taken institutional credit.
Aim of the Scheme:
• To provide financial support to farmers suffering from crop
loss/damage.
• To ensure continuous income of farmers.
• Ensuring uninterrupted flow of credit to the agriculture sector.
Note: Government has appointed senior bureaucrat Ashish Kumar Bhutani as
Chief Executive Officer (CEO) of Pradhan Mantri Fasal Bima Yojana (PMFBY).

Pradhan Mantri Shram Yogi Maan-Dhan Yojana (PM-SYM)

It is a voluntary and contributory pension scheme that will engage as many as
42 crore workers in the unorganised sector.
Eligibility:
• Entry age group: 18-40 years.

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• Unorganised sector workers, with income of less than Rs 15,000 per

month.
• The applicant should not be covered under New Pension Scheme (NPS),
Employees’ State Insurance Corporation (ESIC) scheme or Employees’
Provident Fund Organisation (EPFO).
• Also, one should not be an income tax payer.
Contribution to the scheme:
The subscriber has to contribute the prescribed contribution amount from the
age of joining the scheme till the age of 60 years.
Equal contribution by the Central Government: Under the PM-SYM,
contribution by the Central Government will be made on a ‘50:50 basis’.
Benefits:
Minimum Assured Pension: Person subscribing to the scheme will receive
minimum assured pension of Rs 3000 per month after attaining the age of 60
years.
the subscriber dies during the receipt of pension, his or her spouse will be
entitled to receive 50 percent of the pension as family pension.
Note: PM Narendra Modi launched the Pradhan Mantri Shram Yogi Maan-Dhan
(PM-SYM) Yojana at Vastral (Ahmedabad) in Gujarat.
Also, recently government approved a new scheme, which assures
minimum monthly pension of Rs 3,000 to all shopkeepers, retail traders and
self-employed persons after attaining the age of 60 years, the decision will
benefit 3 crore retail traders and shopkeepers.
Eligibility: All shopkeepers and self-employed persons as well as retail traders
with GST turnover below Rs 1.5 crore and aged between 18-40 years can enrol
for the scheme.

Atal Pension Yojana (APY)

Under this scheme depending on their contributions, the subscribers would
receive the fixed minimum pension at the age of 60 years. The scheme mainly
focusses on citizens in unorganized sector. It replaced the Swavalamban
scheme.
The scheme started in 2005 and is administered by the Pension Fund
Regulatory and Development Authority.
Eligibility: All Indians falling in the age group of 18-40 years.
The beneficiary should not have subscribed to any statutory social security
scheme and must not be income tax payers.
Contribution to the scheme:

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The Central Government co-contribute 50% of the total contribution or Rs.

1000 per annum, whichever is lower to each eligible subscriber account.
Benefits:
Under the APY, subscribers would receive a fixed minimum pension of Rs. 1000
to Rs. 5000 per month. The minimum period of contribution by the subscriber
under this would be 20 years or more.

Pradhan Mantri Suraksha Bima Yojana (PM-SBY)

PM-SBY is a yearly personal accident insurance scheme which is to be renewed
every year. The scheme offers protection against death or disability due to
accident.
The scheme is offered/administered through Public Sector General Insurance
Companies (PSGICs) and other general insurance companies.
Eligibility: The scheme is available to all the Indian citizens including NRIs in
the age group 18 to 70 years having a bank account.
Contribution:
Each subscriber has to pay a premium of Rs. 12 per annum.
Benefits:
Risk coverage available will be Rs. 2 lakhs for accidental death and permanent
total disability and Rs. 1 lakh for permanent partial disability.

Pradhan Mantri Jeevan Jyoti Bima Yojana (PM – JJBY)

It is also one-year life insurance scheme which can be renewed every year.
The scheme offers coverage for death due to any reason. The scheme is offered
through LIC and other Indian private Life Insurance companies.
Eligibility: The scheme is available to all Indian citizens including NRIs in the
age group of 18 to 50 years. With regular annual renewal, benefits are
available till the age of 55.
Benefits: It provides coverage of Rs. 2 lakhs in case of death due to any
reason. The annual premium charge is of Rs 330.

Pradhan Mantri Vaya Vandana Yojana (PM – VVY)

PM-VVY which was launched in 2017 aims to provide social security to elderly
persons against a future fall in their interest income due to uncertain market
conditions.
The scheme is for elderly persons aged 60 years and above.

Benefits:

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Under the scheme an assured pension based on a guaranteed rate of return of

8 per cent for 10 years is provided. Also, there is an option to opt for pension
on a monthly / quarterly / half yearly and annual basis.
• Investment limit under the scheme is Rs 15 lakhs also recently the
government extended the time limits for subscription to 31 st March,
2020.
• It will be implemented through Life Insurance Corporation of India
(LIC).
• Also, a loan facility is available after completion of 3 policy years
maximum of 75% of the purchase price of the policy can be taken as
loan.

Pradhan Mantri Rojgar Protsahan Yojana (PM- RPY)

PM-RPPY aims to incentivize employers promoting employment generation and
providing social security benefits to the workers.
• Implemented by Ministry of Labour and Employment through the
Employees’ Provident Fund Organization (EPFO).
• Under the scheme, Government pays full employers’ contribution of 12%
(towards Employees’ Provident Fund and Employees’ Pension Scheme
both), for a period of 3 years.
• The scheme for employees with salary up to Rs. 15,000 per month.

National Social Assistance Programme (NSAP)

The NSAP is a ‘Core of Core’ scheme being administered by the Ministry of
Rural Development and is being implemented in rural areas as well as urban
areas.
NSAP comprises of following schemes:
Indira Gandhi National Old Age Pension Scheme (IGNOAPS): The Indira
Gandhi National Old Age Pension Scheme (IGNOAPS) is a non-contributory old
age pension scheme that covers Indians who are 60 years and above and live
below the poverty line.
Benefits: Monthly pension of Rs. 300 (Rs. 200 by central government and Rs.
100 by state government). Those 80 years and above receive a monthly
pension amount of Rs.500.
Indira Gandhi National Widow Pension Scheme (IGNWPS): The eligible
age is 40 years and the pension is Rs.300 per month. After attaining the age
of 80 years, the beneficiary will get Rs.500 per month.
Indira Gandhi National Disability Pension Scheme (IGNDPS): The
eligible age for the pensioner is 18 years and above and the disability level has
to be 80%.

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Benefits: The amount is Rs.300 per month and after attaining the age of 80
years, the beneficiary will get Rs 500 per month. Dwarfs will also be an eligible
category for this pension.

IMPORTANT INSURANCE GLOSSARY

A
AD&D: Accidental Death and Dismemberment Benefits.
Assignee, Assignor and Assignment of Insurance (or simply Assign):
Transfer by the holder of a life insurance policy (the assignor: Assignor is
the policyholder who transfers the title, beneficial interest and rights
under the policy to another individual.) of the benefits or proceeds of the
policy to a lender (the assignee: Assignee is the person to whom the title,
rights and benefits under a life policy are assigned.), as a collateral for
a loan. In the event of the death of the assignor, the assignee is paid first and
the balance (if any) is paid to the policy's beneficiary.
Alternative Dispute Resolution (ADR). Alternative Dispute Resolution
(ADR):
Alternative to going to court to settle disputes. Methods include arbitration,
where disputing parties agree to be bound to the decision of an independent
third party, and mediation.
Aleatory contract
A legal contract in which the outcome depends on an uncertain event.
Insurance contracts are aleatory in nature.
Annuity
An annuity is a contract between an individual and an insurance company in
which he/she make a lump sum payment or series of payments and, in return,
obtain regular disbursements beginning either immediately or at some point
in the future.
Admitted company
An insurance company licensed and authorized to do business in a particular
state or country.
Accumulation Period
The time interval between the commencement of the policy and the time when
benefits are paid out. It is established by the insured.
Agent
Insurance is sold by two types of agents: independent agents, who are
self-employed, represent several insurance companies and are paid on

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commission, and exclusive or captive agents, who represent only one

insurance company and are either salaried or work on commission. Insurance
companies that use exclusive or captive agents are called direct writers
Adjuster
An individual employed by an insurer to evaluate losses and settle policyholder
claims. These adjusters differ from public adjusters, who negotiate with
insurers on behalf of policyholders and receive a portion of claims settled.
Affirmative warranty
An agreement between an insurance company and an agent, granting the
agent authority to write insurance from that company. It specifies the duties,
rights, and obligations of both parties.
Acts of god
Natural events such as floods and earthquakes that cannot reasonably be
guarded against are known as Acts of God.
Actual Cash Value (ACV)
A form of insurance that pays damages equal to the replacement value of
damaged property minus depreciation.
Actuary
An actuary is a business professional who analyses the financial consequences
of risk. Actuaries use mathematics, statistics, and financial theory to study
uncertain future events, especially those of concern to insurance and pension
programs.
Adverse selection
The tendency of those exposed to a higher risk to seek more insurance
coverage than those at a lower risk. Insurers react either by charging higher
premiums or not insuring at all.

B
Bailment
Bailment is when a bailor (say for example a car holder) gives temporary
possession of a property (car in this case) to another party, the bailee,
(say a car garage owner) for a specific period of time.
Bailees often purchase bailee's customer insurance to insure the assets
that are temporarily under their care (car in this case).
This customer insurance taken by Bailee comes to his rescue if suppose the
car is stolen from the garage.

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Benefit Period
The time for which an insurance company covers the designated insured or
dependents for the benefits.
Bonus
It is the additional sum that the policyholder will get during the term of the
insurance plan or at maturity of the plan, provided he has paid all premium
amounts due for a specified minimum number of years. Bonus is the amount
added to the basic sum assured under a with-profit life insurance policy.

C
Cash Surrender Value (CSV)
The amount that is available to the owner if a life insurance policy is
surrendered any time before the maturity date. The amount represents the
cash value minus surrender charges and any outstanding loans (and accrued
interest) due upon cancellation of the policy.
Ceding company
An insurer also known as primary insurer, that passes on to other insurers
some part of its risk under insurance policies it has accepted & cession is
defined as that portion of a risk that is passed on to reinsurers by ceding
companies.
Coinsurance
Coinsurance is basically a form of cost-sharing, or splitting the cost of a service
or medication between the insurance company and consumer. For example, in
health insurance, it is a percentage of each claim paid by the policy-holder.
Combined Ratio
It is the ratio used by an insurance company to gauge how well it is performing
in its daily operations. The combined ratio is calculated by taking the sum of
incurred losses and expenses and then dividing them by the earned premium.
A decrease in the combined ratio means financial results are improving; an
increase means they are deteriorating.
Contingent Beneficiary
Person/persons named to receive proceeds of a policy in case the original
beneficiary is not alive, they are also referred to as secondary or tertiary
beneficiary.
Convertible
A term policy that can be converted to permanent coverage rather than
expiring on a specific date.

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Capacity
The maximum amount of insurance or life insurance that can be bought from
a company.
Captives
Insurers that are created and wholly-owned by one or more non-insurers, to
provide owners with coverage. A form of self-insurance.
Cash value option
An option in life insurance policies permitting the insured to take the cash value
of the policy on surrender.
Catastrophe
It is a term used to refer to a single incident or a series of closely related
incidents causing severe insured property losses totalling more than a given
amount.
Concealment
It is the failure of an applicant to reveal, before the insurance company a fact
that is material/ important to the risk.
Contestable Clause
The life insurance contestability period/ clause is a short window in which
insurance companies can investigate and deny claims.

D
Deductible
The amount of loss borne or paid by the policyholder. The bigger the
deductible, the lower the premium charged for the same coverage.
Direct writers
Insurance companies that sell directly to the public using exclusive agents or
their own employees, through the mail, or via Internet.
Diminution of Value
The idea that a vehicle (or any other asset) loses value after it has been
damaged in an accident or prepared.
Declaration
It is that part of a liability insurance policy that states the name and address
of policy-holder, property insured, its location and description, the policy
period, premiums, and supplemental information.
Deferment period

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The period from the date of commencement of the policy to the vesting date
(receiving the policy benefits of a regular stream of income).

E
Earned Premium
An earned premium refers to the premium collected by an insurance company
for the portion of a policy that has expired. In other words, the earned
premium is what the insured party has paid for a portion of time in which the
insurance policy was in effect, but has since expired.
Elimination period
The period that must elapse before disability income is payable under a health
insurance policy covering disability income loss.
Endorsement
An insurance endorsement is an amendment or addition to an existing
insurance contract which changes the terms or scope of the original policy.
Endorsements may also be referred to as riders.
Endowment
An endowment policy is a life insurance contract designed to pay a lump sum
after a specific term (on its 'maturity') or on death.

F
Face Amount
In a life insurance contract, face amount is the stated sum of money to be paid
to the beneficiary upon the insured’s death.
Free Look Period
It is the period of 15 days (30 days if this policy is purchased online) from the
date of receipt of the policy document to review the terms and conditions of
the policy and decide whether to continue with the policy or to return the
policy.
First Unpaid Premium (FUP)
It refers to the first default in paying premium by the policy holder. If this due
premium is not paid on the given date that date becomes the date of FUP.
Floater
It is attached to a House Insurance policy, a floater insures movable property,
covering losses wherever they may occur. Example of items often insured with
a floater are expensive jewellery, musical instruments etc.

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Free-of-capture-and-seizure (FC&S) clause

A clause in ocean marine insurance that excludes war as a covered peril.
Fronting
A procedure in which a primary insurer acts as the insurer of record by issuing
a policy, but then passes the entire risk to a reinsurer in exchange for a
commission.

G
Grace Period
This provision offers the policy holder additional period of time after the due
date, during which the premium can be paid. The policy continues to remain
in force during this grace period and the premium continues to be payable.
Graded Premium Policy
A type of whole life policy designed for people who want more life coverage
than they can currently afford. They pay a lower premium rate that increases
gradually over the first three to five years and then remains constant over the
life of the policy.
Guaranteed renewable
A provision in a life or disability policy that requires the insurer to renew the
policy on its anniversary. The premium can usually be changed if the change
applies to the entire class of insureds covered by the policy.

H
Hard Market
In the insurance industry, the upswing in a market cycle, when premiums
increase and capacity for most types of insurance decreases. This could be due
to many factors, including falling investment returns for insurers, increases in
frequency or severity of losses.
Hull Insurance
It is a type of property insurance policy which covers a sea-going vessel.

I
Imputed acts
Acts committed by one person but for which responsibility has been transferred
or imputed to another.
Indemnify

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It is an act which restores insureds to the situations that existed prior to a

loss.
Intestacy
Intestacy refers to the condition of an estate of a person who dies without a
will, and owns property with a total value greater than that of their outstanding
debts.
Involuntary coverage
Government insurance required to be purchased by certain groups (for
example government employees) and under certain conditions. For example:
provident fund schemes of the government.

L
Law of Privity of Contract
The doctrine of privity of contract is a common law principle which provides
that a contract cannot confer rights or impose obligations upon any person
who is not a party to the contract.
Lapse
Termination of a policy upon the policy owner's failure to pay the premium
within the grace period.
Large-loss principle
A rule for buying insurance such that serious loss exposures receive priority
over less serious loss exposures.
Life Expectancy Tables
Mortality tables that are used to calculate life expectancy figures.
Loading
The overhead or administrative expenses of an insurer that is included in the
cost of a policy.
Loss of use
A provision in renter’s insurance policies that reimburses policyholders for any
extra living expenses due to having to live else-where while their home is being
restored following a disaster.
Loss Ratio
The loss ratio is the ratio of total losses incurred (paid and reserved) in claims
plus adjustment expenses divided by the total premiums earned.

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Money Back Plan

A plan in which part of the sum assured is paid back to the policyholder at
regular intervals.
Misstatement-of-age/sex clause
A clause in life insurance policy requiring an adjustment of the amount of
insurance payable in the event the age/sex of the insured has been
misrepresented.

O
Occurrence policy
Insurance that pays claims arising out of incidents that occur during the policy
term, even if they are filed many years later.
Original Age
The age of the policyholder when he/she bought the policy.

P
Paid-up Value
Paid-up value is the reduced amount of sum assured paid by the insurer in
case of discontinuation of the payment of premiums after paying the full
premiums for the first three years.
Policy
A written contract for insurance between an insurance company and
policyholder stating details of coverage.
Premium Waiver Benefit (PWB)
Premium waiver benefits are the benefits which can be availed under wherein
the future premiums payable upto vesting date are waived in the event of
death of the proposer.
Premiums written
The total premiums on all policies written by an insurer during a specified
period of time, regardless of what portions have been earned. Net premiums
written are premiums written after reinsurance transactions.
Primary Beneficiary
In life insurance the beneficiary designated by the insured as the first to
receive policy benefits.
Primary Policy

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The insurance policy that pays first when the policyholder suffers a loss that's
covered by more than one policy.

R
Ratification
A method by which an agent gains authority to write insurance. The agent
writes a policy and, after the fact, presents it to the insurance company. If the
insurance company approves the policy, the agent’s authority is ratified.
Reinsurance
The shifting of risk by a primary insurer (known as the ceding company) to
another insurer (known as the reinsurer).

S
Salvage
It means the damaged property an insurer takes over to reduce its loss after
paying a claim. Insurers receive salvage rights over property on which they
have paid claims, such as badly-damaged cars.
Second-to-die life insurance
It is a type of life insurance on two people (usually married) that provides
benefits to the beneficiaries only after the last surviving person on the policy
dies.
Secondary Beneficiary
An alternate beneficiary designed to receive payment usually if the original
beneficiary dies before the insured.
Securitization of insurance risk
In it an Insurance or reinsurance company or a pooling entity uses the capital
markets to expand and diversify the assumption of insurance risk as a means
of raising money to cover risks.
Self-insurance
insurance of oneself or one's interests by maintaining a fund to cover possible
losses rather than by purchasing an insurance policy.
Speculative risk
The uncertainty of an event that could produce either a profit or a loss, such
as a business venture or a gambling transaction.
Solvency

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In insurance sector it means Insurance companies’ ability to pay the claims of

policyholders.
Soft market
An environment where insurance is plentiful and is thus sold at a lower cost,
also known as a buyer’s market.
Standard Premium
A premium amount found by calculating the regular rates on an insured's
payroll. This amount is the standard premium, from which a fraction is taken
and used as the basic premium.
Straight life
A whole life policy in which premiums are payable as long as the insured lives.
Subjective risk
The risk based on the mental state of an individual who experiences
uncertainty or doubt as to the outcome of a given event.
Surrender or Cash Value
If a policy is surrendered before the maturity date of a policy, the sum that is
payable at that point to the policy holder is called the surrender value or cash
value. However, the insurance protection provided under the policy will also
cease.
The fee charged to a policyholder on surrendering the insurance policy is called
surrender charge.

T
Target Pension
The amount of pension that a policyholder desires under a pension policy.
Term contract
Term is the period for which insurance coverage is given and a health policy
that expires at the end of a specified time and which cannot be renewed is
term contract.
Term Cover
A type of life insurance where the sum assured is payable only in the event of
death of the insured during the specified term. In the case of survival, the
contract expires and the premium is not paid back to the insured.
Theft insurance
Coverage against loss through stealing by individuals not in a position of trust.

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Third-party administrator
An administrator hired by an employer to handle claims and other
administrative functions associated with employee benefits. It may also refer
to and outside group that performs clerical functions for an insurance
company.
Twisting
The acts of a life insurance agent to persuade a client to drop one life policy
and accept another, by misrepresenting the terms of either the present policy
or the new policy.

U
Umbrella Insurance
An umbrella insurance policy is extra liability insurance coverage that goes
beyond the limits of the insured's home, auto or other insurance. It provides
an additional layer of security to those who are at risk for being sued for
damages to other people's property or injuries caused to others in an accident.
Underinsurance
An underinsured policyholder is someone who fails to buy sufficient insurance.
Unilateral contract
A contract, such as an insurance contract, in which only one of the parties
makes promises that are legally enforceable.

V
Voluntary coverage
Insurance coverage purchased at the discretion of the buyer.
Valued policy
A policy under which the insurer pays a specified amount of money to or on
behalf of the insured upon the occurrence of a defined loss.
Vesting Bonus
It is the bonus which the insurer declares after evaluating its assets and
liabilities and that is added to the sum assured under a policy.

W
Waiver
A waiver is a legal form or document that releases someone, or some
organization, from liability. Insurance waivers usually are offered to, or

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requested to be signed by, individuals by organizations or companies seeking

to document the fact that the individual has declined a certain type of
insurance.
War hazard exclusion
Eliminates insurance coverage for death that is a direct result of war or other
hostile action.
Workers compensation
Insurance that pays for medical care and physical rehabilitation of injured
workers and helps to replace lost wages while they are unable to work.

IMPORTANT INSURANCE CURRENT AFFAIRS

(JANUARY- JULY)
JANUARY
1. Allahabad Bank (Headquarter: Kolkata) & Syndicate Bank
(Headquarter: Manipal, Karnataka) signed a bancassurance pact with
SBI Life Insurance (Headquarter: Mumbai) to sell the policies of the insurer
from over 3,238 branches of the Allahabad Bank.
2. Bharti AXA Life Insurance started delivering policies and renewal
premium receipt to customers via instant messaging platform WhatsApp
as a part of its alternative service option to the policy holders.
3. IRCTC tied up with Bharti AXA General insurance company to provide
free travel insurance to the air travellers.
4. Life insurance company HDFC Standard Life Insurance renamed itself
to HDFC Life Insurance.
5. Life insurance firm IndiaFirst buys 9% stake in CSC e - Governance
services India Limited.

FEBRUARY
1. Pradhan Mantri Jan Arogya Yojana (PMJAY) proposes three models
through which the states can implement the scheme. The models are
insurance model, trust-based model and hybrid model.
2. A first-of-its kind ‘Trip Protector’ insurance policy was launched by
HDFC ERGO General Insurance Company for non-life insurance segment
in India. The policy aims for safeguarding holders financially against the cost
of cancellation levied during cancellation of Air, hotel etc bookings.
3. Life Insurance Corporation (LIC) of India launched a new micro
insurance plan ‘Micro Bachat’ recently. It provides a coverage of up to 2
lakhs.

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MARCH
1. Life Insurance Corporation Housing Finance Ltd (LIC-HFL) partnered with
India Mortgage Guarantee Corporation (IMGC) to offer home buyers
enhanced loan eligibility and easy loans.
2. ASSOCHAM (The Associated Chambers of Commerce and Industry of
India), has conferred ‘Non-Life Insurer of the Year Award 2019′ to
Bharti AXA General Insurance.
3. “Mukhyamantri Parivar Samman Nidhi” scheme was launched by
Haryana government recently; the scheme is for farmers with areas upto
five acres and the families with an income of less than Rs. 15,000 per month.
The scheme would provide a sum of Rs. 6,000 yearly. The scheme
provides insurance facilities of- Rs. 2 lakhs on natural death, Rs. 2 lakhs
for accidental death, Rs. 2 lakhs for permanent disability and Rs. 1 lakh for
partial disability.
4. M. R. Kumar has been named as the chairman of the Life Insurance
Corporation (LIC) for a period of 5 years.
5. India’s first digital insurer, AU Small Finance Bank Ltd.
(Headquarter: Jaipur, Rajasthan) announced its partnership with Acko
General Insurance Limited to provide customized insurance products to its
customers.
6. ACKO General Insurance was awarded the prestigious Golden
Peacock Innovative Product Award – 2019, for their contextual micro
insurance product -“Ola Ride Insurance“.
7. RBI has categorized IDBI Bank as a Private Sector Bank with effect
from January 21, 2019 after Life Insurance Corporation of India (LIC)
acquired 51 per cent of the total paid-up equity share capital of the bank.
RBI has stipulated that after 12 years LIC has to reduce stake in IDBI
Bank by 10 percent to 40 percent.
NOTE: According to (IRDAI), LIC can hold up to 15 percent stake in any bank
which can go up to 30 percent as per the board approval.
8. Aviva Life Insurance announced the launch of ‘Wings’, a specially
designed mentorship program to empower the female workforce.
9. ICICI Lombard and digital financial services company MobiKwik entered
into a partnership to provide cyber insurance cover of Rs. 50000.
10. Insurance web aggregator, PolicyX.com has named former cricketer
Virender Sehwag as its brand ambassador.

APRIL

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INSURANCE AWARENESSPDF
INSURANCE AWARENESS

1. Vipin Anand has been appointed as the Managing Director of the Life
Insurance Corporation of India (LIC).
2. Karnataka Bank (Headquarter: Mangalore) has signed a pact with
Bharti Axa Life Insurance Company Ltd to distribute life insurance
products to the customers of Karnataka Bank.
3. Chairman and Managing Director (CMD) of the General Insurance
Corporation of India (GIC), Alice G. Vaidyan has been honoured with
the Freedom of the City of London for the recognition of her work to
promote insurance ties between India and the UK.
4. Insurance major Cholamandalam MS General Insurance Company
Limited has received ISO 31000:2018 certification by TUV India.
5. According to IRDAI data, life and non-life premium income of
insurance companies have registered substantial growth in financial year
2019. Life and Non-Life insurance firms’, premium income grew 11% and
13% respectively in FY19.
6. SBI General Insurance has launched its new product – cyber defence
insurance to protect businesses from financial and reputational losses
due to cyber-attacks. The Cyber Defense comes with CyRUSS (Cyber Risk
Underwriting & Solution Suite) which is a cloud-based tool for Commercial
Cyber polices.
7. Insurance Regulatory and Development Authority of India (IRDAI) has set
up a 13-member committee headed by Suresh Mathur to review
regulatory framework on micro insurance, and suggest the steps to be
taken to raise demand for such products in India.
8. Canara Bank and its life insurance partner Canara HSBC Oriental Bank
of Commerce Life Insurance launched ’Webassurance’ to enable its
customers to purchase life insurance in a convenient and hassle-free way.
9. Airtel Payments Bank joined hands with Bharti AXA General
Insurance for a two-wheeler insurance product.

MAY
1. Max Life Insurance Co Ltd has announced that the 6th day of each
month as ‘Protection Day’. The objective of this initiative was to raise
awareness on financial protection.
2. IBM India tied-up with HDFC ERGO General Insurance Company, to
co-create new Artificial Intelligence (AI)-based solutions.
3. Bharti AXA Life Insurance, a private life insurer, has been conferred
with the FICCI Claims Excellence Award. The recognition comes for its
customer-friendly claims services in the life insurance sector.

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INSURANCE AWARENESSPDF
INSURANCE AWARENESS

JUNE
West Bengal Government launched a crop insurance scheme, Bangla
Shashya Bima (BSB) for the 2019 ‘Kharif’ season to protect farmers from
losses due to natural disasters and provide a steady income in case of unstable
market prices.
IDBI has signed a bancassurance agreement with Tata AIG General
Insurance Company Ltd to provide Tata AIG’s Property and Casualty
insurance products to its customers.
Government of India reduced the interest rate on small savings schemes by
0.1 per cent for the July-September quarter. Current interest rates for various
small savings are:
Kisan Vikas Patra: 7.6%, will now double in 113 months.
Sukanya Samriddhi Yojana: 8.4%
Public Provident Fund (PPF) and National Savings Certificate (NSC):
7.9%
JULY
Ganesh K has been appointed as the new whole-time member (life) at
Insurance Regulatory and Development Authority (IRDAI).
LIC has agreed to offer Rs 1.25 trillion line of credit by 2024, to fund
highway projects under Bharatmala Scheme.
Siddhartha Mohanty has assumed charge as Managing Director and Chief
Executive Officer (MD and CEO) of the LIC Housing Finance (LIC HFL).
As per Union Budget foreign direct investment (FDI) limit is now 100
percent in the insurance intermediaries.
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