Project

General
Insurance
cooperation
of India
Submitted by shivansh
dalela XI-E
shivansh dalela
 INDEX
Serial Topic
no.

1 Origin of Insurance

2 A brief history of the Insurance sector

3 Insurance Sector Reforms

4 Insurance Regulatory Authority

5 Insurance Industry Classification

7 General Insurance

13 Insurance Regulatory & Development Authoritarian

15 Changing Scenario of General Insurance Market

17 Claims
 Origin of Insurance

Whenever there is uncertainty there is risk. We do not have any

control over uncertainties which involves financial losses. The risk
may be certain events like death, pension retirement or uncertain
events like theft, fire, accident, etc. Insurance is a financial service for
collecting the savings of the public and providing them with risk
coverage. It comes under service sector and while marketing this
service due care is taken in quality product and customer satisfaction.
The main function of the Insurance is to provide protection against the
possible chances of generating losses. The insurance sector in India
has come a full circle from being an open competitive market to
nationalization and back to a liberalized market again. Tracing the
developments in the Indian insurance sector reveals the 360-degree
turn witnessed over a period of almost two centuries.

Brief History of the Insurance Sector

The business of life insurance in India in its existing form started in
India in the year1818 with the establishment of the Oriental Life
Insurance Company in Calcutta. Some of the important milestones in
the life insurance business in India are:1912: The Indian Life
Assurance Companies Act enacted as the first statute to regulatethe
life insurance business.1928: The Indian Insurance Companies Act
enacted to enable the government to collectstatistical information
about both life and non-life insurance businesses.1938: Earlier
legislation consolidated and amended to by the Insurance Act with
theobjective of protecting the interests of the insuring public.1956:
245 Indian and foreign insurers and provident societies taken over by
the centralgovernment and nationalized. LIC formed by an Act of
Parliament, viz. LIC Act, 1956,with a capital contribution of Rs. 5
crore from the Government of India. The Generalinsurance business
in India, on the other hand, can trace its roots to the Triton
InsuranceCompany Ltd., the first general insurance company
established in the year 1850 inCalcutta by the British.Some of the
important milestones in the general insurance business in India
are:1907: The Indian Mercantile Insurance Ltd. set up, the first
company to transact allclasses of general insurance business.1957:
General Insurance Council, a wing of the Insurance Association of
India, frames acode of conduct for ensuring fair conduct and sound
business practices.2

1968: The Insurance Act amended to regulate investments and set

minimum solvencymargins and the Tariff Advisory Committee set
up.1972: The General Insurance Business (Nationalization) Act, 1972
nationalized thegeneral insurance business in India with effect from
1st January 1973. 107 insurersamalgamated and grouped into four
companies’ viz. the National Insurance CompanyLtd., the New India
Assurance Company Ltd., the Oriental Insurance Company Ltd.
andthe United India Insurance Company Ltd. GIC incorporated as a
company.INSURANCE SECTORThe opening up of Insurance sector
was a part of the on going liberalization in thefinancial sector of India.
The changing face of the financial sector and the entry of several
companies in the field of life and non life Insurance segment are one
of the keyresults of these liberalization efforts. Insurance business by
way of generating premium income adds significantly to be the
GDP.Over the past three years, more than thirty companies have
expressed interest in doingbusiness in India. The IRDA (Insurance
Regulatory Development Authority) is there gulatory authority, which
looks over all related aspects of the insurance business. The
provisions of the IRDA bill acknowledge many issues related to
insurance sector.The IRDA bill provides guidance for three levels of
players - Insurance Company,Insurance brokers and Insurance agent.
Life Insurance sector is one of the key areas where enormous business
potential exists. In India currently the life insurance premiumas a
percentage of GDP is 1.3 % against, 5.2 per cent in the US.General
Insurance is another segment, which has been growing at a faster
pace. But asper the current comparative statistics, the general
insurance premium has been lower than life insurance. General
Insurance premium as a percentage of GDP was a mere 0.5'per cent in
1996. In the General Insurance Business, General Insurance
Corporation(GIC) and its four subsidiaries viz. New India Insurance,
Oriental Insurance, National Insurance and United India Insurance,
are doing major business. The General Insurance Industry has been
growing at a rate of 19 percent per year.
The entry of several private insurance companies, particularly
international insurance companies, through joint ventures, will speed
up the process of insurance mobilization.The competition will unleash
new schemes and benefits, which will give consumers abetter Chance
to save as well as insure. The regulatory system in India is relatively
new and takes some more time to make the Insurance sector a
perfectly competitive one . Insurance Regulatory Authority of India
issued regulations on 15 subjects which included appointed. Actuary,
actuarial report, Insurance agents, Solvency margins, re-insurance,
registration of Insurers, and obligation of insurers to rural and social
sector investment and accounting procedure. The reform in Insurance
in India is guided byf actors like availability of a variety of products
at a competitive price, improvement in the quality of customer
services etc. Also the employment opportunities in the Insurance
sector wil1 increase as major players set their business plans in India.
The policy of the government to open up the financial sector and the
Insurance sector is expected to bring greater FDI inflow into the
country. The increase in the investment limit in this vital sector has
generated considerable business interests among the foreign Insurance
companies" Their entry wil1 certainly change the Insurance sector
considerably.

Insurance Sector Reforms:

In 1993, Malhotra Committee, headed by former Finance Secretary
and RBI GovernorR.N. Malhotra was formed to evaluate the Indian
insurance industry and recommend itsfuture, direction. The Malhotra
committee was set up with the objective of complementing the
reforms initiated in the financial sector.
In 1994, the committee submitted the report and some of the key
recommendations included:
Structure:
1. Government stake in the insurance Companies to be brought down
to 50%.
2.Government should take over the holdings of GlC and its
subsidiaries so that thesesubsidiaries can act as independent
corporations.
3. All the insurance companies should be given greater freedom to
operate.
Competition
1. Private Companies with a minimum paid up capital of Rs. 1 bn
should be allowed toenter the industry.
2. No Company should deal in both Life and General Insurance
through a single entity
3. Foreign companies may be allowed to enter the industry in
collaboration with thedomestic companies
4. Postal Life Insurance should be allowed to operate in the rural
market.
5. Only one State Level Life Insurance Company should be allowed
to operate in eachstate.5

Regulatory Body:
1. The Insurance Act should be changed.
2. An Insurance Regulatory body should be set up.Controller of
Insurance (Currently a part from the Finance Ministry) should be
madeindependent.
Investment:
1. Mandatory Investments of LIC Life Fund in government securities
to be reduced from75% to 50%.
2. GIC and its subsidiaries are not to hold more than 5% in any
company (There currentholdings to be brought down to this level over
a period of time.)
Customer Service:
1. LIC should pay interest on delays in payments beyond 30 days.
2. Insurance companies must be encouraged to set up unit linked
pension plans.
3. Computerization of operations and updating of technology to be
carried out in theinsurance industry.The committee emphasized that
in order to improve the customerServices and increase the coverage of
the insurance industry should open up tocompetition. But at the same
time, the committee felt the need to exercise caution as anyfailure on
the part of new players could ruin the public confidence in the
industry. Hence,it was decided to allow competition in a limited way
by stipulating the minimum capitalrequirement of Rs. 100 crores. The
committee felt the need to provide greater autonomyto insurance
companies in order to improve.

Insurance Regulatory Authority

On the recommendations of the Malhotra Committee, government has
set up an interimInsurance Regulatory Authority (IRA), with a view
to activate an insurance regulatoryapparatus essential for proper
monitoring and control of the insurance industry. The IRAis headed
by a chairman who is also Controller o0f insurance and chairman of
TBC. Theother members of the IRA, not exceeding seven in number
of whom not more than threeshall serve full time, shall be nominated
by the central government.
INSURERS:
Insurance industry, as on 1.4.2000, comprised mainly two players: the
state insurers:
Life Insures:
 •Life Insurance Corporation of India (LIC)
General Insurers:
•General Insurance Corporation of India (GIC) (with effect from Dec
‘2000, anational reinsurer)7

INSURANCE INDUSTRY:
CLASSIFICATION

INSURANCE

LIFE INSURANCE GENERAL INSURANCE

Motor vehicle
Fire Marine Mediclaim
insurance insurance

SOME PLAYERS IN THE INDUSTRY

 Life Insurance General Insurance
Life Insurance Corporation of India . General Insurance Corporation of India.
1. Oriental Insurance Company Ltd.
2.New India Assurance Company Ltd.
3. National Insurance Company Ltd.4.

New Entrants
ICICI Prudential Life Insurance Ltd. Bajaj Alliaz General Insurance Company Ltd.
Tata AIG Life Insurance Corporation Ltd. Reliance General Insurance Company Ltd.
ING Vysya Life Insurance Corporation Ltd. Tata AIG General Insurance Company Ltd.
Om Kotak Mahindra Life Royal Sundaram Alliance Insurance
InsuranceCorporation Ltd. CompanyLtd.

4 I’s of Insurance Service

The 4 I’s refers to the different dimensions/ characteristics of any service.
Unlike pure product, services have its own characteristics and its related
problems. So the service provider needs to deal with these problems
accordingly. The service provider has to design different strategies according
the varying feature of the service. These 4 I’s not only represent the
characteristics of different services butalso the problems and advantages
attached to it.

These 4 I’s can be broadly classified as:

•Intangibility

•Inconsistency

•Inseparability

•Inventory
  Intangibility:
Insurance is a guarantee against risk and neither the risk nor the guarantee
istangible. Hence, insurance rightly come under services, which are
intangible.Efforts have been made by the insurance companies to make
insurance tangible tosome extent by including letters and forms

 Inconsistency:
Service quality is often inconsistent. This is because service personnel
havedifferent capabilities, which vary in performance from day to day. This
problem of inconsistency in service quality can be reduced through

 Inseparability:
Services are produced and consumed simultaneously. Consumers cannot and
donot separate the deliverer of the service from the service itself. Interaction
betweenconsumer and the service provider varies based on whether consumer
must bephysically present to receive the service.

 Inventory
No inventory can be maintained for services. Inventory carrying costs are more
subjective and lead to idle production capacity. When the service is available
but there is no demand, cost rises as, cost of paying the people and overhead
remains constant even though the people are not required to provide services
due to lack of demand.

In the insurance sector however, commission is paid to the agents on each

policy that they sell. Hence, not much inventory cost is wasted on idle
inventory. As the cost of agents is directly proportionate to the policy sold.

GENERAL INSURANCE
With the opening up of the insurance industry to the private sector, the need
for a strong,independent and autonomous Insurance Regulatory Authority was
felt. As the enacting of legislation would have taken time, the then
Government constituted through aGovernment resolution an Interim
Insurance Regulatory Authority pending the enactmentof a comprehensive
legislation.The Insurance Regulatory and Development Authority Act, 1999 is
an act to provide forthe establishment of an Authority to protect the interests
of holders of insurance policies,to regulate, promote and ensure orderly
growth of the insurance industry and for mattersconnected therewith or
incidental thereto and further to amend the Insurance Act, 1938,the Life
Insurance Corporation Act, 1956 and the General insurance
Business(Nationalization) Act, 1972 to end the monopoly of the Life Insurance
Corporation of India (for life insurance business) and General Insurance
Corporation and its subsidiaries(for general insurance business).

Definition and meaning:

1.INSURANCE:
Insurance is the means of managing risk and protection against financial
lossarising as a result of contingencies, which may or may not occur.In other
words, insurance is the act of providing assurance, against a possible loss,by
entering into a contract, with one who is willing to give assurance. Through
thiscontract the person willing to give assurance binds himself to make good
such loss, if itoccurs.12

2.GENERAL INSURANCE:
General insurance means managing risk against financial loss arising due to
fire,marine or miscellaneous events as a result of contingencies, which may or
may not occur.General Insurance means to “Cover the risk of the financial loss
from any natural calamities viz. Flood, Fire, Earthquake, Burglary, etc.. i.e. the
events which are beyond the control of the owner of the goods for the
things having insurable interest with the utmost good faith by declaring the
facts about the circumstances and the products by paying the stipulated sum ,
a premium and not having a motive of making profit from the insurance
contract.”

Some of the General Rules:

1.Mis-description: The insurance policy shall be void and all the premiums paid
by insured may be Forfeited by the insurance company in the event of mis-
presentation or mis-declaration and/or non-disclosure of any material facts.

2.Reasonable care: The insured shall take all reasonable steps to safeguard the
property insured against any loss or damage. Insured shall exercise reasonable
care that only competent employees are employed and shall take all
reasonable precautions toprevent all accidents and shall comply with all
statuary or other regulations

3.Fraud: If any claim under the policy may be in any respect fraudulent or if
any fraudulent means or device are used by the insured or any one acting on
the insured’s behalf to obtain any benefit under the insurance policy, all the
benefits under the insurance policy may be forfeited.

4.Risks of loss not covered under general insurance are: The loss or damage
or liability or expenses whether direct or indirect occasion by happening
through or arising from any consequences of war, invasion, act of foreign
enemy, hostilities (whether war be declared or not), civil war, rebellion
revolution, civil commotion or loot or pillage in connection therewith and loss
or damage caused by depreciation or wear and tear. However the risk of loss
or damage by war can be insured by payment of additional premium in some
cases only.
3. Fraud :

If any claim under the policy may be in any respect fraudulent or if any
fraudulent

means or device are used by the insured or any one acting on the insured’s
behalf

to obtain any benefit under the insurance policy, all the benefits under the

insurance policy may be forfeited.

4. Few basic principles of general insurance are :

1. Insurable interest

2. Utmost good faith

3. Subrogation

4. Contribution

5. Indemnity

5 Risks of loss not covered under general insurance are:

The loss or damage or liability or expenses whether direct or indirect

occasion by

happening through or arising from any consequences of war, invasion, act of

foreign

enemy, hostilities (whether war be declared or not), civil war, rebellion

revolution, civil
commotion or loot or pillage in connection therewith and loss or damage
caused by

depreciation or wear and tear. However the risk of loss or damage by war can
be insured

by payment of additional premium in some cases only.

Market Share

As by this time we are well versed with all the General Insurance companies
both Public and private we know how each company contributes serving the
customers and also generating revenue through it. We also know that General
Insurance contributes towards the Gross Domestic Profit, but now let us see
how these companies individually contribute towards the Gross Domestic
Profit through the way of Market Share of each company both Private & Public.
As we can see in the Pie Charts a comparison of 3 consecutive years have been
taken which are 2003-04, 2004-05 & 2005-06.Public Companies have been
dominating the General Insurance Market since long time, the market share of
Private companies have been improving in the last few years by approximately
6 % each year, but then too Public sector companies capturing the major
market. But also in Public sector companies New India Assurance is been
leading the way which is been closely followed by the remaining. Among the
private players we can note that ICICI Lombard is leading the way.By
considering 2005-06 as the base year, we can note that the market share of
Public companies have been deteriorating having 73.43% of the market share
from 85.54% in the year 2003-04.
 INSURANCE REGULATORY AND

DEVELOPMENT AUTHORITARIAN

Insurance Regulatory and Development Authority Act, 1999, came into

being from 19/04/2000.

Objects are stated in Act are as follows: "An Act to provide for
establishment of Authority to protect interests of holders of insurance policies
to regulate, promote and ensure orderly growth of insurance industry and for
matters connected there with and further to amend Insurance Act, 1938,Life
Insurance Corporation Act, 1956 and General Insurance Business
(Nationalization)Act, 1972".

Composition:
IRDA will consist of a chairperson and not more than Five whole time members
and not more than four part time members.Whole time members shall hold
office for 5 years or until age of 62 (65 in case of chair person) whichever is
earlier. Part time members shall hold office for not more than 5 years.

Powers and Function of Authority

1. To regulate, promote and ensure orderly growth of insurance and re-
insurance business

2. To issue a certificate of registration, renew, modify, withdraw, suspend or

cancel such registration of applicant, i.e. insurance company

3. To prepare a code of conduct for agents, surveyors and loss accesses and
other intermediaries who take part in insurance business

4. To exercise all powers and perform all functions of controller of Insurance

under Insurance Act, 1938

5. To protect interest of policy holders in matters concerning assignment of

policy, settlement of claims, terms and conditions of contract etc.

6. To promote efficiency in conduct of insurance business

7. To promote and regulate professional organizations connected with

insurance business

8. To regulate investment of funds of insurance companies

9. To regulate maintenance of margin of solvency

10. To adjudicate disputes between insurers and intermediaries

11. To call for information from" undertake inspection and conduct enquiries
and investigations including audit of insurers, intermediaries etc.

12. To control and regulate rates', advantages, terms and conditions offered by
Insurers

in respect of general insurance business riot so controlled by Tariff Advisory

committee

13. To prescribe manner and forms in which books of accounts is to be

maintained

14. To exercise other powers as such may be prescribed by central

government.
Insurance Advisory Committee:

Authority has power to appoint a committee to provide guidance

to

Authority and committee is called Insurance Advisory Committee.

This committee contains not more than 25 members excluding ex-officio

member

representing interest of commerce, trade industry, agriculture, surveyors,

agents,

intermediaries etc.

Chairperson and members ~f Authority are ex-officio members of

Insurance

Advisory Committee.

15) Code of conduct for insurance agent:

Every insurer agent shall,

• Identify himself and insurance company of whom he is an agent

• Disclose his license to prospect on demand

• Give requisite information in respect of insurance product offered for sale

by his

insurer and into account needs of prospect while recommending a specific

'plan.

• Disclose scales of commission payable to him if asked by prospect

• Indicate premium to be charged by insurer on insurance product

 • Explain to prospect nature of information required in proposal from and
also

importance of disclosure of material information

• Bring to notice of insurer any adverse habits or income inconsistency of

Prospect

• Inform promptly about acceptance of rejection of proposal by insurer.

• Render necessary assistance to policyholder or claimant in complying

with,

requirements of settlement of claims

50
 CHANGING SCENARIO OF GENERAL

INSURANCE MARKET

'Looks to the future with confidence and optimism'

Brief the history of general Insurance.

In India General Insurance business started, Marine Insurance started on later

part of the 17th century. Before nationalization in 1947 we have 147 insurance
companies, foreign and Indian both. But during there nationalization, in 1973
we have 107 companies that merge into four companies, i.e. taken over by
Government. General Insurance Corporation of India (GIC) was set up in 1973
as a holding company,with four subsidiary operating companies - National
Insurance co Ltd., New India Assurance Co. Ltd., Oriental Insurance co Ltd., and
United India Insurance Co Ltd., with a clear cut mission as set out in the Act.
The overall scenario in the insurance market in India after nationalization.GIC
and its subsidiaries function through a vast country - wide network of around
4100 offices spread across the length and breadth of the country, GIC has
taken the benefit of insurance to almost every district, across hilly terrain and
often inaccessible areas of the country. The customer interface is made easy
through a network of agents, development officers and employees at Branch,
Divisional and Regional offices as well as at the corporate level.

The GIC and its subsidiaries have a workforce of approximately 86,000 In 1973
tainted at various levels through in house training institutions. Now the total
number of employees went up.The industry has also promoted the National
Insurance Academy (NIA), which is the premier training institute in insurance,
catering not only to Indian Nationals but also to select foreign nationals. The
industry issues around 23 million documents and settles 2 million claims every
year.Country wide computerization in the recently past has made the task of
policy- holder's servicing easier and rapid. At the same time, profitable lines
and premium components increases and we became a investment company
.Where does Indian Insurance sector stand compared to International
Insurance Sector? Technologically, Indian insurance sector is quiet comparable
with the international sector. Our vast resources of skilled and technical
manpower, huge market potentiality and technical know-how - all are
comparable with the international market.But lacking in the process of
computerization and in pricing (premium rate) is also seen.In product, we have
demand in less because lack of awareness for adequate insurance cover in
India with insuring public. Our marketing strategy is not very modern. But we
are trying to rectify both these (Technology and Marketing) areas The
problems faced by Indian Insurance Sector Today

The main problems are:

Lack of awareness for insurance needs.

Lack of penetration due to inadequate marketing/delivery system.

Total computerization still in the process of implementation.

Sophisticated covers do not have adequate demands because of General

attitude toinsurance in India.

The Schemes
Recognizing its organizational strengths, the Govt. of India has also entrusted
the corporation with the administration of various schemes for social
melioration and public welfare. Social security schemes benefiting millions of
Citizens below the poverty line.Personal Accident Insurance and Hut Insurance
are operated all over the country for which the premiums are paid by the
Government. The GIC administers on behalf of Government, the crop
Insurance scheme for areas and crops notified under the crop Insurance
Scheme. Various low cost mass insurance policies have been evolved over a
period of time, e.g.'Jan Arogya Bima Policy'.Role General Insurance Industry is
playing in the growth of economy of the country The General Insurance
Industry has an enviable track record among public sector units. It has a
consistent profit and dividend paying record accompanied by a steady growth
in its financial resources.Through investments in the- Government sector and:
socially - oriented Sectors the Industry has contributed immensely to the
nation's development. The industry is recognized as one of the largest
financial' Institutions in the Country. The ventures initiated by the industry in
the areas of Mutual Fund, Housing Finance have done exceedingly well in
recent years.To protect the country's foreign exchange reserves, the
reinsurance arrangement are so organized that maximum retention is made
possible within the country while at the same time protecting interests of the
policy holders. The GIC'S inwards reinsurance wing, called the SWIFT,
maximizes the foreign exchange balance by acting as an international insurer-
accepting risk from all over the globe.

GIC'S International operation:

GIC'S international operations span over 31 countries around the globe. The
reinsurance expertise built over a long period has made the Indian Insurance
Industry a globally acknowledged reinsurer of repute GIC'S risk management
skill has been backed by specialists with a vast insurance experience.Thus, the
technical and underwriting skills have been acknowledged in the international
market. The corporation operates in 17 countries through branches and
agencies, whereas in another 14 countries, it has subsidiaries and associate
companies. The GIC has a subsidiary company known as 'India International
Pvt, Ltd.,' operating in Singapore and a joint-venture company, Kenindia
Insurance co.Ltd. The impact of liberalization of economy in the activities of
GlC. With the liberalization of economy, General Insurance in India is poised
for a quantum jump, both in quality and quantity.

Vision for the future:

It is estimated that the industry will outstrip the present rate of growth and
reach a premium value of over Rs. l,20,000 millions by taking advantage of the
extra-large mega- risk and social awareness of insurance in general, even as . a
developing country turns into a developed country.The task before the
industry to service the growing number of policy-holders would equally see a
quantum jump in issuance of documents and settlement of claims. Matching
reserves and consequent investment will be a natural corollary.It is expected
that the investment portfolio will touch around Rs. 2,50,000 millions by the
end of the next decade, with the strength built up over the years since
nationalization, GIC new looks to the future with confidence and optimism,
takes on global challenge with its high standard of service, innovative initiative
and a compelling social perspective.

GIC's plan - in new business areas:

The two new areas that GIC is getting into are the areas of health care and crop
insurance. For the health care business, the corporation has received
permission to set up a separate management services company. GIC has plans
to increase the scope of cover in health care, personal accident and crop
insurance and will require expertise in pricing the products.

The Research & Development activities:

They have just entered these areas and for the coming five years we are
investing approximately 500 crores. GIC'S R & D cell is created backed up
market research data.The subsidiaries of GIC are becoming an autonomous
body.Privatization in the insurance sector of India - Is it in the right direction
It's purely a government decision and the nationalized sector is ready to face
the challenge. And have taken the challenge to stand in the stiff competition.
And now, many private companies have entered the market. These companies
are a result of merger of Indian companies with foreign companies.

Claims
The Settlement of claims constitutes one of the important functions in an
insurance organisation.

The proper settlement of claims requires a sound knowledge of thee law,

principles andpractices governing insurance contracts and in particular a
thorough knowledge of the terms and conditions of the standard policies and
various extensions and modifications there under.

The procedure in respect of claim a under various classes of insurance follows

a common pattern and may be considered under 3 broad headings.
Preliminary procedure

It is essential that early notification of the loss is received by insurance undue

delay in notification would adversely affect the position of the insurer.
However if there is any delay in notification or not or weather is material will
be ultimately decided by the courts based on the facts of the individual cases

The notice of loss condition in liability policies provides for two aspects

a.) Notification of the happening of the accident immediately followed by

b.) Notification of the receipt of claim or suit filed against the insured.

Under certain types of policies (e.g. Burglary) notice is also to be given to

police authorities.

Loss Minimization

At common law, there is a duty on the part of the insured to observe good
faith .This duty of good faith means that at all times the insured has to act as if
he is uninsured.For E.g., the private car package policy provides , among other
things , that the insured shall take all reasonable steps to safeguard the motor
car from loss or damage and to maintain it in efficient condition. In the event
of any accident or breakdown the motor car shall not be left unattended
without proper precautions being taken to prevent further damage or loss.

Procedural

On receipt of intimation of loss or damage insurers check that:

a.) the policy is in force on the date of occurrence of the loss or damage
b.) The loss or damage is by a peril insured by the policy.
c.) Notice of loss received without undue delay.
d.) After this check up the loss is allotted a number and entered in theclaims
register.
Claim Forms

The contents of the claim form vary with each class of insurance .In general the
claim in general the claim form is designed to elicit full information regarding
the circumstances of the loss such as date of loss, time, cause of loss, extent of
loss etc claim forms are invariably sued in fire and miscellaneous insurance.

Investigation and Assessment

On receipt of the claim form duly completed from the insured the insurers
decide about the investigation and assessment of loss if the loss is small the
investigation to determine the cause and extent of loss is done by an officer of
the insurers. Some times even this may be waived and the loss settled he basis
of the claim form only.The investigation of larger or complicated claims is
entrusted to independent professional surveyors who are specialist in their line
the appointment of a surveyor is intimated to the claimant the surveyor is
furnished with all relevant claim papers such as claim form policy copy
etc…However, many a times surveyor is appointed and survey is carried
immediately on receipt on notice of loss, that is even before claim form could
be issued.

Claims documents

In addition to the claim form independent survey report certain documents

are required to be submitted by the insurers to substantiate the claim for
example for fire claims for fire claims a report for the fire brigade for motor
claims driving license registration copy police report etc

Arbitration

It is distinct from litigation and is a method of settling disputes under contract

in accordance and conciliation act 1996.

Settlement

The claim is processed on the basis of Claim form Independent report from
Surveyors, legal opinion, medical opinion etc as the case may be. Various
documents furnished by the insured. Any other evidence secured by the
insurers If the claim is in order settlement is effected by cheque the payment is
entered in claims register as well as in the relevant process record. Appropriate
recoveries are made fromthe insurers if any.