HOW MANY TYPES OF FIRE POLICY CONDITIONS

 Policy conditions are simply provisions of an  insurance policy  which along with the  insuring agreement  and exclusions  complete the contract. The conditions may be precedent to the contract, conditions subsequent to the contract and conditions precedent to liability . The conditions must be complied  with to make the insurer liable under the contract . The conditions may or may not be  incorporated in the policy. The conditions which are not mentioned in the policy are known as Implied  conditions. The implied conditions are utmost good faith, insurable interest  and indemnity. On the contrary, the conditions which are set out in the policy are known as Express Conditions which may be either of general  nature and therefore , printed on the policy or conditions specially designed with reference  to a particular  contract  and are incorporated in the policy. 

The following  are the express conditions printed on the Standard policy form. 

 (1) MISDESCRIPTION : (condition I) : As per this condition there should be no misdescription  or mis representation or non  disclosure of the material facts as regards the subject  matter is concerned. Otherwise the policy be voidable at the option of the insurer. The condition stresses the proposer’s  duty to reveal all material facts at the time of making proposal. What is material and what is not material will depend  upon the circumstances of particular  case. Generally a fact  is said to be material if it affects the judgement  of the insurer after its disclosure . Some questions raised in the proposal from such as information  relating to past losses sustained on the property refusal for renewal or payment of claim by any other insurer or the involvement  of the insured in a  hazardous occupation etc. are considered as material.

 This condition is in accordance with the principle of equity  in as much as it protects the insurer if it is subsequently discovered  that the insurance. has been obtained through  an inaccurate statement on the part of the insured.  This is obvious because the insurer in deciding whether a risk should be accepted  and the rate of premium to be charged  has regards to the facts disclosed  by the proposer. Even if they misdescription  affects a part only  the whole and renders it untenable. 

  (2)  PAYMENT  OF PREMIUM CONDITION-2: No payment in respect  of premium shall be deemed unless  a printed form of receipt for the same has been given to the insured. The condition says about the proof of premium payments   (a) Premium be paid, (b) Form of printed  receipt be obtained, ( C ) it should  be signed by  an official  or agent of the company, Unless premiums  is paid in advance no risk is covered.  (3) OTHER INSURANCES  (CONDITION-3) (4) COLLAPSE OF BUILDING  CONDITION-4: According  to this condition the insurance cover is automatically cancelled  in the event of collapse of the building or of any important  part of the building if it goes to change the original  risk. The fall or  displacement may subject the building or its contents  to an   increased risk of fire. The insurance cover is not cancelled if they collapse  is covered by fire . The responsibility to prove falls  on the insured

TYPES OF MARINE INSURANCE

   (1) HULL INSURANCE: The term “HULL” refers to the frame or body of the ship or vessel and its machinery  . As the ship/ vessel/ hull moves from the one part to mother and it may be subject to marine perils, hence  insurance is effected against the risks. There are a number of classification  of vessel  such as a ocean steamers, sailing vessel etc. The  hull  insurance policies are generally issued  for 12 months . The hull policies provide the cover for the hull and machinery  as well as in report of materials and outfit and stores and provision  for the officers and crew . In addition, cover for liabilities is included. The hull policy consists of the basic policy form to which clauses are  attached. The clauses are a known as “ Institute clauses” and are drafted by the institute of London Underwrites which is an association  representing the marine  insurance companies  and Lloyds” underwriting  operating  in London. These clauses  are adopted by the General Insurance Industry in India. The cover is provided by the Institute Times Clauses (Hull) and the risk covered are maritime perils such as fire collision stranding Etc., 

 Additional perils not of a maritime nature are also covered. Some examples are damage to hull caused by latent defect in machinery  accidents in loading or discharging cargo etc., The Institute  Time clauses (Hull ) includes a clauses  known as Running Down Clauses which extends the hull policy  to provide cover to the shipowner in respect of his liability  for damage caused to the another ship in a  collision as a consequence of negligent navigation.  Hull policies are also available to cover (1) loss of freight I.e.,  earnings derivable by a  shipowner for the employment of his a  ship and (2) disbursements I. e , amount spent by him in fitting out the vessel including provisions   and a stores. Hull policies are also issued to cover vessels in course of constructions . These policies are taken by the ship builder . The vessels are insured from the laying of the keel until completion of trails leading to the delivery  of the ship to its owners.  Hull  insurance also includes the following insurances: (1) Inland vessels such as a barges launches, passengers, vessels etc., (2) Dredgers ( merchandised or non-mechanised) .

3) Fishing   vessels  ( merchandised or non-mechanised) . (4) Sailing vessels ( merchandised or

non-merchandised) . (5) Jetties and wharves.    2.   CARGO INSURANCE: Cargo means the good or merchandise  commodities carried in a ship in the course of shipment. When the goods or cargo transported  from the port of the departure of the port of destination, forms the subject  matter of  insurance. This policy  may be arranged for the duration of a voyage or as time policies or open policies or on other basis. As in hull  insurance, the basic cover (I.e . in respect  of maritime perils) is provided by the Standard marine policy. In practice the cover is much the Institute Cargo clauses attached to the policy. However from 31st march 1983, the Lloyd’s  S.G. Policy form the  has been replaced by the a new simplified policy which  contains particulars such as a name of the insured, details of vessels , voyage,  goods insured sum insured,  premium etc.,

 The risks covered under the cargo is  policies  an  are incorporated in the revised institute Cargo clauses (A), (B), and  ( C ).    (1)  INSTITUTE CARGO CLAUSE ( C ): This cover is provided for loss or damage to cargo due to  (a) Fire or explosion, (b) Standing  grounding  sinking of the vessel or craft: ( c )  Overturning or derailment of vehicle . (d) Collision or contract of vessel or conveyance  with an external object  (e) discharge of cargo at port of distress: (f) General average and Salvage charges and  (g) Jettisoning.  (2). institute cargo clauses (B): In additional to the losses covered under clauses ( C ) Sling loss

I, e, total of any package lost or dropped during loading or unloading and (d) entry of sea, lake or river water.  (3)  INSTITUTE CARGO CLAUSE (A): The cover is on a All risks basis and thus covers all physical loss or

SETTLEMENTS OF CLAIMS UNDER MOTOR INSURANCE

 The claims arise under motos insurance are divided  into two classes i.e. claim for own damages  and claims for third liability.  (A) CLAIMS FOR OWN DAMAGES: Own Damages arise which damage to the vehicle  is caused by the insured. These damaged  are generally caused by collision or over running of the vehicle. The settlement of claims for own damage is done in three phases, namely preliminary scrutiny  assessment of loss and settlement.  

 (a) PRELIMINARY SCRUTINY:  Immediately on occurrences of any accident or loss of or  a damage to the vehicle, the  insured has to serve a notice of a loss of the insurer. On receiving  the notice, the insurer will check his records to find out whether policy is in force or discontinued . Later, the loss is entered in claims  register and a claims form is sent to the insured to be filled up by him and to be returned  to the insurer. The insured is asked to give all  relevant   particulars in the claim form such as a date and time of accident cause of accident extent of damage to the vehicle  etc. The insured is also required to submit a detailed  estimate of repairs from any repairer of his choice. The insurer generally accepts the estimates. But at times he  asks for another estimate , Insurer does with this when it doubts the competence  moral hazard or business integrity of repairer first chosen.

  (b) ASSESSMENT: The insurer employs independent  automobile surveyors  to ascertain the cause of the accident and extent of loss sustained by the insured. The surveyors  are supplied a copy of a the policy , the claim form and repairer’s  estimate. They inspect the damage vehicle, discuss the cost of the repair or replacement with repairer and submit their survey report. In case of minor damage claims independent   surveyors is not appointed. The officials  of insurance company or its engineer inspect  and finalise the claim  report. 

 ( C ) SETTLEMENT: The surveyors  report is taken as a basis for settlements of claims. The report is examined  thoroughly  and settlements is made according to the recommendations  in the report. The usual practice is to authorize repairer. The repair receives a later from the insurer. The repairer will be given payment after completion  of repairs. The insured has go to give a satisfactions  note or voucher that he is hundred  percent satisfied with the repairs. In case the cost of repair paid by the insured, the latter can recover the amount from the insurer. For reimbursement of cost of the repair the insured has to produce  the letter receive from the repairer  with the insurer as an evidence for payment of cost of repair. Finally the insurer will pay the claim for cost of repair.

  (B)  CLAIMS  FOR THIRD PARTY LIABILITY: The third party liability arises  when a motor vehicle hurts a third party so as to cause damage to his property or his death or a personal  injury  to him. For settlement claims for third party liability the following procedure is generally adopted:  (1) ENTRY OF NOTICE:  As soon as the notice of claim is received  from any: the insured the third party, or the Motor Accidents Claims Tribunal (MACT)  the same will be entered in Claims Register. Date of intimation, claim number , Policy number data of accident. Vehicle number . MACT  number . Name of Insured, Driver and claimant, amount claimed etc are entered in the Claim Register. Separate sections are maintained in the register for fatal claims and bodily injury  claims

RISK MANAGEMENT AND ITS EVOLUTION

These techniques range from carrying a talisman or a lucky dollar to fortune tellers and star readers and ultimately to the multinational  financial  behemoths of insurance companies. Most business  in the past centuries have transformed some of their risks to insurance companies in exchange for a premium. Insurance companies in their search for  more business and more profits have hired  agents and brokers to sell more of their products  to more clients in exchange for a sizeable commission. It is only when business owners realized that the coast  of this distribution system and its inherent conflict  of interest did not work to their  advantage that the discipline  of risk management  came into its own right. The conflict  of interest comes from the fact that agents and brokers are paid by the insurance companies  to produce sales. Consequently they only solve risk problems through more insurance sales and  then only solve those that are problems.  that fit the available  products  of the insurance company ( ies ) they represent.    Risk management  as a discipline  is an objective look at all the risks a  business faces, evaluating  them, prioritizing them and solving them . For example providing protective footwear to your employees may be a much more practical  and cost effective manner to solve your problem than buying insurance for such risk.

With this realization and the ever increasing  demands from better educate  consumers and employees the business brought the management of their risk In house. They hired and trained professionals  who were on the payroll of the company rather than commission   driven marketing people to handle all aspects of their risks. When the broker industry saw their  business disappear they reacted by consolidating  ferociously  and repositioning  themselves  very often as risk consultants A professional  risk manager should be completely  independent from the insurance industry in order to be able to provide advice  and solutions which are in the best interest  of those they serve. This can be obtained by either bringing  the service  In house or hiring  consultants on a fee for service basis. Any risk manager worth their “Cup Of Tea”  should be able to earth this fee back for their employer client in a short time by improved protection and lower insurance costs.  The risk and insurance management Society based in New York is one of the most prestigious international organizations  in this field advocating the above principles. It celebrated its 50th Anniversary  this year. Their annual convention gathers some 15,000 people active in the international risk management business.

  DEFINATION OF RISK MANAGEMENT:  (1) CUMBRIA COUNTY COUNCIL: “Risk management is a continuous process involving there current cycle of identifying   hazards and that lead to the risks occuring analyzing  the risk of an event and its profiling the risk in a respect of likelihood and impact controlling  the risk through action planning outcomes and monitoring the effectiveness of the control measures.  (ESSENTIALS OF RISK MANAGEMENT: The above definitions have brought to light a few essentials of an effective risk management . They are as a following:  (1) Risk must be identified before they can be measured and only after their impact  has been evaluated  can we decide on the most effective method of control. (2) The method of risk control should be economic . There are is no in spending Rs. 1,00,000 to control a risk which can only cost rs. 50,000, There will always be a point where spending on risk  control has to stop,  (3) The assets of the organization can be physical or human they are both important and risk management  must be seen to have a part to play in a  both . However risks do not strike at a sets but also play earning capacity of the enterprise.  (4) The principle of risk management  are just as applicable in the services sector as they are in the manufacturing  sector
and are of the equal  importance in the public and private sectors of the economy.

BENEFITS OFRISK MANAGEMENT: The following are some of the key gains from risk management “ (1) Reduces losses and costs due to risks. (2) Helps in anticipating problems before they impact a business . (3) Enhance profits.  (4) Eases out uncertainty by proactive systematic methods. (5) Ensures stability and target achievements. (6) Avoids litigation by taking preventive steps. (7) Improves efficiency in the organizations  by weeding out unplanned events and consequent loss of time and money.  (8) Improves  decision  making by understanding and systematic study of volatility and the opportunities  there from.  RISK MANAGEMENT PROCESS: The process risk management  can be broken into five steps, namely:  (1) Setting the objectives of risk management . (2) Risk Identification. (3( Risk Impact analysis-evaluation or estimation (4) Risk Strategy
(a) Risk Reduction and avoidance. (b) Risk transfer. ( C ) Risk retention

PERSONAL PACKAGE INSURANCE

1. HOUSE HOLDER’S INSURANCE: The house holder’s  insurance is a package cover designed to meet various  insurance  requirements of a house holder by combining  under a single  policy a number of contingencies generally  encountered by house holder. This  insurance providers protection for property and interests of the insured and his family members  who permanently reside with the insured. Generally properties like building household goods, jewellery & valuable domestic, electric appliances etc.,.  are covered by this policy. This minimum premium under this policy is Rs. 100.    

  2. PEDAL CYCLE INSURANCE: This  insurance is intended to cover loss of a or a damage to the cycle by fire, lighting , explosion  burglary house breaking theft and accident external means. It also covers the insured’s  legal liability  for bodily  injury to third parties subject to a specified  limit, say Rs. 15,000 . Any loss of a or a damage to rubber tyres , lamps, tools and accessories is covered only if they are lost or damaged in the same accident in which  the insured pedal cycle is also damaged. This policy can be extended to cover personal accident  insurance benefits on payment of additional premium.  

 3. MOBILE PHONE INSURANCE: Under this  insurance the insurer will indemnify  the insured for the loss of or a damage to cellular phone by theft, and burglary, fire, explosion , malicious or accidental damage due to external means, earthquake, flood, storm, electrical, and mechanical breakdown. On payment of additional premium, the cover can be extended  to indemnify insured against fradulent  use of the cellular  phone, following the physical loss of damage to the cellular phone, where such loss is total loss for a time limit of 24 hours, from the time of recording by the cellular operator of first fradulent call subject to a  maximum limit of Rs. 5,000 for any loss or any series of loss in any one period of  insurance. The premium for this extension is normally  charged @ Rs. 50 for any one period of  insurance.   

 4.  BAGGAGE INSURANCE:  This  insurance is damaged  to cover accompanied  baggage during specified journey, which includes  air, sea, rail or travel undertaken by the insured. The risks  covered are burglary  , theft or damage by accidental means. The route of the journey is specified in the policy and the cover is operative only when the insured is travelling  by an accepted mode of the travel on the specified  route. proposal form should be fully completed  as regards description  contents and value of each package. Further, if jewellery, valuable  and items listed in the exclusions  clause are to be covered then full description  and individual  value should be noted.  

 5.  ALL RISKS INSURANCE:  This  insurance grant very wide cover in respect of valuable property  and is normally issued  only to very good clients . Barring a  few perils like Earthquake, War, etc.,  the cover offers very comprehensive  protection  to the insured propertyagainst many perils such a as fire, Riot, & Strike. Terrorist Activity, burglary house breaking , theft, accidental  loss or damage. The following are the special features of this  : (a) The cover is strictly restricted  to personal  jewellery ornaments and other such valuable  which should be specified and separate  value declared against each.  (b) Declaration of full value should be a insisted upon but valued policies should not be a be agreed to.  ( C ) All articles  should be a sufficiently  in detail to permit identification. (d) In case of jewellery studded with pearls, diamond, or other precious , stones, valuation certificate of jewellery with number and detailed  description of the stone’s  should be obtained.  (e) furs and similar costly items, personal belongings  can also be included but articles like fountain  pens, spectacles, clothing  musical, instruments, and silver utensils etc., are not covered under this policy. However if an All Risk policy holder  insists  on coverage for clothing silver articles and the like, this may be agreed to but the policy should be endorsed restricting the cover on such items to Fire & Theft risks only.

Many Types of Insurance Policy

   SPORTS INSURANCE:  This insurance is available for amateur sportsmen only and not for  professional sportsmen covers sports like, Angling, Badminton, Cricket, Golf, Lawn tennis, Squash and use of sporting guns. It indemnifies  the insured  in respect of the following:  (a) Loss of or damage to sporting  equipments accessories etc., (b)  Loss of or damage to clothes and belonging  caused by fire , burglary, house breaking or theft. ( C ) Legal liability of the insured and named members of the insured’s family, to the public, while engaged  in practicing the sport.  (d) Accidental bodily injury to the insured and to the named members of the insured’s  family whilst engaged in or  practicing  the sports.  

  2.  OIL AND ENERGY RISK INSURANCE: This is also  known as off-shore insurance. Insurances are granted for: (a) Mobile off-shore  drilling units (drill ships and rigs). (b) Off-shore platforms for productions  and processing . ( C ) Associated pipelines, cables etc., These policies issued in Marine Hull department are granted  to Oil and Natural Gas Corporation which is engaged in oil and gas exploration  and production at sea.  (a) Insurance of aircraft against  loss or damage.  (b)  Insurance of legal liability  to third parties and passengers.  ( C )  Insurance of legal liability  for freight, mail etc carried.  (d)  Insurance pilots crew and ground staff against  personal accident risk.  (e)  Insurance   of pilots  and other crew against  loss of professional licence.     

3. SPECIAL CONTINGENCY POLICY:  This policy covers the risk relating  to machinery and or equipment or any other property. The rate of premium charged varies from 1 % to 2% of the value of the property to be covered. A new type of a special contingency policy has become popular in the recent year. This  relates to total abandonment of one day  cricket match due to specified perils. These perils being fire, lighting  explosion,  earthquake, rain, riot, strike etc.,  This policy  cover the actual financial loss suffered  by the insured i.e., the organizers . The insured has to establish the extent of loss by the submitting an audited accounts. It is a condition  under the policy that no liability  will attach event a if a  single ball is a bowled. It should  be noted that once a match thus commences, subsequent,  abandonment would be noted constitute a loss. Similarly changes in venue or postponement of the match does not constitute a claim. It is prescribed that the tickets issued shall contain a stipulation that once a ticket is sold, no refund will be allowed. 

  4.  CREDIT INSURANCE: Credit  Insurance comes in a variety. Typical credit  Insurance coverages included  credit life, credit disability, involuntary, unemployment, and credit property  Insurance. Separate coverages  such as those listed above often bundled  together and marketed as one packaged  product. Credit   life  Insurance is a type of life  Insurance that effectively pays off the debt  you owe on a credit account or mortgage in the event of your death. The payment from the  Insurance company reflecting the pay off balance of your account or loan always to the lender who is a named  as the  beneficiary of  the policy . You  cannot name a spouse, family member or friend as a beneficiary for a  credit life  Insurance policy. Credit Disability  Insurance helps to a secure your favourable  credit rating by covering  your minimum  monthly  credit account payment during a period of documented medical disability. Since it is a common for policies to contain a maximum time period for continuing payment benefits , it is likely that your entire balance will not be paid off. Morever, as interest and  Insurance charges continue  to add up throughout  the period of your disability, it is possible that you may be owe more money on your account after your disability  than you did before, depending upon your original balance,  Generally you will not be covered for any additional purchase  made after the onset of your disability. Involuntary unemployment   Insurance, like credit disability  Insurance, makes your minimum monthly  credit account payment during a of a involuntary unemployment, such as a lay off or down sizing. The limitations noted with credit disability  Insurance as defined above a are also applicable to involuntary unemployment  Insurance. It is a possible that your entire balance will not be a paid off and it is possible that your may owe more money after unemployment ends than did you before even, though the  Insurance company was making your minimum monthly payment. Credit property  Insurance cancels  the debt you owe on items purchased on a an insured credit account if the property purchased is destroyed by the specific  named perils such as an accident theft, flood, or  earthquake. Unlike most property  Insurance, you do not he  not have a to pay a deductible up-front when submitting a claim. Deductibles are not used in credit  property  Insurance.  5. STUDENT SAFETY INSURANCE: This  Insurance is issued on similar lines to personal accident  Insurance. It is meant for children going to school, college and other educational institutions. It covers death or the to the permanent disablement due to accident. The sum assured ranges from Rs. 10,000, to Rs. 10, 00, 000 . The benefits offered to the insured are as follows.

NON MEDICAL SCHEME

The practice of accepting  insurance without a medical examination ( I.e.,  non medical) became established  in the UK in the 1920’s. Eventually this practice spread to North America. For many years, non0medical medical history question are asked by agent rather than a  doctor was limited to smaller amounts at the ages of 40 under , but due to favourable  experiences, it was extended  to quite large amounts in the early 1980’s The term non-medical should not however, be taken to mean that  insurance is issued without any medical  information. Medical information is sought from the proponent directly  and in this regard, there is an additional responsibility  on the proponent to be totally fair and frank. Here the agent also plays an important role as his role as the primary underwriter is brought into play  because of his close intimacy with the proponent  and knowledge of any additional adversity in the proponent’s  health condition. There are many reason for accepting applications  without medical examination.  (a) There has been a growing  realization in the  recent past that a medical examination is not indispensable  because it is known from experience that it brings out the adverse feature in not more than the a tenth of all the applications received. (b) The slight increase in the claims can well be compensated for by the saving of medical fee and other procuring  expenses.

 ( C ) In our country more than 75% of the population is in rural areas. It is difficult to have competent  medical examiners in these areas to conduct the medical  examination for the purpose of life insurance. This is a more true in respect of lady medical examiners.  It is also difficult to bring applicants to nearby  towns for that purpose, which will also be prohibitively  costly.  (d) Where the applicants are employees of an institution which insists  on standard age proof and a medical examination  at the time of a entry in to service and also maintenance of regular  leave records, medical examination can be dispensed with.  (e) The effect of selection by medical examination for life insurance on the rate of the mortality is limited to a few years after acceptance of the application may be a year or two. There could be some extra death during the period, which can be compensated by  savings of medical fees. In view of these reasons, if some safeguards can be  designed and adopted it will become possible to considered  applications  without the necessity  oaf any medical examination. The following  condition are generally employed.:  (1) Application form may be more elaborate and may included  a personal statement. 

The applicant will have to furnish his/her physical measurements like height and weight (LIC of India has built the tables which gives the range of weight for each age and height-minimum and maximum for consideration  of applications  under its Non medical  schemes those beyond  are considered subject to medical examinations.  (2) A detailed  report of the field worker is also called for in a which,  after making careful enquiry, the agent will have to  furnish details of the health habits, personal and family history,  financial position of the applicant to avoid moral hazard.  (3) There can be certain restrictions regarding  age at entry types of products  offered maximum maturity age, maximum sum assured etc., (4)  There can be more restrictions on allowing non-medical scheme to female lives.  (5) The insurance company can always reserve its right to call for a medical examinations in any case. LIC of  India has introduced two different  schemes: (a) Non-Medical special scheme, and (b) Non Medical (General) scheme. They are discussed in detail here 

LIFE INSURANCE PREMIUM SETTING: The insurer collects contributions from a large number of individual to compensate the financial consequences  of the loss of the unfortunate few. This contributions  is known as premium. In other worlds, premium is the price paid to the insurer by the insured fro underwriting  risk. There is a rate for each type or insurance. The rate of premium depends upon the  risk undertaken by the insurer,  expressed generally per hundred  or per thousands  of sum insured. It can be paid either in one lump sum  or in easy periodic instalments like monthly, quarterly  half-yearly of annual. The manner of a payment usually annual and the payment by monthly or other instalments  usually involves slight extra cost. 

TYPE OF PREMIUM: The determination of life insurance premium is one of the most technical  and a difficult aspects of the branch of actuarial  science which requires a broad knowledge  of science of mathematics and satistics The premiums can be classified into the following heads: (1) Net  premium. (2) Gross premium. (1) NET PREMIUM: This premium  is mainly based on the past experience  mortality and assumed rate of interest. No consideration is given for expenses incurred  and for future contingencies. The net premium should be equal to the claims paid other on the death or due to the maturity of the policy.  (2) GROSS PREMIUM: It is also known as the “office premium”  It is the amount that the life assured is required  to pay. It includes  the mortality rate, the assumed rate of interest, the expenses and loading  . So if expenses and bonus to policy holder are added to net premium it becomes gross premium. Gross premium =  Net Premium + Expenses + Loading.  The premiums mentioned above may be further classified  into two parts. (a) Net single premium: and. (b) Level premium.  (a) NEWT SINGLE PREMIUM: This premium is received  by the insurer in a Lump sum and is exactly  adequate, along with the return earned thereon, to pay the amount of claim. It does not provide for expenses of management  and for contingencies. Net single premium = Mortality cost + Loading --Interest. The computation of net single premium rates on any kind  of policy requires the information as to.  the age  and sex of the assured  since rate must be commensurate with age and sex. the type of policy, for the rate depends on the type of policy. The size of the policy, for the  rate depend on the amount of assurance or the amount of the claim guaranteed and the rate of interest  assured fr investment made by the insurance company.  (b)  LEVEL PREMIUM.: Due to financial constraints, some insured may find it difficult  to pay for this their life insurance  on a single premium.

MARINE POLICY CONDITION OR CLAUSES IN A MARINE POLICY

In order to satisfy the varied requirements of the insured suitable condition are incorporated in marine policy. These condition are the clauses  which are found in the policy. There are many conditions under which a policy is issued but we shall discuss below the most important among them:

 (1)  NAME OF THE INSURED: In marine policy,  the opening words are following by a blank space which are is used for the name of insured or his agent. If the name of is not inserted in the policy, the document will not be a considered as a marine policy. The names of those persons, who have an insurable interested in the subject matter insured alone should be inserted  in the policy. In the past in some of the policies the opening words were “ In the name of God”, such practice does not exist any longer. (2) ASSIGNMENT CLAUSE: According  to this clause, a marine policy is a freely assignable unless this is expressly prohibited. The policy may be assigned to any person who has insurable  interest or who may acquire it at some later date. Generally, cargo policies can be assigned freely without giving prior notice to the underwriter insurer but in case of the hull insurance, the policy cannot be  assigned freely and the consent  of the underwriting  is essential because the degree of risk of the subject matter is the materially  altered when the management and ownership of the vessel is changed. As  the cargoes on ships change ownership  several times before they finally reach the port of destination  the assignment of a cargo policy is to be done by means of the blank endorsement i.e, by putting the signature of the insured or his agent if the policy is in the name of the agent. On the contrary, the hull insurance policy should be assigned only by means  of specific endorsement. It is interesting  too note  that marine policy can be a assigned  even after it takes places, but the assignee cannot be a get a better title than the assignor.In marine policy was that sometimes the merchants receive information of shipments of their cargoes very late, particularly  after the sailing of the steamer. In such cases therefore both the parties viz. the insured and the insurer were ignorant about the safety or otherwise of the subject matter. In order to provide  protection to the merchants for such shipments the Lost or Not Lost Clause has been inserted  in the policy which makes the insurer liable to indemnify the insured  whether  the subject matter before the date of issues of the policy has already been lost in the way or not lost. The inclusion of these words makes the policy effective  from a retrospective  date and covers any loss which might have occured  between the period of shipment of the date of issue of the Policy.

  It is quite obvious that the clause pre-suppose complete reliance on the principle of good faith on the part of the parties. If at any point of time, it is proved that one of the parties, was in possession of information about the safety or otherwise of the subject matter, the contract of marine insurance  will come to an end. For example if the insurer at the time of taking the policy knows that the good have already reached  the port of destination safely or the insured aware that the goods have been destroyed  on the way, then in both the cases, the  policy will be declared  void an account of concealment of fact. This clause  was most prevalent in olden times when communications network was not so developed. But now this clause has lost of much of its importance. 

(4) AT AND FROM CLAUSE: This clause describes the point  of times from which the risk commences and is generally applied to hull and frieght  insurance. When a ship is insured “at and Form” a particular place, the risk commences as soon as the ship is  arrives at the port safely. It means that the  policy covers the subject matter while it is lying at the port of the departure  and from the  time the ship sails. For example, if they  policy contains the words, “ at and from Chennai it means that the subject matter is covered under the  policy up to the time the ship stays  in Chennai or any time it leaves the Chennai port. In case the  policy contains the word “From” instead of at and from the risk of covered  only from the time of a departure and bot prior  to that. For example if the  policy provide. From Mumbai, it will imply that the  insurer is liable for any loss or damage arising after the ship has sailed  from the port of Mumbai and not before that. In case  of goods, the risk commences from the time they are loaded on a the vessel and insurers are not responsible for the loss while in transit In lighters and crafts from the shore to the ship. If the place of departure is specified by the  policy and the ship sails from other place than the specified one, the risk does not attach.

KINDS OF MARINE INSURANCE POLICIES

Different  kinds of marine insurance  policies have been introduced to cover a large number of risks including sinking and burning of ship, stranding or going astray of the ship, accident, collision of ships, jettison, piracy, explosion, sea decoities, stormy winds causing losses to the ship and cargo and many other perils of the sea. These policies  contain detailed information about the subject matter insured  risks covered description  of voyage, terms of insurance, premium etc. The following are the major policies issued under marine insurance: 

  (1) TIME POLICY: When a policy is taken a definite  period of time, it is  called time policy for example a policy insuring  the ship from 1.1.04 to 31.12.04. This policy may pursue any course it likes the policy would cover all the risks from the perils  of the sea for a stated period of time. Generally this policy cannot be issued for a period exceeding 12 months . However this policy may contain  a  “continuation clause” providing  that if at the end of the period the ship is yet at sea, the policy will continue for a reasonable time there after till the ship arrives safely at the port of destination. It is to be noted that if the risk attaches  under the continuation clause  a fresh policy duly stamped covering the period in question must be a taken before the insured  can claim any loss under the policy. This policy is commonly used  for hull insurance though it may be taken out also for movables and other goods when small quanties are involved.

 (2) VOYAGE POLICY: When the marine risk during a  particular voyage only a covered under a policy it is called voyage policy. For example a policy insuring cargo for a voyage from Chennai to London. This policy is more suitable  cargo insurances  as cargoes  are in danger of destruction from maritime perils during the period of the transportation. Since this policy  covers the risk in transit, it is not suitable for hull Ship insurance as the ships generally do not operate over a  particular route only. (3) MIXED POLICY: A policy which combine  the features of voyage policy and time policy is known as a Mixed policy. For example a policy insuring  a subject matter from a Mumbai to Karachi from the 1.4.04 to 31.3.05. These policies are the governed by the combined  application of the rules relating  to both time and voyage  policies. These policies are also  known as “ Time and voyage policies and are issued for ship and steamers operating over particular routes or sailing between certain fixed ports. 

  (4) VALUED POLICY:  When the value of the subject matter is a declared  at the very outset in the policy itself  at the time of a taking insurance, it is called valued policy. Such declared  insured  value consists of (a) cost of goods: (b) Freight and shipping charges etc., and ( C ) a margin of anticipated profits. In the absence of fraud  or misrepresentation  the valued policy is the measure of indemnity. In case of total loss of the goods, the insurer is required to pay the declared amount to the insured. However in case of partial losses, the liability of the insurer is determined  on the basic of the assessment made by the officials. It should be noted  that the insured value is not necessarily the actual value for the of the cargoes, which may be even less than the invoice price of the goods. For example the actual value of the goods insured may be Rs. 25,000, while the policy may be taken only for Rs. 15, 000. In this case, the insured value is a 15,000 which will be taken will be inserted in the policy itself and will be taken as the  basis of indemnity in case of loss or damage.

 (5) UNVALUED POLICY: When the value of the subject matter is not expressly declared at the time of taking insurance and is left to be a decided at the time of loss, it is called Unvalued policy and the value to be decided later is known as “Insurable value” which consists  of the market value of the goods at the time of a loss and freight and shipping charges only and not of margin for anticipated profits. The Unvalued policies are not popular  or common  in the marine insurances because of difficulties  faced in evaluation of loss at the time of damage. 

(6) FLOATING POLICY: A Floating policy is one of which is taken for a sufficient round sum to cover several shipments: the name of the ship and other particulars about shipments  made under it being  declared as and when they are made till the total sum insured or opened  is exhausted. This policy is also  known as ‘Declaration policy or Open policy”. This policy has made the present day voluminous commercial transactions possible and is particularity  convenient for merchants who are interested  in a series of regular shipments of goods between certain ports or within  defined geographical  areas. All this shipments of cargo-owners are automatically insured against marine perils  immediately after their shipment whether known to be the insured or not. However it is necessary that the declarations  has been top declared to is should be duly made after each shipments with in a reasonable time. The premium should be is calculated according to the amount of risks as a determined from the declarations made. It is not open to the insured to omit to send it in the declarations for shipments which have safely arrived. If he fails to do so. It amount to a breach of trust and renders the policy void. 

INVESTMENT OF FUND

 The Fund or  reserve is the liability of the company  towards the policy holders and the company invests  it to earn the   assumed interest  . The Fund  is not an extra  amount  to meet contingencies , but it represent the accumulated  liabilities  of the insurer to wards  policy holder  and it is a  to be a kept as  trust money. The supreme  consideration  in the investment  of life Fund is to preserve the interests  of the policy holder. It is a basic that in handling  trust funds, the  trustee shall in no way profit  personally  there from. Every effort  should be made to protect  the  assets  of life insurance assurance from any element  of fluctuations, wide swings in market value, losses growing out of the sale of security on an u unfavourable market and speculation for profits. Great care has to be taken in selecting suitable channels of investments and supervising them. Life insurance companies  keep organized departments  to handle the tremendous  volume of business occasioned by the investment  of reserve funds. Experts are constantly the market outlet  for funds and, through an analysis of economy and financial condition are able to forecast investment trends. However  the life insurance company officers must observe complete good faith and should  formulate an investment plan in conformity with the following canons of investment.

  (1) SAFETY AND SECURITY: The investment should comprise  the permanent integrity of the capital so as to avoid so as to avoid the violent and frequent  in the value of securities. Accordingly  every insurer carrying on the business of life insurance is required to invest the life fund in the following manner:  At least 25% in Govt. securities. Another 25% either in Govt. securities or other approved securities. Another 35% in the approved securities such as a  immovable property preference, equity shares, etc., Another 15% investment in other invested  in such a way that they may be readily convertible whenever claims are payable. To ensure that they are may the proper degree of liquidity , investments, are so made that the maturities will occur at intervals adjusted to meet the needs of a maturing policies. As a provision against sudden to demand  for surrender values or policy loans, the insurer may keep a part of the fund in cash or in a such securities which can be realized quickly and without loss. This could be used to meet a sudden contingency or to avail of an exceptional investment opportunity. 

  3.  PROFITABILITY: The insurer must earn at least the assumed rate of a interest other wise  there will be a loss. The investments should be a made in a such securities  which can be yield the highest  return but not at the cost of the  safety. It has been realized that safety and profitability are opposed to each other and so a fair and a true  balanced policy of the  investment should be a observed.  4. DIVERSIFICATION: The investment of the funds should be diversified . It means spreading over investment among different classes of securities so that risks and return are adjustments . The diversification  can be according to time factor . It provides  maximum security and yields and an efficient rate of return. So the principle of “  not” having all the eggs in one basket: should be adopted.   5.  AID TO LIFE BUSINESS: The funds should be invested  in those  projects or activities which may provide more employments opportunities  and may also increase the standard of living of the people so that the insurer  can get the benefits of the lower mortality rate and increase in new business

FUNDAMENTAL PRINCIPLES OF LIFE INSURANCE

  The essential elements that are required for creation of a valid contract such as offer and acceptance, competencies of the parties to contract, free consent of the parties, legal object and lawful consideration is applicable to life insurance contract too. In addition  to these the life insurance contract should be based upon four  important principles such as a  utmost good faith., insurable interest warranty and causa proxima.  

(1) OFFER AND ACCEPTANCE: There are at least two parties to life insurance contract insurer . The proposal submitted by the proposer  for life insurance is the offer. When it is a accepted absolutely and unconditionally  it is a converted  into a contract. If the insurer on considering a proposal  decides that it can be accepted on terms  other than a  as proposed, he informs the proposer the modified terms. This is called a counter offer. It is now for the proposer to accept the  modified or counter offer. Once he accepts such counter offer absolutely and unconditionally a contract  comes in to a existence.  (2) CAPACITY OF PARTIES: The essential of “ Competency” applies more to the proposer  than a life insurance company. A proposal from a minor is not entertained by an insurance company. But under certain the company may issue a policy on the life of a minor . But in such case is a  the contract will be the with the guardian or parent because a contract creating only rights or property in favour of a minor  is valid.  (3) FREE CONSENT Freeconsent is present  only when parties agree  on a thing  in the same sense. If the consent is obtained by such means, I ,e, by coercion, undue influence  fraud, misrepresentation or mistake  then that will not be called free consent .

 A person  whose consent it is a  not freely  obtained may avoid or cancel the contract if he desires. Importance of free consents and agent: Where a person signs a proposal he gives his consent. But when the signs in a vernacular or a language different from that the  of form, he must declare in his own hand that the contents of proposal were explained to him and he has a  signed the proposal after fully understanding them. The witness to the  proposal should also certify that he has explained  the contents of the form to the proposer only than the consent is considered to be free. Agents are advised to be a careful that proposal for assurance is given by the proposer with a  free consent and agent  should be not adopt unfair practice.  (4) LEGALITY OF OBJECT: It is a very much essential in a  life insurance contract . The life insurance contract should be not be based on a mere gambling instinct and the object of insurance and premium consideration  is not fraudulent immoral and forbidden by low.  ( 5) CONSIDERATION: Consideration is a something that moves from one party to the other and in return  for that party fulfils  his part of obligation e. g. premium is a consideration and is paid by insured a to insurer to bear risk of the insured’s life.  (6) UTMOST GOOD FAITH (PRINCIPLES OF UBERRIMAE FIDEI) The contract of life insurance requires utmost good faith on the part of both the parties so that the person  undertaking to shoulder the burden or risk may correctly ascertain the true nature and extent  of it before  fixing its price. They must  make a full disclosure  of all the facts material to the risk. The words material to the risk mean any fact concerning the health condition or physical history of the applicant which may influence  the insurer in determining  whether to issue the policy.

Fire Insurance Policy Types

MEANING OF FIRE INSURANCE:. The Fire Insurance  shift the burden of fire losses from  their actual victims to all the members of the society. It is a co-operative device to share the loss. It relieves the insured from the horror of the fire losses to which he is exposed . The insurer undertakes ti indemnify the insured  against any loss due to fire caused to the property insured in considered  of premium paid by the insured. Thus fire insurance is the handmaid of the commerce as it is the concerned with the protection of capital  and business properties. Business properties like factory building, godowns finished and semi-finished goods and the like cannot be said to the be immune from fire risk. Protections of properties from fire is indispensable  for the continuity of any business. Fire Insurance provides  timely financial help in case of loss of insured  properties. It also provides for the consequential  loss including profit due to the interruption of business on occurrence of fire: 

DEFINITION OF FIRE : According to the above definitions  of fire insurance, the losses to the property by fire are covered. The meaning  of the word, Fire” should be clearly understood in order to make the insurer liable under the contract. For this purpose a fire  must satisfy  two condition : firstly  there must be actual fire or ignition: and secondly  the fire must be fortuitous  in its nature.  (1) IGNITION: The first condition requires that there must be actual fire or ignition. In a case Byles J. said “The  expression  in the policy  we have to construe  is loss or damages occasioned by fire”. These words are to be construed  as ordinary people would construe them. They mean loss or damage either by ignition  of the article consumed or by ignition  of part of the  premisses where the article  is: in the one of the case there is a loss, in the other a damage occasioned by fire”. Loss or damage caused by  excessive fire heat cannot be included in loss or damage by fire, All that is necessary  to prove in the case of Fire insurance is that the loss is caused by fire. The cause of fire is immaterial. Even if the fire is caused by the negligence of the servants of the insured or of himself, the loss is covered. Of course  there should be no fraud or wilful misconduct by the assured.  If the proximate cause of the loss or damage is fire, the insurer is responsible  but, if the loss occurs  not by the actual  ignition  but buy  a process resembling fire, it is not regarded  to be a loss by fire. For this reason  smoke damage which arises from a faulty chimney.  or from the scorching of articles  by overheated irons  or being  placed too near to the fire, does not fall within the scope of a fire policy. Loss or damages by explosion is not a  loss by fire. The word fire does not extend to chemical actions, which though they may correspond in this the effect to fire. do not result  in actual ignition. Similarly loss occasioned by lightning  without ignition  is not a loss by fire: but where lightning  results in the ignition  the loss caused by such ignition  is a loss  by fire and can be recovered from the insurer. 

FIRE SHOULD BE  ACCIDENTAL AND NOT INTENTIONAL: The second condition stipulates  that the fire should have been accidental and not intentional. Any loss caused by a fire lighted  purposely for some use is not a loss by fire it is was intended. But there when property is accidentally burned in an ordinary fire, such as a domestic fire, the loss is covered even if they the fire remains under control. Here something is burned which might not to have burned. Similarly when a  fire is purposely lighted  but later on it escapes control and causes loss to the property the loss is a loss by fire and is recoverable under the contract..

How To Make Sve Life By Insurance

Evised by firms that safeguard the interest of the client. There are several insurance companies that offer  different types of insurances. There are several life insurance companies and general insurance companies offering different services to the clients. The  insurance requires the customers to pay a certain  insurance fees for a specified period of time. The mode of payment and the nature of compensation depend  upon the  insurance policy a person buys. There are many players and several packages being offers  to the customers.  Insurance marketing is very vital for the success of  insurance companies and to attract customers  to the  insurance policies. But the Indian  insurance players face a lot of difficulties  in marketing their  products. People of India do not show interest  in buying  the policies of different players. They do not find any immediate benefit by purchasing policies  of both life  insurances ane general insurers. Some general  insurance policies are purchased  because of legal compulsion as for instance  motor  insurance or transit  or fire  insurance as a precondition for bank credit. Life policies also may be very rarely purchased compulsorily as a collateral for a housing  or educational  loans. Barring these minor exceptions, Life policies are always sold and not purchased willingly for the following reasons.

  (1) Life  insurance is intangible and not tangible  like a washing machine  or a bath soap which are needed and which give instant satisfaction. The satisfaction in life  insurance comes after a long period to the customer when it meets some specific money milestones in his life such as a marriage or own retirement  or is of immense benefit to his family in case of his early death. Many do not understand what life  insurance does to them or their   family. They never feel it as a need as they seldom realize that the suddenness of untimely death is a  very likely event in their own lives. The agent has to explain this situation in an acceptable  manner to uncover the need and to convert it into a want so that the customer buys it immediately.  (2) There is always a tendency to defer the decision even when the need is accepted as the possibility of death is very often ignored or not realized as imminent. The pressing requirements of today takes the front seat pushing the life  insurance providing  to the back seat or for a tomorrow that never comes.  (3) Religious and cultural beliefs, conservatism, the usual fatalistic attitude of leaving every thing  to fate of God all these come in the way of the purchase of life  insurance.

 (4) There is a strong notion that life  insurance is a not a good investment by making a improper comparisons. (5) People do not know that life  insurance can be purchased  only if they are in reasonable  good health and it is not granted if they are in bad health. Life  insurance may become impossible when they finally decide. (6) The idea of  insurance requires personal explanation  of the benefits and features by an agent. Every prospect has a  different  need and there are policies suitable  for each need. (7) Purchases  of life  insurance involves a long a  term  commitment  putting aside considerable  amount of money  regularly for a benefit  which rather vague  and far a and in taking the decision  the agent has to play a big role.  All these reason  make  insurance marketing difficult and different  at the same time. In order to attract the potential customers  to the  insurance company and to earn more revenue by selling more policies , the  insurer  will have to adopt  certain  marketing strategies with regard  to product  the insurer will have to adopt  certain customer service management. Before we discus in detail about the marketing strategies  of Indian  insurance players, let us first understand the concept of  insurance market and  insurance marketing.  

CONCEPT OF INSURANCE MARKET: The term market refers to a place where sellers and buyers sell and buy goods  directly or through intermediaries. According to the Federation of  insurance Institute, Mumbai the term Insurance Market comprises the insurer, buyers and intermediaries who bring  the two together. As such like other commodity or service  market an  insurance market also consists of three parties i.e, (1) Seller: Insurance companies or insurer: (2) Intermediaries: Insurance agents or brokers or bankers: and (3) Buyers: Insureds of prospective buyers. The key players sellers in the Indian  insurance market include: In public sector: LIC of Indian, National Insurance company LTD., Oriental Insurance Co. Ltd., New India  assurance Co. Ltd. and United India Insurance Co Ltd.,   IN PRIVATE SECTOR: Bajaj Allianz, ING Vysya , SBI Life,

CONCEPT OF INSURANCE MARKETING: The term Insurance Marketin refers to the marketing  insurance services with the motto of customer orientation and profit generation. A fair blend of profit generation and customer satisfaction  makes by the way for development and expansion. The  insurance marketing focuses on the formulation  of an ideal mix for the  insurance business so that the insurer survive and thrive in a right perspective. The quality of services  can be improved  by formulating a fair mix of a the core and peripheral  services. The persuasion process can be speeded up with the support of creative can be made  promotional measures. The premium and bonus decision can be made3 motivational the gap between the service promised and service offered can be bridged, the quality and value based personnel  can make performance-orientation possible  and these developments can make the  insurance organizations strong enough to face the challenges and threats in the market, . Thus the marketing concept in  insurance business focuses on the formulation of marketing mix or a control over the whole group of marketing  mix or a control over a the whole group of marketing activities  that make up an integrated  marketing strategy. From the above the following facts regarding the concept of  insurance marketing are derived. (1)  It is a managerial process. (2) It is a conceptualization    of marketing principles .(3) It is a  process of formulating the marketing mix.  (4) It is a device which makes consumer  orientation possible. (5) It is an attempt to help profit maximization . (6) It is even a social process that paves a avenues  for social transformation. (7) It makes the products  attractive. (8) It is to energies the process of quality  up gradation.