Insurance environment

INSURANCE AND RISK MANAGMENT UNIT-05: RISK MANAGEMENT ENVIROMENT Indian insurance industry Introduction The insurance industry of India consists of 53 insurance companies of which 24 are in life insurance business and 29 are non-life insurers. Among the life insurers, Life Insurance Corporation (LIC) is the sole public sector company. Apart from that, among the non-life insurers there are six public sector insurers. In addition to these, there is sole national re-insurer, namely, General Insurance Corporationof India (GIC Re). Other stakeholders in Indian Insurance market include agents (individual and corporate), brokers, surveyors and third party administrators servicing health insurance claims.Out of 29 non-life insurance companies, five private sector insurers are registered to underwrite policies exclusively in health, personal accident and travel insurance segments. They are Star Health and Allied Insurance Company Ltd, Apollo Munich Health Insurance Company Ltd, Max Bupa Health Insurance Company Ltd, Religare Health Insurance Company Ltd and Cigna TTK Health Insurance Company Ltd. There are two more specialised insurers belonging to public sector, namely, Export Credit Guarantee Corporation of India for Credit Insurance and Agriculture Insurance Company Ltd for crop insurance. The insurance sector in India has progressed significantly since deregulation. The passage of the Insurance Regulatory and Development Authority (IRDA) Act, in 1999 paved the way for this progress. This phase of insurance development in the country is marked by entry of international insurers, introduction of innovative products, diverse distribution channels, higher supervision standards, promotional campaigns increasing product awareness, and promoting consumer education, among others. Key Highlights  India is ranked 11th among 88 countries in life insurance business and 21st in global non-life insurance markets in 2013.  The life insurance segment dominates the Indian insurance sector with a share of around 80% in the total premium paid.  Insurance density and penetration have registered a decline in the last three years.  The share of non-linked premium in life insurance premium has increased to 88% in FY14 from 56.5% in FY10.  Bancassurance is one distribution channel which is emerging in the distribution network. As insurers continue to spread their reach, newer distribution channels are being adopted to expand the insurance business.  Direct selling and individual agents are the two major distribution channels adopted by the insurance companies.  The non-life insurance segment has fared very well over the last decade since liberalization. Over the last five years ending FY14, gross direct premium income of non-life insurers has grown at a CAGR of 18.4%.  The Indian insurance sector is witnessing a spate of mergers and acquisitions with joint venture partners expressing their intent to look for new partners.  Government clears ordinance to hike FDI cap in insurance sector to 49%. 1 | Page Prof. N.V Nagesh- MBA., M.Com. NET. JRF. (Ph.D) Coordinator –M.Com The National Degree College-Basavanagudi-B’lore -04 In 2013, India ranked 11th and 21st globally in life insurance and general insurance respectively The Indian insurance sector has developed and evolved significantly over the past decade and ranked 11th among 88 countries in life insurance business and 21st in global non-life insurance markets in 2013. However, share of the Indian insurance market in the global insurance market is small. Further, it ranks low in terms of insurance penetration and density, the two important indicators that show the development of the insurance sector in any country. During 2013, India’s share in global life insurance market was 2.0%, while its share in the non-life insurance premium was a mere 0.7%. Insurance penetration refers to premium as a percentage of GDP whereas insurance density refers to per capita premium or premium per person. India’s insurance density stood at US $ 52 in 2013, way behind the world average of US$ 652. Further, the world average in insurance penetration stood at 6.3% in 2013 and India is way behind at 3.9%. The life insurance segment has fared well with a penetration level of 3.1% in 2013 compared with a world average of 3.5%. However, the increase in non-life insurance sector has been marginal with a penetration level of 0.8% compared with world average of 2.8%. Some of the major factors responsible for lower penetration of insurance products in India are low consumer preference, untapped rural markets, and constrained distribution channels. Globally, the life insurance segment leads in terms of insurance premium with a share of 56.2% and the non-life insurance segment accounts for the balance. However, in India, the life insurance segment dominates the sector with a share of around 80% in the total premium paid. Tax incentives provided in return for investment in insurance contribute heavily to the high share of life insurance premium. The lower penetration of non-life insurance is due to factors such as lack of awareness and understanding of general insurance (non-life insurance) products, low perceived benefits, and lower propensity to purchase non-life insurance. 2 | Page Prof. N.V Nagesh- MBA., M.Com. NET. JRF. (Ph.D) Coordinator –M.Com The National Degree College-Basavanagudi-B’lore -04 Government Regulation of Insurance Business Insurance Regulatory law Insurance regulatory law is the body of statutory law, administrative regulations and jurisprudence that governs and regulates the insurance industry and those engaged in the business of insurance. Insurance regulatory law is primarily enforced through regulations, rules and directives by state insurance departments as authorized and directed by statutory law enacted by the state legislatures. However, federal law, court decisions and administrative adjudications also play an important role. Purpose Insurance is characterized as a business vested or affected with the public interest. [2] Thus, the business of insurance, although primarily a matter of private contract, is nevertheless of such concern to the public as a whole that it is subject to governmental regulation to protect the public’s interests. Therefore, the fundamental purpose of insurance regulatory law is to protect the public as insurance consumers and policyholders. Functionally, this involves:  Licensing and regulating insurance companies and others involved in the insurance industry;  Monitoring and preserving the financial solvency of insurance companies;  Regulating and standardizing insurance policies and products;  Controlling market conduct and preventing unfair trade practices; and  Regulating other aspects of the insurance industry. 3 | Page Prof. N.V Nagesh- MBA., M.Com. NET. JRF. (Ph.D) Coordinator –M.Com The National Degree College-Basavanagudi-B’lore -04 INSURANCE REGULATORY AND DEVELOPMENT AUTHORITY OF INDIA ACT, 1999 INSURANCE REGULATORY AND DEVELOPMENT AUTHORITY OF INDIA ACT, 1999 An Act To provide for the 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 matters connected therewith or incidental thereto and further to amend the Insurance Act, 1938, the Life Insurance Corporation Act, 1956 and the General Insurance Business(Nationalisation) Act, 1972. BE it enacted by Parliament in Fiftieth Year of Republic of India as follows:- 1. SHORT TITLE, EXTENT AND COMMENCEMENT.---(1) This Act may be called the Insurance Regulatory and Development Authority of India Act, 1999. (2) It extends to the whole of India. (3) It shall come into force on such date as the Central Government may, by notification in the Official Gazette, appoint: Provided that different dates may be appointed for different provisions of this Act and any reference in any such provision to the commencement of this Act shall be construed as a reference to the coming into force of that provision. 2. DEFINITIONS.--- (1) In this Act, unless the context otherwise requires, - (a) "appointed day" means the date on which the Authority is established under sub-section (1) of section 3; (b) "Authority" means the Insurance Regulatory and Development Authority of India established under sub-section (1) of section 3; (c) "Chairperson" means the Chairperson of the Authority; (d) "Fund" means the Insurance Regulatory and Development Authority of India Fund constituted under sub-section (1) of section 16; (e) "Interim Insurance Regulatory Authority" means the Insurance Regulatory Authority set up by the Central Government through Resolution No.17(2)/94-Ins-V, dated the 23rd January, 1996; (f) "intermediary or insurance intermediary" includes insurance brokers, reinsurance brokers, insurance consultants, surveyors and loss assessors; (g) "member" means a whole time or a part time member of the Authority and includes the Chairperson; (h) "notification" means a notification published in the Official Gazette; (i) "prescribed" means prescribed by rules made under this Act; (j) "regulations" means the regulations made by the Authority. (2) Words and expressions used and not defined in this Act but defined in the Insurance Act, 1938 (4 of 1938) or the Life Insurance Corporation Act, 1956 (31 of 1956) or the General Insurance Business (Nationalisation) Act, 1972 (57 of 1972) shall have the meanings respectively assigned to them in those Acts. INSURANCE REGULATORY AND DEVELOPMENT AUTHORITY OF INDIA 4 | Page Prof. N.V Nagesh- MBA., M.Com. NET. JRF. (Ph.D) Coordinator –M.Com The National Degree College-Basavanagudi-B’lore -04 3. ESTABLISHMENT AND INCORPORATION OF AUTHORITY.-- (1) With effect from such date as the Central Government may, by notification, appoint, there shall be established, for the purposes of this Act, an Authority to be called "the Insurance Regulatory and Development Authority". (2) The Authority shall be a body corporate by the name aforesaid having perpetual succession and a common seal with power, subject to the provisions of this Act, to acquire, hold and dispose of property, both movable and immovable, and to contract and shall, by the said name, sue or be sued. (3) The head office of the Authority shall be at such place as the Central Government may decide from time to time. (4) The Authority may establish offices at other places in India. 4. COMPOSITION OF AUTHORITY.--- The Authority shall consist of the following members, namely:- (a) a Chairperson; (b) not more than five whole-time members; (c) not more than four part-time members, to be appointed by the Central Government from amongst persons of ability, integrity and standing who have knowledge or experience in life insurance, general insurance, actuarial science, finance, economics, law, accountancy, administration or any other discipline which would, in the opinion of the Central Government, be useful to the Authority: Provided that the Central Government shall, while appointing the Chairperson and the whole-time members, ensure that at least one person each is a person having knowledge or experience in life insurance, general insurance or actuarial science, respectively. 5. TENURE OF OFFICE OF CHAIRPERSON AND OTHER MEMBERS.--(1) The Chairperson and every other whole-time member shall hold office for a term of five years from the date on which he enters upon his office and shall be eligible for reappointment: Provided that no person shall hold office as a Chairperson after he has attained the age of sixty-five years: Provided further that no person shall hold office as a whole-time member after he has attained the age of sixty-two years. (2) A part-time member shall hold office for a term not exceeding five years from the date on which he enters upon his office. (3) Notwithstanding anything contained in sub-section (1) or sub-section (2), a member may - (a) relinquish his office by giving in writing to the Central Government notice of not less than three months; or (b) be removed from his office in accordance with the provisions of section 6. REMOVAL FROM OFFICE.---(1) The Central Government may remove from office any member who- (a) is, or at any time has been, adjudged as an insolvent; or (b) has become physically or mentally incapable of acting as a member; or (c) has been convicted of any offence which, in the opinion of the Central Government, involves moral turpitude; or (d) has acquired such financial or other interest as is likely to affect prejudicially his functions as a member; or (e) has so abused his position as to render his continuation in office detrimental to the public interest. (2) No such member shall be removed under clause (d) or clause (e) of sub-section (1) unless he has been given a reasonable opportunity of being heard in the matter. 5 | Page Prof. N.V Nagesh- MBA., M.Com. NET. JRF. (Ph.D) Coordinator –M.Com The National Degree College-Basavanagudi-B’lore -04 7. SALARY AND ALLOWANCES OF CHAIRPERSON AND MEMBERS.--(1) The salary and allowances payable to, and other terms and conditions of service of, the members other than part-time members shall be such as may be prescribed. (2) The part-time members shall receive such allowances as may be prescribed. (3) The salary, allowances and other conditions of service of a member shall not be varied to his disadvantage after appointment. 8. BAR ON FUTURE EMPLOYMENT OF MEMBERS.-- The Chairperson and the whole-time members shall not, for a period of two years from the date on which they cease to hold office as such, except with the previous approval of the Central Government, accept- (a) any employment either under the Central Government or under any State Government; or (b) any appointment in any company in the insurance sector. 9. ADMINISTRATIVE POWERS OF CHAIRPERSON.-- The Chairperson shall have the powers of general superintendence and direction in respect of all administrative matters of the Authority. 10. MEETINGS OF AUTHORITY.--(1) The Authority shall meet at such times and places and shall observe such rules and procedures in regard to transaction of business at its meetings (including quorum at such meetings) as may be determined by the regulations. (2) The Chairperson, or if for any reason he is unable to attend a meeting of the Authority, any other member chosen by the members present from amongst themselves at the meeting shall preside at the meeting. (3) All questions which come up before any meeting of the Authority shall be decided by a majority of votes by the members present and voting, and in the event of an equality of votes, the Chairperson, or in his absence, the person presiding shall have a second or casting vote. (4) The Authority may make regulations for the transaction of business at its meetings. 11. VACANCIES, ETC., NOT TO INVALIDATE PROCEEDINGS OF AUTHORITY.---No act or proceeding of the Authority shall be invalid merely by reason of - (a) any vacancy in, or any defect in the constitution of, the Authority; or (b) any defect in the appointment of a person acting as a member of the Authority; or (c) any irregularity in the procedure of the Authority not affecting the merits of the case. 12. OFFICERS AND EMPLOYEES OF AUTHORITY.-- (1) The Authority may appoint officers and such other employees as it considered necessary for the efficient discharge of its function under this Act. (2) The terms and other conditions of service of officers and other employees of the Authority appointed under sub-section(1) shall be governed by regulations made under this Act. The Insurance Regulatory and Development Authority (IRDA) is a national agency of the Government of India, based in Hyderabad. It was formed by an act of Indian Parliament known as IRDA Act 1999, which was amended in 2002 to incorporate some emerging requirements. Mission of IRDA as stated in the act is "to protect the interests of the Policyholders, to regulate, promote and ensure orderly growth of the Insurance industry and for matters connected therewith or incidental thereto." In 2010, the Government of India ruled that the Unit Linked Insurance Plans (ULIPs) will be governed by IRDA, and not the market regulator Securities and Exchange Board of India. 6 | Page Prof. N.V Nagesh- MBA., M.Com. NET. JRF. (Ph.D) Coordinator –M.Com The National Degree College-Basavanagudi-B’lore -04 The law of India has following expectations from IRDA: 1. To protect the interest of and secure fair treatment to policyholders. 2. To bring about speedy and orderly growth of the insurance industry (including Annuity and Superannuation payments), for the benefit of the common man, and to provide long term funds for accelerating growth of the economy. 3. To set, promote, monitor and enforce high standards of integrity, financial soundness, fair dealing and competence of those it regulates. 4. To ensure that insurance customers receive precise, clear and correct information about products and services and make them aware of their responsibilities and duties in this regard. 5. To ensure speedy settlement of genuine claims, to prevent insurance frauds and other malpractices and put in place effective grievance redressal machinery. 6. To promote fairness, transparency and orderly conduct in Financial markets dealing with insurance and build a reliable management information system to enforce high standards of financial soundness amongst market players. 7. To take action where such standards are inadequate or ineffectively enforced. 8. To bring about optimum amount of Self-regulation in day to day working of the industry consistent with the requirements of prudential regulation. Duties, Powers and Functions of IRDA Section 14 of IRDA Act, 1999 Lays down the duties, powers and functions of IRDA: 1. Subject to the provisions of this Act and any other law for the time being in force, the Authority shall have the duty to regulate, promote and ensure orderly growth of the insurance business and re- insurance business. 2. . Without prejudice to the generality of the provisions contained in sub-section (1), The powers and functions of the Authority shall include, 1. issue to the applicant a certificate of registration, renew, modify, withdraw, suspend or cancel such registration; 2. protection of the interests of the policy holders in matters concerning assigning of policy, nomination by policy holders, insurable interest, settlement of Insurance claim, surrender value of policy and other terms and conditions of contracts of insurance; 3. specifying requisite qualifications, code of conduct and practical training for intermediary or insurance intermediaries and agents; 4. specifying the code of conduct for surveyors and loss assessors; 5. promoting efficiency in the conduct of insurance business; 6. promoting and regulating professional organizations connected with the insurance and re-insurance business; 7. levying fees and other charges for carrying out the purposes of this Act; 8. calling for information from, undertaking inspection of, conducting enquiries and investigations including audit of the insurers, intermediaries, insurance intermediaries and other organizations connected with the insurance business; 9. control and regulation of the rates, advantages, terms and conditions that may be offered by insurers in respect of general insurance business not so controlled and regulated by the Tariff Advisory Committee under section 64U of the Insurance Act, 1938 (4 of 1938); 10. specifying the form and manner in which books of account shall be maintained and statement of accounts shall be rendered by insurers and other insurance intermediaries; 7 | Page Prof. N.V Nagesh- MBA., M.Com. NET. JRF. (Ph.D) Coordinator –M.Com The National Degree College-Basavanagudi-B’lore -04  11. regulating investment of funds by insurance companies; 12. regulating maintenance of margin of solvency; 13. adjudication of disputes between insurers and intermediaries or insurance intermediaries; 14. supervising the functioning of the Tariff Advisory Committee; 15. specifying the percentage of premium income of the insurer to finance schemes for promoting and regulating professional organisations referred to in clause (f); 16. specifying the percentage of life insurance business and general insurance business to be undertaken by the insurer in the rural or social sector; and 17. Exercising such other powers as may be prescribed from time to time. Privatization of Insurance Business in India Public Enterprises in any country cannot perform all the economic and business activities efficiently. Even in a socialist country, public enterprises in all the fields cannot discharge their full responsibilities. Complete governmentalisation or nationalisation will lead towards serfdom or anarchism. In absence of free will personal interests; the economic activities will not provide adequate and qualitative production. This is the reason that some troubles have started in some parts of the USSR and China. In Indian conditions where we have adopted mixed economy, expecting too much from public enterprises will distort the economy and ultimately will lead towards wastage of precious resources India initiated its insurance sector reforms in 2000 as an inevitable part of the on-going economic reforms in the country. This long awaited reform was expected to boost the sector. The Insurance reform was marked with the establishment of IRDA, participation of private companies and permission of FDI, and soon it emerged as one of the most vibrant segment of Indian financial sector. India's insurance sector witnessed many changes and experienced high growth after the privatisation. As the privatised insurance industry has completed more than a decade now and the sector is evolving with the progression of further reform, a close scrutiny of the sector is needed. This paper tries to narrate the story of the development and growth of the insurance sector during the first decade after the privatisation of the sector. Supporting and subsidizing by the Government indirectly punish the tax-payers and the country-men. Therefore, it is the high time to recast our Industrial Policy and should consider the productivity and efficiency as criteria to continue a particular unit whether public enterprises or private enterprises. The public enterprises cannot be sustained as sacred cow without milk. Similarly, the unscrupulous private enterprises declaring themselves sick cannot be put on ambulance for a longer time. It is a matter of satisfaction that the Government has started taking pragmatic approaches to revive the productivity and efficiency base criteria for the development of an enterprise. The restrictions on utilisation of full capacity by private enterprises are being removed gradually to increase production and productivity of the economy. The public enterprises will have to come at the combative of the private enterprises. CHANGES IN INSURANCE ACT Major Highlights of the Insurance Laws (Amendment) Bill, 2015 Passed by Parliament The Insurance Laws (Amendment) Bill, 2015 was passed by the Parliament. The passage of the Bill paved the way for major reform related amendments in the following acts : – 8 | Page Prof. N.V Nagesh- MBA., M.Com. NET. JRF. (Ph.D) Coordinator –M.Com The National Degree College-Basavanagudi-B’lore -04   Insurance Act, 1938  The General Insurance Business (Nationalization) Act, 1972  The Insurance Regulatory and Development Authority (IRDA) Act, 1999. I have prepared this post with inputs from PIB. Have a look at the major highlights of the changes that the amendment will bring. 1. . The Insurance Laws (Amendment) Act 2015 to will replace the Insurance Laws (Amendment) Ordinance, 2014. 2. The amendment Act will remove archaic and redundant provisions in the legislations and incorporate certain provisions to provide Insurance Regulatory and Development Authority of India (IRDAI) with the flexibility to discharge its functions more effectively and efficiently. 3. Provides for enhancement of the foreign investment cap in an Indian Insurance Company from 26% to an explicitly composite limit of 49% with the safeguard of Indian ownership and control. The enactment of the bill will also raise the foreign investment cap in the pension sector since it was linked to the ceiling in the insurance sector at the time of the passage of the Pension Fund Regulatory and Development Authority bill in 2013. 4. Capital Availability: It will enable capital raising through new and innovative instruments under the regulatory supervision of IRDAI. Greater availability of capital for the capital intensive insurance sector would lead to greater distribution reach to under / un-served areas, more innovative product formulations to meet diverse insurance needs of citizens, efficient service delivery through improved distribution technology and enhanced customer service standards. . It would also boost infrastructure funding since only an insurance corpus can fund long-gestation public works projects. Four public sector general insurance companies had to be 100 % government owned as per The General Insurance Business (Nationalisation) Act, 1972 (GIBNA, 1972). They are now allowed to raise capital. This is due to the need for expansion of the business in the rural and social sectors, meeting the solvency margin for this purpose and achieving enhanced competitiveness. But government equity will not be less than 51% at any point of time. 5. Consumer Welfare: It will enable the interests of consumers to be better served through provisions like those  Enabling high penalties on intermediaries / insurance companies for misconduct, mis-selling and misrepresentation by agents / insurance companies  Disallowing multilevel marketing of insurance products in order to curtail the practice of mis-selling. This could act as a deterrent against the rampant mis-selling menace which has resulted in many policyholders being duped into buying unsuitable products. 9 | Page Prof. N.V Nagesh- MBA., M.Com. NET. JRF. (Ph.D) Coordinator –M.Com The National Degree College-Basavanagudi-B’lore -04 6. Empowerment of IRDAI: The Act will entrust responsibility of appointing insurance agents to insurers and provides for IRDAI to regulate their eligibility, qualifications and other aspects. It enables agents to work more broadly across companies in various business categories. The safeguard being that conflict of interest would not be allowed by IRDAI through suitable regulations. IRDAI is empowered to regulate key aspects of Insurance Company operations in areas like solvency, investments, expenses and commissions and to formulate regulations for payment of commission and control of management expenses. It empowers the Authority to regulate the functions, code of conduct, etc., of surveyors and loss assessors. It also expands the scope of insurance intermediaries to include insurance brokers, re- insurance brokers, insurance consultants, corporate agents, third party administrators, surveyors and loss assessors and such other entities. Further, properties in India can now be insured with a foreign insurer with prior permission of IRDAI, which was earlier to be done with the approval of the Central Government. 7. Health Insurance: The amendment Act defines ‘health insurance business’ inclusive of travel and personal accident cover and discourages non-serious players by retaining capital requirements for health insurers at the level of Rs. 100 Crore, thereby paving the way for promotion of health insurance as a separate vertical. 8. Promoting Reinsurance Business in India: The amended law enables foreign re-insurers to set up branches in India and defines ‘re-insurance’ to mean “the insurance of part of one insurer’s risk by another insurer who accepts the risk for a mutually acceptable premium”. It excludes the possibility of 100% ceding of risk to a re-insurer, which could lead to companies acting as front companies for other insurers. Entry of reinsurance companies into the Indian market will bring in knowledge and expertise together with underwriting capacities. Must be wondering what re-insurance is ? Re-insurance means that multiple insurance companies share risk by purchasing insurance policies from other insurers to limit the total loss the original insurer would experience in case of a disaster. By spreading risk, an individual insurance company can take on clients whose coverage would be too great of a burden for the single insurance company to handle alone. 9. Strengthening of Industry Councils: The Life Insurance Council and General Insurance Council have now been made self-regulating bodies by empowering them to frame bye-laws for elections, meetings and levy and collect fees etc from its members. Inclusion of representatives of self-help groups and insurance cooperative societies in insurance councils has also been enabled to broad base the representation on these Councils. 10. Robust Appellate Process: Appeals against the orders of IRDAI are to be preferred to SAT as the amended Law provides for any insurer or insurance intermediary aggrieved by any order made by IRDAI to prefer an appeal to the Securities Appellate Tribunal (SAT). 10 | P a g e Prof. N.V Nagesh- MBA., M.Com. NET. JRF. (Ph.D) Coordinator –M.Com The National Degree College-Basavanagudi-B’lore -04 Thus, the amendments are in tune with the evolving insurance sector scenario and regulatory practices across the globe. The amendments will enable IRDAI to create an operational framework for greater innovation, competition and transparency, to meet the insurance needs of citizens in a more complete and subscriber friendly manner. The amendments are expected to enable the sector to achieve its full growth potential and contribute towards the overall growth of the economy and job creation. INSURANCE INTERMEDIARIES or Brokers Insurance Intermediaries Insurance intermediaries facilitate the placement and purchase of insurance, and provide services to insurance companies and consumers that complement the insurance placement process. Traditionally, insurance intermediaries have been categorized as either insurance agents or insurance brokers. The distinction between the two relates to the manner in which they function in the marketplace. Definition Brokers or agents who represent consumers in insurance transactions. Insurance intermediaries are contracted with multiple insurance companies so they can focus on matching their client's needs with the most suitable insurance products IRDA has permitted 3 types of Brokers to operate in India: The Direct Broker (betwee n end- users and primary insurers only), Re-insurance Brokers (between primary insurers and re-insurers only) Composite Brokers (both the above). As direct insurance broker, we are in a strategically advantageous position of offering a totally flexible approach to your insurance portfolio. The access to all constituents of the insurance sector, both public and private, enables us to negotiate the most competitive rates & maximize the scope of your required level of insurance cover. We would emphasize that as a direct broker, we represent the client and not the insurer. Our services to clients are free of charge and include comprehensive insurance cover to cater to a variety of disparate needs whether corporate, institutional, group or personal lines of insurance as well as risk management analysis where we suggest ways and means of minimizing your risk exposure. 11 | P a g e Prof. N.V Nagesh- MBA., M.Com. NET. JRF. (Ph.D) Coordinator –M.Com The National Degree College-Basavanagudi-B’lore -04 Insurance Agents Insurance agents are, in general, licensed to conduct business on behalf of insurance companies. Agents represent the insurer in the insurance process and usually operate under the terms of an agency agreement with the insurer. The insurer-agent relationship can take a number of different forms. Insurance Brokers Insurance brokers typically work for the policyholder in the insurance process and act independently in relation to insurers. Brokers assist clients in the choice of their insurance by presenting them with alternatives in terms of insurers and products. Acting as “agent” for the buyer, brokers usually work with multiple companies to place coverage for their clients. Brokers obtain quotes from various insurers and guide clients in determining the adequate policy from a range of products Reinsurance brokers solicit, negotiate and sell reinsurance cessions and retrocessions on behalf of ceding insurers seeking coverage with reinsurers. Reinsurance brokers can also be involved in a reinsurer’s retrocession of parts of its risk. The Role of Insurance Intermediaries As players with both broad knowledge of the insurance marketplace, including products, prices and providers, and an acute sense of the needs of insurance purchasers, intermediaries have a unique role – indeed many roles – to play in the insurance markets in particular and, more generally, in the functioning of national and international economies. Intermediary activity benefits the overall economy at both the national and international levels: The role of insurance in the overall health of the economy is well-understood. 1. Innovative marketing 2. Dissemination of information to consumers 3. Dissemination of information to the marketplace 4. Sound competition 5. Spread insurers’ risks 6. Reducing costs DOMESTIC AND FOREIGN INSURERS IN INDIA Leading Insurers in India Following are the leading insurers in India: 1. Life Insurance Corporation of India 2. Tata AIG General Insurance 3. Bajaj Allianz General Insurance 4. New India Assurance 5. ICICI Prudential Life Insurance 6. IFFCO TOKIO General Insurance 7. ICICI Lombard General Insurance 8. Oriental Insurance General insurance companies 12 | P a g e Prof. N.V Nagesh- MBA., M.Com. NET. JRF. (Ph.D) Coordinator –M.Com The National Degree College-Basavanagudi-B’lore -04 Public Sector 1. New India Insurance 2. National Insurance Company 3. The Oriental Insurance Company 4. United India Insurance Company 5. Agriculture Insurance Company of India Private Sector 1. Apollo Munich Health Insurance Company Limited 2. Bajaj Allianz General Insurance 3. Bharti AXA General Insurance Company Limited 4. Cholamandalam MS General Insurance Co. Ltd. 5. Cigna TTK Health Insurance Company Ltd. 6. Future Generali India Insurance Company Limited 7. HDFC ERGO General Insurance Company Ltd. 8. ICICI Lombard 9. IFFCO Tokio 10.L&T General Insurance Company Limited 11.Liberty Videocon General Insurance Co Ltd 12.Magma HDI General Insurance Company Limited 13.Max Bupa Health Insurance Company Ltd 14.Reliance General Insurance 15.Royal Sundaram Alliance Insurance Co. Ltd 16.SBI General Insurance Company Limited 17.Shriram General Insurance Company Limited, 18.Star Health and Allied Insurance Company Limited 19.Tata AIG General 20.Universal Sompo General Insurance Co. Ltd. Export credit guarantee insurance companies Public Sector 1. Export Credit Guarantee Corporation of India Life insurance companies Public Sector 1. Life Insurance Corporation of India 13 | P a g e Prof. N.V Nagesh- MBA., M.Com. NET. JRF. (Ph.D) Coordinator –M.Com The National Degree College-Basavanagudi-B’lore -04 Private Sector 1. AEGON Religare Life Insurance[2] 2. Aviva Life Insurance Company India Limited[3] 3. Bajaj Allianz Life Insurance Company Limited [3] 4. Bharti AXA Life Insurance Company Ltd. [3] 5. Birla Sun Life Insurance Co. Ltd [3] 6. Canara HSBC Oriental Bank of Commerce Life Insurance Company Ltd.[3] 7. DHFL Pramerica Life Insurance Co. Ltd.[3] 8. Edelweiss Tokio Life Insurance Co. Ltd.[3] 9. Exide Life Insurance Company Limited[3] 10. Future Generali India Life Insurance Company Limited [3] 11. HDFC Standard Life Insurance Company Limited[3] 12. ICICI Prudential Life Insurance Co. Ltd [3] 13. IDBI Federal Life Insurance Company Ltd [3] 14. IndiaFirst Life Insurance Company Limited [3] 15. Kotak Mahindra Old Mutual Life Insurance Limited[3] 16. Max Life Insurance Co. Ltd 17. PNB Metlife India Insurance Co. Ltd. 18. Reliance Life Insurance Company Limited 19. Sahara India Life Insurance Co, Ltd. 20. SBI Life Insurance Co. Ltd 21. Shriram Life Insurance Co, Ltd. 22. Star Union Dai-ichi Life Insurance 23. Tata AIA Life Insurance Company Limited Health insurance companies==[4] 1. Max Bupa Health Insurance Company 2. Star Health and Allied Insurance 3. CignaTTK Health Insurance Company Limited 4. Apollo Munich Health Insurance 5. Religare Health Insurance Re-insurance companies Public Sector 1. GIC Re Insurance Broker 1. GIC Re. Wealth Addwell Services Limited 14 | P a g e Prof. N.V Nagesh- MBA., M.Com. NET. JRF. (Ph.D) Coordinator –M.Com The National Degree College-Basavanagudi-B’lore -04 1. PolicyBazaar. 15 | P a g e Prof. N.V Nagesh- MBA., M.Com. NET. JRF. (Ph.D) Coordinator –M.Com The National Degree College-Basavanagudi-B’lore -04