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CHAPTER 1
INSURANCE
1.1 INTRODUCTION
Insurance may be described as a social device to reduce or
eliminate risks of loss to life and property. It is a provision which a
prudent man makes against inevitable contingencies, loss or misfortune.
Insurance is a form of risk management in which the insured
transfers the cost of potential loss to another entity in exchange for
monetary compensation known as premium.
Insurance allows individuals, businesses and other entities to
protect themselves against significant potential losses and financial
hardship at a reasonably affordable rate. We say significant because if
the potential loss is small, then it doesnt make sense to pay a premium to
protect against a $50 loss because this would not be considered a
financial hardship for most.
Insurance is appropriate when you want to protect against a
significant monetary loss. Take LifeInsurance as an example. If you are
the primary breadwinner in your home, the loss of income thatyour
family would experienced as a result of our premature death is considered
a significant loss and hardship that you should protect them against. It
would be very difficult for your family to replace your income, so the
monthly premiums ensure that if you die, your income will be replaced
by the insured amount. The same principle applies to many other forms of
Insurance. If the potential loss will have a detrimental effect on the
person or entity, Insurance makes sense.
Under the plan of Insurance, a large number of people associate
themselves by sharing risks attached to individuals. As in private life, in
business also there are dangers and risks of different kinds. The aim of all
types of Insurance is to make provisions against such dangers.
Insurance is the modern method by which men make the uncertain
certain and the unequal, equal. It is the means by which success is almost
guaranteed.
The aim of all types of Insurance is to make provision against such
dangers. The risks which can be insured against include fire, the perils of
sea (marine Insurance), death (Life Insurance) and, accidents and
burglary. Thus, collective bearing of risks is Insurance.
1.1 DEFINITIONS
The term Insurance has been defined by different experts on the subject.
The views expressed by them through various definitions can be
classified into the following three categories for the convenience of the
study:
General or Social Definitions.
Functional/ Economics/ Business Definitions.
Contractual/ Legal Definitions.
1.2 TYPES OF INSURANCE
(A) LIFE INSURANCE
Term Life Insurance
Permanent Life Insurance
(B)GENERAL INSURANCE
Fire Insurance
Marine Insurance
Accident Insurance
Livestock Insurance
1.3 CHARACTERISTICS OF INSURANCE
Sharing of risks: Insurance is a cooperative device to share
the burden of risk which may fall on happening of some
Primary Functions
Secondary Functions
Other Functions
I. Primary Functions
The primary Functions of Insurance include the following:
1. Provide protection: The primary purpose of Insurance is to
provide protection against future risk, accidents and uncertainty.
Insurance cannot check the happening of the risk, but can
certainly provide for the losses of risk.
2. Collective bearing of risk:Insurance is a device to share the
financial loss of few among many others. The collective bearing
of risks is Insurance. All the insureds contribute the premiums
towards a fund and out of which the persons exposed to a
particular risk is paid.
3. Evaluation of risks: Insurance determines the probable volume
of risk by evaluating various factors that give rise to risk. Risk
is the basis for determining the premium rate also.
4. Provide certainty against risk:Insurance is a device which
helps to change from uncertainty to certainty. This may be
reason that the function of Insurance is to provide certainty.
5. Spreading risks:Insurance is the device for spreading or
distributing risks.
security:
Through
various
social
1.6RESEARCH METHODOLOGY
Primary Data:
I have collected the primary data on this topic from 30 respondents living
in Dombivli area. I prepared a well-structured questionnaire for the same.
On the basis of convenience, I analyzed the data and presented the data in
the form of tables and diagrams.
Secondary Data:
I have collected the secondary data from books, newspapers and the web.
Sample size:
CHAPTER 2
LIVESTOCK INSURANCE
2.1 INTRODUCTION
The importance of livestock Insurance is increasing gradually in India
before the nationalization of General Insurance. Some Insurance
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Eventually, it's hoped that all the families in these five villages will be
part of the program. The Trust and its local partner organizations also
hope to expand the program to other parts of northern India. Discussions
with community leaders have already begun in the Gya-Miru region, in
the Indian state of Ladakh.
The Trust has gradually been decreasing its financial support of the
livestockInsuranceprogram, as the Insurance fund has built surplus funds
year by year. By 2010, it's hoped that the program will become selfsustaining.
2.3 Origin of Livestock Insurance
Various types of livestock have been vital to agriculture throughout
the world since the beginning of human civilization. Some forms of
livestock, such as goats and sheep, can be raised in areas inhospitable to
cereal crop allowing large concentration of people to live there.
In other cases, livestock could be used to supplement unreliable or
uneconomical cereal crops. Raising livestock is less dependent on good
weather and is less labour incentives than most forms of plant agriculture.
Animals could graze on pasture unfit for human consumption.
For example, in Italy and Spain during the middle ages and early
modern period, sheep were extremely important for an economy. The
often dry weather and increasing number of crop failures during the 16th
century encouraged landlords and other investors to switch from grain
production to livestock-raising. Massive sheep migrations were regulated
by the governments, and formed a large portion of the tax base for the
economy in Spain and were vitally important in Italy. The government
established vast networks of sheep walks with sufficient pasture lands, in
order to facilitate the winter migration of herds of millions of sheep and
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prophylactic
measures
Lack of good breeding and genetic improvement methods
Improper feeding and sheltering facilities with the farmers
Poor rural veterinary infrastructure soft as well as hard
Insurance product presently offered are limited to
Penetration
6.58%
- Problem with
Distribution
Channels
- Literacy and
awareness
2007-08
11.50%
2008-09
16.50%
2009-10
21.50%
2010-11
26.50%
2011-12
31.50%
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Table 2.1
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Disease
Sources animal
Smallpox
Cattle
Tuberculosis
cattle
Measles
cattle
Influenza
Pigs, ducks
Pertussis
Pigs, dogs
Table 2.2
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Sheep and Goat Insurance provides indemnity to indigenous crossbred and exotic sheep and goat. Animal against death of sheep and goats
due to accident. Including Fire, lighting, Flood, cyclone, Famine,
earthquake, landslide, Strike, Riot or diseases contracted or occurring
during the period of Insurance.
This policy is available to persons having sheep and Goat of either
sex certified as being in sound and perfect health and free from injury or
disease by a veterinary doctor/ surgeon and who are Members(in groups)
of
Micro Finance
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Pig Insurance:
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The elephant Insurance policy indemnifies the owner for death due
to accident or disease contracted or occurring during the period of
Insurance subject to certain exclusions stipulated. The insurable age
group is one year to 60 years. The policy is applicable to the elephants
including those owned by temple, circus companies and individuals. The
sum assured is 80% of market value. The value of sum assured does not
exceed Rs. 50,000. The premium rate is 5% per annum. The common
exclusions clause as mentioned under Cattle Market Agreement is also
applicable in this case. Specific exclusions are surgical operations,
disability, breeding and calving and certain specific diseases such as
tubereulosis, foot and mouth diseases etc.
Dog Insurance:
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The dog Insurance policy insures the risks against due to accident and/
or disease contracted during the period of Insurance subject to usual
theory and conditions. The Insurance age group is 8 weeks to 8 years.
Dogs of indigenous cross-bred and exotic breed should not be less than
Rs. 200 and maximum value of any dog should not exceed Rs. 2,000 each
dog. The premium rate is 5% per annum. In the event of death the insures
dog, any amount received or receivable by the insured from third parties
and value of the salvage value recovered if any would be deducted from
the claim amount.etc
2.8 EXCLUSIONS
Death of the animals, arising out of the following are excluded
1 War and allied risks, strikes, riot and civil commotion;
2 Slaughter of the animal without prior consent of the insurers;
3 Fire, lighting, seagoing transit, surgical operations, breeding and loss
occasioned by the animal becoming unfit or incapable of fulfilling the
functions for which it is kept or employed.
2.9 Advantage Livestock Shield
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Meat:
In many agricultural societies, livestock replaced wild game as the
primary source of source of animal protein. Livestock frequent eat forage
and other food sources that humans are unable (or prefer not ) to eat and
convert them to types of food that humans can eat.
Dairy products:
Mammalian livestock can be used a source of milk, which can in
turn easily be processed into other dairy products such as yogurt,
cheese, butter, ice cream, kefir, and kumiss. In advanced dairing
countries the number of products made from milk range in the 20 to
30 types. Using livestock for this purpose can often yield several times
the food energy of slaughtering the animal outright.
Honey and Wax :
Bees collect pollen and honey from plants and process them into
products that are useful to human survival. Honey is a food and a
medicinal product (for external application and internal use) , beeswax is
still used for expensive candles.
Raw materials:
A variety of useful materials are produced by livestock. Some animal,
such as sheep, grow thick coats that can be shorn and used in textiles.
Animal, such as cows, deer and sheep have a tough skin which can be
made into leather. The bones, hoofs and horns of livestock have also been
employed in a variety of industrial, cultural and decorative uses. Most
animal offal and non-edible parts are transformed into products such as
stock-feed and fertilizer. Larvae make silk that is woven into fabric.
Fertilizer:
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Labour management:
The grazing of livestock is something used as a way to control weeds
and undergrowth on an area of land. For example goats and sheep are
used to eat dry scrub in areas prone to wild fires in order to remove
combustible material and reduce fire risk.
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CHAPTER 3
IMPORTANT ASPECTS OF LIVESTOCK
INSURANCE.
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The Livestock Insurance Scheme has been formulated with the twin
objective of providing protection mechanism to the farmers and cattle
rearers against any eventual loss of their animals due to death and to
demonstrate the benefit of the Insurance of livestock to the people and
popularize it with the ultimate goal of attaining qualitative improvement
in livestock and their products.
Livestock policies
Buying a livestock Insurance policy is one risk management option.
Producers should always carefully consider how a policy will work in
conjunction with their other risk management strategies to insure the best
possible outcome
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III.6
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United India
Insurance
Com pany Ltd
G eneral
Insuranc
e
Bharat AXA
G eneral
Insurance
Com paniesthat
provide Livestock
Inusrance
Livestock
Insurance
Schem e
Figure 3.1
CHAPTER 4
INSURANCE PROFILE
4.1 GENERAL INSURANCE COMPANY
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2. AGE GROUP
Milch cows 2yearso or age at first calving to 10 years.
Milch buffaloes 3 years or earlier age at sexual maturity to 8 years.
Bullock /He Buffaloes 3 years to 12 years.
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5. Transit Cover
No extra premium to be charged for transit of animal from place
to purchase to place of stabling if distance is upto 80 kms.
In case of transfer of animal during currency of policy, transit
cover can be extended to the new owner without any additional
premium in case the transit distance is within 80 kms.
4.2THE NEW INDIA ASSURANCE
New India is a leading global insurance group, with offices and
branches throughout India and various countries abroad. The company
services the Indian subcontinent with a network of 1068 offices,
comprising 26 regional offices, 393 Divisional offices and 648 branches.
With approximately 21000 employees, New India Assurance has the
largest number of specialist and technically qualified personnel at all
levels of management, who are empowered to underwrite and settle
claims of high magnitude.
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HIGHLIGHTS
1. This scheme covers the following whether indigenous, exotic or crossa.
b.
c.
d.
bred.
Milch Cows and Buffaloes.
Calves/Heifers
Stud Bulls
Bullocks (Castarted Bulls) and Castarted Male Buffaloes,
2. Animal within a specified age group are accepted under the Standard
Insurance Scheme.
3. Sum Insured Under the policy will be the Market Value of the animal.
4. Indemnity Under the policy will be the Sum Insured or market Value
prior to illness whichever less is. The indemnity is limited to 75 % of
Sum Insured in case of a PTD claim.
5. The basic premium rate per annum is 4% of the sum Insured. Long term
policies are also issued with long term discounts.
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6. The premium rates under the policy are concessional for covering animals
under government subsidized schemes.
7. Group discount are also available.
Insurance Coverage
The policy shall give indemnity for death due to.
Accident (Inclusive of Fire, lighting, flood, inundation, storm, hurricane,
premium;
Permanent Total Disability Which, in the case of Milch Cattle
results
Identification Of Animal
All insured animals should be suitably identified by natural
Identification marks and color should be clearly noted in the proposal
form and veterinarians Report.
Ear tags made of suitable material are applied to the ear of the
animals and the code number is entered into the veterinary Health
Certificate.
Photographs of animals may be insisted in case of high value animal.
Claims Procedure
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submitted.
Admissibility of claim will be considered after two months of veterinary
Doctor / Company Doctors report.
The indemnity is limited to 75 % of sum Insured.
Major Exclusion
A)Common Exclusions:
Malicious or willful injury or neglect, overloading, unskillful treatment or
use of animal for purpose other than stated in the policy without the
consent of the company in writing.
Accidents occurring and /or Disease contracted prior to commencement
of risk.
Intentional slaughter of the animal except in cases where destruction is
necessary to terminate incurable suffering on humane consideration on
the basis of certificate issued by qualified veterinarian or in cases where
destruction is resorted to by the order of lawfully constituted authority.
Theft and clandestine sale of the insured animal.
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B) Specific Exclusions:
Pleuropneumonia in respect of Cattle in Lakhimpur and Sibasagar
Districts and newly carved out districts out of these two districts of
Assam.
All the claims received without ear tag.
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