Distribution Alliance between the insurance company and the bank whereby both the entities are independent. The agreement between them is only for distribution of insurance company’s products by the bank.Insurance Company as a Subsidiary of the Bank : The Insurance Company is floated by one bank or certain banks through a joint venture with some multinational such as (i) SBI General Insurance Co by SBI & Insurance Australia Group; (ii) Universal Sompo General Insurance Co by Allahabad Bank, Indian Overseas Bank and Karnataka Bank and Sompo Japan; (iii) ICICI General Insurance Co. The Banks who have floated the insurance company are the corporate agents of the insurance company. In this case, therefore, while the insurance company is a subsidiary of the bank or a syndicate of certain banks, the respective banks are the corporate agents of the insurance company. As the corporate agent is actually the parent company of the insurance company the partnership between them is very different to what it is where the association is purely a distribution alliance.Strategic Alliance or a Joint Venture between the two companies viz., the Bank and the Insurance Company : In this arrangement the insurance Company gets into a strategic alliance of a joint venture, by offering equity stake to the bank, to foster the business alliance between them. In this case, the joint venture happens not at the time of inception of the company, but at a later stage. Metlife Insurance has not only offered 30% equity stake to Punjab National Bank, the name of the insurance company has also been changed to PNB Metlife Insurance Co Ltd. For many years, J &K Bank has also been the corporate agent of Metlife and indeed, J&K Bank had almost, 12% equity stake of erstwhile Metlife Life Insurance co. As for now, J&K Bank has around 5% equity stake in PNB Metlife Life Insurance Co Ltd Similarly, Axis Bank Ltd has been offered 4% equity stake by Max Life Insurance Co Ltd in the company whereby is not only a corporate agent of Max Life but also a joint venture partner.Bankers’ Indemnity Insurance : A compressive policy purchased by banks to provide them indemnity for the Direct loss of money and/or securities sustained by the insured (i.e., the bank) and discovered during the period of Insurance. The Policy covers On Premises : Money and/or securities for which bank is responsible being lost or destroyed or made away with by Fire Riot and Strike Burglary or Housebreaking Theft Robbery or hold-up whether by the employee(s) of the Insured or any other person or persons whomsoever. However, if any of these contingencies are brought about by the employees, the claims, if any will be considered under the Section of Dishonesty.In Transit : Money and/or securities being lost, stolen, mislaid or misappropriated whether due to the Negligence or Fraud of the employees(s) of the insured or otherwise whilst they are in transit in the hands of the employees. (The negligence, otherwise, is an exclusion under the policy).Forgery or Alteration : The payment of bogus, fictitious forged or raised cheques or drafts including payment of genuine cheques, drafts or fixed deposit receipts bearing forged endorsements, or the establishment of any credit to any customer on the faith of such documents irrespective whether received over the Counter or through the Clearing House or by Mail.Dishonesty : The Dishonest or Criminal Act of the employee(s) of the Insured with respect to the loss of money and/or Securities wherever committed and whether committed singly or in connivance with other.Hypothecated good : Fraud and/or Dishonesty of the employee(s) of the Insured in respect of any goods and/or commodities pledged or hypothecated to the Insured and under the Insured’s control.Registered Postal Sending : Loss by Robbery, Theft or by other causes in transit by Registered post provided that each post parcel is insured with the post office.Ap praisers : Loss due to Infidelity or Criminal Acts on the part of Appraisers provided that such Appraisers are on the approved list of Appraisers maintained by the Insured.Janata Agents/Chhoti Bachat Yojana Agents/Pygmy Collectors : Loss due to dishonesty or criminal act on the part of Janata Agent/Chhoti Bachat Yojna Agents/Pygmy Collectors, etc.Additional Risk Coverage : Automated Teller Machines owned, rented or leased by the Insured and installed in the bank premises Cash and/or items for deposit whilst within Automated Teller Machine loss or damaged or destroyed due to any cause including mysterious unexplainable disappearance. Unauthorized taking of cash and/or items for deposit from an automated teller machine by fabricating or altering an access or identification or using a fabricated access or identification card or using an access or identification card which has been lost by or stolen from the bank or their printer. Physical Loss or damage to Automated Teller MachinePolicy Excess : The insured has to bear an excess of each and every loss. If the claim is under terms A to E above the insured shall bear 25% of each loss or 2 per cent of the basic sum insured whichever is higher but not exceeding Rs. 50,000/-. The excess will not apply to loss and/or damage arising out of Fire Riot and Strikes, Burglary and House Breaking. If the claim is in respect of items F to H the insured has to bear 25% of each and every claim.Basic Sum Insured : The proposer has to select the sum insured which is the limit of the liability of the insurer for any one loss. The sum is known as the basic sum insured. It cannot be increased during the currency of the policy. However, it may be increased at the renewal of the policy. However, the bank is allowed to select a higher sum insured for either or one or both Sections A & B which is known as additional sum insured. The rate of premium is higher for basic sum insured and lower for the additional sum insured.Time Period: The policy is generally issued for a period of 12 calendar months. It is provided that the insurers are not liable (a) for losses not discovered within the period of insurance. (b) In the event of non-renewal or cancellation for losses not discovered within 6 calendar months next following the date of expiry or date of cancellation. (c) For losses not sustained within a retroactive period not exceeding two years from the date of discovery of any such loss or losses provided that in such retroactive period the insurance was continuously in force but in no event the insurers shall be liable to pay any claim in respect of a loss or damage sustained prior to inception of the original policy. (d) Policy is on discovery basis and not on occurrence basis. Therefore for a particular policy to be operative the loss has to be discovered during the policy period. The relevant occurrence could be within the same policy period or earlier period but within the retroactive period covered which is a maximum period of two years from the date of discovery of a loss.Banking Correspondent (BC) : “Reserve Bank of India (RBI)” introduced a regulation in 2006 allowing banks to provide service at people’s doorstep through the use of third party services. This model is referred to as “Business Correspondents/Banking correspondents” in short BC’s. BC is a representative authorized to offer services such as cash transactions where the lender does not have a branch. Primary role of BC is to oversee the proper development and functioning of indirect banking channel services such as cash deposits, withdrawals, remittances and balance enquiries from anywhere in the country on the lines of ATM facilities available to customers in urban areas. Of late, insurer or Banks by way of Bancassurance are seeking their help for reaching potential Micro Customers for Marketing of Micro Insurance in in-accessible and Rural areas. Oxigen, FINO, A Little World, EKO and the nearby Kirana Store are some of the well known BC’s currently operating in India. Recently telecom companies such as Vodafone, Idea Cellular, Airtel, Vodafone; and consumer goods firms such as ITC, HUL who have large distribution channel and pan India presence have shown interest to become business correspondents for banks as well as insurers. Even the postal department which has about 1.55 lakh post offices over 90 per cent of which are in villages.