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Insurance Mediation Directive

Approved by the European Parliament in September 2002 concerning insurance and reinsurance intermediary regulation. Its aim is to create a system of registration based on the following professional requirements: (a) in possession of the necessary general, commercial and professional knowledge and ability; (b) of good reputation; (c) in possession of professional indemnity insurance or any comparable guarantee against liability for professional negligence; (d) having sufficient financial capacity for those intermediaries who handle client account money. This is similar to the GISC matrix of regulation. Once intermediaries are registered in their home country they will be free to provide services in other EC states. See MEDIATION ACTIVITIES.

Insurance of Property

Here, property, which has intrinsic value of its own is insured against loss or damage by various perils such as Fire, burglary, accidents, etc.Insurance of Liability : Legal liability to third parties, legal liability to employees etc. Insurance provides protection against financial loss caused by incurring legal liability through negligence or by reasons of statutory law.Insurance of Persons : Personal accident, Mediclaim, Bhavishya Arogya and like Insurances. Here, Insurance provides for payment of fixed benefits in the event of death, disablement or disease of the insured due to an accident or disablement due to illness.Insurance of Pecuniary Losses : Loss of Profit Policies, and Fidelity Guarantee policies. Loss of profit policies provide protection against certain consequential losses that result from material damage. Fidelity guarantee polices pay for financial losses suffered by the insured due to acts of dishonesty of his employees.Combination Insurance Policies covering more than one subject matter: Some policies are combination of property Insurance, liability Insurance, Insurance of persons and also covering pecuniary losses. For example, Shopkeepers’ Insurance, Householders’ Insurance etc.Insurance Hall of Fame : An institution created to honor those who have made outstanding contributions to insurance through and practice. Selections are made on an international basis.

Insurance penetration

Measures and monitors trend of insurance purchases as a percentage of gross domestic product in a particular country. It is an indicator of the importance of insurance generally or a particular line of insurance. Higher penetration rates are achieved in the developed countries.
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Insurance penetration is defined as the ratio of premium underwritten in a given year, to the gross Domestic Product (GDP).

Insurance Policy

A contract under which an Insurer, in exchange for premium, provides financial and other protection in the event the insured suffers a loss. Clauses in a Policy– The Recital Clause : Refers to the contract, the Insurer and the insured and also the consideration under the contract.The Operation Clause : Defines the perils covered under the Policy and the liability of the Insurer under the contract.The Attestation Clause : Provides for the signatures of the Insurers.The Conditions Clause/s : Regulate the cover provided under the Policy.The Schedule : Schedule is the space provided in the Policy for describing the property insured in detail including the period of cover.Insurance Premium : Charge by the Insurance Company to individual or Company for the Insurance contract. The premium reimburses the Insurance Company for the risk they have assumed.
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The contract between an insurance company and the insured.
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The document containing the contract between the insured and the insurer that defines the rights and duties of the contracting parties.

Insurance pool

A group of insurance companies that pool assets, enabling them to provide an amount of insurance substantially more than can be provided by individual companies to ensure large risks such as nuclear power stations. Pools may be formed voluntarily or mandated by the state to cover risks that cannot obtain coverage in the voluntary market such as coastal properties subject to hurricanes. (See Beach and windstorm plans Fair access to insurance requirements plans/FAIR plans Joint underwriting association/JUA).

Insurance premium tax (IPT)

Tax on general insurance premiums. Current (2003) standard rate is 5 per cent of gross premium but 17.5 per cent (introduced in April 1997) for travel and extended warranties on vehicles and some domestic appliances. Most long-term insurance is tax exempt, as is reinsurance, insurance for commercial ships and aircraft and insurance for commercial goods in international transit. Premiums for risks located outside the UK are also exempt, but they may be liable to similar taxes imposed by other countries.

Insurance Regulatory and Development Authority of India

Insurance Regulatory and Development Authority of India (IRDAI) is an autonomous apex statutory body which regulates and develops the insurance industry in India. The Insurance Regulatory and Development Authority was established in the year 1999 by the Indian Government, for two significant reasons-to safeguard the interest of the policy holders and for the up gradation of the entire insurance sector right from the approach adopted by the existing insurance companies towards their shareholders to the eradication of the shortcomings of the industry. The Insurance Regulatory and Development Authority has been authorized to register the new insurance companies in India as well renew the Registration of existing Insurers in India.