ingvsya project

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INTRODUCTION

Perception is the process by which organisms interpret and organize sensation to produce a meaningful

experience of the world. Sensation usually refers to the immediate, relatively unprocessed result of

stimulation of sensory receptors in the eyes, ears, nose, tongue, or skin. Perception, on the other hand,

better describes one's ultimate experience of the world and typically involves further processing of

sensory input. In practice, sensation and perception are virtually impossible to separate, because they

are part of one continuous process.

Thus, perception in humans describes the process whereby sensory stimulation is translated into

organized experience. That experience, or percept, is the joint product of the stimulation and of the

process itself. Relations found between various types of stimulation (e.g., light waves and sound waves)

and their associated percepts suggest inferences that can be made about the properties of the

perceptual process; theories of perceiving then can be developed on the basis of these inferences.

Because the perceptual process is not itself public or directly observable (except to the perceiver

himself, whose percepts are given directly in experience), the validity of perceptual theories can be

checked only indirectly.

Historically, systematic thought about perceiving was the province of philosophy. Philosophical

interest in perception stems largely from questions about the sources and validity of what is called

human knowledge (epistemology). Epistemologists ask whether a real, physical world exists

independently of human experience and, if so, how its properties can be learned and how the truth or

accuracy of that experience can be determined. They also ask whether there are innate ideas or

whether all experience originates through contact with the physical world, mediated by the sense

organs.

As a scientific enterprise, however, the investigation of perception has especially developed as part of

the larger discipline of psychology. For the most part, psychology bypasses the questions about

perceiving raised by philosophy in favors of problems that can be handled by its special methods. The

remnants of such philosophical questions, however, do remain; researchers are still concerned, for

example, with the relative contributions of innate and learned factors to the perceptual process.

Such fundamental philosophical assertions as the existence of a physical world, however, are taken for

granted among most scientific students of perceiving. Typically, researchers in perception simply accept


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the apparent physical world particularly as it is described in those branches of physics concerned with

electromagnetic energy, optics, and mechanics. The problems they consider relate to the process

whereby percepts are formed from the interaction of physical energy (for example, light) with the

perceiving organism. Of further interest is the degree of correspondence between percepts and the

physical objects to which they ordinarily relate.

In philosophy,psychology, and cognitive science, perception is the process of attaining awareness or

understanding of sensory information.The word "perception" comes from the Latin words perceptio,

percipio, and means "receiving, collecting, action of taking possession, apprehension with themind or

senses.

Perception is one of the oldest fields in psychology. The oldest quantitative law in psychology is the

Weber-Fetcher law,which quantifies the relationship between the intensity of physical stimuli and their

perceptual effects. The study of perception gave rise to the Gestalt school of psychology, with its

emphasis onholistic approach.

Types of Perception:-

Two types of consciousness are considerable regarding perception:

Phenomenal(any occurrence that is observable and physical) and

Psychological.

The difference every sighted person can demonstrate to him- or herself is by the simple opening and

closing of his or her eyes: phenomenal consciousness is thought, on average, to be predominately

absent without senses such as sight. Through the full or rich sensations present in senses such as sight,

nothing by comparison is present while the senses are not engaged, such as when the eyes are closed.

Using this precept, it is understood that, in the vast majority of cases, logical solutions are reached

through simple human sensation. The analogy ofPlato's Cave was coined to express these ideas.

Passive perception can be surmised as the following sequence of events:--

Surrounding Input (senses) processing (brain) Output (re-action).
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theory is the perceptual ecology approach of James J. Gibson. Gibson rejected the assumption of a

poverty of stimulus by rejecting the notion that perception is based in sensations. Instead, he

investigated what information is actually presented to the perceptual systems. He and the psychologists

who work within this paradigm detailed how the world could be specified to a mobile, exploring

organism via the lawful projection of information about the world into energy arrays. Specification is a

1:1 mapping of some aspect of the world into a perceptual array; given such a mapping, no enrichment

is required and perception isdirect perception.

Preconceptions can influence how the world is perceived. For example, one classic psychological

experiment showed slower reaction times and less accurate answers when a deck of playing cards

reversed the color of thesuit symbol for some cards (e.g. red spades and black hearts).

There is also evidence that the brain in some ways operates on a slight "delay", to allow nerve impulses

from distant parts of the body to be integrated into simultaneous signals.

Perception-in-action

An ecological understanding of perception derived fromGibson's early work is that of "perception-in-

action", the notion that perception is a requisite property of animate action; that without perception

action would be unguided, and without action perception would serve no purpose. Animate actions

require both perception and motion, and perception and movement can be described as "two sides of

the same coin, the coin is action". Gibson works from the assumption that singular entities, which he

calls "invariants", already exist in the real world and that all that the perception process does is to home

in upon them. A view known as constructivism (held by such philosophers as Ernst von Glasersfeld)

regards the continual adjustment of perception and action to the external input as precisely what

constitutes the "entity", which is therefore far from being invariant.

Glasersfeld considers an "invariant" as a target to be homed in upon, and a pragmatic necessity to allow

an initial measure of understanding to be established prior to the updating that a statement aims toachieve. The invariant does not and need not represent an actuality, and Glasersfeld describes it as

extremely unlikely that what is desired or feared by an organism will never suffer change as time goes

on. This social constructionist theory thus allows for a needful evolutionary adjustment.

A mathematical theory of perception-in-action has been devised and investigated in many forms of

controlled movement, and has been described in many different species of organism using theGeneral
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Taw Theory.According to this theory, taw information, or time-to-goal information is the fundamental

'percept' in perception.

Theories of Perception

Two major classes:

Bottom-up: perception builds up hierarchically from a set of primitive "features" to our internal

representations.

Top-down: perception starts with a set of primitives, but our perceptual experience is influenced

by higher-level processes, such as knowledge and context.

Bottom-up theories

All bottom-up theories rely on the notion that perception builds upwards from a

foundation of primitives to a representation our cognitive system can use. This takes place without any

influence from higher cognitive processes.

Five main theories are as follows:-

Direct perception

Precursor to behaviorism Perception is a direct result of stimulus energy affecting receptor cells. No

higher cognitive processes or internal representations are necessary
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Template/Exemplar theory

We store examples of all the objects we have seen as exemplars or templates. We compare a perceived

object to this set of exemplars until we find a match.

Proto type theory

Instead of storing many exemplars or rigid templates, we store aprototype, which is kind of like the

average of an object. We compare a perceived object to these prototypes until we find the closest

match.

Feature theory

Perception starts with the identification of basic features that are put together into more complex

objects, which are put together into more complex objects, etc. until we identify an object. Example:

Pandemonium

Structural description theory

Kind of like a three-dimensional version of feature theory, where rather than having lines and corners as

the basic features, simple geometric shapes, called geons, are the basic features. We recognize objects

by matching the geons we are looking at to the stored geons in memory.

Top-down theories

Top-down theories posit varying degrees of influence of higher cognitive processes on what we actually

perceive. The primary example of this is the effect of context on perception, such as in the Word

Superiority Effect.


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THE HISTORY OF INDIAN INSURANCE INDUSTRY

The story of insurance is probably as old as the story of mankind. The same instinct that prompts

modern businessmen today to secure themselves against loss and disaster existed in primitive men also.

They too sought to avert the evil consequences of fire and flood and loss of life and were willing to make

some sort of sacrifice in order to achieve security. Though the concept of insurance is largely a

development of the recent past, particularly after the industrial era past few centuries yet its

beginnings date back almost 6000 years.

Life Insurance

In 1818 the British established the first insurance company in India in Calcutta, the Oriental Life

Insurance Company. First attempts at regulation of the industry were made with the introduction of the

Indian Life Assurance Companies Act in 1912. A number of amendments to this Act were made until the

Insurance Act was drawn up in 1938. Noteworthy features in the Act were the power given to the

Government to collect statistical information about the insured and the high level of protection the Act

gave to the public through regulation and control. When the Act was changed in 1950, this meant far

reaching changes in the industry. The extra requirements included a statutory requirement of a certain

level of equity capital, a ceiling on share holdings in such companies to prevent dominant control (to

protect the public from any adversarial policies from one single party), stricter control on investments

and, generally, much tighter control. In 1956, the market contained 154 Indian and 16 foreign life

insurance companies. Business was heavily concentrated in urban areas and targeted the higher

echelons of society. Unethical practices adopted by some of the players against the interests of the


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consumers then led the Indian government to nationalize the industry. In September 1956,

nationalization was completed, merging all these companies into the so-called Life Insurance

Corporation (LIC). It was felt that nationalization has lent the industry fairness, solidity, growth and

reach.

Insurance may be described as a social device to ensure protection of economic value of life and other

assets. Under the plan of insurance, a large number of people associate themselves by sharing risks

attached to individuals. The risks, which can be insured against, include fire, the perils of sea, death and

accidents and burglary. Any risk contingent upon these, may be insured against at a premium

commensurate with the risk involved. Thus collective bearing of risk is insurance.

Insurance is a contract whereby, in return for the payment of premium by the insured, the insurers pay

the financial losses suffered by the insured as a result of the occurrence of unforeseen events. The term

"risk" is used to describe the possibility of adverse results flowing from any occurrence or the accidental

happenings, which produce a monetary loss.

Insurance is a pool in which a large number of people exposed to a similar risk make contributions to a

common fund out of which the losses suffered by the unfortunate few, due to accidental events, are

made good. The sharing of risk among large groups of people is the basis of insurance. The losses of an

individual are distributed over a group of individuals.

Definitions:

General definition:

In the words of John Magee, Insurance is a plan by themselves which large number of people associate

and transfer to the shoulders of all, risks that attach to individuals.

Fundamental definition:

In the words of D.S. Hansell, Insurance accumulated contributions of all parties participating in the

scheme.


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Functions of insurance:

Primary functions:

1. Provide protection: - Insurance cannot check the happening of the risk, but can provide for the

losses of risk.

2. Collective bearing of risk: - Insurance is a device to share the financial losses of few among many

others.

3. Assessment of risk: - Insurance determines the probable volume of risk by evaluating various factors

that give rise to risk.

4. Provide certainty: - Insurance is a device, which helps to change from uncertainty to certainty.

Secondary functions:

1. Prevention of losses: - Insurance cautions businessman and individuals to adopt suitable device to

prevent unfortunate consequences of risk by observing safety instructions.

2. Small capital to cover large risks: - Insurance relives the businessman from security investment, by

paying small amount of insurance against larger risks and uncertainty.

3. Contributes towards development of larger industries.

Other Function:

Means of savings and investment:

Insurance companies are business houses. The product they sell is financial protection. To succeed and

survive, they must cover their costs, which include payments to cover the losses of policyholders, as well

as sales and administrative expenses, taxes and dividends.

Insurance companies have two sources of incomefor covering these costs:

Premiums and


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Investment income.

The premiums are collected on a regular basis and invested in Government Bonds, Gilt, stocks, mutual

funds, real estates and other conservative avenues. However, investment income depends on market

conditions, interest rates, economy etc. and varies from year to year. Because of the uncertainty

associated with the investment income, insurance companies must generate enough income from

premiums to cover the bulk of their expenses.

Some of the important milestones in the life insurance business in India are:

1818:Oriental Life Insurance Company, the first life insurance company on Indian soil

started functioning.

1870:Bombay Mutual Life Assurance Society, the first Indian life 'Insurance Company started 'Its

business,

1912:The Indian Life Assurance Companies Act enacted as the first statute to regulate the life

'Insurance business.

1928:The Indian Insurance Companies Act enacted to enable the government to collect

statistical 'Information about both life and non life insurance businesses.

1938:Earlier legislation consolidated and amended to by the Insurance Act with the objective of

protecting the 'Interests of the insuring pubic.

1956:245 Indian and foreign insurance and provident societies are taken over by the central

government and nationalized. LIC formed by an Act of Parliament, viz. LIC Act, 1956, with a capital

contribution of Rs. 5 chores from the Government of India.

Liberalization of Indian Insurance


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1994: Insurance sector invited private participation to induce a spirit of competition amongst the

various insurers and. to provide a choice to the consumers.

1997:Insurance regulator IRDA was set up as there felt the Feed:

To set up an independent regulatory body, that provides greater autonomy to insurance companies in

order to improve their performance, In the first year of insurance market liberalization (2001) as much

as 16 private sector companies including joint ventures with leading foreign insurance companies have

entered the Indian insurance sector. Of this, 10 were under the life insurance category and six under

general insurance. Thus in all there are 25 players (12-life insurance and l3-general insurance) in the Indian

insurance industry till date.

Players in Indian insurance industry

Life insurers

Insurance industry, as on 1.4.2000, comprised mainly two players: the state insurers:

Life Insurance Corporation of India (LIC)

General insurers:

General Insurance Corporation of India (GIC) with effect from Dec'2000, a National

Reinsure

GIC had four subsidiary companies, namely with effect from Dec'2000, these subsidiaries have been de-

linked from the parent company and made as independent insurance companies.

1. The Oriental Insurance Company Limited

2. The New India Assurance Company Limited,

3. National Insurance Company Limited

4. United India Insurance Company Limited.


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Yr: 2000-2007: Insurance Industry in the year 2009-2010 had 15 new entrants, namely:

Life Insurers:

S.No. Name of the Company

1 Max New York Life Insurance Co. Ltd.

2 HDFC Standard Life Insurance Company Ltd.

3 ICICI Prudential Life Insurance Company Ltd.

4 Om Kotak Mahindra Life Insurance Co. Ltd.

5 Birla Sun Life Insurance Company Ltd.

6 Tata AIG Life Insurance Company Ltd.

7 SBI Life Insurance Company Limited

8 ING Vysya Life Insurance Company Private Limited

9 Allianz Bajaj Life Insurance Company Ltd.

10 MetLife India Insurance Company Pvt. Ltd.

11 Reliance Life Insurance Company Ltd.

12 Shriram Life Insurance Company Ltd.

13 Sahara India Life Insurance Company Ltd.

14 Bharti AXA Life Insurance Company Ltd.

15 Aviva Life Insurance Company Ltd.


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General Insurers:

S.No. Name of the Company

1 Royal Sundaram Alliance Insurance Company Limited

2 Reliance General Insurance Company Limited.

3 IFFCO Tokyo General Insurance Co. Ltd

4 TATA AIG General Insurance Company Ltd.

5 Bajaj Allianz General Insurance Company Limited

6 ICICI Lombard General Insurance Company Limited.


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ADVANTAGES OF LIFE INSURANCE

1. It is superior to an ordinary saving plan: - Unlike other saving plans, if affords full protection against

risk of death. In case of death, the full sum assured is made available under a life assurance policy;

whereas under saving scheme the total accumulated saving alone will be available. The later will be

considerable less than the sum assured, if death occurs during early years.

2. Easy settlement & protection against creditors: -The life assured can name person(s) called Nominee

to whom the policy money would be payable in the event of his death. The proceeds of a life policy can

be protected against the claim of the creditors of the life assured by effecting a valid assignment of the

policy.

3. Ready marketability & suitability for quick borrowing: - After an initial period, if the policyholder

finds him unable to continue payment of premiums, he can surrender the policy for a cash sum.

Alternatively, he can tide over a temporary difficulty by taking loan on the sole security of the policy

without delay. Further, a life insurance policy is sometimes acceptable as security for a commercial loan.

4. Tax Relief: -The Indian Income-Tax allows deduction of certain portion of the taxable income, which

is diverted to payment of life insurance premiums from the total income tax liability. When this tax relief

is taken into account, it will be found that the assured is in effect paying a lower premium for his

insurance.


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Need for insurance

To provide cash to meet various routine expenses of the family on or immediately after

the death of the income earner of the family.

To preserve the familys accustomed standard of living ever after the death of the

breadwinner.

To provide continuous flow of funds for the living spouse.

To allocate income funds for the childrens education.

To provide a retirement income throughout old age.

To provide a reliable savings plan for the future.

To supplement income when earning power is reduced or eroded by illness, accident or

any handicap.

To furnish surplus earnings for the investors should disaster strike.


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Insurance Marketing focuses on the formulation of an ideal mix for Insurance business so that the

Insurance organization survives and thrives in the right perspective.

MARKETING --MIX FOR INSURANCE COMPANIES: The marketing mix is the combination of marketing

activities that an organization engages in so as to best meet the needs of its targeted market. The

Insurance business deals in selling services and therefore due weight-age in the formation of

marketing mix for the Insurance business is needed. The marketing mix includes sub-mixes of the 7

P's of marketing i.e. the product, its price, place, promotion, people, process & physical attraction.

The above mentioned 7 P's can be used for marketing of Insurance products, in the following

manner:

1. Product:

A product means what we produce. If we produce goods, it means tangible product and when

we produce or generate services, it means intangible service product. A product is both what a

seller has to sell and a buyer has to buy. Thus, an Insurance company sells services and

therefore services are their product.

In India, the Life Insurance Corporation of India (LIC) and the General Insurance Corporation (GIC) are

the two leading companies offering insurance services to the users. Apart from offering life insurance

policies, they also offer underwriting and consulting services. When a person or an organization buys

an Insurance policy from the insurance company, he not only buys a policy, but along with it the

assistance and advice of the agent, the prestige of the insurance company and the facilities of claims

and compensation. It is natural that the users expect a reasonable return for their investment and

the insurance companies want to maximize their profitability. Hence, while deciding the product

portfolio or the product-mix, the services or the schemes should be motivational. The Group

Insurance scheme is required to be promoted, the Crop Insurance is required to be expanded and

the new schemes and policies for the villagers or the rural population are to be included. The Life

Insurance Corporation has intensified efforts to promote urban savings, but as far as rural savings are

concerned, it is not that impressive. The introduction of Rural Career Agents Scheme

has been found instrumental in inducing the rural prospects but the process is at infant stage

and requires more professional excellence. The policy makers are required to activate the efforts.

It would be prudent that the LIC is allowed to pursue a policy of direct investment for rural

development. Investment in Government securities should be stopped and the investment should be


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canalized in private sector for maximizing profits. In short, the formulation of product-mix should be

in the face of innovative product strategy. While initiating the innovative process it is necessary to

take into consideration the strategies adopted by private and foreign insurance companies.

2. Pricing:

In the insurance business the pricing decisions are concerned with:

i) The premium charged against the policies,

ii) Interest charged for defaulting the payment of premium and credit facility, and

iii) Commission charged for underwriting and consultancy activities. With a view of influencing thetarget market or prospects the formulation of pricing strategy becomes significant. In a developing

country like India where the disposable income in the hands of prospects is low, the pricing decision

also governs the transformation of potential policyholders into actual policyholders. The strategies

may be high or low pricing keeping in view the level or standard of customers or

the policyholders. The pricing in insurance is in the form of premium rates. The three main factors

used for determining the premium rates under a life insurance plan are mortality, expense and

interest. The premium rates are revised if there are any significant changes in any of these factors.

Mortality (deaths in a particular area): When deciding upon the pricing strategy the average rate of

mortality is one of the main considerations. In a country like South Africa the threat to life is very

important as it is played by host of diseases.

Expenses:The cost of processing, commission to agents, reinsurance companies as well as

registration are all incorporated into the cost of installments and premium sum and forms the

integral part of the pricing strategy

Interest:The rate of interest is one of the major factors which determine people's willingness to

invest in insurance. People would not be willing to put their funds to invest in insurance business if

the interest rates provided by the banks or other financial instruments are much greater than

the perceived returns from the insurance premiums.


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3. Place:

This component of the marketing mix is related to two important facets --

i) Managing the insurance personnel, and

ii) Locating a branch. The management of agents and insurance personnel is found significant with

the viewpoint of maintaining the norms for offering the services. This is also to process the services

to the end user in such a way that a gap between the services- promised and services -- offered is

bridged over. In a majority of the service generating organizations, such a gap is found existent which

has been instrumental in making worse the image problem. The transformation of potential

policyholders to the actual policyholders is a difficult task that depends upon the professional

excellence of the personnel. The agents and the rural career agents acting as a link, lack

professionalism. The front-line staff and the branch managers also are found not assigning due

weight-age to the degeneration process. The insurance personnel if not managed properly would

make all efforts insensitive. Even if the policy makers make provision for the quality upgrading the

promised services hardly reach to the end users.

It is also essential that they have rural orientation and are well aware of the lifestyles of

the prospects or users. They are required to be given adequate incentives to show their

excellence. While recruiting agents, the branch managers need to prefer local persons and provide

them training and conduct seminars. In addition to the agents, the front-line staff also needs anintensive training program to focus mainly on behavioral management. Another important

dimension to the Place Mix is related to the location of the insurance branches. While locating

branches, the branch manager needs to consider a number of factors, such as smooth accessibility,

availability of infrastructural facilities and the management of branch offices and premises. In

addition it is also significant to provide safety measures and also factors like office furnishing, civic

amenities and facilities, parking facilities and interior office decoration should be given proper

attention. Thus the place management of insurance branch offices needs a new vision, distinct

approach and an innovative style. This is essential to make the work place conducive, attractive and

proactive for the generation of efficiency among employees. The branch managers need professional

excellence

to make place decisions productive.


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4. Promotion:

The insurance services depend on effective promotional measures. In a country like India, the rate of

illiteracy is very high and the rural economy has dominance in the national economy. It is essential to

have both personal and impersonal promotion strategies. In promoting insurance business, the

agents and the rural career agents play an important role. Due attention should be given in selecting

the promotional tools for agents and rural career agents and even for the branch managers and front

line staff. They also have to be given proper training in order to create impulse buying.

Advertising and Publicity, organization of conferences and seminars, incentive to policyholders

are impersonal communication. Arranging Kirtans, exhibitions, participation in fairs and festivals,

rural wall paintings and publicity drive through the mobile publicity van units would be effective

in creating the impulse buying and the rural prospects would be easily transformed into

actual policyholders.

5. People:

Understanding the customer better allows designing appropriate products. Being a service

industry which involves a high level of people interaction, it is very important to use this resource

efficiently in order to satisfy customers. Training, development and strong relationships with

intermediaries are the key areas to be kept under consideration. Training the employees, use of ITfor efficiency, both at the staff and agent level, is one of the important areas to look into.

6. Process:

The process should be customer friendly in insurance industry. The speed and accuracy of payment is

of great importance. The processing method should be easy and convenient to the

customers. Installment schemes should be streamlined to cater to the ever growing demands of the

customers. IT & Data Warehousing will smoothen the process flow. IT will help in servicing large no.

of customers efficiently and bring down overheads. Technology can either complement or

supplement the channels of distribution cost effectively. It can also help to improve customer service

levels. The use of data warehousing management and mining will help to find out the profitability

and potential of various customers product segments.


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7. Physical evidence:

Distribution is a key determinant of success for all insurance companies. Today, the nationalized insurers

have a large reach and presence in India. Building a distribution network is very expensive and time

consuming. If the insurers are willing to take advantage of India's large population and reach a profitable

mass of customers, then new distribution avenues and alliances will be necessary. Initially insurance was

looked upon as a complex product with a high advice and service component.

Buyers prefer a face-to-face interaction and they place a high premium on brand names and reliability.

As the awareness increases, the product becomes simpler and they become off-the-shelf commodity

products. Today, various intermediaries, not necessarily insurance companies, are selling insurance. For

example, in UK, retailer like Marks & Spencer sells insurance products. The financial services industries

have successfully used remote distribution channels such as telephone or internet so as to reach more

customers, avoid intermediaries, bring down overheads and increase profitability. A good example is UK

insurer Direct Line. It relied on telephone sales and low pricing. Today, it is one of the largest motor

insurance operators.

Technology will not replace a distribution network though it will offer advantages like better customer

service. Finance companies and banks can emerge as an attractive distribution channel for insurance in

India. In Netherlands, financial services firms provide an entire range of products including bank

accounts, motor, home and life insurance and pensions. In France, half of the life insurance sales are

made through banks. In India also, banks hope to maximize expensive existing networks by selling a

range of products. It is anticipated that rather than formal ownership arrangements, a loose network of

alliance between insurers and banks will emerge, popularly known as bank assurance.

Another innovative distribution channel that could be used are the non-financial organizations. For an

example, insurance for consumer items like fridge and TV can be offered at the point of sale. This

increases the likelihood of insurance sales. Alliances with manufacturers or retailers of consumer goods

will be possible and insurance can be one of the various incentives offered.


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Various types of life insurance policies:-

Endowment policies: This type of policy covers risk for a specified period, and at the end of the

maturity sum assured is paid back to policyholder with the bonuses during the term of the

policy.

Money back policies: This type of policy is for periodic payments of partial survival benefits

during the term of the policy as long as the policy holder is alive.

Group insurance: This type of insurance offers life insurance protection under group policies to

various groups such as employers-employees, professionals, co-operatives etc it also provides

insurance coverage for people in certain approved occupations at the lowest possible premium

cost.

Term life insurance policies: This type of insurance covers risk only during the selected term

period. If the policy holder survives the term, risk cover comes to an end. These types of policies

are for those people who are unable to pay larger premium required for endowment and whole

life policies. No surrender, loan or paid up values are in such policies.

Whole life insurance policies: This type of policy runs as long as the policyholder is alive and is

covered for the entire life of the policyholder. In this policy the insured amount and the bonus is

payable only to nominee on the death of policy holder.

Joint life insurance policies: These policies are similar to endowment policies in maturity

benefits and risk cover, but joint life policies cover two lives simultaneously such as married


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couples. Sum assured is payable on the first death and again on the death of survival during the

term of the policy.

Pension plan: a pension plan or annuity is an investment over a certain number of years but

does not provide any life insurance cover. It offers a guaranteed income either for a life or

certain period.

Unit linked insurance plan: ULIP is a kind of insurance plan which provides life cover as well as

return on premium paid over a certain period of time. The investment is denoted as units and

represented by the value called as net asset value (NAV).

IRDA (Insurance Regulatory and Development Authority)

The Insurance Act, 1938 had provided for setting up of the Controller of Insurance to act as a strong and

powerful supervisory and regulatory authority for insurance. Post nationalization, the role of Controller

of Insurance diminished considerably in significance since the Government owned the insurance

companies. But the scenario changed with the private and foreign companies foraying in to the

insurance sector. This necessitated the need for a strong, independent and autonomous Insurance

Regulatory Authority was felt. As the enacting of legislation would have taken time, the then

Government constituted through a Government resolution an Interim Insurance Regulatory Authority

pending the enactment of a comprehensive legislation.

The Insurance Regulatory and Development Authority Act, 1999 is an act to provide for theestablishment of an Authority to protect the interests of holders of insurance policies, to regulate,

promote and ensure orderly growth of the insurance industry 17 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

(Nationalization) Act, 1972 to end the monopoly of the Life Insurance Corporation of India (for life

insurance business) and General Insurance Corporation and its subsidiaries (for general insurance

business).

The act extends to the whole of India and will come into force on such date as the Central Government

may, by notification in the Official Gazette specify. Different dates may be appointed for different

provisions of this Act. The Act has defined certain terms; some of the most important ones are as

follows:


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Appointed day means the date on which the Authority is established under the act.

Authority means the established under this Act.

Interim Insurance Regulatory Authority means the Insurance Regulatory Authority set up by the Central

Government through Resolution No. 17(2)/ 94-lns-V dated the 23rd January, 1996.

Words and expressions used and not defined in this Act but defined in the

Insurance Act, 1938 or the Life Insurance Corporation Act, 1956 or the General Insurance

Business (Nationalization) Act, 1972 shall have the meanings respectively assigned to them in those

Acts.

A new definition of "Indian Insurance Company" has been inserted. "Indian insurance company" means

any insurer being a company

(a) Which is formed and registered under the Companies Act, 1956

(b) In which the aggregate holdings of equity shares by a foreign company, either by itself or

through its subsidiary companies or its nominees, do not exceed twenty-six percent, paid up capital in

such Indian insurance company.

(c) Whose sole purpose is to carry on life insurance business, general insurance business or re-insurance

business?

The Authority is a ten member team consisting of

(a) A Chairman;

(b) five whole-time members;

(c) four part-time members,

(all appointed by the Government of India)

ingvsya project

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