FUNDAMENTAL KNOWLEDGE ABOUT INSURANCE

                       Today I will strive to narrate herein classes of life and non-life insurance business, but estimate it more appropriate and apposite to first describe respecting “insurance”, “insurer”, “policyholder” and “investment contract” so that existent perception may occur accurately in mind of every Bibliophile.

 INSURANCE:

“Insurance” means the business of entering into and carrying out policies or contracts, by whatever name called, whereby, in consideration of premium received, a person promises to make payment together person contingent upon the happening of an event,

specified in the contract, on the happening of which the second named person suffers loss and includes reinsurance and reprocessing. Provided that contract of life insurance shall be deemed to be a contract of insurance notwithstanding that it may not comply with the definition set out hereinabove.

 INSURER:

insurer
insurer

IT means any company or other body corporate carrying on the business of insurance. which is a company or other body corporate incorporated under any law for the time being in force.

POLICYHOLDER:

Policyholder means the person to whom a policy is issued or, in the case of a policy of life insurance, the person to whom the whole of the interest of the policyholder in the policy is assigned once and for all, but does not include an assignee thereof whose interest in the policy is defeasible or is for the time being subject to any condition.

INVESTMENT CONTRACT:

Means a contract of insurance, providing for benefits to be paid on death or on a specified date or dates before death where the benefits paid are calculated by reference to either running account or units under the contract whether or not the minimum value of that account or those units is guaranteed and providing for the account to be increased during the currency of the contract.

   CLASSES OF LIFE AND NON-LIFE INSURANCE BUSINESS.

                   The following shall be the classes of business into which life insurance business is divided:

insurance accident
insurance accident
  •  Being ordinary life business:
  •  It means effecting and carrying out contracts of life insurance other than contracts included in classes 2, 3 or 4 (will be mentioned hereinafter)
  • Being a capital redemption business.
  • It means effecting and carrying out capital redemption contracts
  • Being pension fund business It means effecting and carrying out contracts of life insurance that are maintained for the purposes of a pension or retirement scheme and are owned by trustees under the scheme; and
  • Being accident and health business It means effecting and carrying out contracts of insurance providing fixed pecuniary benefits in the nature of indemnity or a combination of both, against risks of the policyholder or a person for whose benefit the contract was made:-
  • Sustaining injury as a result of an accident;
  • Becoming incapacitated in consequence of an accident or disease; or
  • Suffering loss, including medical expenses, attributes to accident, sickness or infirmity
  • Suffering loss, including medical expenses, attributable to sickness or infirmity.

CLASSES OF BUSINESS INTO WHICH NON-LIFE INSURANCE BUSINESS IS DIVIDED

              The following shall be the classes of business into which non-life insurance business is divided:-

  • Being fire and property damage business:
  • It means effecting and carrying out contracts of insurance against loss to the policyholder arising from loss of or damage to property
  • Being a marine, aviation and transport business It means effecting and carrying out contracts of it against loss to the policyholder arising from loss of or damage to or arising out of or in connection with the use of transport including motory, vehicles and railway rolling stock used on land, vessels used on the sea or on inland waters, and aircraft or the machinery, tackle, furniture or equipment of those means of transport and loss of damage to merchandise, baggage and all other goods in transit, irrespective of the form of transport.
  • Motor third party compulsory business It means effecting and carrying out contracts of insurance against loss to the policyholder arising from liabilities incurred to third parties arising out or in connection with the use of motor vehicles on land as specified in the Motor Vehicles Act, 1939.