What is insurance?
Insurance is a contract between two parties insurer and insured in which one party (the insurer, in return of certain and agreed amount of money called the premium), assure the other party (the insured) to make good any financial loss. The insured may suffer as a result of occurrence of the specified, insured and unforeseen events (perils) that take place within the period described in the contract.
How many types of insurance are there in the market?
There are two types of insurance in the market, namely Life Insurance and Non-Life or General Insurance. Life Insurance provides cover for human and human related things. IME General Insurance Limited only issues Non-Life Insurance.
What is Non-Life Insurance?
Non-Life or General Insurance provides cover for all the rest (house, warehouse, industry, vehicle etc.) apart from that covers in Life Insurance. However, Personal Accidents, Personal Medical, Third Party Liability, Production Liability, Travel Trip are also covered in Non-Life Insurance. The nature of Non-Life insurance cover is normally short term, such as one year.
What does underwriting Mean?
Underwriting is the function of evaluating the subject of insurance, whether a person, property, profession, business, or other entity, and determining whether to insure it. The underwriter must apply company standards to each applicant and, base on these standards, ascertain whether the application represents an acceptable risk. Underwriting is the foundation of the insurance transaction process.
What does an insurance underwriter do?
Underwriting involves examining application forms, supporting documents such as appraisals or Bills that verify the value of property, or medical reports that verify the health condition of an individual, looking at insurance maps that provide information relevant to the statistical possibility of certain types of loss, reviewing statistical data applicable to the risk to be insured, reviewing company records regarding the application and evaluating site inspection reports. Upon a thorough examination of all the data, underwriters then assign rates to the application, or decline to issue a policy if it does not meet underwriting standards. During the entire process, the underwriting department frequently communicates with agents, inspectors, adjusters and other field personnel.
What are the steps in insurance underwriting process?
Underwriting is the process of determining whether an insured is an acceptable risk, and if so, at what rate the insured will be accepted. Insurers cannot accept every applicant. An insurer has a responsibility to its current policyholders to make sure that it will be able to meet all the contractual obligations of its existing policies. If the insurance company issues policies on applicants that represent risks that are uninsurable or risks that require premiums higher than the insurer may charge can cover, the insurer’s ability to meet its contractual obligations is jeopardized. On the other hand, a for-profit insurer wants to make money and to increase its number of policyholders. No insurer wants to reject applicants unnecessarily. All these factors must be taken into consideration in the underwriting process. An insurer is also regulated by the states in which it does business. The states expect the insurer to establish reasonable, non-discriminatory standards for accepting insured. Regulation is another important factor in the underwriting process; most of the risks are tariff governed.
What is the purpose of filling up the proposal form?
The purpose of proposal form is to get information from the insured to issue an insurance policy. The information is as followed:
· Name & Address of proposer;
· Details about the proposed properties, persons, liabilities etc;
· Location, Transit route etc. of proposed;
· Property, profession age etc. of proposed persons, nature of business for liabilities etc;
· Proposed Value, Limit of liabilities, Sum Insured etc. for the insurance;
· Risks required;
· Period of insurance;
· Past insurance and claim record…..etc
How long does the underwriting process take?
Total Premium has to be paid immediately by the Insured (Proposer) once the proposal is accepted or Policy is issued by the Insurance Company.
When does coverage become effective?
As per the insurance Act without the payment of premium the insurance policy will not be valid Therefore after paying premium against the Risk and it can be effected policy thereafter. The liability of insurance company does not commence until the proposal has been accepted by the company and premium is paid.
What are the duties of insurance policy holder?
The insurance policy holder should check the “Policy Schedule” for the confirmation of insured name, policy period, property/person/liability insured, risks covered, premium, special exclusions etc and “Policy” for terms, conditions, exclusions, warranties, limitations etc. The insurance policy holder should also check the premium calculation.
What are the cancellation rules and procedures?
This insurance may be terminated at any time at the request of the insured, in which case the company will retain the premium calculated at the customary short period rate for the time the policy has been in force. This insurance may also at any time be terminated at the option of the company with 7 days prior notice to that effect being given to the insured.
In case of request made by insured to cancel the Everest Travel Trip Insurance with valid reason within Policy period a refund premium of 75 percent on total premium will be allowed to Insured.
Does the company automatically renew Policies?
No, first of all, the renewal Notice should be issued by Insurance Company 1 month prior to expiry of period of insurance. The insured should submit signed renewal notice to the company for renewal within Policy period.
What do I need to be careful about when buying insurance?
1. Fixing of Present Sum Insured
2. Selecting Proper period of Insurance
3. Selecting Risk
4. Giving proper description.
5. Submitting required document to Insurance Company
6. In case of claim : Inform immediately to Insurance Company verbally and written and / or electronic media
Will the company provide a company of policy paper to me if it is lost?
Yes, it will be provided to customer as per their written request.
1. It increases security feeling to an individual and Entrepreneur
2. Provides financial support
3. Promotes business efficiency
4. Helps in financial stability.
5. Plays a vital role in minimization of loss.
6. It provides funds for investment.
7. It increases employment opportunities.
What should we do after accident accrued?
When you met an accident you have to inform insurance company at the same time and will have to do as per the claims persons advise. Main important matter is you don’t have to remove the vehicle from the place of accident without permission of insurance company. In emergency if you will have to, you have take photos on spot from every angle of the damaged vehicle then you will have to take your vehicle on safe place.
What information do I need to report my claim?
You need to mention your vehicle number, insurance policy number, date of accident, time of accident, place of accident and how does that accident accrued with your name, contact address and contact number in the claim intimation letter.
Where can I obtain copies of the Insurance Policy Claims Form?
You can receive claim form of the company from our Head Office and any branches of us; as well as you can download claim form from our official website.
Where can I file a claim?
We have branches on different places like: Butwal, Narayanghat, Birjung, Biratnagar and Pokhara or you can check our official website www.iginepal.com, so you can file your claim wherever you find suitable to you or to our Head Office, Narayanchaur, Naxal, Kathmandu.
Does it cost anything to file a claim?
No, it does not cost anything to file a claim.
What happens after I report my claim?
After you report your claim to us, either we will send insurance surveyor for inspection of loss or we will guide you for the process and documentation whichever.
Who are insurance surveyors, how they are qualified to survey our property and who will pay his fee bill?
To be a insurance surveyor he or she should be a engineer or ca (should complete his/ her fixed experience as per the rule of the Beema Samiti) or insurance professionals (should complete his/ her fixed experience on fixed position as per the rule of the Beema Samiti) and they will be qualified for insurance surveyor after having surveyor’s license from the Beema Samiti. Clients never need to pay any bill or amount to surveyors; Insurance Company will pay his survey bill except marine claims (which is also not compulsory).
How long it will take to have compensation after accident? How long will it take to settle my claim?
It depends, it’s not sure how long it will take to settle the claim it’s up to the client so normally it will take as per Beema Samiti Directive, as to settle the claims after submission of complete documents which are asked by insurance company.
What will be the rate or compensation amount which we will receive from insurance company if accident accrued?
Compensation amount will be accessed by the insurance surveyors who are the license holder from the Beema Samiti and it will be the as per the norms which has been approved from the Beema Samiti but amount could be lesser than surveyors report if insurance company will found any lapses on the same.
Do I have the right to appeal the Company’s decision about my claim?
Yes you have the right to appeal to the Beema Samiti, if you are not agreed on company’s decision.
What is Reinsurance?
Reinsurance is insurance that is purchased by an Insurance company (the “ceding company” under the arrangement) from one or more other insurance companies (the “reinsurer”) directly or through a broker as a means of risk management. It is transferring of Risk from ceding company to reinsurer.
Difference between Insurance and Reinsurance?
Insurance is the equitable transfer of the risk of a loss, from one entity to another in exchange for payment. It is a form of risk management. An insurer, or insurance carrier, is a company selling the insurance; the insured, or policyholder, is the person or entity buying the insurance policy. The transaction involves the insured assuming a guaranteed and known relatively small loss in the form of payment to the insurer in exchange for the insurer’s promise to compensate the insured in the case of a financial (personal) loss.
Whereas, Reinsurance is insurance that is purchased by an insurance company (the “ceding company” or “cedant” or “cedent” under the arrangement) from one or more other insurance companies (the “reinsurer”) directly or through a broker as a means of risk management. The ceding company and the reinsurer enter into a reinsurance agreement which details the conditions upon which the reinsurer would pay a share of the claims incurred by the ceding company. The reinsurer is paid a “reinsurance premium” by the ceding company, which issues insurance policies to its own policyholders.
Why reinsurance is important in catastrophes?
Normally, catastrophic risks are not self-insured as they are highly unpredictable and high in loss-value. Catastrophic risks are normally underwritten by the re-insurance .Any risk where the potential loss is so large that no one could afford to pay the market premium required to provide cover would not be commercially insurable. An example is that earthquakes cannot be fully insured against because an earthquake can cause more damage than any insurer or the combined insurance market is willing to risk in total assets.
What are the types of Reinsurance Treaties?
There are two types of treaties
Under proportional reinsurance, one or more reinsurers take a stated percentage share of each policy that an insurer writes. This means that the reinsurer will receive that stated percentage of the premiums and will pay the same percentage of claims. In addition, the reinsurer will allow a ceding commission to the insurer to cover the costs incurred by the insurer (marketing, underwriting, claims etc.).
Under non-proportional reinsurance the reinsurer only pays out if the total claims suffered by the insurer in a given period exceed a stated amount.
How does the insurance pool work?
The insurance pool is one of the forms of risk management mostly practiced by insurance companies. Under this system, insurance companies come together to form a pool, which can provide protection to insurance companies against catastrophic risks such as floods, earthquakes, RSTMDST etc.