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Tag: IRDA

  • Marine Insurance (Description Part-3)

    In this article, we will discuss Marine Insurance (Description Part-3). So, let’s get started.

    Inland Transit Clause

    There are three sets of pure Inland Transit Clauses which are (i) Inland Transit (Rail or Road) Clause A (All Risks) (ii) Inland Transit (Rail or Road) Clause B Basic cover) (iii) Inland Transit (Rail or Road) Clause – C.

    The cover is also available for transportation of cargo during inland waterways under Inland Transit (Inland Vessels) Clause (Basic Cover).

    The Inland Transit Clause-A covers all risks but Inland transit ( Rail or Road) Clause-B (Basic cover)covers named perils i.e. Fire, lightning breakage of bridges, collision with or by the carrying vehicle, overturning of the carrying vehicle and derailment or accidents of like nature to the carrying railway wagon/vehicle

    Inland Transit Clause (C ) covers Fire and Lightning only

    Inland Transit (Inland Vessel) Clause covers named perils i.e. fire or explosion, vessel or craft
    being stranded grounded sunk or capasized

    Duration of Cover

    Under Inland Transit Rail or Road Clause A and B, the risk will commence from the time the goods leave the warehouse and/or store at the place named in the policy for the purpose of commencement of journey and shall terminate on expiry of 7 days after arrival of the land conveyance at the final destination railway station and/or destination town.
    Under Inland Transit (Inland vessels) Clause, the risk will commence from the time the goods are handed over to the inland carriers against receipt and shall terminate on expiry of 7 days from the date of arrival of vessel at destination named in the policy.

    Under Inland Transit Rail or Road Clause -C, the risk will commence with the loading of each package into wagon/truck and shall terminate on unloading at destination railway station/destination point.

  • Marine Insurance (Description Part-2)

    In this article, we will discuss Marine Insurance (Description Part-2). So, let’s get started.

    Extent of cover under ICC 1982
    The Institute of London underwriters issued the first Insutitute Cargo Clauses in 1912. The standard clause, which covered named perils, were actively updated throught the early twentieth century and standard all risks clauses, the Institute Cargo Clauses(All Risks), were introduced on 1st January 1951. The Institute Cargo Clauses were reissued in 1963 and revised in 1982 when the MAR Form was introduced as a substitute for the SG policy form. In late 2005 it was decided by the JCC that review of the Institute Cargo Clauses should be undertaken. Accordingly in February 2006, a questioner was issued by the LMA to the interested parties worldwide and later that year the Joint Cargo Committee, set up a working party to analyze the feedback received and carry out the review. As a result of the market feedback, a new set of Institute Cargo Clauses AB, and C 1/1/2009 alongwith War and Strikes Clauses were introduced at the beginning of 2009 with some modifications to run in parallel with 1982 Clauses.

    Attachment Termination (1/1/1982)
    The risk under marine policy attaches from the time the goods leave the warehouse or place of storage at the place named herein for the commencement of transit and terminates upon delivery to the consignees or other final place of storage at the destination named in the policy. The transit risk may also terminate upon delivery to any other warehouse or place of storage, whether prior to or at the destination, elects by the Assured for storage other than ordinary course of transit and/or for allocation or distribution. The transit risk shall terminate upon expiry of 60 days after the completion of discharge overside of the goods from the overseas vessel at the final port of discharge.

    Since period of 60 days is not a storage cover, any unreasonable delay detention/storage during transit within the control of the Assured shall cause immediate termination of cover.

    Institute Cargo Clause 2009
    Attachment Termination ( 1/1/2009)
    The risk under the particular clause shall commence from the time the subject matter insured is first moved in the warehouse or at the place of storage at the place mentioned in the contract of insurance for the purpose of immediate loading into or on to the carrying vehicle or other conveyance for the commencement of transit.
    The cover terminates on completion of unloading from the carrying vehicle or other conveyance at the final warehouse at destination.

    The cover will also terminate if the storage is done other than ordinary course of transit for allocation or distribution and if the Assured or their employees elect the vehicle or other conveyance or any container for storage other than ordinary course of transit or on expiry of 60 days after completion of discharge overside of the goods from the overseas vessel at the final port of discharge. whichever shall first occur.

  • Marine Insurance (Description Part-1)

    In this article, we will discuss Marine Insurance (Description Part-1). So, let’s get started.

    An Overview of Risks Exposed during Transit

    During the course of transit the cargo may be exposed to various risks despite adopting adeguate precautions in packing, transportation, loading unloading, selection of Carriers etc. The risks can be classified into two categories, depending on their causes:
    – Normal risks during transit
    – High risks during transit (War/SRCC or Terrorism)
    – Normal risk is Particular Average
    – High risk is General average

    Particular Average
    The Particular Average refers to physical loss or damage to the cargoes suffered by the insured
    during a particular voyage/transit.

    Depending upon the voyage, conveyance and nature of cargoes, the insured may suffer the following losses:
    Loss or damage to cargo due to Sinking of vessels, Grounding, Stranding, Capsizing Collision, Fire, Earthquake, Volcanic eruption etc.
    Loss or damage to cargo due to sea water river water, fresh water, washing overboard lost
    overboard, entry of lake water, sea water into the vessel and place of storage, Condensation,
    Contamination Heating and sweating oil stained, acid damage and mud damage etc.
    Accident to the carrying conveyance, mishandling spillage shortage. Theft pillerage and non delivery of entire consignment etc.

    In addition to physical loss or damage to cargo, the insured may also incur certain expenses at short of destination to avert or minimize the losses which are admissible under the policy.

    General Average
    Rule A of York Antwerp Rules 1994 provides definition of General Average as ” There is a general average act when, and only when any extra ordinary sacrifice or expenditure is intentionally and reasonably made or incurred for the common safety for the purpose of preserving from peril the property involved in a common mantime adventure’ The word “general” has been defined in Harris v Scaramanga case to mean that the loss is to be generally distributed, or the contribution to be generally made by all.

    Example
    (1) A ship had discharged nearly all its cargo when a fire broke out which necessitated the use of
    water to extinguish it The remaining goods were thus damaged. It was held that the common
    adventure was not at an end until all the goods are discharged and therefore the ship was liable
    to contribute to the damage cargo

    (2) The vessel put into a port of refuge to repair general average damage, which necessitated
    discharge of cargo. It was held that the inward port charges, cost of discharging and warehousing cargo, together with the outward port charges and reloading cargo expenses were all general average.

  • Marine Insurance (Basic Principles)

    In this article, we will discuss Marine Insurance (Basic Principles). So, let’s get started.

    Basic Principles
    The following basic principles are applicable for Marine Cargo insurance contracts:
    Insurable Interest
    Indemnity
    Utmost Good Faith
    Subrogation
    Proximate Cause
    Contribution

    Since applicability of Insurable Interest and Indemnity in Marine Insurance differs from other
    branch of insurances, the details of both the principles are to be specifically observed

    (i) Insurable Interest: Sec 7 of Marine Insurance Act , 1963 refers that every person has insurable
    interest who is interested in marine adventure Sec 8 of MI Act provides that the assured must
    be interested in the subject matter insured at the time of the loss though he need not be
    interested when the insurance is done.

    (ii) Indemnity: Sec. 67 of Marine Insurance Act 7963 states that the sum which the assured can recover in respect of a loss on a policy by which he is insured, in the case of an unvalued
    policy to the full extent of the insurable value. or, in the case of a valued policy to the full
    extent of the value fixed by the policy Therefore, the Assured is allowed to set the insured value
    while effecting the insurance according to the value of consignment shown in the invoice
    issued by them. The Assured is allowed to include some mark up, say 10-15% over and above the invoice value. The maximum liability under the policy will be the insured value on which the premium was collected

    (iii) Proximate Cause: Proximate cause is the active, efficient cause that sets in motion a train of events which brings about a result, without the intervention of any force started and working actively from a new and independent source Sec. 55 of Marine Insurance Act, 1963 provides included and excluded losses. The insurers are liable to compensate the loss under the subject provision if an insured peril is the proximate cause of loss. However, if an insured peril is only the remote cause of the loss, the proximate cause being an uninsured or excepted peril, the insurers are not liable.

    (iv) Utmost good faith: Every contract of insurance is a contract of “uberrimae fidei”, that is, one which requires utmost good faith on the part of both, the insurer and the assured. Sec 19 to 23 of MIA (1963) deals with principle of utmost good faith which states that the contract of
    insurance is based on utmost good faith where promise or insured is bound to communicate
    to the promisor or the insurer every factor circumstance which will decide by the promisor
    whether to accept the insurance or not. In other words, the assured must disclose to the insurer before the conclusion of contract every material circumstance known to the assured as the contract of marine insurance is a contract based upon utmost good faith and if the good faith is not observed by either party, the contract may be avoided by the other party. It is important to note that the duty of disclosure of any circumstance within the knowledge of the Insured will also continue even after the contract is concluded
    Example: Where, after attachment of insurance, the original destination is changed by the Insured during the course of voyage, the same should be informed to the Insurer prior to such change.

    (v) Subrogation: Sec. 78 of Marine Insurance Act 1963 provides where the insurer pays for a total loss, ether of the whole, or in the case of any apportionable part of the subject matter insured, he there upon becomes entitled to take over the interest of the assured in whatever may remain of the subject matter so paid for and he is thereby subrogated to all the nights and remedies of the assured in and in respect of that subject matter as from the time of the casualty causing the loss. It is to be noted that the Insured will subrogate all his rights and remedies to the Insurer to recover the loss from the wrongdoer after being indemnified.

    (vi) Contribution: Sec 80 of MI Act, 1963 states that where the assured is over insured by double insurance, each insurer is bound, as between himself and the other insurers, to contribute rateably to the loss in proportion to the amount for which he is liable under his contract. It is further stated that if any insurer pays more than his proportion of loss, he is entitled to maintain a suit for contribution against the other insurers, and is entitled to the like remedies as a surety who has paid more than his proportion of the debt.

  • Marine Insurance (Introduction)

    In this article, we will discuss Marine Insurance (Introduction). So, let’s get started.

    Origin and Development of Marine Insurance

    The History of Marine Insurance in England is associated with the history of Lloyds. The word “Lloyds” is associated with the name of Edward Lloyd, a small coffee-house keeper where in towards the latter part of the seventeenth century, the commercial community interested in shipping met The Italian merchants who introduced the practice of marine Insurance in England were known as Lombards. The frequenters of “Lloyds” coffee-house were not allowed the privilege of conducting the marine insurance on a monopoly basis and it was in 1720 that the parliament allowed two more marine insurance companies to be established in London. In 1820 an Act was passed by which marine insurance in England was thrown open and thereafter many other insurance companies together with Lloyds formed the marine insurance market of London. Lloyds were incorporated in 1871 under Lloyds Act of that year and the same was amended by Lloyds Act, 1911.
    According to history of Marine Insurance, all trade operations of any nature, until 17th century had operated by Sea from one port to another port. When transport facilities were gradually developed the other modes of conveyances like Road, Rail, Air were utilised With the development of various modes of conveyances, marine insurance is now extended to cover the transit risks while the cargo is shipped/dispatched by different modes of conveyances according to the convenience of the shippers.

    Need for Marine Insurance
    Marine Insurance occupies an important position in overseas commerce. It enables the parties engaged in overseas trade to venture their capital more freely since it affords protection against fortuitous losses. The advance made by the Bank is secured on the goods if marine policy is obtained by the client. Where shipments are not financed by a Bank, common prudence suggests that the client should obtain marine policy to protect his financial interest. In terms of Section 2 of The Insurance Act, 1938. “Marine Insurance Business” means the business of effecting contracts of insurance upon vessels of any description including cargoes, freight and other interests which may be legally insured, in or in relation to such vessels, cargoes and freight, goods, wares, merchandise and property of whatever description insured for transit by land or water, or both, and whether or not including warehouse risks or similar risks in addition or as incidental to such transit, and includes any other risks customarily included among the risks insured against in marine insurance policies. The law of marine insurance has been codified by the Marine Insurance Act, 1963.

    Who are entitled to Marine Insurance
    The following are only entitled to Marine Insurance
    Individual person (s)
    Bank or any financial institution
    Exporters
    Importers
    Shipowner
    Ship Builders
    Ship Repairers

    Who are not entitled to Marine Insurance
    Carriers/Transporters
    Clearing and Forwarding Agents
    Stevedores
    Freight forwarders
    Commission Agent

  • English (Practice Set-13)

    In this article, we will solve English (Practice Set-13). So, let’s get started.

    1. Fill in the blank with it to complete the sentence.
    She let her horse……in the field.
    (a) loosen
    (b) loose
    (C) loosely
    (d) lose
    Directions (Q. Nos. 2-3) Find out which part of the sentence has an error and select the appropriate option. If a sentence is free from crror ‘No error’.
    2. This is turned out to be (a)/one of our most successful projects and we have made quite (b)/large a profit from it (c)/ No error (d)

    3. He has given me (a). lot of documents (b)/ to read before the presentation tomorrow. (c)/ No error (d)

    4. A sentence has been given Direct/Indirect. Select the one
    which best expresses the same sentence in Indirect/Direct.
    The teacher said, “The Earth goes round the Sun.”
    (a) The teacher said the Earth went round the Sun.
    (b) The teacher said the Earth goes round the Sun.
    (c) The teacher said that the Earth goes round the Sun.
    (d) The teacher said that the Earth went round the Sun.

    5. Fill in the blank.
    Had you told me carlier, I …….. the metting.
    (a) had attended
    (b) have attended
    (c) attended
    (d) would have attended

    6. Choose the proper sequence.
    (a) By June next year Ajay will be twenty years working in the office
    (b) Till June next year Ajay will work in the office for twenty years.
    (c) Till June next year Ajay will work in the office for twenty years.
    (d) By June next year Ajay will have been working in the office for twenty years.

    7. A part of the sentence is underlined. Choose the correct
    alternative which should be put in place of underlined part.
    she found a wooden broken table in the room.
    (a) wooden and broken table
    (b) broken wooden table
    (c) broken and wooden table
    (d) No improvement

    8. Choose the correct preposition
    Pour the juice…. the glass
    (a) in
    (b) into
    (c) onto
    (d) on

    Directions (Q. Nos. 9-13) Read the passage and answer the following questions,
    Given below is a short passage. After the passage, you will find some items based on the passage. First, read a passage and answer the items based on it. You are required to select your answers based on the contents of the passage and opinion of the author only.
    To eat and not be eaten that’s imperative of a caterpillar’s existence. The leaf roller reduces its risks of being picked off by predators by silking together a temporary shelter in which to feed and rest. Adopting a different line of defense, the jelly slug extrudes a sticky translucent coating that may foul the mouth-part of marauding ants. For its part, the aquatic larva, by its watery element, fashions a protable hideout from fragments of aquatic leaves. Cutting a serpentine trail as it feeds on tender young leaves, the minute citrus leaf miner spends its entire larval life inside its host plant, thus keeping its appetizing body safely under wraps.

    9. Which varieties of caterpillars ‘build’ shelters to protect themselves?
    (a) Leaf roller and aquatic larva
    (b) Leaf roller and jelly slug
    (c) Jelly slug and aquatic larva
    (d) Jelly slug and citrus leaf miner

    10. Which one of the following caterpillars produces e sticky
    covering?
    (a) Leaf roller
    (b) Jelly slug
    (c) Aquatic larwa
    (d) Citrus leaf miner

    Answer sheet
    1(d) 2(c) 3(b) 4(c) 5(d) 6(d) 7(b) 8(b) 9(a) 10(b)

  • BREXIT

    In this article, we will discuss BREXIT (Imapct on India). So, let’s get started.

    Impact on India

    • India has had strong historical ties with the UK, and currently, it is one of India’s most important trading partners. In the
    last four years alone, the number of Indian companies investing in the UK has quadrupled.
    • Similarly, the U.K. is one of the largest investors in India, among the G20 countries. Hence, it is important to see how
    India and the U.K. can manoeuvre through Brexit and enter into new trade agreements that are mutually beneficial to both economies.
    • Brexit will directly impact not only the Indian stock market but the global market in totality, including the emerging markets in the world. This is because of the high volatility in the pound.
    • Both the UK and EU account for 23.7% of Rupee’s effective exchange rate. With Brexit, foreign portfolio investments will outflow and will lead to the weakening of the rupee.
    • India’s businesses based in the UK will be hampered as till now they had border-free access to the rest of Europe.
    • The investors are concerned as India Invests more in the United Kingdom than the rest of Europe combined.

    Real Effective Exchange Rate

    • It is the weighted average of a country’s currency in relation to an index or basket of other major currencies. The weights are determined by comparing the relative trade balance of a country’s currency against each country within the index.
    • This exchange rate is used to determine an individual country’s currency value relative to the other major currencies in the index.

    Foreign Portfolio Investments

    • These stands for those investors who invest for a shorter-term in a company as compared to Foreign Direct Investors (FDI)
    • These generally participate through the stock markets and gets in and out of a particular stock at much faster frequencies.

  • IRDA (Features and Benefits)

    In this article, we will discuss IRDA (Features and Benefits). So, let’s get started.

    Features and Benefits

    Following are the salient features of the apex body, the Insurance Regulatory and Development Authority of India:

    Acts as a regulator for the insurance industry.

    Protects the policyholder’s interests.

    Rules and regulations are framed by the apex body under Section 114A of the Insurance Act, 1938.

    It is entrusted under the Insurance Act to grant the certificate of registration to new insurance companies to operate in India.

    Oversees the insurance industry’s activities to ensure sustained development of insurers and policyholders.

    Types of Insurances Regulated by the IRDAI:
    Insurance is mainly divided into Life and Non-Life/General Insurance. These are further classified into other types of insurance. Below are the types of insurance regulated by the IRDAI:

    Life Insurance

    • Term Plans
    • Endowment Policies
    • Unit-linked Insurance Policies
    • Retirement Policies
    • Money-back Policies

    General Insurance

    • Health Insurance Policies
    • Vehicle/Motor Insurance Policies
    • Car insurance
    • Bike Insurance
    • Property Insurance Policies
    • Travel Insurance Plans
    • Gadget Insurance Plans

  • IRDA (Functions)

    In this article, we will discuss IRDA (Functions). So, let’s get started.

    Functions

    Below are the important functions of the IRDAI in the insurance industry in India:

    Grant, renew, modify, suspend, cancel or withdraw registration certificates of the insurance company.

    Protecting the interests of the policyholder in matters concerning the grant of policies, settlement of claims, nomination by policyholders, insurable interest, surrender value of the policy and other terms and conditions of the policy.

    Specify code of conduct, qualifications and training for intermediary or insurance agents.

    Specify code of conduct for loss assessors and surveyors.

    Levying fees and charges for carrying out the provisions of the Act.

    Undertaking inspection, calling for information, and investigations including an audit of insurance companies, intermediaries, and other organizations associated with the insurance business.

    Regulate and control insurance rates, terms and conditions, advantages that may be offered by the insurance providers.

    Apart from the above-mentioned core functions of the IRDA, there are several functions that the regulator performs keeping the policyholder’s interest as its priority.

  • Insurance in India

    In this article, we will discuss Insurance in India (Background and Challenges). So, let’s get started.

    Background of Insurance Sector

    The insurance sector has witnessed many changes over the years including:

    • Nationalisation of life (LIC Act 1956) and non-life sectors (GIC Act 1972).
    • Constitution of the Insurance Regulatory and Development Authority of India (IRDAI) in 1999.
    • Opening up of the sector to both private and foreign players in 2000.
    • Increase in the foreign investment cap to 26% from 49% in 2015.
    • The recent notification of 100% foreign direct investment (FDI) for insurance intermediaries (announced in the Union Budget of 2019-20) has further liberalised the sector.

    Challenges

    • Prevalence of Insurance Gap: The insurance penetration (ratio of total premium to GDP (gross domestic product)) and density (ratio of total premium to population) stood at 3.69% and US$ 73, respectively for FY18 (fiscal year 2017-18), which is low in comparison with global levels.
    • These low penetration and density rates reveal the uninsured nature of large sections of population in India, and the presence of an insurance gap.
    • Public Sector Dominated: The insurance sector has transitioned from being an exclusive State monopoly to a competitive market, but public-sector insurers hold a greater share of the insurance market even though they are fewer in number.
    • Nascent Non-life Insurance: Life insurance dominates the sector with a huge share of 74.7%, with non-life insurance accounting for the remaining 25.3%.
    • In the non-life insurance sector, motor, health, and crop insurance segments are driving growth. India’s non-life insurance penetration is below 1%.
    • In addition, insurance products catering to speciality risks such as catastrophes and cyber security are at a nascent stage of development in the country.
    • Rural-Urban Divide: Low insurance penetration and density rates prevail in India. However, Rural participation of insurers remains deficient, and life insurers, especially private ones, gravitate towards the urban population.
    • Capital Starved Insurers: Insurers in India lack sufficient capital, and their financial health, particularly that of the public-sector insurers, is in a precarious state.
    • Further, investment in the insurance sector got dwindled due to the crisis in banks and NBFCs (non-banking financial companies) sector.