Insurance Companies
Chapter notes, video classes, MCQ practice tests and quick-revision one-liners for Indian Economy and Indian Financial System — JAIIB.
One-liners from this chapter
Free sample — 8 of 65 rapid-fire Q&A cards.
What is the fundamental nature of an insurance contract?
An insurance contract is one under which one party agrees to indemnify another against loss arising from a specified risk.
What is the statutory requirement for any insurer to commence insurance business in India under the Insurance Act, 1938?
Obtain a Certificate of Registration from the regulator (IRDAI), renewable annually
What principle ensures that an insured cannot profit from an insurance claim?
The principle of indemnity ensures that the insured is restored to the same financial position as before the loss, preventing any profit from a claim.
What is the penalty for offering a rebate of commission or premium as an inducement to buy an insurance policy under Section 41 of the Insurance Act, 1938?
A penalty extending up to ₹10 lakh
What does the principle of insurable interest require in an insurance contract?
The principle of insurable interest requires that the insured must have a financial stake in the subject matter of insurance, such that loss or damage would cause them a financial loss.
How is insurance penetration defined and calculated?
Insurance penetration = (total insurance premium ÷ GDP) × 100, expressed as a percentage
What is the principle of utmost good faith (uberrimae fidei) in insurance?
The principle of utmost good faith requires both parties to an insurance contract to disclose all material facts honestly and completely before the contract is concluded.
What is insurance density and in what unit is it expressed?
Insurance density is the ratio of premium to population (per capita premium), expressed in US Dollars
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