BASICS OF BANKING AND INSURANCE by V SEMESTER Book

BASICS OF BANKING AND INSURANCE by V SEMESTER Book
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    BASICS OF BANKING ANDINSURANCEV SEMESTERCORE COURSEB Com(2011 Admission)UNIVERSITY OF CALICUTSCHOOL OF DISTANCE EDUCATIONCalicut university P.O, Malappuram Kerala, India 673 635.334

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    School of Distance EducationBasics of Banking and InsurancePage 2UNIVERSITY OF CALICUTSCHOOL OF DISTANCE EDUCATIONSTUDY MATERIALCore CourseB ComV SemesterBASICS OF BANKING AND INSURANCEPrepared bySri. Praveen M V,Asst. Professor,Department of Commerce,Govt. College, Madappally.Scrutinized byDr. K...

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    School of Distance EducationBasics of Banking and InsurancePage 3CONTENTSPAGEMODULE 1ORIGIN AND DEVELOPMENT OF BANKING5MODULE 2TYPES OF CUSTOMERS OF BANKS38MODULE 3INTRODUCTION TO INSURANCE49MODULE 4INSURANCE LAWS IN INDIA78

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    School of Distance EducationBasics of Banking and InsurancePage 4

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    School of Distance EducationBasics of Banking and InsurancePage 5MODULE 1ORIGIN AND DEVELOPMENT OF BANKINGBanking: Meaning and definitionFinance is the life blood of trade, commerce and industry. Now-a-days, banking sectoracts as the backbone of modern business. Development of any country mainly ...

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    School of Distance EducationBasics of Banking and InsurancePage 6derived from the German word “back” meaning a joint stock fund, which was Italianized into“banco” when the Germans were masters of a great part of Italy. This appears to be morepossible. But whatever is the origin of the wor...

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    School of Distance EducationBasics of Banking and InsurancePage 71.2 Growth and developments of banks in IndiaWe cannot have a healthy economy without a sound and effective banking system. Thebanking system should be hassle free and able to meet the new challenges posed bytechnology and other fac...

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    School of Distance EducationBasics of Banking and InsurancePage 8Phase 2 (1969 to 1991)The government took major initiatives in banking sector reforms after Independence.In 1955, it nationalized the Imperial Bank of India and started offering extensive bankingfacilities, especially in rural and s...

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    School of Distance EducationBasics of Banking and InsurancePage 91.3. Indian Banking StructureThe structure of banking in India consists of following components:1. Central Bank–Reserve Bank of India(RBI)2. Commercial Banksa. Public sector Banksb. Private Banksc. Foreign Banks3. Co-operative Ban...

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    School of Distance EducationBasics of Banking and InsurancePage 10Commercial BanksThere are three types of commercial banks in India1. Public sector banks2. Private Banks3. Foreign banksCurrently, there are 88 scheduled commercial banks, including 28 public sector banks, 29private banks and 31 fo...

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    School of Distance EducationBasics of Banking and InsurancePage 11Private BanksPrivate Banks are banks that the majority of share capital is held by privateindividuals. In Private sector small scheduled commercial banks and newly established bankswith a network of 8,965 branches are operating. To...

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    School of Distance EducationBasics of Banking and InsurancePage 12Foreign BanksForeign banks are registered and have their headquarters in a foreign country butoperate their branches in India. Apart from financing of foreign trade, these banks haveperformed all functions of commercial banks and t...

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    School of Distance EducationBasics of Banking and InsurancePage 13Central Co-operative Banks:Central co-operative banks operate at the district level having some of the primarycredit societies belonging to the same district as their members. These banks provide loans totheir members (i.e., primar...

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    School of Distance EducationBasics of Banking and InsurancePage 14Industrial Development Bank of India (IDBI)The IDBI was established on July 1, 1964 under an Act of Parliament. It was set up asthe central co-ordinating agency, leader of development banks and principal financinginstitution for in...

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    School of Distance EducationBasics of Banking and InsurancePage 15Apart from this the Industrial Reconstruction Corporation of India (IRCI) establishedin 1971 with the main objective of revival and rehabilitation of viable sick units and wasconverted in to the IndustrialReconstruction Bank of In...

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    School of Distance EducationBasics of Banking and InsurancePage 16Small Industries Development Bank of IndiaThis specialized bank grant loan to those who want to establish a small-scale businessunit or industry. Small Industries Development Bank of India (SIDBI) was established inOctober 1989 and...

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    School of Distance EducationBasics of Banking and InsurancePage 17a) Takes measures towards institution building for improving absorptive capacity of thecredit delivery system, including monitoring, formulation of rehabilitation schemes,restructuring of credit institutions, training of personnel,...

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    School of Distance EducationBasics of Banking and InsurancePage 182.Development financial institutions (DFIs)DFIs are specialized financial institutions the Government established to promoteinvestments in the manufacturing and agricultural sectors.Their functions include:1. Extending financial as...

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    School of Distance EducationBasics of Banking and InsurancePage 193. InnovationsInnovations are an essential prerequisite for economic progress. These innovations aremostly financed by bank credit in the developed countries. But the entrepreneurs inunderdeveloped countries cannot bring about thes...

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    School of Distance EducationBasics of Banking and InsurancePage 20Types of Banking SystemA bank is an institution which deals with money and credit. It accepts the depositsfrom public and makes the funds available to those who need them. A modern bank performsa variety of functions and they purvi...

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    School of Distance EducationBasics of Banking and InsurancePage 214. Chain banking systemIt is another form of group of banking. It refers to the system in which two or morebanks are brought under common control by a device other than the holdingcompany. Theyhave common management and policies. T...

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    School of Distance EducationBasics of Banking and InsurancePage 221.6 Commercial BanksA bank is a financial institution engaged in banking business. A bank is a financialintermediary. It deals in money and credit. It deals with other people's money. It collects thesavings of some people and gives...

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    School of Distance EducationBasics of Banking and InsurancePage 23(c) Savings Deposits: As the name suggests, this deposit is meant for promotion of savingsand thrift among the people. In the case of savings deposits there are certain restrictions onthe number of withdrawals or on the amount that...

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    School of Distance EducationBasics of Banking and InsurancePage 24government as well as state government. It also invests in other approved securities like theunits of UTI, shares of GIC and LIC, securities of State Electricity Board etc.4. Credit Creation: -It is a unique function ofCommercial ...

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    School of Distance EducationBasics of Banking and InsurancePage 254. It undertakes the safe custody of valuables. For this purpose safe deposit vaults aremaintained. Vault is a strong room for keeping the valuables safe.5. Bank makes arrangements for transport, insurance and warehousing of goods....

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    School of Distance EducationBasics of Banking and InsurancePage 26their units, and term credit for meeting their working capital needs. The borrower isrequired to make a down payment of 20 to 33 1/3% of cost of equipment to bepurchasedfrom one's own resources while the rest is financed out of th...

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    School of Distance EducationBasics of Banking and InsurancePage 27which has been entrusted the duty of regulating the volume of currency and credit in thecountry”. The fact that several banks have been named reserve banks appears to show that inthe opinion of some authorities the custody of ban...

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    School of Distance EducationBasics of Banking and InsurancePage 28government accounts, provides financial advice to the government. It managesgovernment public debts and maintains foreign exchange reserves on behalf of thegovernment. It provides overdraft facility to the government when it faces ...

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    School of Distance EducationBasics of Banking and InsurancePage 29sector. It has earlier the Agriculture Refinance and Development Corporation (ARDC)to look after the credit, National Bank for Agriculture and Rural Development(NABARD) and Regional Rural Banks (RRBs).3. Provision of Industrial Fin...

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    School of Distance EducationBasics of Banking and InsurancePage 30III. Supervisory Functions of RBIRBI has authority to regulate and administer the entire banking and financial system. Some ofits supervisory functions are given below.1. Granting license to banks: The RBI grants license to banks f...

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    School of Distance EducationBasics of Banking and InsurancePage 311. Bank Rate Policy:-Bank rate is the rate at which the Central bank lends money to the commercial banksfor their liquidity requirements. Bank rate is also called discount rate. In other words bankrate is the rate at which the c...

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    School of Distance EducationBasics of Banking and InsurancePage 32Reverse repo rate is the rate that banks get from RBI for parking their short termexcess funds with RBI. Repo and reverse repooperations are used by RBI in its LiquidityAdjustment Facility. RBI contracts credit by increasing the re...

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    School of Distance EducationBasics of Banking and InsurancePage 331.8. Emerging Trends in BankingIn1990’sIndianbankingsectorsawagreatemphasisonthereplacementoftechnology with the new innovations. Banks began to use these new technologies to providebetterandquickservicestothecustomersatagreatspe...

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    School of Distance EducationBasics of Banking and InsurancePage 341. Automated Teller Machine:An ATM is a computerized Tele-communication device which provides the customersthe access to financial transactions in public places without human inter-mention. It enablesthe customers to perform severa...

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    School of Distance EducationBasics of Banking and InsurancePage 354. Mobile Banking:It isanother important service providedby thebanks recently. Thecustomers canutilize it with the help of a cell phone. The bank will install particular software and provide apassword to enable a customer to utiliz...

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    School of Distance EducationBasics of Banking and InsurancePage 369. Debit CardAdebit card (also known as a bank card or check card) is a plastic card that providesthe cardholder electronic access to his or her bank account/s at a financial institution. Somecards have a stored value against which...

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    School of Distance EducationBasics of Banking and InsurancePage 37The most common smart card applications are:Credit cardsElectronic cashComputer security systemsWireless communicationLoyalty systems (like frequent flyer points)BankingSatellite TVGovernment identification1...

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    School of Distance EducationBasics of Banking and InsurancePage 38MODULE 2TYPES OF CUSTOMERS OF BANKSIn the ordinary language, a person whohas an accountin a bankis considered itscustomer.The term customer also presents some difficulty in thematter of definition. Thereis no statutory definitio...

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    School of Distance EducationBasics of Banking and InsurancePage 39and any contract entered into with a minoris not only invalid but voidable at theoption of theminor. The law has specially protected a minor merely because his mental faculty has notfully developed and as such, he islikely to commi...

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    School of Distance EducationBasics of Banking and InsurancePage 40(c)Guardian Appointed by Court:A guardian may be appointed by the court under the Guardians and Wards Act, 1890, butthe court shall not be authorised to appoint or declare a guardian of the person of aminor, ifhisfather is alive an...

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    School of Distance EducationBasics of Banking and InsurancePage 41IV. Married Women:An account may be opened by the bank in thename of a married woman as she has thepower to draw cheques and give valid discharge. At the time of opening an account in thenameof a married woman, it is advisable too...

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    School of Distance EducationBasics of Banking and InsurancePage 42on behalf of the principal, thebanker should see that he isproperly authorised to dothe actswhich heclaims to do. If he has been appointed by a power of attorney, the banker shouldcarefully pursue the letter-of-attorney to confirm...

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    School of Distance EducationBasics of Banking and InsurancePage 43(e)Application Form and Copy of the Board’s Resolution:A copy of the prescribed application form duly completed in all respects has to besubmitted in thebeginning and that tooduly signed by the company’s authorised officers.Alo...

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    School of Distance EducationBasics of Banking and InsurancePage 44(b)Rules and by-laws of the Organisation:A registered association or organisation isgoverned by the provisions of the Act underwhich it has been registered. It may have its own Constitution, Charter or Memorandum ofAssociation and ...

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    School of Distance EducationBasics of Banking and InsurancePage 45X. Partnership Firm:A partnership is not regarded as an entity separate from the partners. The IndianPartnership Act, 1932, defines partnership as the “relation between persons who have agreedto share the profit of the business...

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    School of Distance EducationBasics of Banking and InsurancePage 46(a). The application for openinga joint account must be signed by all the persons intending toopen a joint account.(b). A mandate containing name or names of persons authorised to operate an account.(c). The full name of the acco...

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    School of Distance EducationBasics of Banking and InsurancePage 47(d) The account should be operated on only by the Kartha and the authorised majorcoparceners.(e) While making advances, the banker should ascertain the purpose for which the loan isobtained and whether the loan is really needed by ...

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    School of Distance EducationBasics of Banking and InsurancePage 48A banking institution solicits deposits of money from the members of the public. Anaccount in a bank for this purpose may be opened by any person who (i) is legally capable ofentering into a valid contract, (ii) applies to the ban...

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    School of Distance EducationBasics of Banking and InsurancePage 49MODULE 3INTRODUCTION TO INSURANCEIt is a generally acknowledged phenomenon that there are enormous risks in everysphere of life. For property, there are fire risks; for shipment of goods, there are perils of sea;for human life,ther...

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    School of Distance EducationBasics of Banking and InsurancePage 50Brief History of InsuranceThe growth of insurance industry is associated with the general growth of industry,trade and commerce. The origin of insurance services may be traced back to 14thCentury inItaly when ships carrying goods w...

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    School of Distance EducationBasics of Banking and InsurancePage 51England in 1720. In the year 1735 saw the birth of the first insurance company in AmericanColonies in Charleston. In 1759, the Presbyterian Synod of Philadelphia sponsored the firstLife Insurance Corporation in America. However, it...

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    School of Distance EducationBasics of Banking and InsurancePage 52PremiumThe amount whichis paid to the insurer by the insured in consideration to insurancecontract is known as premium. It may be paid on monthly, quarterly, half yearly, yearly or asagreed upon it is the price for an insurance pol...

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    School of Distance EducationBasics of Banking and InsurancePage 53Double InsuranceDouble insurance implies that subject matter is insured in two or more insurancecompanies (insurers) and the total sum insured exceeds the actual value of subject matter. Inother words, the same subject matter is in...

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    School of Distance EducationBasics of Banking and InsurancePage 546. Transfer of riskInsurance isa plan in which the insured transfers his risk on the insurer. This may be thereason that may person observes, that insurance is a device to transfer some economic losseswould have been borne by the i...

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    School of Distance EducationBasics of Banking and InsurancePage 5514. Regulation under the lawThe government of every country enacts the law governing insurance business So as toregulate, and control its activities for the interest of the people. In India General insurance act1972 and the life in...

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    School of Distance EducationBasics of Banking and InsurancePage 568. Credit Facility9. Tax exemption10.Contribution to the conservation of health11.Cover for legal liability12.Security to the mortgaged property13.Poster economic independenceII Economic aspects1. Safety against risk2. Protection t...

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    School of Distance EducationBasics of Banking and InsurancePage 57Function of insuranceInsurance becomes very useful in today’s life. It plays significant role in thiscompetitive era. According to Sir William Beveridge the functions of insurance can be dividedinto three categories.1) Primary fu...

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    School of Distance EducationBasics of Banking and InsurancePage 58Indirect function1. A forced savingsLife insurance is also a method of savings in India. Income tax act gives relief in payment ofincome tax because government wants to habituate general public to save money. Itencourages the habit...

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    School of Distance EducationBasics of Banking and InsurancePage 59g. Capital formation-insurance companies as institutional investors can mobilise smallnational savings in the form of premium and ensure capital for productive sectors.h. Insurance encourage saving-life insurance is like a compulso...

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    School of Distance EducationBasics of Banking and InsurancePage 60principle comes to be more useful in modern affairs. It not only serves the ends of individuals,or of special groups of individuals, but also tends to spread through and renovate modernsocial order or social security. Following poi...

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    School of Distance EducationBasics of Banking and InsurancePage 615. Life insurance encourages savingThe elements of protection and investment are present only in case of life Insurance.In property insurance, only protection element exists. In most of the life Policies elements ofsaving predomina...

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    School of Distance EducationBasics of Banking and InsurancePage 62substituted. The death or disability of such valuable lives will, in many instances, prove amore serious loss than that by fire or any other hazard. The Potential loss to be suffered andthe compensation to the dependents of such em...

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    School of Distance EducationBasics of Banking and InsurancePage 635. Causa proxima6. Contribution7. Mitigation of loss8. Subrogation1. Nature of ContractThe nature of contract is a fundamental principle of a contract of insurance requiredfor a valid contract. Essential elements of a valid contrac...

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    School of Distance EducationBasics of Banking and InsurancePage 643. The insured should have a legal relation to the subject matter insurable interest could arisein a number of ways such as ; Ownerships, Mortgagee, Trustee, Bailee, Lessee etc.In fire insurance, the insurable interest must exist...

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    School of Distance EducationBasics of Banking and InsurancePage 65For a building damaged by fire measure of indemnity is the cost of repairing thebuilding to its pre-fire condition. For machinery the measure of indemnity is the cost ofrepair, if the machinery is destroyed by fire the market value...

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    School of Distance EducationBasics of Banking and InsurancePage 66(a) When different insurer has agreed to contribute the loss by way of collectingproportionate premium.(b) The policies are in existence at the time of loss.(c) The policies are legally enforceable at law.(d) The interest covered u...

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    School of Distance EducationBasics of Banking and InsurancePage 67On the basis of nature of businessa. Life insuranceb. General insurance- 1. Fire insurance2. Marine insurance3. Social insurance4. Miscellaneous insuranceMiscellaneous insurance may includesa) Vehicle insuranceb) Accident insuranc...

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    School of Distance EducationBasics of Banking and InsurancePage 68Features of marine insurance contract:1. Featuresofavalidcontract:marineinsuranceisacontract;thereforeitshouldpossessthe features of a valid contract, according to Indian contract act.They are;The proposal forms called slips are...

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    School of Distance EducationBasics of Banking and InsurancePage 694. PrincipleofIndemnity:Marineinsuranceisacontractofindemnity.Itimplies that the policy holder cannotmake profit out ofa claim. In theabsence of principle of indemnity, the policy holder maymakeprofit out of claim. The insurance co...

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    School of Distance EducationBasics of Banking and InsurancePage 70Marine PolicyThe instrument in which the contract of insurance is affected is known as marinepolicy or sea policy. It is a document which incorporates the details of terms and conditions ofmarine insurance. Contents of marine polic...

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    School of Distance EducationBasics of Banking and InsurancePage 71Types of marine insurance policies:1. Time policy:Ifthepolicyistoinsurethesubjectmatterforadefiniteperiodoftimeitiscalled timepolicy. For example: 6 AMof 1stJuly 2013 to 6 AM of 31 March 2014 or 6 Am of1stMarch2012 to 6 PM 28thFebr...

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    School of Distance EducationBasics of Banking and InsurancePage 727. Blanket policyopen cover policy)This policy is issued to cover several different properties or all assets fixed as well ascurrent of the insured under one insurance. It is the policy which covers more than one typeof property...

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    School of Distance EducationBasics of Banking and InsurancePage 732. Contact of Indemnity: Fire insurance is a contract ofindemnity, inthe event of losstheinsured can recover actual amount of loss.Insured is allowed to gainexcess amount out oftheloss caused dueto fire.3. Contract ofUberimae fidei...

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    School of Distance EducationBasics of Banking and InsurancePage 7410.Declaration policy:This policy may be granted only in respect of stock of inventoriesof the insured. As per this, insured must declare in writing the stock covered underthe policy to the insurer and at the end premium is adjust...

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    School of Distance EducationBasics of Banking and InsurancePage 75a. Business premises insurance policyb. Private dwelling insurance policyc. Jewellery and Valuable insurance policyd. All risks insurance policy.2. Health InsuranceMedical insurance)It covers all medical expenses following hospi...

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    School of Distance EducationBasics of Banking and InsurancePage 766. Fidelity guarantee insurance:In this insurance, the insurer undertakes to indemnify the insured (employer) inconsideration of certain premium,upto certain specified amount insured against for lossarising through the fraud, or em...

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    School of Distance EducationBasics of Banking and InsurancePage 779. Engineering insuranceThis insurance is designed to protect the interest of contractors and principals inrespect of civil engineering projects, like building, bridges, tunnel etc. this policy provides an“All Risks” cover. Imp...

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    School of Distance EducationBasics of Banking and InsurancePage 78MODULE 4INSURANCE LAWS IN INDIALife insurance- conceptLife insurance is a contract under which the insurer (Insurance Company)inconsideration of a premium paid undertakes to pay a fixed sum of money on the death ofthe insured or on...

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    School of Distance EducationBasics of Banking and InsurancePage 791. Elements of a valid contract2. Insurable interest3. Utmost good faith4. Warranties5. Assignment and Nomination6. Cause is certain7. Premium (consideration)8. Term of policy9. Return of premium (surrender)Importance of Life Insur...

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    School of Distance EducationBasics of Banking and InsurancePage 80vi) Social SecurityLife insurance is important for the society as a whole also. Life insurance enables aperson to provide for education and marriage of children and for construction of house. Ithelps a person to make financial base...

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    School of Distance EducationBasics of Banking and InsurancePage 81(2) Limited payment whole life policy–In this case premium ispayable for a specified period(Say 20 Years or 25 Years) Only.(3) Single Premium whole life policy–In this type of policy the entire premium is payable inone single p...

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    School of Distance EducationBasics of Banking and InsurancePage 828. Annuity PolicyUnder this policy, the sum assured is payable not in one lump sum payment but inmonthly, quarterly and half-yearly or yearly instalments after the assured attains a certainage. This policy is useful to those who wa...

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    School of Distance EducationBasics of Banking and InsurancePage 83The contract for the life insurance starts with the proposal made by theproposer instandard application form available with insurance company and then various otherdocuments are prepared.Proposal FormsThe proposal form is a standar...

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    School of Distance EducationBasics of Banking and InsurancePage 84First Premium ReceiptThe agent provides the proposal form and other related documents and theunderwriter examines the form and other documents and then determines the terms onwhich to accept the risk or reject the same. The consent...

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    School of Distance EducationBasics of Banking and InsurancePage 85Change in Nomination.Change ofnomination can be done by the policy holder any time during the term of thepolicy and any number of times he wants to. Procedure of nomination is same every time.Withdrawal of nominationNomination can ...

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    School of Distance EducationBasics of Banking and InsurancePage 86AssignmentAssignment is a means whereby the right and title under a policy gets transferred fromassignor to assignee. Assignor is the policyholder who transfers the title and assignee is theperson who gets the title of the policy f...

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    School of Distance EducationBasics of Banking and InsurancePage 87Points to be considered by the insurance company for affecting assignment:(1) Check whether the assignment is executed on the Policy or on a separate paper and if it isexecuted on a separate paper that the paper is adequately stamp...

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    School of Distance EducationBasics of Banking and InsurancePage 88Death ClaimsFollowing points to be considered in connection with insurance claim,I.Intimation of deathThe death of the life assured has tobe intimated in writing to the insurer. It can bedone by the Assignee or nominee under the po...

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    School of Distance EducationBasics of Banking and InsurancePage 89If the claim has accrued within three years from the beginning of the policy, thefollowing additional requirements may be called for:(i)Statement from the hospital if the deceased had been admitted to hospital.(ii) Certificate of m...

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    School of Distance EducationBasics of Banking and InsurancePage 90Maturity ClaimsIf the life insured survives to the full term, then basic sum assured is payable. Thispayment by the insurer to the insured on the date of maturity is called maturity payment. Theamount payable at the time of the mat...

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    School of Distance EducationBasics of Banking and InsurancePage 91Surrender ValueIf the insured is unwilling or unable to pay the premium of the policy, he maysurrender the policy and ask for its surrender value. Surrender value is the cash valuepayable by the insurance on voluntary termination o...

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    School of Distance EducationBasics of Banking and InsurancePage 927. Principle of indemnity-Principle of indemnity does not apply in life assurance. Thesum assured is payable unrespectable of any profit or loss and the full extent of theamount insured.Principle of indemnity is the basis of genera...

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    School of Distance EducationBasics of Banking and InsurancePage 93Legal Frameworks of Insurance (Law relating to insurance)There are mainly four laws areconcerned with the insurance business of India are as follows.A. Insurance Act, 1938B. Life Insurance Corporation Act, 1956C. General Insurance ...

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    School of Distance EducationBasics of Banking and InsurancePage 94b. Licensing of agentsLicense is the pre requirement for becoming the agent. Person can’t work as aninsurance agent unless he has obtained a license from the authority. There is somedisqualification as per the act for a person to...

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    School of Distance EducationBasics of Banking and InsurancePage 95from September 1, 1956. Its working is governed by theLIC Act. The LIC is a corporate havingperpetual succession and a common seal with a power to acquire hold and dispose ofproperty and can by its name sue and be sued.Important Pr...

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    School of Distance EducationBasics of Banking and InsurancePage 96Objectives of LIC of IndiaThe LIC was established with the following objectives:1. Spread life insurance widely and in particular to the rural areas, to the socially andeconomically backward claries with a view to reaching all insu...

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    School of Distance EducationBasics of Banking and InsurancePage 976. It has provided indirect support to industry through subscriptions to shares and bonds offinancial institutions such as IDBI, IFCI, ICICI, SFCs etc. at the time when they required initialcapital. It also directly subscribed to t...

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    School of Distance EducationBasics of Banking and InsurancePage 98Role and Functions of GICa. Carrying on of any part of the general insurance, if it thinks it is desirable to do so.b. Aiding,assisting and advising the acquiring companies in the matter of setting up ofstandards ofconduct and soun...

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    School of Distance EducationBasics of Banking and InsurancePage 99b) Private Insurance Companies:-There are totally 12 private General Insurance companies in India namely:-• Apollo DKV Health Insurance Ltd• BajajAllianz General Insurance Co. Ltd• Cholamandalam MS General Insurance Co. Ltd...

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    School of Distance EducationBasics of Banking and InsurancePage 100Duties, Powers and Functions of IRDASection 14 of IRDA Act, 1999 lays down the duties, powers and functions of IRDA.(1) Subject to the provisions of this Act and any other law for the time beingin force, theauthority shall have th...

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    School of Distance EducationBasics of Banking and InsurancePage 101There are certain other acts which directly or indirectly affects the general insurancebusinesses which are as follows:1. Marine Insurance Act, 1963The act is specially formulated for the marine insurance business. It codifies the...

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    School of Distance EducationBasics of Banking and InsurancePage 1027. Indian Railways Act, 1989The act deals with various aspects of railway administration; there are also provisions,which are relevant to marine insurance. The provisions of the relate to rights and liabilities ofrailways as carri...

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    School of Distance EducationBasics of Banking and InsurancePage 10314.The Workman’s Compensation Act, 1923It describes the payment by employers to their employee / workmen, of compensationfor injury by accident or disease, arising out of and in the course of employment.15.Sale Of Goods Act, 193...

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    School of Distance EducationBasics of Banking and InsurancePage 104oPartial or total repudiation of claimsoDelay in settlement of claimsoLegal construction of policy (Policy wordings)oPremium paid or payableoNon issue of insurance documents to customers after receipt of premium.Insurance Business...

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    School of Distance EducationBasics of Banking and InsurancePage 105Model Question Paper. 1FIFTH SEMESTER B.COM. DEGREE (PRIVATE/SDE)EXAMINATION 2013(CCSS)BC5 B09-Banking and InsuranceTimeWeightagePart I-Descriptive questions2.45 hours27Part II-Multiple choice questions 0.15 hours3Maximum3 hours30...

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    School of Distance EducationBasics of Banking and InsurancePage 106( 5 x 2= 10 weightage)Part cAnswer any 2 questions.Each question carries a weightage of 417.“As controller of credit, the central bank attempts to influence and control thevolume of Bank credit and also to stabilize business con...