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Life
Insurance
The insurance company
receives the premiums from the policy owner and invests
them to create a pool of money from which it can pay
claims and finance the insurance company's operations.
Personal Insurance
In terms
of being rated for financial strength like international
players, only "ICICI" Prudential is rated by Fitch India
at National Insurer Financial Strength Rating of AAA(Ind)
with stable outlook indicating the highest claims paying
ability rating.
Insurance Companies
All
life insurance companies in India have to comply with
the strict regulations laid out by Insurance Regulatory
and Development Authority of India (IRDA). Therefore
there is no risk in going in for private insurance
players.
Insurance brokerage in the United States is also a
regulated industry, with almost all states
individually issuing brokerage licenses. Most states
have reciprocity agreements whereby brokers from one
state can become easily licensed in another.
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History of insurance
:
In some sense we can
say that insurance appears simultaneously with the appearance of
human society. We know of two types of economies in human
societies: money economies (with markets, money, financial
instruments and so on) and non-money or natural economies
(without money, markets, financial instruments and so on).
The second type is a more ancient form than the first. In such
an economy and community, we can see insurance in the form of
people helping each other. For example, if a house burns down,
the members of the community help build a new one. Should the
same thing happen to one's neighbor, the other neighbors must
help. Otherwise, neighbors will not receive help in the future.
This type of insurance has survived to the present day in some
countries where modern money economy with its financial
instruments is not widespread (for example countries in the
territory of the former Soviet Union).
Turning to insurance in the modern sense (i.e., insurance in a
modern money economy, in which insurance is part of the
financial sphere), early methods of transferring or distributing
risk were practiced by Chinese and Babylonian traders as long
ago as the 3rd and 2nd millennia BC, respectively. Chinese
merchants travelling treacherous river rapids would redistribute
their wares across many vessels to limit the loss due to any
single vessel's capsizing. The Babylonians developed a system
which was recorded in the famous Code of Hammurabi, c. 1750 BC,
and practiced by early Mediterranean sailing merchants. If a
merchant received a loan to fund his shipment, he would pay the
lender an additional sum in exchange for the lender's guarantee
to cancel the loan should the shipment be stolen. |
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