WHAT ARE THE TYPES OF INSURANCE AND INSURANCE AGENTS?

The following are the various types of insurance businesses recognised under the Insurance Act, 1938:

(a) Life insurance business
(b) General insurance business (also called “Non-Life” business). This is sub divided into the following 3 sub-categories:
(i) Fire insurance business
(ii) Marine insurance business
(iii) Miscellaneous insurance business

The life insurance industry protects against the danger of contingencies involving human life. For example, payment of a sum (referred to as the “sum assured”) upon the death of the life assured. Annuity contracts (which allow for monthly payments to the life assured as long as the policyholder is alive) and accident benefit provisions are also part of the life insurance business.

General insurance businesses include all enterprises other than life insurance. Fire insurance, as the name implies, covers the risks connected with property loss due to a fire accident. The business of arranging insurance contracts on boats of any sort, including cargoes, freights, and other interests that may be covered for passage by land, water, or both, and includes warehouse hazards or similar risks incidental to such transit, is referred to as marine insurance.

Other than fire and marine insurance, miscellaneous insurance encompasses all insurance industries (and Life insurance business). It covers coverage for auto, liability, health, and burglary.

In general, indemnity-based health insurance policies (which reimburse hospitalisation expenditures) were categorised as General insurance. The Health insurance business has been classified as a separate line of business from the General insurance industry under the Insurance Bill. Given the enormous potential for this business, IRDA has approved stand-alone health insurance businesses to sell exclusively health insurance products.

types of insurance

ROLE OF INTERMEDIARIES IN INSURANCE INDUSTRY

Intermediaries, as players with both broad knowledge of the insurance marketplace, including products, prices, and providers, and an acute sense of the needs of insurance purchasers, play a unique – and multiple – role in insurance markets in particular, and, more broadly, in the functioning of national and international economies.

Intermediary activities benefits the economy on a national and international scale:
Insurance’s function in the overall health of the economy is well acknowledged. Without the risk protection that insurance provides, commercial activity would decrease, perhaps grinding to a standstill, slowing or eliminating economic growth and the financial rewards that such expansion delivers to businesses and individuals.

The role of insurance intermediaries in the entire economy is fundamentally one of making insurance – and other risk management products – widely available, hence boosting the positive impacts of insurance in general – risk-taking, investment, basic societal requirements provision, and economic growth.

TYPES OF INSURANCE AGENTS

The following are the different types of Insurance Agents recognised under the Regulations:
(a) Individual Agent
(b) Corporate Agent
(c) Micro Insurance Agent

Individual Agents

IRDA (Licensing of types of Insurance Agents) Regulations, 2000 as amended from time to time, contains provisions relating to licensing of individual Insurance Agents. The following are the different types of licences issued within the Regulations:

(a) Direct Life
(b) Direct Non Life
(c) Composite Licence (both Life and Non-Life)

The following are the pre-requisites for a candidate intending to get a licence issued (common for all types of agents):

(a) Minimum qualifications: The minimum qualifications prescribed are a pass in 12th standard or equivalent examination conducted by a recognised Board/Institution. This condition is relaxed to a pass in 10th standard for applicants residing in a place where the population is not less than 5,000 (‘Rural agents’).

(b) The applicant must not be disqualified by any of the following factors: a. being a minor; b. being determined to be of sound mind by a court with appropriate jurisdiction.
c. That a court of competent jurisdiction has not found him guilty of criminal misappropriation, criminal breach of trust, cheating, forgery, or an abetment of or attempt to commit any offence, and that five years have not passed since the date of the conviction.

d. That he has been found guilty of fraud, dishonesty, or misrepresentation against an insurer or an insured during any of the following: I Legal proceedings involving any insurance policy; (ii) The winding up of an insurance company; (iii) In the course of an insurer’s internal inquiry.

(e) That he adheres to the regulations’ code of behaviour, which is not violated.
(c) Practical Training: Over the course of one to two weeks, the applicant must complete at least 50 hours of practical training in the life or general insurance industries, depending on the situation. When a composite licence application is made, 75 hours of training encompassing both life and general insurance topics must be completed over the course of three to four weeks.

If the applicant has a Masters degree in Business Administration from any institution recognised by the Central Government or State Government, membership in the Institute of Chartered Accountants of India, Institute of Cost and Works Accountants of India, Institute of Company Secretaries of India, Insurance Institute of India, or the Institute of Actuaries of India, or a similar special qualification,

it is sufficient if the training is completed for 25 hours (35 hours if th Any of the IRDA-accredited training facilities can provide the instruction.
(d) Examination: Each applicant must pass a pre-recruitment exam in life insurance, general insurance, or both, depending on the situation, given by the Insurance Institute of India or another organisation recognised by IRDA.

AML and ULIP training (e) In addition to the aforementioned, all insurance agents receive particular anti-money laundering training from the insurer to whom they are affiliated (under the IRDA’s Anti-Money Laundering Guidelines dated 31 March 2006). According to the IRDA (Linked Insurance Products) Regulations, 2013, life insurance agents must complete training in Unit Linked Insurance Products (ULIP) before they are permitted to market ULIPs on behalf of a life insurer.

(f) Paying a fee of Rs. 250 and submitting a licence application with documentation of one’s age, education, training, and examination results.

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