All questions of Insurance Business And Market for B Com Exam

The primary purpose of reinsurance for an insurance company is to increase its underwriting capacity. Reinsurance is a mechanism through which insurance companies transfer a portion of their risk to other insurers, known as reinsurers. This allows the primary insurance company to write policies for larger amounts of coverage than it would otherwise be able to handle on its own.

Underwriting capacity refers to the maximum amount of risk that an insurance company is willing and able to assume. By entering into reinsurance agreements, an insurance company can spread its risk across multiple reinsurers, thereby increasing its capacity to underwrite policies with higher limits. This enables the insurance company to take on larger and more complex risks that it would otherwise be unable to handle on its own.

Reinsurance also provides stability to an insurance company's profits. Insurance companies face the risk of large losses due to catastrophes or other unexpected events. By reinsuring a portion of their risks, insurance companies can protect themselves against such large losses. In the event of a claim, the reinsurer shares the financial burden with the primary insurance company, helping to stabilize its profits and prevent significant fluctuations in its financial results.

Additionally, reinsurance helps insurance companies reduce their exposure to unearned premium reserves. Unearned premiums are the portion of the premium that has been paid by policyholders but has not yet been earned by the insurance company. By reinsuring a portion of its risks, the insurance company can reduce the amount of unearned premium reserves it needs to maintain, which can improve its overall financial position.

It is worth noting that while reinsurance helps insurance companies manage their risks and increase their underwriting capacity, it does not provide personal assistance to policyholders. The primary responsibility of providing assistance and support to policyholders lies with the insurance company itself.

In summary, the primary purpose of reinsurance for an insurance company is to increase its underwriting capacity, which allows the company to write larger policies and take on more complex risks. Reinsurance also helps stabilize profits and reduce exposure to unearned premium reserves.

ICICI Lombard General Insurance
ICICI Lombard General Insurance is a leading insurance company operating in various domains such as general insurance, insurance claims management, reinsurance, and investment management. Here are the key points about ICICI Lombard General Insurance:
- General Insurance: ICICI Lombard offers a wide range of general insurance products such as health insurance, motor insurance, travel insurance, home insurance, and more to cater to the diverse needs of customers.
- Insurance Claims Management: The company has a robust claims management process in place to ensure quick and hassle-free settlement of claims for its policyholders. This helps in providing a seamless experience to customers during times of need.
- Reinsurance: ICICI Lombard also operates in the reinsurance domain, which involves transferring a portion of the insurance risk to other insurers to mitigate the impact of large losses. This helps in managing the overall risk exposure of the company.
- Investment Management: Apart from insurance services, ICICI Lombard also offers investment management solutions to help customers grow their wealth through various investment products like ULIPs, mutual funds, and more.
Overall, ICICI Lombard General Insurance is a well-rounded insurance company that caters to the diverse needs of customers across various domains such as general insurance, insurance claims management, reinsurance, and investment management.

Facultative reinsurance is an optional, case-by-case method of reinsurance. It is used when the ceding insurer receives an application for insurance that exceeds its retention limit. Unlike treaty reinsurance, which covers a broad portfolio of policies, facultative reinsurance is arranged for individual cases as needed.

Bajaj Allianz General Insurance specializes in auto insurance. It is known for its wide range of automotive insurance products and services.

ICICI Lombard General Insurance is the first India-based insurer to receive ISO 9001:2000 certification, indicating its commitment to quality and service excellence.

Life Insurance Corporation of India (LIC) has the highest number of policyholders and agents in India. LIC is the largest life insurer in the country and is wholly owned by the Indian government.

The purpose of a quota-share treaty in reinsurance is to increase the insurer's underwriting capacity. It allows the insurer to cede a portion of each policy to the reinsurer, thereby expanding its ability to underwrite new business and share the risk with the reinsurer.

The main objective of surplus share treaty reinsurance is to increase the insurer's underwriting capacity. This type of reinsurance allows the insurer to retain a portion of the risk while ceding a surplus or excess portion to the reinsurer, enabling the insurer to write more policies and accept larger risks.

The primary function of the investment department in an insurance company is to invest premiums received from policyholders until they are needed to pay claims. This investment income is a crucial component of an insurance company's overall financial performance.

Insurance companies use reinsurance primarily to increase their underwriting capacity. Reinsurance allows them to accept more policies and write larger lines of insurance by sharing the risk with reinsurers, which helps them expand their business while managing risk exposure.

The main objective of the three lines of defense model in risk management is to ensure independence in risk oversight. This model delineates specific responsibilities for different layers of defense to maintain independence and provide effective risk management throughout the organization.

The primary role of a Chief Risk Officer (CRO) in an insurance company is to facilitate risk management across the organization. The CRO ensures that risk management is centralized, provides risk-related inputs to decisions, and plays a key role in managing the overall risk framework of the company.

A foreign company carrying on reinsurance business through a branch in India is required to have a minimum net owned funds of INR 50 billion.

The Insurance Regulatory and Development Authority of India (IRDA) is responsible for regulating insurance businesses and intermediaries in India. IRDA was established under the Insurance Regulatory and Development Authority Act of 1999 and derives its powers from the Insurance Act of 1938.

The minimum paid-up capital requirement for a reinsurer in India is INR 2 billion.

IFFCO TOKIO General Insurance has its own distribution channel called "IFFCO-TOKIO Insurance Services Ltd" for serving its retail clients.

ICICI Prudential Life Insurance has been recognized as the "Most Trusted Private Life Insurer" for three consecutive years, reflecting its performance and growth in the life insurance sector.

Oriental Insurance primarily focuses on property insurance. It has a strong presence in the property insurance sector.

In an insurance company's operations, the two primary streams of cash flows are inflows and outflows. Inflows include premiums, investment income, refunds, and other sources of funds coming into the company, while outflows consist of claim payments, reinsurance premiums, agent remuneration, salaries, interest, and dividends to investors, among other expenses.

The primary purpose of loss control services provided by insurance companies is to prevent or minimize losses. These services offer advice and recommendations to policyholders on measures they can take to reduce the likelihood and severity of potential losses, ultimately benefiting both the insurer and the insured.