Insurance Meaning and Types

Insurance & Life Insurance is a legitimate way to extend one’s risk to one’s shoulders. It is a type of contract where an insurance company agrees to pay the insured in the event of loss of insured goods for some unforeseen reasons in exchange for receiving premiums at a fixed rate.

What is Insurance Policy

Insurance is simply a means by which an insurance company provides you with protection against any kind of financial loss, illness, accident, or death risk.

In the event of an accident or financial loss in the life of a person in the future, the insurance company meets the financial loss as per the contract. That is, say you have a car and you are insured. The insurance company will pay for the financial loss of your vehicle in the future. The insurance company will pay you to compensate for your vehicle.

There are lots of insurance in the market and there are different types of insurance policies. However, you need to know about it before you insure. You will need to pay a certain premium for the insurance and in the future, if you make a claim to the insurance company for any financial loss, you will get a refund. So we need insurance to reduce the risk of our own lives. But before insuring, we need to know what kind of insurance is in the market.

Types of Insurance

There are two types of insurance:

1. Life Insurance,
2. General Insurance.

Life Insurance:

Life insurance is the insurance that is insured over people’s lives. Life insurance is a contract between the insurance company and the insurance company where at the end of a specified period the insurance company promises to pay the insured a certain amount of money to the insured or his family member after his death.

First of all, in financial planning, a person is instructed to buy life insurance. Because there are risks to people’s lives. So if a family member gets sick or dies, the entire family will face a financial crisis. For this, we should consider the life insurance policies of each family.

General Insurance:

General insurance is the insurance that is insured on the property or any other damage due to an accident. General insurance comes in many forms such as:

1. Home Insurance,
2. Health Insurance,
3. Car Insurance,
4. Travel Insurance,
5. Business Liability Insurance,
6. Crop Insurance,

Insurance Policy in Bangladesh

There is a history of Insurance Policy in Bangladesh. About 100 years ago, during the British rule in India, some insurance companies started both life insurance and general insurance business. Insurance business in East Pakistan was in good shape during the period of 1947-1991. At the time, 49 life and general insurance companies operated the business. Among them are British, Australian, Indian, West Pakistani and East Pakistani. The headquarters of 10 insurance companies were in East Pakistan, 27 in West Pakistan and the rest at headquarters in the world. Except for a few, most companies were a limited liability and worked in a free competitive economic environment. Some of these were specialized companies that were involved in certain types of business, while some were joint companies that engaged in multiple types of business.

The government of Bangladesh nationalized the insurance industry in 1972 with the President’s order number 95. This order is known as Bangladesh Insurance (Nationalization) Order 1972. In this order, all insurance companies and companies traded in this country, excluding defense, postal life insurance, and foreign life insurance companies, are vested under five public sector corporations. These are National Insurance Corporation, Teesta Insurance Corporation, Karnafuli Insurance Corporation, Rupsa Jeevan Insurance Corporation, and Surma Life Insurance Corporation.

Compare Car Insurance

The National Insurance Corporation was not directly involved in the insurance business. As a top company, it oversees and controls the operations of the other 49 corporations involved in insurance work. Teesta and Karnafuli did general insurance business, Rupsa and Surma worked for life insurance. At that time, the four insurance companies operating were merged with these four corporations. On the other hand, the life insurance portion of a specialized life insurance company or a composite company is linked to Rupsa and Surma, and the general insurance company of a particular company or a mixed company to Tista and Karnafuli.

Auto Insurance Troy mi

The main purpose behind the formation of 42 insurance companies in each of the life insurance and general insurance companies was to encourage competition under the nationalized system. But the unnecessary administrative expense of the 1973 corporations and one of their top companies underscores the benefits of limited competition. As a result, on 14 May, under the Insurance Corporation Act 1973, the insurance industry made structural changes. Under this law, two corporations are replaced by two corporations, one is the general insurance corporation for the general insurance business, and the other is the life insurance corporation for the life insurance business.

Postal life insurance and life insurance by foreign companies are as active as before. In reality, however, the only American life insurance company to continue its new business and services is life insurance. The remaining three companies only continue to provide the required services of the insured policies during the Pakistan period.

Car Insurance Comparison Quote

All the responsibility of running a general insurance business falls on the general insurance corporation. Life insurance is the responsibility of life insurance corporation, American life insurance company and postal life insurance corporation. However, due to the economic liberalization policy, there are structural changes in the insurance industry. Amendment of Insurance Corporation Act-1973 was brought in 1984. In addition to the general insurance and life insurance corporation, the management of insurance companies in the private sector is maintained. Insurance Corporation (Amendment) Act 1973, allows for the establishment of general and life insurance companies in the private sector, subject to certain restrictions on business conduct and reinsurance.

Auto Insurance Philadelphia pa

Under the new law, all public business insurance business is reserved for a state-owned general insurance corporation. General Insurance Corporation is also empowered to compete with private sector insurance companies to conduct private financial sector insurance business. The ban was imposed to provide some protection to state-owned general insurance corporations, as well as giving private sector insurance companies some experience. There was another restriction on the reinsurance system by the private sector insurance company. The law states that private insurance companies must take 5 percent of their reinsurance cover from the general insurance corporation and they cannot go anywhere for reinsurance.

Cars With Cheapest Insurance Rates

The purpose of such sanctions is to create an environment in which the foreign currency can go out of the country in the form of reinsurance premiums and so that a reinsurance market can be developed according to Bangladesh’s internal capability. This arrangement actually turns the general insurance corporation into a reinsurer. However, their direct insurance activities continue as well. However, after the consolidation of the total market cap, additional money from the general insurance corporation is allowed for re-insurance outside the country.

Auto Insurance Conroe tx

Restrictions on business are in fact a type of obligation that is insured upon to insure the insurance policies of the insurer. As a result of this situation, all insurance policies related to Bangladesh’s property, including all imports and exports under the naval insurance policy, are mandated to be completed by the insurance company of Bangladesh.

Best Learner Driver Insurance

The idea of ​​private-sector entrepreneurs imposing such restrictions is not conducive to the growth of the private sector. Conservatism does not help with the expected growth of obstacles. This is because since the public sector economy controls 5 percent of the total premium amount, there is only a 20 percent premium for private sector companies to survive. Nonetheless, general insurance corporations are allowed to compete with private companies engaged in business with a small share of private premium deposits (20 percent).

Insurance Quotes Young Drivers

Private insurers claim to completely override the above limitations so that they can compete with the general insurance corporation, both in the public and private sector insurance business, and re-insure them to the insurer of their choice. As a result, the existing arrangements were changed by the Insurance Corporation (Amendment) Act 190. Changes are:

• Private sector insurance companies can make up to 50 percent of the private sector insurance business.

• Individual insurance companies can cover up to 50 percent of their reinsurance to any insurer in the country or abroad. The remaining 50 percent is kept under the general insurance corporation. Although specified in the law, the real situation in the insurance market was different.

The amount of capital and deposit required to set up an insurance company is as follows:

• Capital requirements Life insurance company Tk 300 million, 60% of which is paid by the entrepreneur; Traditional Mutual Life Insurance Company: Tk 15 million; General insurance company: 400 million, 60 percent of it paid by the entrepreneur; Cooperative Insurance Society Tk 25 million for life insurance and Tk 25 million for general insurance.

• Deposit requirements Every insurance company will have to deposit money at different rates according to different insurance in the form of cash or approved defense form at the time of filing the application for registration. For example, life insurance: 3 million rupees; General insurance: Tk 20 million; Mutual insurance company: Tk 1 million; Cooperative Insurance Society Tk 20 million.

Since the formation of an insurance company is one of the policy issues of the government, it is mandatory to follow several rules. The principles are:

• Interested entrepreneurs need to apply in the prescribed form along with the authority to get advance approval.

• After the necessary selection, the authorities will send the application along with its recommendations to the Ministry of Finance.

• The Ministry of Finance will send it to the Cabinet Committee for decision-making after further scrutiny.

• If the decision of the committee is positive then the application should be sent back to the Ministry of Finance and from there it will be forwarded to the authority to inform the entrepreneur. The entrepreneur will then have to apply to the Registrar of Joint Stock Companies in the prescribed form to get registered as a Public Liability Company under the Companies Act. Memorandum and Articles of Association duly approved by the Authority shall be filed with the application.

• Upon completion of registration, the entrepreneur will have to seek approval from the Securities Exchange Commission to release the company’s capital shares.

• Re-insurance formalities need to be completed at this stage.

• If the above-mentioned conditions are met then the authority to apply for a license to start a business under the Insurance Act 2010 should apply. (Application can only be made subject to official announcement). Insurance companies are governed by the Insurance Act 2010 Finance Act, and the Insurance Development and Management Authority Act 2010, along with the investment activities, taxation, and reporting of insurance companies.

Due to the privatization policy, several insurance companies have made their debut in the private sector since the beginning of the year 1985. As a result, the amount of money available from the premium has increased significantly. This growth is made possible by the discovery of new types of businesses from a wide range of fields of competition, advanced services and unresolved.

Automobile Club Inter-insurance

Prior to privatization, the annual gross premium of the country was Tk 900 million in the general sector and Tk 800 million in the life insurance sector. At present, the amount has increased to Tk 13397 million for general insurance and Tk 44956 million for life insurance.

How many insurance companies are there in Bangladesh?

There are currently 43 general insurance companies and 17 life insurance companies doing business in the Bangladesh market:

The state-owned Life Insurance Corporation and General Insurance Corporation, other than in the company include: Leading Insurance Company, United Insurance Company Limited, Islami Insurance Bangladesh Limited, Eastland Insurance Company Ltd, Eastern Insurance Company Limited, Asia Insurance Company Limited, the Asia-Pacific insyurena Saw Company Ltd, Continental Insurance Limited, Karnaphuli Insurance Company Limited, grinadelta Insurance Company Limited, Janata Insurance Company Ltd, Dhaka Insurance Limited, Delta Life Insurance Company Limited, Northern General Insurance Company Limited, National Life Insurance Company Ltd, Popular Life Insurance company Not Limited, Pioneer Insurance Company Limited, the People’s Insurance Company Ltd, Purobi Insurance Company Limited, Pragati Insurance Company Ltd, Progressive Life Insurance Company Limited, morning Insurance Company Limited, Prime Insurance Company Limited, Prime Islami Life Insurance Limited, Phoenix Insurance Company Limit Dr, Fareast Islami Life Insurance Company, Federal Insurance Company Limited, Bangladesh Co-operative Insurance Company Ltd, Bangladesh General Insurance Company Limited, Bangladesh National Insurance Company Ltd, MetLife American Life Insurance Company Ltd, Mercantile Insurance Company Limited, Meghna Insurance companies limit Dr. Meghna Life Insurance Company Limited, Reliance Insurance Limited, Rupali Insurance Company Limited, Purshadi Life Insurance Company Limited, City General Insurance Company Limited, Central Insurance Company, Sonar Bangla Insurance Limited, Standard Life Insurance Company Limited and Home Life Insurance Limited.

Car Insurance Personal Injury

Insurance Policy companies in the country operate almost all types of general and life insurance services without grain insurance and export loan guarantees. These 2 special insurance are only for a general insurance corporation.

In Bangladesh, numerous organizations, associations, professional groups work for the development and expansion of the insurance business. Some of these notable are:

It was formed under the Companies Law of Bangladesh Insurance Association on May 27, 1985, act 1913 and registered with the Joint Stock Company Registrar. The members of this association number 60 and its purpose is to develop, expand, cooperate and protect the interests of the member companies.

Bangladesh Insurance Academy Bangladesh Government established in 1973 for the purpose of developing professional education, organizing and providing education on insurance and research on insurance.

Surveyors and Brokers:

Insurance Policy business surveyors and brokers occupy an important place in Bangladesh. Surveys have the responsibility of calculating and surveying general insurance losses and sometimes determining the value of an insured’s property. On the other hand, brokers conduct general and life insurance business in exchange for commissions. Insurance companies also hire salaried development officers.

 

Reference:

1. Jibon Bima Corporation
2. Progotirbangla
3. Banglapedia
4. Alejandrorioja

—Bangladesh Viral News