MF0018 - INSURANCE AND RISK MANAGEMENT

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ASSIGNMENT

DRIVE WINTER	2013
PROGRAM	MBADS – (SEM 4/SEM 6) / MBAN2 / MBAFLEX – (SEM 4) / PGDFMN – (SEM 2)
SUBJECT CODE & NAME	MF0018 - INSURANCE AND RISK MANAGEMENT
SEMESTER	4
BK ID	B1816
CREDITS	4
MARKS	60

Note: Answer all questions. Kindly note that answers for 10 marks questions should be approximately of 400 words. Each question is followed by evaluation scheme.

Q.1 Risk is used to describe any situation involving an uncertainty about the outcome. What is the meaning of risk management? Explain the Risk Management process and methods with a flow chart.

Ans :  Introduction of risk management :

Risk management is the identification, assessment, and prioritization of risks (defined in ISO 31000 as the effect of uncertainty on objectives, whether positive or negative) followed by coordinated and economical application of resources to minimize, monitor, and control the probability and/or impact of unfortunate events or to maximize the realization of opportunities. Risks can come from uncertainty in financial markets, threats from project failures (at any phase in design, development, production, or sustainment life-cycles), legal liabilities,

Q. 2 Insurance industry is highly regulated in all the countries. Explain on solvency margin and methods of determining solvency margins. Write down the claim procedures in respect of a general insurance policy.

Ans :  Introduction of solvency margin:

The solvency margin is the amount of regulatory capital an insurance undertaking is obliged to hold against unforeseen events. The solvency margin is a minimum excess on an insurer's assets over its liabilities set by regulators. It can be regarded as similar to capital adequacy requirements for banks. It is essentially a minimum level of the solvency ratio, but regulators usually use a slightly more complex calculation.

Methods of determining solvency margins :

Q. 3 What do you understand by the concept of insurable interest? Write down about the essentials, creation and application of insurable interest. How does a life insurance plan work and write about the two key elements. Also write about riders.

Ans :  Explanation on concept of insurable interest:

Insurable interest exists when an insured person derives a financial or other kind of benefit from the continuous existence of the insured object (or in the context of living persons, their continued survival). A person has an insurable interest in something when loss-of or damage-to that thing would cause the person to suffer a financial loss or other kind of loss. Typically, insurable interest is established by ownership, possession, or direct relationship. For example, people have insurable interests in their own homes and vehicles, but not

Q.4 Liability insurance is classified into two categories. Explain on the types of liability policies and explain on aviation insurance with all the three section of the policy.

Ans : Explanation on types of liability policies:

Public liability:

Industry and commerce are based on a range of processes and activities that have the potential to affect third parties (members of the public, visitors, trespassers, sub-contractors, etc. who may be physically injured or whose property may be damaged or both). It varies from state to state as to whether either or both employer's liability insurance and public liability insurance have been made compulsory by law. Regardless of compulsion, however, most organizations include public liability insurance in their insurance portfolio even though the

Q. 5 When a policy has been issued, the risk for the danger insured against gets covered. Explain on the evidence and claim notice. Also write about the Extent of liability

Ans :  Explanation on the evidence and claim notice:

This Evidence of Insurance is issued under the current Master Policy effected with PTI Insurance Company Limited (the „Insurer’) and IAPA (Global) Ltd. for members of the International Airline Passengers Association („IAPA‟). This document is issued to notify you that your name has been added as an Insured with respect to the insurance under

Q. 6 Insurance Ombudsman was created for quick disposal of the grievances of the insured customers. Write the complete information on Insurance Ombudsman.

Ans : The Insurance Ombudsman scheme was created by Government of India for individual policyholders to have their complaints settled out of the courts system in a cost-effective, efficient and impartial way.

Appointment of Insurance Ombudsman

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Send your semester & Specialization name to our mail id :

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(Prefer mailing. Call in emergency )