Aids To Trade

Insurance

Introduction
Auxiliaries or aids to trade are the activities which are meant for
assisting trade are known as auxiliaries to trade. Aids to trade are
commonly known as services because these are in the nature of
facilitating the activities related to industry and trade.
Examples of aids to trade are insurance, banking, transport,
warehousing, and advertising.

These activities help in removing hindrances which arise in connection

with the production and distribution of the goods.

Insurance
Insurance is a contract under which the insurer undertakes the
responsibility to indemnify the insured against any damage for which
it has taken insurance. The insured needs to pay a certain amount of
premium to the insurer to avail insurance.
Insurance creates risk utility as it provides protection against various
kinds of business risks and facilitates smooth running of business.

History Of Insurance Lloyd’s Contribution

Lloyd’s of London , generally known simply as Lloyd’s is an insurance
and reinsurance market located in London, England. Lloyd’s is a
corporate body governed by the Lloyd’s Act 1871 and subsequently
Acts of Parliament.
The main purpose of Lloyd’s is to act as a intermediary between
clients, underwriters, brokers, and insurance companies.
With roots in Marine Insurance, Lloyd’s was founded by Edward Lloyd
at his coffee house on Tower Street in 1688. It was popular with sailors,
merchants, and ship owners, and Lloyd catered to them with reliable
shipping news. The establishment became known as a good place to
purchase marine insurance.
The Lloyd’s Act of 1911 set out the organisation’s objectives, which
includes the promotion of its members interest and the collection of
information.
Today Lloyd’s have a dedicated building in leme street, which opened
in 1986.

Development of Regulatory Mechanism

In 1993, the Government set up a committee under the chairmanship
of RN Malhotra, the former Governor of RBI, to propose
recommendations for reforms in the insurance sector. The objective
was to complement the reforms initiated in the financial sector. The
committee submitted its report in 1994 wherein, among other things,
it recommended that the private sector be permitted to enter the
insurance industry. They stated that foreign companies should be
allowed to enter by floating Indian companies, preferably a joint
venture with Indian partners.
The Insurance Regulatory and Development Authority (IRDA) was
constituted as an autonomous body to regulate and develop the
insurance industry. The IRDA was incorporated as a statutory body in
April, 2000.
 • Objectives of IRDA
Promotion of competition to enhance customer satisfaction

• Function of IRDA
To regulate the insurance industry of the country.

The IRDA opened up the market in August 2000 with the invitation for
application for registrations. Foreign companies were allowed
ownership of up to 26%. The Authority has the power to frame
regulations under Section 114A of the Insurance Act, 1938.
In December, 2000, the subsidiaries of the General Insurance
Corporation of India were restructured as independent companies and
at the same time GIC was converted into a national re-insurer.
Parliament passed a bill de-linking the four subsidiaries from GIC in
July, 2002. Today there are 24 general insurance companies including
the ECGC and Agriculture Insurance Corporation of India.

Mission Statement of The Authority

• To protect the interest of and secure fair treatment to
policyholders;
• To bring about speedy and orderly growth of the insurance
industry for the benefit of the common man, and to provide long
term funds for accelerating growth of the economy;
• To set, promote, monitor and enforce high standards of
integrity, financial soundness, fair dealing and competence of
those it regulates;
• To prevent insurance frauds and other malpractices and put in
place effective grievance redressal machinery;
• To take action where such standards are inadequate or
ineffectively enforced.
Insurance Companies in India
• The insurance company comprises a total of 57 insurance
companies in India
• For Life Insurance Business there are 24 companies recognised
by IRDA, similarly for non-life insurance 34 companies got the
approval from IRDA.
• Life Insurance Corporation of India is the only public sector
company among the life insurers.
• General Insurance Corporation of India is the only reinsurer in
India recognised by the Insurance Regulatory and Development
Authority.
• there are 6 public sector insurers among various non-life
insurance companies

list of 24 Life Insurance Companies in India recognised by the IRDA

along with their headquarters, year of foundation and the sector
(Public/Private) they belong to:

Life Insurance Companies in India

Insurance Companies Founded Sector Headquarters

Life Insurance Corporation of India 1956 Public Mumbai

HDFC Standard Life Insurance Co. Ltd. 2000 Private Mumbai

Max Life Insurance Co. Ltd. 2000 Private Delhi

ICICI Prudential Life Insurance Co. Ltd. 2000 Private Mumbai

Kotak Mahindra Life Insurance Co. Ltd. 2001 Private Mumbai

Aditya Birla Sun Life Insurance Co. Ltd. 2000 Private Mumbai

TATA AIA Life Insurance Co. Ltd. 2001 Private Mumbai

SBI Life Insurance Co. Ltd. 2001 Private Mumbai

Exide Life Insurance Co. Ltd. 2001 Private Bangalore

Bajaj Allianz Life Insurance Co. Ltd. 2001 Private Pune

PNB MetLife India Insurance Co. Ltd. 2001 Private Mumbai

Reliance Nippon Life Insurance Company 2001 Private Mumbai

Aviva Life Insurance Company India Ltd. 2002 Private Gurugram

Sahara India Life Insurance Co. Ltd. 2004 Private Lucknow

Shriram Life Insurance Co. Ltd. 2005 Private Hyderabad

Bharti AXA Life Insurance Co. Ltd. 2008 Private Mumbai

Future Generali India Life Insurance Co. Ltd. 2007 Private Mumbai

IDBI Federal Life Insurance Co. Ltd. 2008 Private Mumbai

Canara HSBC Oriental Bank of Commerce Life Insurance Co. Ltd. 2008

Private Gurugram

Aegon Life Insurance Co. Ltd. 2008 Private Mumbai

Pramerica Life Insurance Co. Ltd. 2008 Private Mumbai

Star Union Dai-Ichi Life Insurance Co. Ltd. 2008 Private Mumbai

IndiaFirst Life Insurance Co. Ltd. 2009 Private Mumbai

Edelweiss Tokio Life Insurance Co. Ltd. 2011 Private Mumbai

Non-Life Insurance Companies In India

Insurance Companies Founded Sector Headquarter

Acko General Insurance 2016 Private Mumbai

Aditya Birla Health Insurance 2015 Private Mumbai

Agriculture Insurance Company of India 2002 Public New Delhi

Apollo Munich Health Insurance 2007 Private Gurgaon

Bajaj Allianz General Insurance 2001 Private Pune

Bharti AXA General Insurance 2008 Private Mumbai

Cholamandalam MS General Insurance 2001 Private Chennai

Cigna TTK 1918 Private Mumbai

DHFL General Insurance 2016 Private Mumbai

Digit Insurance 2017 Private Pune

Edelweiss General Insurance 2017 Private Mumbai

Export Credit Guarantee Corporation of India 1957 Private Mumbai

Future Generali India Insurance 2007 Private Mumbai

HDFC ERGO General Insurance Company 2002 Private Mumbai

ICICI Lombard 2001 Private Mumbai

IFFCO TOKIO General Insurance 2000 Private Gurugram

Kotak Mahindra General Insurance 2015 Private Mumbai

Liberty General Insurance 2013 Private Mumbai

Magma HDI General Insurance 2009 Private Mumbai

Max Bupa Health Insurance 2008 Private New Delhi

National Insurance Company 1906 Public Kolkata

New India Assurance 1919 Public Mumbai

Raheja QBE General Insurance 2007 Private Mumbai

Reliance General Insurance 2000 Private Mumbai

Reliance Health Insurance 2017 Private Mumbai

Religare Health Insurance Company Limited 2012 Private Gurgaon

Royal Sundaram General Insurance 2000 Private Chennai

SBI General Insurance 2010 Private Mumbai

Shriram General Insurance 2008 Private Jaipur

Star Health and Allied Insurance 2006 Private Chennai

Tata AIG General Insurance 2001 Private Mumbai

The Oriental Insurance Company 1947 Public New Delhi

United India Insurance Company 1938 Public Chennai

Universal Sompo General Insurance Company 2007 Private Mumbai

Principles of Insurance

To ensure the correct functioning of an insurance contract, both the

insurer and the insured must adhere to the following seven
insurance principles:
1. Utmost Good Faith: Fundamental principle is that each of the
parties in an insurance contract ought to act in honestness
towards one another, i.e. they have to offer clear and
sententious data associated with the terms and conditions of
the contract.
2. Proximate Cause: When a loss is caused by two or more causes,
this principle applies. The insurance company will investigate
the most recent cause of loss. The insurer must pay
compensation if the proximate cause is the one for which the
property is insured. If it is not a cause for which the property is
insured, the insured will not be compensated.
3. Insurable Interest: Insurable interest simply means that the
contract’s subject matter must give some financial benefit to
the insured by simply existing and would result in a financial
loss if damaged, destroyed, stolen, or lost.
4. Indemnity: Indemnity is a promise to return the insured to the
position they were in prior to the unforeseen event that
resulted in a loss. The insured is compensated by the insurer.
5. Subrogation: Subrogation occurs when one creditor (the
insurance company) takes the place of another (another
insurance company representing the person responsible for the
loss).
6. Contribution: Contribution creates a symbiotic relationship
between all of the insurance contracts engaged in an incident
or dealing with the same subject.
7. Loss Minimization: This establishes an insurance contract,
which is perhaps the simplest. In the event of an unforeseen
occurrence, it is the insured’s responsibility to take all
reasonable efforts to reduce the loss to the covered property.

Types of insurance
Insurance can be classified as:
Life insurance: purpose of this insurance is to provide
the relatives and beneficiaries of a deceased person
with some financial aid and help. It is a protection
against uncertainity of life.