Glossary related to Insurance regulations in India

 

 “Actuary” means an actuary possessing such qualifications as may be specified by the regulations made by the Authority

“Authority” means the Insurance Regulatory and Development Authority established under sub-section (1) of section 3 of the Insurance Regulatory and Development Authority Act, 1999

“Policy-holder” includes a person to whom the whole of the interest of the policy-holder in the policy is assigned once and for all, but does not include an assignee thereof whose interest in the policy is defeasible or is for the time being subject to any condition;

“Approved securities,” means-
(i) Government securities and other securities charged on the revenue of the Central Government or of the Government of a State or guaranteed fully as regards principal and interest by the Central Government or the Government of any State;
(ii) debentures or other securities for money issued under the authority of any Central Act or Act of a State Legislature by or on behalf of a port trust or municipal corporation or city improvement trust in any Presidency-town;
(iii) shares of a corporation established by law and guaranteed fully by the Central Government or the Government of a State as to the repayment of the principal and the payment of the divided;
(iv) securities issued or guaranteed fully as regards principal and interest by the Government of any Part B State and specified as approved securities for the purposes of this Act by the Central Government by notification in the Official Gazette; and

“Auditor” means a person qualified under the Chartered Accountants Act, 1949 (38 of 1949), to act as an auditor of companies ;

“banking company” and “company” shall have the meanings respectively assigned in them in clauses (c) and (d) of sub-section (1) of Section 5 of the Banking Companies Act, 1949 (10 of 1949);

“certified” in relation to any copy or translation of a document required to be furnished by or on behalf of an insurer or a provident society as defined in Part III means certified by a principal officer of 6Esuch insurer or provident society to be a true copy or a correct translation, as the case may be;

“Court” means the principal Civil Court of original jurisdiction in a district and includes the High Court in exercise of its ordinary original civil jurisdiction;

“fire insurance business” means the business of effecting, otherwise than incidentally to some other class of insurance business, contracts of insurance against loss by or incidental to fire or other occurrence customarily included among the risks insured against in fire insurance Policies;

“general insurance business” means fire, marine or miscellaneous insurance business, whether carried on singly or in combination with one or more of them;

“Government security” means a Government security as defined in the Public Debt Act, 1944 (18 of 1944);

“Indian insurance company” means any insurer being a company-
(a) which is formed and registered under the Companies Act, 1956 (1 of 1956);
(b) in which the aggregate holdings of equity shares by a foreign company, either by itself or through its subsidiary companies or its nominees, do not exceed twenty-six percent paid-up equity capital of such Indian insurance company;
(c) whose sole purpose is to carry on life insurance business or general insurance business or re-insurance business.

“insurance co-operative society” means any insurer being a co-operative society,-
(a) which is registered on or after the commencement of the Insurance (Amendment) Act, 2002, as a co-operative society under the Co- operative Societies Act, 1912 (2 of 1912) or under any other law for the time being in force in any State relating to Co-operative Societies or under the Multi-State Co-operative Societies Act, 1984 (51 or 1984); 
(b) having a minimum paid-up capital, (excluding the deposits required to be made under section 7), of rupees one hundred crores;
(c)in which no body corporate, whether incorporated or not, formed or registered outside India, either by itself or through its subsidiaries or nominees, at any time, holds more than twenty-six per cent of the capital of such Co-operative Society;
(d) whose sole purpose is to carry on life insurance business or general insurance business in India:

“Insurer” means-
(a) any individual or unincorporated body of individuals or body corporate incorporated under the law of any country other than India, carrying on insurance business not being a person specified in sub-clause (c) of this clause which-
(i) carries on that business in India, or
(ii) has his or its principal place of business or is domiciled in India, or
(iii) with the object of obtaining insurance business, employs a representative, or maintains a place of business, in India; 

“insurance agent” means an insurance agent licensed under Sec. 42 who receives agrees to receive payment by way of commission or other remuneration in consideration of his soliciting or procuring insurance business including business relating to the continuance, renewal or revival of policies of insurance;

“investment company” means a company whose principal business is the acquisition of shares, stocks debentures or other securities;

“intermediary or insurance intermediary” shall have the meaning assigned to it in clause (f) of sub-section 2 of the Insurance Regularoty and Development Authority Act, 1999 (41 of 1999)

“life insurance business” means the business of effecting contracts of insurance upon human life, including any contract whereby the payment of money is assured on death (except death by accident only) or the happening of any 

“marine insurance business” means the business of effecting contracts of insurance upon vessels of any description, including cargoes, freights and other interests which may be legally insured, in or in relation to such vessels, cargoes and freights, goods, wares, merchandise and property of whatever description insured for any transit, by land or water, or both, and whether or not including warehouse risks or similar risks in addition or as incidental to such transit, and includes any other risks customarily included among the risks insured against in marine insurance policies;

“miscellaneous insurance business” means the business of effecting contracts of insurance which is not principally or wholly of any kind or kinds included in clause (6A), (11) and (13A);

“linked business” means life insurance contracts or health insurance contracts under which benefits are wholly or partly to be determined by reference to the value of underlying assets or any approved index;

“non-linked business” means life insurance contracts or health insurance contracts which are not linked business;

“pension business”™ includes business of effecting contracts to manage investments of pension funds or superannuation schemes or contracts to pay annuities that may be approved by the Authority in this behalf

“principal officer” means any person connected with the management of the applicant or any other person upon whom the Authority has served notice of its intention of treating him as the principal officer thereof;

“TPA” means a Third Party Administrator who, for the time being, is licensed by the Authority, and is engaged, for a fee or remuneration, by whatever name called as may be specified in the agreement with an insurance company, for the provision of health services;

“extra premium’ means a charge for any risk not provided for in the minimum contract premium;

“group business” means those insurance contracts which are group policies as mentioned under sub-section (2) of section 4 of the Act; 

“guarantees” means the terms in regard to benefits or premiums or charges, which may not be altered during the currency of the policy;

“individual business” means individual insurance contracts issued on single/joint lives;

“inter valuation period” means, as respects any valuation, the period to the valuation date of that valuation from the valuation date of the preceding valuation in connection with which an abstract was prepared under the Act or under the enactments repealed by the Act, or, in a case where no such valuation has been made in respect of the class of business in question, from the date on which the insurer began to carry on that class of business;

“maturity date” means a fixed date on which benefit may become payable either absolutely or contingently;

“non-par policies” or “policies without participation in profits” means policies which are not entitled for any share in surplus (profits) during the term of the policy;

“office yearly premium” means regular premium (excluding extra premiums which are required to be shown separately) payable by the policyholder to secure the basic benefits under the policy in a policy year ;

“options” means the rights available to a policyholder under a policy;

“policies with deferred participation in profits” means polices entitled for participation in profits after a certain period from the date of commencement of the policy,

“premium term” means the period during which premiums are payable;

“riders” or “rider benefits” means add-on benefits, which are in addition to basic benefits under a policy;

“valuation date” means as respects any valuation the date as at which the valuation is made;

“Professional Standard” means the standard of practice specified, with the concurrence of the Authority, by the Actuarial Society of India by issue of guidance notes to its members.

“˜cession”™ means the unit of insurance passed to a reinsurer by the insurer which issued a policy to the original insured and, accordingly, a cession may be the whole or a portion of single risks, defined policies or defined divisions of business, as agreed in the reinsurance contract;

“˜facultative”™ means the reinsurance of a part or all of a single policy in which cession is negotiated separately and that the reinsurer and the insurer have the option of accepting or declining each individual submission;

“˜pool”™ means any joint underwriting operation of insurance or reinsurance in which the participants assume a predetermined and fixed interest in all business written. 

“˜retrocession”™ means the transaction whereby a reinsurer cedes to another insurer or reinsurer all or part of the reinsurance it has previously assumed;

“˜retention”™ means the amount which an insurer assumes for his own account. In proportionate contracts, the retention may be a percentage of the policy limit. In excess of loss contracts, the retention is an amount of loss;

“˜treaty”™ means a reinsurance arrangement between the insurer and the reinsurer,usually for one year or longer, which stipulates the technical particulars and financial terms applicable to the reinsurance of some class or classes of business;

“composite broker” means an insurance broker who for the time-being licensed by the Authority to act as such, for a remuneration, arranges insurance for his clients with insurance companies and/or reinsurance for his client/s

“direct broker” means an insurance broker who for the time-being licensed by the Authority to act as such, for a remuneration carries out the functions as specified under regulation 3 either in the field of life insurance or general insurance or both on behalf of his clients;

“enquiry officer” means an officer of the Authority, or any other person having experience in insurance business, who is appointed by the Authority under regulation 37, to hold an enquiry against an insurance broker;

“form” means the forms specified under these regulations;

“inspecting authority” means one or more of its officers appointed by the Authority to discharge the functions stated in regulation 29;

“insurance broker” means a person for the time-being licensed by the Authority under regulation 11, who for a remuneration arranges insurance contracts with insurance companies and/ or reinsurance companies on behalf of his clients.

“Composite Corporate Agent” means a Corporate Agent who holds a licence to act as an insurance agent for a life insurer and a general insurer;

“Corporate Agent” means any person specified in clause (k) and licensed to act as such;

“Corporate Insurance Executive” in the case of a company or firm means, a director or a partner or one or more of its officers or employees so designated by it, and in the case of any other person, the chief executive, by whatever name called, or one or more of his employees designated by him, who possesses the requisite qualifications and practical training and who have passed such an examination as required under clauses (e) and (f) of Section 42 of the Act.

“Licence” means a certificate of licence to act as an insurance agent issued under these regulations;

“Person” means
i. a firm; or
ii. a company formed under the Companies Act, 1956 (1 of 1956); or
iii. a banking company as defined in clause (4A) of section 2 of the Act; or
iv. a corresponding new bank as defined under clause (d(a)) of sub-section (1) of section 5 of the Banking Companies Act, 1949 (10 of 1949); or
v. a regional rural bank established under section 3 of the Regional Rural Banks Act, 1976 (21 of 1976); or
vi. a co-operative society including a co-operative bank, registered under the Co-operative
Societies Act, 1912 or under any law for the registration of co-operative societies; or
vii. a panchayat or a local authority; or
viii. a Non-Governmental organisation or a micro lending finance organisation covered under the Co-operative Societies Act, 1912 or a Non Banking Financial Company registered with the Reserve Bank of India; or
ix. any other institution or organisation which on an application to the Authority is specifically approved by the Authority.

“Practical training” includes orientation, particularly in the area of insurance sales, service and marketing, through training modules as approved by the Authority;

“Recognised Board or Institution” means such board or institution as may be recognised by any State Government or the Central Government;

“Specified Person” means a director or a partner or one or more of its officers or other employees so designated by the corporate agent and, in the case of any other person, the chief executive, by whatever name called, or one or more of the employees designated by him, who has undergone the practical training, examination, certification and who is responsible for soliciting and procuring insurance business on behalf of the Corporate Agent;