TYPES OF INSURANCE

ORGANIZATION

GROUP MEMBERS
PRIYAL CHEDDA-5
MANALI PARMAR29
NIRBHAY JADHAV54

1. Self-Insurance
The plan by which an individual or concern sets up a private
fund out of which to pay losses is termed "Self-insurance".
The person lays aside periodically certain sum to meet the
losses of any contemplated risk.
While it may be called "self-insurance", it is not, as a matter
of fact, insurance at all because there is no hedge, no
shifting or distributing of the burden of risk among larger
persons.
The fund, as it accumulates, belongs to the insured and he
can invest it as he may deem prudent. He pays no
commission to agents, no extra expenses for maintaining
office. So, on the one hand, the return of an investment will
be higher and on the other, the cost of operation will be
lesser

 The self-insurance will be successfully operated where

(i) there are several properties such as, machine,
motor vehicle, house factories, etc., (ii) the properties
or units are widely distributed, (iii) these are under the
influence of varied risks, and (iv) the risks are greater
at one place and lesser at another place.
The self- insurance cannot be effectively utilised by
those concerns where the losses cannot be easily
estimated, no proper management of the
accumulated funds can be practiced, and the
accumulated funds prove to be inadequate at the
contingency.

2.Individual Insurer
An individual like other business can perform the
business of insurer provided he has sufficient
resources and talent of insurance business. The
individual organisation has been rare in the field of
insurance.

3.Partnership
A partnership firm can also carry on the insurance business for the
sake of profit. Since it is not an entity distinct from the persons
composing it, the personal liability of partners in respect of the
partnership debts is unlimited. In case of huge loss the partners
have to pay from their own personal funds and it will not be
profitable to them to start insurance business .
In the early period before the advent of joint stock companies
many insurance undertakings were partnership or unincorporated
companies. They were constituted by deed of partnerships which
regulated the business.
Before formation of joint stock companies, the crown had
empowered to grant application letters patent to such
unincorporated companies to operate the business with limited
liabilities. Sometimes, the policy-holders were permitted to share
the management of the concern .

 These forms of insurance had been completely

disappeared with the advent of joint stock companies

4.Joint Stock Companies

The company can operate insurance business and the policy-holders
have nothing to do with the management of the concern. But, in life
insurance, it is the practice to share certain portion of profit among the
certain policy-holders.
The participating policy-holders are getting the bonus. Before
nationalisation, according to Insurance Act, 1938, the policy-holders had
a right to elect their representatives to the Board of Directors to the
extent of one-fourth of the total number of directors of the company.
The provision enabled the policy-holders to have an effective voice in
the management of the company. Most of the insurance businesses
were done on joint stock basis before nationalisation. They were
operating within the memorandum of association and articles of
association framed by them.
They used to distribute only 5 per cent of divisible profit to the shareholders and more than 95 per cent of the divisible profit was distributed
amongst the policy-holders.

5.Co-operative Insurance
Organisation
Co-operative insurance organisations are those
concerns which are incorporated and registered under
Indian Co-operative Societies Act. The concerns are
also called 'Co-operative Insurance Societies'. These
societies like mutual companies are non-profit
organisation.
The aim is to provide insurance protection to its
members at the lowest reasonable, net cost. The
Indian Insurance Act, 1938, has provided special
provisions for the co-operative insurance societies, but
after nationalisation the societies have been ceased.
IRDA has also permitted cooperative insurance
organisation in 2005

6.Mutual Companies
The mutual companies were a type of
Cooperative association formed for the
purpose of the effecting insurance on the
property of its members. The shareholders of
the company were the policyholders
themselves. Each member was an insurer as
well as insured. They participated in the
management of the company

7.Lloyd's Association
Lloyd's Association is one of the greatest insurance institutions in
the world. Taking its name from the Coffee House of Edward Lloyd,
where underwriters assembled to transact business and pick-up
news, the organisation traces its origin to the latter part of the
seventeenth century. So, it is an oldest insurance organisation in
existing form in the world.
In 1871, Lloyds' Act was passed incorporating the members of the
association into a single corporate body with perpetual succession
and a corporate seal. The power of Lloyd's Corporation was
extended from the business of marine insurance to other
insurances and guarantee business. The Lloyd's association is an
association of individual insurers known as 'underwriters'.
They are also termed as 'Syndicates' or 'Names'. Any insurer who
wants to become a member of such association has to deposit a
certain fee as security for the regular payment of his liabilities.

 The business is affected by the insurers called underwriters,

syndicates, or names. The association is merely a controlling and
guiding body. Anybody desirous of taking insurance will approach
to the 'underwriters' and not to the association. Each underwriter
will be responsible for his business underwritten of a policy.
Thus, a policy will be underwritten by several underwriters but
their share or portions of business are fixed individually. When the
policy becomes a claim, the insured realises money from all the
underwriters who had underwritten the policy according to their
respective shares.
If an underwriter fails to pay his share of claim, the association will
pay from his security which he had taken at time of enrolment of
the underwriter. Never is one member or underwriter liable for the
losses of other members either on a policy or in a syndicate.
Underwriter assumes liability 'each for himself and not for another .

 Lloyd's as a corporation is never liable on a policy. It

does supervise the conditions under which its
members may issue policies; it undertakes to provide
collective protection for the commercial and maritime
interest of its members

8. State Insurance
The Government of a nation sometimes owns the insurance and runs the
business for the benefit of the public. The state insurance is defined as
that insurance which is under public sector put; more specifically it can
be stated that when governments have taken over the insurance
business particularly life insurance.
France had nationalised larger insurance companies in 1946. In Brazil,
Japan and Mexico, the insurances are largely nationalised.
Previously, the state undertook only those insurances which were
regarded to be very vital for the public interest or where private
companies were not able or willing to enter the field of insurance. Social
security, unemployment, crop insurance, war risk insurance, export credit
insurance, aero plane insurance were generally under state insurance.
In India, the life insurance business was nationalised in 1956 and the
general insurances were nationalised in 1971. Thus, the insurance
business in India, today, is under the control and ownership of the Central
Government although they are in different forms of insurances.