Insurance Concepts and IRDA [Insurance Regulatory and Development Authority]

Brief Introduction about Insurance

Insurance is a federal subject in India. It is a subject matter of solicitation. The legislations that deal with insurance business in India are Insurance Act, 1938 and Insurance Regulatory & Development Authority Act (IRDA), 1999.

Insurance is defined as is a form of risk management primarily used to hedge against unforeseen risks of contingent losses. Another definition for Insurance is the equitable transfer of the risks from the possibility of occurrence of losses, from one entity to another (or host of others), by the method of diversification in exchange for a premium. As a result the ramifications of a large and devastating loss can be minimized to a great extent.

An Insurer is a company designing, promoting and selling the insurance products and services amongst the public. An insured or policyholder is the person or entity purchasing the insurance products and services. Risk management, the practice of appraising and controlling everpervading risks, has evolved as a discrete field of study and practice. The study of Insurance incorporates the discipline of Risk Management which acts as a driving force.