Principles and Practices of Insurance

Paper Code: 
25BIE231
Credits: 
04
Contact Hours: 
60.00
Max. Marks: 
100.00
Objective: 

This course will enable students to understand the fundamentals of insurance, risk management principles, insurance contracts, types of insurance, reinsurance, premium calculation methods, and claim settlement processes.

Course Outcomes: 

Course

Learning outcome

(at course level)

Learning and teaching strategies

Assessment Strategies

Course Code

Course

Title

 

25BIE231

Insurance

(Theory)

 

On completion of this course, the students will be able to:

  1. Analyze the principles, functions, and legal aspects of insurance contracts to differentiate between general agreements and insurance contracts.
  2.  Evaluate risk classification, management processes, and mitigation strategies to develop effective risk-handling techniques in insurance..
  3.  Assess the role and functions of IRDA, insurance contracts, and reinsurance mechanisms to understand regulatory frameworks in insurance.
  4. Analyze premium computation methods, mortality tables, and policy provisions to determine factors influencing premium pricing.
  5. Examine policy issuance, distribution models, and claim settlement processes to enhance efficiency in insurance operations.
  6. Contribute effectively in course-specific interaction

Approach in teaching: Interactive Lectures, Discussion, Tutorials, Practical cases, Power point presentation.    

 Learning activities for the students: Self-learning assignments, Effective questions, Seminar presentation, Live practical problem analysis

CA test, Semester end examinations, Quiz, Solving problems in tutorials, Assignments, Presentations, Individual and group projects.

 

12.00
Unit I: 
Insurance:

• Concept, Characteristics, Functions and Limitations.
• Principles of Insurance: Principle of Utmost Good Faith, Principle of Insurable interest, Indemnity, Subrogation, Causa Proxima.
• Essentials of Insurance Contracts: Legal requirements of Insurance contract. Distinction between General Law of Contract and Insurance Contract; Life and indemnity Contract.

12.00
Unit II: 
Risk Management:

• Risk: Meaning , Definition , Peril , Hazard, Classification of hazard Classification of risk, Requirements of an Insurable risk.
• Risk Management in Insurance: Need and process,
• Methods of handling risk: Avoidance, Risk Reduction, Risk retention, Risk transfer, combination, Hedging method.

12.00
Unit III: 
Regulation of Insurance:

• Insurance regulator : IRDA: Role , power and functions
• Essentials of insurance contracts- Distinction between General Law of contract and Insurance contract; Life and indemnity Contract.
• Double Insurance: Meaning, Features Reinsurance: Characteristics of Reinsurance, Types of Reinsurance. Reinsurance Vs. Double insurance, Methods of Reinsurance

12.00
Unit IV: 
Premium calculation:

• Calculation of Premium: Net premium, Gross premium, Methods of computation of Premium- Assessment plan, Natural premium Plan, Level Premium Plan, Mortality table-meaning, characteristics, need.
• Lapse and Revival
• Nomination and Assignment

12.00
Unit V: 
Issuance, Distribution, and Claims Settlement:

• Process of issuing Life Insurance policy: Proposal and Application, Underwriting , Policy Issuance
• Distribution Channels of Insurance: Traditional Distribution Channels, Direct and Digital Channels, Emerging Distribution Models.
• Settlement of claim: Death claims, Maturity/Survival claims

Essential Readings: 

• MJ Mathew, ”Risk Management and Insurance”,RBSAPublications,Jaipur.
• “Risk and Insurance management” Dr. R.K. Kothari, Dr. MukeshJain,RBD publications, Jaipur
• Neelam C.Gulati,”Principles of Insurance Management", Excel books.

References: 

Suggested Readings:
• Insurance management(text and cases), Swarup C. Sahoo, Suresh C.Das, Himalaya publishing house
• Principles of risk management and Insurance, George E. Rajda, Pearson Publication
• Insurance and risk management, P.K. Gupta, Himalaya publishing house
• Life Insurance module,Vol.I,II

E-Content:
• Investments (SIE),https://www.expresslibrary.mheducation.com/bookshelf Workbook for NISM
• Mutual fund products and services, Indian institute of banking and finance

Reference Journals:
• Economic and Political Weekly, www.epw.in
• Indian Journal of Finance
• The Economic Challenge

Academic Year: 
2025-2026
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