Objectives and scope of the report:
The objectives of the report are:
-To fulfill the requirement of the course curriculum.
-To know about activities of insurance company in Bangladesh.
-To know about the essentialities of insurance company in Bangladesh.
-To find out some major problems of insurance in Bangladesh as follows
-To identify the solutions of solving the problems of insurance in Bangladesh
-To gather knowledge about insurance company in Bangladesh.
-To suggest or recommend some necessary steps to solve the ...view middle of the document...
It is a contract whereby the insurers, on receipt of a consideration known as premium, agree to indemnify the insured against losses arising out of certain specified unforeseen contingencies or perils insured against.
Insurance has be defined to be that in which a sum of money as a premium is paid in consideration of the insurer’s incurring the risk of paying a large sum of upon a given contingency .
In legal terms, insurance is a contract of utmost god faith. Here both the parties namely insurer (insurance company) and insured (policy holder) must be honest and disclose all material facts about the insurable interest. Here the insurance company undertakes to indemnify the insured against any loss in lieu of a small charge known as premium. Such as insurance policies except life insurance allows a policy-holder to transfer all risk to the insurance company in exchange of paying a certain amount of premium. The insurance company then transfers the same risk to a large number of other policy-holders who also pay the premium agreed among them. In reality, a small fraction of the policy-holders suffer loss and hence the insurance company pays them for the losses suffered while retaining the premium income from others.
The same principle of risk transfer is also applicable to life insurance policy but in a different form. Here the person insured may or may not be alive to become the beneficiary of a life insurance policy on maturity. This is, however, not applicable in case of a term or endowment policy. A life insurance policy is mostly adopted by a person who gives high priority to protection of family, economic security in the event of his death and deep emotional factor.
Principles of insurance
Insurance is based upon the two following principles:
- Principles of co-operation
-In insurance the loss is shared by a group of people who are willing to co-operate.
-Principles of probability
-The loss in the shape of premium can be distributed only on the basis of theory of probability. The probability tells what the chances of losses are and what will be the amount of losses.
Insurance business is not a new business in Bangladesh. Almost a century back, during British rule in India, some insurance companies started transacting business, both life and general, in Bengal. Insurance business gained momentum in East Pakistan during 1947-1971, when 49 insurance companies transacted both life and general insurance schemes. These companies were of various origins British, Australian, Indian, West Pakistani and local. Ten insurance companies had their head offices in East Pakistan, 27 in West Pakistan, and the rest elsewhere in the world. These were mostly limited liability companies. Some of these companies were specialized in dealing in a particular class of business, while others were composite companies that dealt in more than one class of business.