Category: Insurance

As an academic field of study, insurance involved the analysis of risk, risk management practices.

It also involves the study of the various types of insurance, such as health, life, liability, motor.

Insurance also studies the principles and practices involved in underwriting and managing risks.

The field of Insurance also study’s the various institutional and legal frameworks that guide insurance practice in various countries.

 

Insurance

History of Insurance and Insurance regulations in Nigeria

Written by Joshua

But before then, the Motor Vehicles Act of 1945 was in place in Nigeria. The Motor Vehicle Act made it compulsory for every motorist to have an insurance policy covering third-party legal liability for accidents.

However, the First insurance regulation after independence is the Insurance Companies Act of 1961.

Let us look at the Insurance Companies Act of 1961 in detail.

The Insurance Companies Act, 1961

The key highlight of this act is that it distinguishes between locally-based and foreign-based insurance companies existing in Nigeria.

The insurance company Act require that a local-based insurance company should have a paid-up capital of not less than £25,000(N50,000) while a foreign-based insurance company should have a paid-up capital of not less than £50,000(N100,000).

Insurance

Insurable Interest – Meaning, Features, Importance and Examples

Written by Joshua

1. To prevent Gambling: Insurable interest is necessary to prevent insurance from being used as a form of gambling.

If there is no insurable interest, people could potentially take out insurance on something they don’t have a financial stake in and hope that it gets damaged or destroyed, so they can collect the insurance payout.

For example, imagine someone who doesn’t own a car taking out an insurance policy on a friend’s car.

Since he has no financial interest in the car, he would hope that the car gets involved in an accident so that he can collect the insurance payout.

This would be similar to gambling, as he is essentially betting on something happening so that he can gain from it.

However, with the presence of insurable interest, such a scenario is not possible.

Insurance

The Meaning, Features, advantages and Disadvantages of Treaty Reinsurance

Written by Joshua

Treaty reinsurance is a type of reinsurance where a re-insurer agrees to cover specific risks of the ceding company over a period of time.

It is a type of reinsurance contract where the reinsurer agrees to accept all or some portion of the risk of the primary insurer provided it meets specific criteria based on ceding company underwriting and issue requirements.

That is, treaty reinsurance covers all of the primary insurer’s policies in a given area that meets certain standards.

Insurance

Facultative Reinsurance -Definition, Features, Advantages and Disadvantages

Written by Joshua

Facultative reinsurance is a form of reinsurance that is transacted on an individual basis, where the reinsurer and the insurer have the option to accept or reject individual risks.

This type of reinsurance is considered the oldest form of reinsurance and is typically used for specific risks that are not covered by standard policies.

The reinsurer has the freedom to accept or reject any risk offered, and the ceding firm has the option to select a specific risk.

Insurance

Meaning and Importance Of Reinsurance

Written by Joshua

Reinsurance is an insurance contract between two parties, the primary insurer and the reinsurer, whereby the reinsurer agrees to protect the insurer against part of its risk in return for the premium to be paid by the primary insurance.

In essence, reinsurance is insurance for insurance companies. It is not insurance for regular customers.

Reinsurance serves as a way for an insurance company to diversify its risk exposures by sharing it with another insurance company, called the re-insurer, which doesn’t have a direct relationship with the insured person or company.

Reinsurance helps insurance companies manage their risks by transferring a portion of the potential losses they face.