FACTORS TO BE CONSIDERED FOR RATING

 The following factors are generally  taken in to a account while determining the rating of vessels and cargo:  (A) RATING UNDER HULL INSURANCE: (a) TYPES AND TRADE: The quality and fitness of the ship  to serve as a carrier on the particular route is an important factor considered for rating on hull insurance .  The insurer, while underwriting the risk, would like to know the ship with regard to its builder and owner , structural strength to resist strains  adaptability to carry various  kinds of a cargo and its age, and physical condition  the types of engine and its horse power and the special types  of equipments  etc.,

 The risk to be insured depends upon the vessel’s  construction and according to the standard I ,e, commercial standard in the trade,. The rates of premium are determined accordingly.  (b): MANAGEMENT:  The management of the ship entirely  depends upon the shipowner for up keeping the ship. In order  to avoid a bad  track record through  negligence  , indifference, etc., the shipowner appoints  efficient  officers  and crew in the ship. As the nature of risk will vary  depending   upon the efficiency  of management the rates  of premium will also vary.  ( C ) PAST CLAIM EXPERIENCE: The number of claim made by the insurance during the past few years is to be considered  for fixing the rates of premiums. If there were too many claims in the past, the insurer will charge higher rates of premiums on different  marine risks. (d) VALUATION  OF VESSEL : The valuation of the vessel to be insured is very  important  for determining  the rate. The insurer  while underwriting the risk, should verify the valuation  and should ask for the valuation  certificate  from competent  surveyors before granting  the covers . Valuations  includes  adjustment  for the  gross registered  tonnage make machinery installed therein, type, special for the gross equipments  modern gadgets nature and type of a engine, age and  horse power etc.,

 (e): POLICY CONDITIONS: The liability of the insurer increases or decreases  depending  upon the insurance policy conditions given for a bearing the risk. So according to variation  of liability premium  varies.  (f): REPAIR COST: Extra expenditure incurred for the safety of the vessel  is also to be considered  for determining the rates of premium. These expenditures  are incurred at the port when the ship is repaired . These expenditures  or losses  are expressed  as particular average or general average. The definition  of particular average is that the loss or damage must be accidently for or fortuitously  caused by a  peril insured against , and it concerns solely the person interested in the subject  matter of insurance and his underwriting  . On the other hand, General Average implies some voluntary sacrifice of the property made or extraordinary expenditure incurred at a time of peril threatening  the whole property involved in a common maritime adventure with a  view to preserving it  from the peril.

 When such sacrifice ha been made or expenditure  incurred the whole property  preserved shall contribute to the  loss sustained  or the expenditure  incurred . All expenses will be treated  as a General Average  expenditure. The Marine Insurance Act 1963 states that temporary  repairs made for the common safety shall be admitted  as a general average. So under the applications  of general averages the general average contributions are recoverable from respective  marine insurers  insuring the ship  provided the expenses do not exceed the insured value.  (g): NATURAL FACTORS AND TOPOGRAPHY: The insurer also considers the route and terms of the contracts . Some natural hazards are permanent  in nature and some  are seasonal  . For example frequency of storm , shallow water narrow channel. ice, tides, seaquakes are to be taken into account  while calculating  premium chargeable   on a particular route. 

HISTORY OF LIFE INSURANCE

(1) EARLY DEVELOPMENTS: The early development of life insurance closely linked with that of marine  insurance. The first  life  insurers  were marine  insurance underwriters  , who started issuing  policies on the life of a merchants, master and the crew of the ship sailing along with the goods. . If a ship was captured, the insurer paid the ransom  needed to secure release of the captain  and the sailors . Life  insurance policies were granted during the reign of Queen Elizabeth. These early  contract took the form of temporary  assurance  covering  the life assured  for a short period only. These were issued by the private individual  known as underwriters who formed  Mutual assurance Associated  which were in a way, self- insurance  clubs. They issued annuities and pension and for a husbands.

The  first recorded life policy  was issued by on 18.6.1583 on the life of William Gibbons for 12 months  at the  rate of 8%  of 382,65.84 for which sum sixteen underwriters  were responsible. However this first policy was subject to a dispute  over payment because the policy holder died within 11 months of issuing  the policy. The underwriters  contended that the policy  period of 12 months  related to lunar months , which has expired. Happily the court ruled that the payment must be made. 

  (2)  LIFE INSURANCE IN 18TH CENTURY:  It was in the eighteen century the societies  began of the  to be formed with the object of granting life  assurances . The Amicable  Society (1705)  the equitable Life Assurance Society. (1762.,), the West Minister Society (1792) were some important societies  .The application of the mortality  tables in 1755 by the Dodson and the introductions  of actuarial  science revolutionized  the whole concept  of life  insurance. As the life  insurance became better known, a practice grew up of speculating in lives,  particularly  of well-known  people, like kings, national leaders or prisoners particularly , if charged  with an offence that would call for capital punishment  upon conviction . The premiums varied with their reputation  and state of health. If person of this  category fell seriously ill a huge amount of the insurance  was written. In order to put  an end to this speculation with the  its attendant  evils,  an Act called  the “Life Assurance Act” (commonly known as the Gambling Act), was passed in 1774. It prohibited all  insurance on lives expect those  satisfying  insurable interest requirements . 

  (3)  LIFE IN\SURANCE IN 19 TH CENTURY:  During the early years of the nineteen  century a large number of life  insurance companies were formed. A large number of companies  failed and many of them preferred  to amalgamate their business . In order to stabilise the business  further . Life Assurance companies Act 1870 was passed. Further Act was passed in 1871.   (4): LIFE INSURANCE IN 20TH CENTURY:  The above legislation  was repealed by the Assurance Companies Act 1909, which  was applied to all classes  of the  insurance business. Later on, various  acts were passed to meet the growing needs of the industry and to protect the insured. Some of these  acts are : Industrial Assurance  Act 1923,. Assurance Companies Act 1946, Insurance Companies Act 1956 and the Companies Act 1967

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(5)  LIFE INSURANCE IN INDIA:  In India an English  insurance company known as oriental Life Insurance Company started its operation in Calcutta in the year 1818. It insured the employees of East India Company  only. A good member of European  companies had entered the Indian scene by 1870, but mostly European  lives were insured by them. The first Indian company by the name of : Bombay Mutual Life Assurance Society” was set up in1870-71. Then came in 1874 the “ Oriental Government Security Life Assurance company”. Swedeshi  Movement started in the wake of freedom struggle  in India, gave birth to many Indian  insurance companies and some very important prominent Indian  names were associated with the life  insurance industry. In 1956, the life  insurance business was nationalized by taking over 245 companies and by forming one single  corporation  named as Life  insurance Corporation  (LIC) of India. Now Life  insurance Corporation of India and 12 private life  insurance companies are permitted to carry  on life  insurance business in India. 

DEVELOPMENT OF MARINE INSURANCE

As discussed in chapter 1, Marine  insurance  is the oldest class of general  insurance  business  . It began probably in the cities of northen Italy around the end of 12th century.  From Italy, marine  insurance  spread to Spain, Belgium, England and other countries. In England marine  insurance  was spread  brought by the Lombard merchants  who established  themselves in London and controlled a large portion of British commerce in the 15th  and 16th centuries .

 Lombards were great traders in addition to their goods, they brought with them their  business methods and practices such as a banking  insurance  etc., By end of 16th century  however the Lombards lost their grip over the marine business and the  business passed on into the hands  of Lloyds  of London , who used to discuss marine matters in the coffee houses. One such  coffee house was opened by Edward Lloyd in 1680. This  become a great centre for marine business and  insurance  transactions. Generally a close-knit association  of insurers emerged in 1774 in London which was  a  known as Lloyds  Association. This association has contributed a lot for a the  development of marine  insurance   business. Even today , Lloyd’s  association is considered  as a pioneer international marine  insurance  centre. Later on, marine  insurance  as a  was modified and Marine Insurance Act 1906 was passed in England, Similar statutes  were passed in other countries also 

. In India  till  fairly recently there was no  statute relating  specifically  to marine  insurance . The subject was governed by the . Provisions  of the British Marine  insurance  Act 1938. In 1963, an Act was enacted known as the Marine  insurance  Act. It came into force  from 1st August 1963, by this Act, the rules  relating to marine  insurance  in India  have been codified.  LLOYD’S ASSOCIATION:  As Lloyd’s association has contributed a lot for a the  developments of marine  insurance  at the international level, it is better to have knowledge about its origin  and operations. In   England in addition to Marine  insurance  companies  a sizable  business  is done by the Lloyd’s  association of underwriters  who carry on marine  insurance  business in their  individual capacities. 

The Association  originated from a coffee house any run by Edward Lloyd in Tavern street in 1689, where person interested  in shipping used to meet for collecting shipping information. At that time though the Electric Telegraph was not known yet to satisfy  these customers. Lloyds  established  means of getting news about shipping by semaphore Telegraphs  from the coast, as also by means of correspondence  from the various  parts of the world. The meagre activities , rather whims of the far-sighted proprietor of the coffee-canteen graduallygrew-upin various directions concerning shipping and a are directly responsible for the establishment of a world -wide organizations  which is a  unique today. 

There is a  practically no part in the world today where one does not come across with at least  one agent of the “ Lloyd’s “ These agents , living in different parts of the world. gather information  relating  to shipping and forward the same to central organizations  where it is recorded and published daily in the Lloyds list.