Tribhuvan University
Faculty of Management
Office of the Dean
Bachelor of Business Administration (BBA)
Course Objective
:This course aims to provide a comprehensive understanding of insurance and risk management concepts, ensuring that students develop both theoretical knowledge and practical skills relevant to the field. The student will be able to understand the role of insurance in the risk management process.
Course Description
:This course deals with the basic nature of risk and the way it is managed by different types of insurance businesses. This course contains an introduction, risk management, Insurance device, legal principles in insurance, life insurance, non-life insurance, and Government Regulations of Insurance regulating insurance business in Nepal.
Course Contents:
Lecture hours show the approximate classroom time allocated to each unit.
Unit 1.Introduction
- Meaning of risk
- Peril and hazard
- Classification of risk: pure and speculative, diversifiable and nondiversifiable, enterprise and systemic
- Major personal risk: premature death, inadequate retirement income, poor health, unemployment, property and liability
- Commercial risk: property, liability, loss of business income, cyber security
- identity theft and other
- Burden of risk on society
- Techniques of managing risk: risk control, risk financing.
Unit 2.Risk Management
- Meaning of risk management
- Objective of risk management
- Steps in risk management process
- Benefits of risk management
- Personal risk management
- Business risk management The changing scope of risk management
- Loss forecasting
- Financial analysis in risk management decision making
- Other risk management tools.
Unit 3.Insurance Device
- Definition of insurance
- Basic characteristics of insurance
- Characteristics of insurable risk
- Adverse selection and insurance
- Insurance and gambling
- Insurance and hedging
- Types of insurance: private and government
- Benefits and costs of insurance to society.
Unit 4.Legal Principles in Insurance
- Fundamental legal principles: principle of indemnity, principle of insurable interest, principle of subrogation and principle of utmost good faith
- Requirements of an insurance contract
- Distinct legal characteristics of insurance contracts
- Law and the insurance agent
- Basic parts of insurance contract
- Insurance provisions: endorsements and riders, Deductibles, coinsurance
- Other-insurance provisions.
Unit 5.Life Insurance
- Meaning and importance of life insurance
- Premature death
- financial impact of premature death
- amount of life insurance of own, Types of life insurance
- Other types of life insurance
- Life insurance contractual provisions
- Dividend option
- Nonforfeiture option
- Settlement option
- additional life insurance benefits
- Determining the cost of life insurance
- Rate of return on saving component
- Taxation of life insurance, Shopping of life insurance, Calculation of life insurance premium
- Progress of life insurance in Nepal.
Unit 6.Non-life insurance
- Commercial Property and liability insurance
- Fire insurance: nature and use of fire insurance
- types of policies
- rate fixation in fire insurance
- Payment of claims
- Marine insurance: nature, marine insurance policies
- premium calculation, payment of claims
- Auto insurance: Liability coverage
- Medical payment coverage
- Uninsured motorists coverage
- Cost of auto insurance
- Compulsory auto third party insurance
- Social Insurance: Old-age survivors and disability insurance
- Medicare
- Unemployment insurance
- Workers compensation
- Miscellaneous insurance.
Unit 7.GovernmentRegulations of Insurance
- Reasons for insurance regulation
- Methods of regulating insurers
- Areas of regulation
- Current issues in insurance regulation
- Features and coverage of the existing Insurance Act and Insurance Regulation
- Role and functions of Nepal Insurance Authority in regulating insurance in Nepal.
Suggested Readings:
Rejda, G. E. Principles of risk management and insurance. Pearson Education. Vaughan, E. J. & Vaughan, T. M. Fundamentals of risk and insurance. Willey India. Harrington, S. E., & Niehaus, G. R. Risk management and insurance. Tata McGraw-Hill. Mishra, M, N, & Mishra, S. B. Insurance: Principles and Practice. S. Chand &Company Ltd. Government of Nepal, Insurance Act. Nepal Insurance Authority, Annual Reports of Nepal Insurance Authority.