Tribhuvan University
Faculty of Management
Office of the Dean
Bachelor of Business Management (BBM)
Course Description
:This course deals with basic nature of risk and the way it is managed by different types of insurance businesses. This cour se contains introduction to risk, risk management, insurance and risk, legal principles in insurance, life insurance, non-life insurance, and Government regulations of Insurance regulating insurance business in Nepal.
Course Objective
:This course aims to provide a comprehensive understanding of risk and insurance concepts, ensuring that students develop both theoretical knowledge and practical sk ills relevant to the field. Student will be able to understand the role of insurance in risk management process. Course Description This course deals with basic nature of risk and the way it is managed by different types of insurance businesses. This cour se contains introduction to risk, risk management, insurance and risk, 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 to Risk
- Meaning of risk
- Peril and hazard
- Classification of risk: pure and speculative, diversifiable and non -diversifiable, 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
- Pe rsonal risk management
- Enterprise risk management(ERM)
- Difference between traditional risk management and ERM
- ERM process
- Benefits of ERM programme
- Insurance market dynamics
- Loss forecasting
- Financial analysis in risk management decision making
- Other risk management tools.
Unit 3. Insurance and Risk
- Meaning of insurance
- Basic characteristics of insurance
- Char acteristics of insurable risk
- Adverse selection and insurance
- Insurance and gambling
- insurance and hedging
- Types of insurance
- Benefits and costs of insurance to society.
Unit 4. Legal Principles in Insurance
- Fundamental legal principle s: 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
- Life insurance: meaning, features and importance
- Premature death and its impact
- Amount of life insurance of own
- Types of life insurance
- Life insurance contractual provisions
- Determining the cost of life insurance
- Rate of return on saving component
- Taxation of life insurance, Shopping of life insurance, Calculation of life insur ance premium
- Life insurance in Nepal: Practices, issues, and life insurance companies.
Unit 6. Non-life insurance
- Property insurance, liability insurance, pecuniary benefit insurance, Fire insurance: nature and use of fire insu rance: 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, uninsured motorists coverage, cost of auto insura nce, third party insurance
- Social Insurance
- Health insurance
- Unemployment insurance
- Agriculture insurance.
Unit 7. Government Regulations of Insurance
- Reasons for insurance regulation
- Methods of regulating insurers
- Areas of regulation
- Current issues in insurance regulation
- Features and coverage of 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. New Delhi: Pearson Education. Vaughan, E. J. & Vaughan, T. M. Fundamentals of risk and insurance. New Delhi: Willey India. Harrington, S. E., & Niehaus, G. R. Risk management and insurance. New Delhi: Tata McGraw- hill. Mishra, M, N, & Mishra S. B. Insurance: Principles and Practice. New Delhi: S. Chand and Company Ltd. Government of Nepal, Insurance Act. Nepal Insurance Authority, Annual Reports of Nepal Insurance Authority