Discuss the functions of insurance organizations.

Functions of insurance organizations
Apart from functions discussed above, the insurance organizations have some more functions as listed below. The functions already discussed were mainly related to the owners of the company or the insurers, but the functions covered in this section are common to all financial organizations. 
  • Accounting - Accounting department handles the financial accounting processes of an insurer. An insurance company recruits and assigns accountants to do this task. 
  • Legal functions - In an insurance organisation, legal function is a very important function. Legal functions are mainly to address the general corporate operations of the company. 
  • Loss control services - An insurance company is obliged to provide loss control services as an important part of the risk management. Generally, property and liability insurers provide many loss control services. 
  • Electronic data processing - Like any other commercial company, insurance companies are also using technology in every process. Electronic data processing (EDP) is used to computerize every operation performed in an insurance company. The use of EDP has transformed the insurance industry as it speeds up the processing and storage of information which lessens many routine tasks. 
  • Other departments - Some other departments of insurance organizations are engineering, administrative, statistical etc.
Functions of public sector insurance organizations in India
In India there is only one public sector life insurance company, Life Insurance Corporation of India (LIC). The functions of LIC are as given below: 
  • Provide long-term investments in governmental securities, public sectors, private sectors and joint sectors. 
  • Provide financial support through loans to the development of industries in India. 
  • Developing schemes to mobilize funds from public. 
  • Underwrite and subscribe to share new bonds and debentures. 
  • Provide financial support for various industries such as electricity, agriculture, industry and other development schemes.
The functions of the only public sector general insurance company in India, the General Insurance Corporation of India has the following functions: 
  • Advise acquiring companies in the matter of setting standards in general insurance business. 
  • Render services to policyholders. 
  • Advise the acquiring companies in the matter of investment and finance management. 
  • Encouraging competition among the acquiring companies to provide their best service.

Discuss the functions of insurance organizations. Discuss the functions of insurance organizations. Reviewed by enakta13 on December 14, 2019 Rating: 5

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