LECTURE 5
Functions of an Insurance Company[1].
1] Provides Reliability.
Insurance’s primary function is eliminating the uncertainty of an unexpected and sudden financial loss. This is one of the biggest worries of a business. Instead of this uncertainty, it provides the certainty of regular payment, i.e., the premium to be paid.
2] Protection.
Insurance does not reduce the risk of loss or damage that a company may suffer. But it provides protection against such loss that a company may suffer. So at least the organization does not suffer financial losses that debilitate their daily functioning.
3] Pooling of Risk.
In insurance, all the policyholders pool their risks together. They all pay their premiums, and if one suffers financial losses, the payout comes from this fund. So, the risk is shared between all of them.
4] Legal Requirements.
In many cases, getting some form of insurance is required by the law of the land. For example, when goods are in freight or when you open a public space getting fire insurance may be a mandatory requirement. So, an insurance company will help us fulfil these requirements.
5] Capital Formation.
The pooled premiums of the policyholders help create capital for the insurance company. This capital can then be invested in productive purposes that generate income for the company.
POST OFFICES[2].
A post office is a public facility and a retailer that provides mail services, such as accepting letters and parcels, providing post office boxes, and selling postage stamps, packaging, and stationery. Post offices may offer additional services, which vary by country. These include providing and accepting government forms (such as passport applications), and processing government services and fees (such as road tax, postal savings, or bank fees). The chief administrator of a post office is called a postmaster.
Before the advent of postal codes and the post office, postal systems would route items to a specific post office for receipt or delivery. During the 19th century in the United States, this often led to smaller communities being renamed after their post offices, particularly after the Post Office Department began to require that post office names not be duplicated within a state.
India Post[3].
India Post is a government-operated postal system in India, part of the Department of Post under the Ministry of Communications. Generally known as the Post Office, it is the world’s most widely distributed postal system. Warren Hastings had taken the initiative under East India Company to start the Postal Service in the country in 1766. It was initially established under the name “Company Mail”. It was later modified into service under the Crown in 1854 by Lord Dalhousie. Dalhousie introduced uniform postage rates (universal service) and helped to pass the India Post Office Act 1854, which significantly improved upon the 1837 Post Office act which introduced regular post offices in India. It created the position of Director General of Post for the whole country.
It is involved in delivering mail (post), remitting money by money orders, accepting deposits under Small Savings Schemes, providing life insurance coverage under Postal Life Insurance (PLI) and Rural Postal Life Insurance (RPLI) and providing retail services like bill collection, sale of forms, etc. The DoP also acts as an agent for the Indian government in discharging other services for citizens, such as old age pension payments and Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) wage disbursement. With 154,965 post offices (as of March 2017), India Post is the widest postal network in the world.
The country has been divided into 23 postal circles, each circle headed by a Chief Postmaster General. Each circle is divided into regions, headed by a Postmaster General and comprising field units known as Divisions. These divisions are further divided into subdivisions. In addition to the 23 circles, there is a base circle to provide postal services to the Armed Forces of India headed by a Director General. One of the highest post offices in the world is in Hikkim, Himachal Pradesh, operated by India Post at an altitude of 14,567 ft (4,440 m).
[1] https://www.toppr.com/guides/business-studies/business-services/insurance/
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