Pass Marks: 35
Lecture Hours: 150
Course Objectives:
The objective of this course is to familiarize students with the basic nature of risk and provide detail knowledge of
insurance. The course also aims at providing necessary skills to analyze and shop appropriate life and non-life
policies.
Course Description:
This course deals with basic nature of risk and the way it is managed by different types of insurance businesses. In
this course, students will learn fundamental aspects of risk management along with general principles of
insurance. Besides, they will also have an opportunity to learn the principles and processes of effecting life,
health, and property and liability insurances. Students will also develop the necessary skills to evaluate and shop
appropriate insurance policies. This course includes a total of 12 units, they are: Introduction to Risk and
Insurance, Risk management, Risk Identification and Measurement, Fundamental Legal Principles and Insurance
Contract, Life Insurance, Health Insurance, Automobile Insurance, Homeowners Insurance, Commercial Property
Insurance, Commercial Liability Insurance, Social Insurance and Government Regulation of Insurance.
Course Details:
Unit 1: Introduction to Risk and Insurance LH 10
Meaning of risk; Peril and hazard; Basic categories of risk; Burden of risk on society; Methods of
handling risk; Definition of insurance; Basic characteristics of insurance; Requirements of insurable risk;
Types of insurance; and Benefits and costs of insurance to society.
Unit 2: Risk Management LH 10
Meaning of risk management; Objective of risk management; Steps in risk management process; Benefits
of risk management; Personal risk management; The changing scope of risk management; Financial
analysis in risk management decision making; and Other risk management tools.
Unit 3: Risk Identification and Measurement LH 10
Risk identification; Concept and use of probability in risk measurement; and Evaluating the frequency
and severity of losses.
Unit 4: Fundamental Legal Principles and Insurance Contract LH 10
Legal principles; Requirements of an insurance contract; Distinct legal characteristics of insurance
contract; and Basic elements of insurance contract.
Unit 5: Life Insurance LH 15
Meaning and importance of life insurance; Types of life insurance; Life insurance contract; Procedure of
life insurance contract; Determining the premium of life insurance; Principles of investment of life fund;
Distribution channels for life insurance; Group life insurance: concept, group life underwriting principles,
group life insurance plans; and Life insurance in Nepal: evolution, current status, and major policies.
Unit 6: Health Insurance LH15
Meaning and importance of health care insurance; Types: individual and group; Individual health care
insurance coverage; Individual medical expense contractual provisions; Shopping for individual health
insurance; Group medical expense insurance and plans: traditional indemnity plan, anaged care plan,
consumer-driven health plan; Group medical expense contractual provisions; Group-disability income
insurance; and Health insurance in Nepal: current status and major challenges.
Unit 7: Auto Insurance LH 12
Overview of automobile insurance; Liability coverage; Medical payment coverage; Uninsured and
insured motorists coverage; Auto insurance pricing and underwriting: rating factors, underwriting,
residual markets; Arguments for and against compulsory auto third party insurance; Tort liability and nofault law; and Automobile insurance in Nepal: current status, process of effecting automobile insurance
and major issues.
Unit 8: Homeowners Insurance LH 7
Types of policies; Major coverage; Property loss settlement; Pricing homeowners policies; Personal
umbrella policies; Coverage of high risk/ catastrophic perils; and Impact of catastrophes on property
insurance.
Unit 9: Commercial Property Insurance LH 6
Commercial package policy; Important forms: property coverage form, causes-of-loss form, reporting
form; Business income insurance; and Transportation insurance: ocean marine insurance and inland
marine insurance.
Unit 10: Commercial Liability Insurance LH 15
General liability loss exposure; Commercial general liability policy; Workers’ compensation insurance;
Commercial motor vehicle liability insurance; Aviation liability insurance; Professional liability
insurance; Directors and officers liability insurance.
Unit 11: Social Insurance LH 15
Concept of social security scheme; Need of social insurance; Old-age survivors and disability insurance;
Major benefits; Medicare; Unemployment insurance; Workers compensation; and Social security schemes
in Nepal: current status and major issues.
Unit 12: Government Regulations of Insurance LH 15
Rationale for insurance regulation; Methods of regulating insurers; Areas of regulation; Problems and
issues in regulation; Features and coverage of existing Insurance Act and Insurance Regulation; Role and
functions of Beema Samiti (Insurance Board) in regulating insurance in Nepal.
Project Work LH10
After the completion of fourth year concentration classes the students shall have to prepare and submit a project
work in the area they have specialized. The subject teachers have to discuss with students on possible topics of the
project work, availability and sources of literature, availability of data, data collection methods, appropriate tools
of data analysis, etc relevant to the subject within 10 lecture hours.
Text and Reference Books:
Rejda, G. E. Principles of risk management and insurance. New Delhi: Pearson Education.
Harrington, S. E., & Niehaus, G. R. Risk management and insurance. New Delhi: Tata McGraw-hill.
Vaughan, E. J. & Vaughan, T. M. Fundamentals of risk and insurance. New Delhi: Willey India.
Williams, C. A., Smith, M. L. & Young, P. C. Risk management and insurance. Ohio: McGraw Hill.
Dorfman, M. S. Introduction to risk management and insurance: New Delhi: Pearson Education.
Government of Nepal, Insurance Act.
Beema Samiti, Annual Reports of Beema Samiti
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