Explanation and Understanding Insurance

 Explanation and Understanding Insurance is? Insurance is an agreement between an insurance company and a policyholder which forms the basis for receiving premiums by the insurance company in return for:

a. ​provide compensation to the insured or policyholder due to loss, damage, costs incurred, loss of profit, or legal responsibility to a third party that may be suffered by the insured or policyholder due to an uncertain event; or

b. provide payments based on the death or life of the insured with benefits whose amount has been determined and/or based on the results of fund management.

Understanding Insurance

Insurance business is a business activity that is engaged in:

a. Coverage or risk management services.

b. Risk reinstatement.

c. Marketing and distribution of insurance products or sharia insurance products.

d. Consulting and intermediary for insurance, sharia insurance, reinsurance, or sharia reinsurance, or

e. Insurance loss appraiser or sharia insurance.

Insurance business carried out by: 

1. Insurance Company:

a. General Insurance Company, is a company that provides risk coverage services that provide reimbursement due to loss, damage, costs incurred, loss of profit, or legal responsibility to third parties that may be suffered by the insured or policyholder due to an uncertain event.

b. Life Insurance Company, is a company that provides services in risk management that provides payments to policyholders, the insured, or other entitled parties in the event that the insured dies or remains alive, or other payments to policyholders, the insured, or other parties entitled to certain time stipulated in the agreement, the amount of which has been determined and/or based on the results of fund management.

c. Reinsurance Company, is a company that provides services in reinsurance against risks faced by Loss Insurance Companies, Life Insurance Companies, Guarantee Companies, or other Reinsurance Companies.

2. Insurance Business Support:

a. Insurance Brokerage Company, is a company that provides intermediary services in closing insurance or sharia insurance and handling insurance compensation settlements by acting for the benefit of the insured.

b. Reinsurance Broker Company, is a company that provides intermediary services in placing reinsurance and handling the settlement of reinsurance compensation by acting on behalf of insurance companies, guarantee companies, reinsurance companies.

c. Insurance Loss Appraisal Company, is a company that provides appraisal services for claims and/or consulting services for the insured object of insurance.