Bottomry Bonds

 4th Century: Bottomry bonds allowed ship captains to borrow money by pledging their ships
during emergencies.

 Repayment was required only if the ship reached its destination safely; if lost, no repayment was
needed.

 Lenders charged premiums alongside interest for the risk.

Respondentia Bonds

 Similar to bottomry bonds but focused on cargo.

 Repayment depended on the safe arrival of the cargo; if lost, no repayment was needed.

General Average

 916 B.C.: Established with the Rhodians.

 Involves sharing losses among all parties when a sacrifice (like throwing cargo overboard) is
made to save the ship and remaining cargo.

Merchant Risk Sharing

 Up to the 18th Century: Merchants formed groups to share risks.

 One merchant accepted risk for a voyage and charged others a premium.

History and Development of Marine Insurance

 12th-13th Century: Marine insurance likely began in Northern Italy, introduced to the UK by
Italian merchants.

 13th-14th Century: Lombard Street in London became the center for marine insurance activities.

 Disputes were settled based on local customs, often involving the Admiralty Court, which lacked
expertise in merchant laws.

 1575: The Chamber of Assurances was established to register insurance policies, reducing
disputes.

 1601: The Court of Arbitration was created for marine policy disputes.

 1680: Edward Lloyd opened a coffee house where merchants gathered, evolving into Lloyd’s of
London.

 1720: The Bubble Act granted charters to Royal Exchange and London Assurance, creating a
monopoly.

 The monopolies were repealed, allowing more insurance companies to operate in the UK.

 1906: The Marine Insurance Act became the governing law for marine insurance in the UK.
Fire Insurance

 1666: The Great Fire of London highlighted the need for fire insurance, prompting about seven
companies to offer coverage.

 19th Century: The Industrial Revolution created new hazards, thus the demand for fire insurance
and new companies’ entry to the market

 1861: The Toole Street Fire emphasized the need for risk classification to establish a sound
rating system.

 1868: The Fire Offices Committee (FOC) was formed to address uniform rating, statistics, and
provide technical advice to member companies.

 Other organizations, such as the Joint Fire Research Organization and Salvage Corporations,
emerged to support fire insurance on scientific lines.

Life Insurance

 1583: The earliest recorded life insurance policy issued, focusing on short-term policies payable
only upon death during the term.

 Policies lacked fixed sums, and payments varied based on available funds.

 1693: Halley introduced a mortality table, allowing for a scientific assessment of death risk.

 1774: The Life Assurance Act was passed, requiring insurable interest for life policies, laying a
foundation for systematic and scientific life assurance.

Accident Insurance

 Accident insurance encompasses any new type of insurance not covered under marine, fire, or
life insurance, including personal accident, liability, and engineering policies.

 The industrial revolution in the 19th century, especially steam power and railways, led to an
increase in accidental deaths and injuries.

 Specialized insurance companies began operating alongside those offering fire, marine, and life
insurance, responding to the public’s demand for broader coverage.

Common Features of Development

 Insurance developed in response to demand from the insuring community.

 The Industrial Revolution significantly fueled the growth of the insurance business.

 Early insurance lacked reliable data; over time, theoretical frameworks and associations provided
legal, technical, and scientific foundations.

 Initially, insurers specialized in one type of business, but demand led to the formation of
composite offices handling multiple types of insurance.

 The practice of maintaining reserves for catastrophic losses became standard.

  The necessity for reinsurance emerged as insurers took on larger commitments for specific risks.

DEVELOPMENT OF INSURANCE IN BANGLADESH

 Insurance began during British rule in India, about a century ago.

 From 1947 to 1971, approximately 49 companies operated in East Pakistan, offering life and
general insurance.

 These companies had diverse origins, including British, Australian, Indian, and local sources.

NATIONALIZATION OF INSURANCE

 In 1972, the government nationalized the insurance industry through Presidential Order No. 95.

 This order nationalized all companies except postal life insurance and foreign life insurers
(excluding Pakistani firms).

 Five corporations were formed:

1. Jatiya Bima Corporation - central oversight.

2. Teesta Bima Corporation - general insurance.

3. Karnaphuli Bima Corporation - general insurance.

4. Rupsa Jiban Bima Corporation - life insurance.

5. Surma Jiban Bima Corporation - life insurance.

 All existing companies merged into these corporations.

FORMATION OF TWO CORPORATIONS

 On May 14, 1973, to reduce administrative costs, the five corporations were replaced by two:

1. Sadharan Bima Corporation - for general insurance.

2. Jiban Bima Corporation - for life insurance.

 Postal life insurance and operations by foreign companies continued.

CURRENT SITUATION

 Insurance has struggled to grow due to limited policy options and public awareness.

 The market historically focused on conventional policies without considering customer needs.

 Challenges persist, but the government is working on improvements to enhance the industry's
growth.
BANGLADESH INSURANCE ACADEMY

 In 1972, the Government of Bangladesh nationalized all insurance companies to promote social
service and protect public interest.

 Before nationalization, most insurance was handled by companies from West Pakistan, with little
focus on education or training.

 This lack of training led to a shortage of skilled professionals in the insurance industry.

ESTABLISHMENT AND OBJECTIVES

 To address these needs, the Bangladesh Insurance Academy was established in November 1973
with the following objectives:

1. Promote professional education in insurance with degrees and certificates.

2. Conduct research on issues in the insurance industry.
3. Train employees of JBC, SBC, and other insurance organizations.
4. Encourage publishing research and literature about insurance.
5. Maintain connections with experts and similar institutions, both local and international.
6. Provide coaching for standard exams like ACII and CLU.
7. Award prizes for contributions to insurance education and the industry.