Understanding General Insurance

Understanding General Insurance

Insurance or in Dutch “Verzekering” which means coverage. In article 246 of the Commercial Code (KUHD) or Wetboek Van Koophandle, that insurance or coverage is an agreement with which an insurer binds himself to an insured person by accepting premium money to provide reimbursement to him for a loss, damage or loss of profit Expected that might be fined for an indeterminate event. This provision applies to all kinds of coverage, both within the Code of Commercial Law (KUHD) and those outside the Commercial Code (KUHD). (Understanding Insurance)

Definition of General Insurance – There are 3 (three) absolute elements that need to be considered in Article 246 Book of the Law on Trade Law, namely:

1. The existence of Interests
Interests are the subject of coverage and are subjective rights that may be lost or diminished by the occurrence of an uncertain or definite event. The element of interest is an absolute element that must be present in each of the coverage, either at the time of the closure of the coverage or at the time of the occurrence of the avemen.

2. The Uncertain Event
The element of unnecessary events in the life of the soul, that is death is an event that will surely happen, where that is not certain is “when” death will come true. Indeterminate events in a new life insurance exist if the insurer binds himself to pay, if death comes shorter than the period and the likelihood of the person’s life. Another case with the loss of interest because there is an event that in human experience can not be expected to happen. (Prof. Emmy Pangaribuan Simanjuntak., SH., Legal Cover, Liberty Publisher)

3.Adanya Losses – Understanding Insurance
Indemnification provided by the insurer can not really be said as a compensation, because the person receiving the indemnity does not receive a compensation that actually matches the loss. The compensation it receives is actually the result of determining a certain amount of money agreed upon by the parties. (Ibid, Page 9)

So the giving of money by the insurer is not purely a compensation, because the human soul can not be judged by money. The formulation of the definition of coverage in Article 246 of the Code of Commercial Law (KUHD) applies to all kinds of coverage, thereby applicable to the loss of liability as well as to the insured amount of money or life insurance.

Insurance Objectives – The purpose of Insurance or Coverage is as follows: (R adiks Purba, Understanding Insurance in Indonesia, Jakarta: Institute for Management Education and Development, 1995, page 56)

1. Destination of Indemnification
Compensation provided by the insurer to the insured if the insured suffered losses guaranteed by the policy, which aims to restore tertangung of bankruptcy so that he is still able to stand like before suffering losses.

So the insured only by may get compensation for the loss he suffered, meaning the insured should not seek profit (speculation) from the insurance. Likewise with the insurer, he should not seek profit on the interst he endured, except to obtain service fees or premiums.

2. Objectives of the insured
Are as follows :
To obtain a sense of tranquility and safe from the risks it faces over his business activities on his property.
To encourage the courage to tie a bigger business with greater risk too, because the right risk is taken by the insurer.
Purpose of the Insurer

The purpose of the insurer is divided into 2 (two), namely:
General purpose, namely: to gain profit in addition to providing employment, if the insurer bleach auxiliary workers.
Specific Objectives, are:
Relieve the risks faced by the customers or the insured by taking the risks faced.
Creating a sense of peace and security among customers, so more daring to tie a larger business.
Collect funds through premiums accumulated piecemeal from their customers so as to collect large funds that can be used to finance the distribution of Nations and the State.
Nature of Insurance

Insurance or coverage in Indonesia is actually derived from the law of Weight, both in terms of definition and adlam. Insurance as a form of law in Indonesia which is regulated in the Civil Code which has several properties as follows: (W irjono Projodikoro, Insurance Law in Indonesia jakarta, Inter Masa, 1994, page 10)

A. Nature of the Agreement
All insurance in the form of a certain agreement (Boyzondere Over Komst), which is a consensus between two or more parties in order to achieve a goal, where one or more promises to another or more (Article 1315 of the Civil Code).
B. Reciprocity (Wedding Kerige)
The insurance or coverage agreement is a reciprocal agreement (Wedding Kerige Overeen Komst), which means that each party promises to do something for the other party.

Guaranteed parties promise to pay premium money, the guarantor promised to pay some money (insurance money) to the guaranteed, if a particular event occurs.

C. Consensual Nature
Insurance or bailing approval is a consensual agreement, which is considered to be formed by an agreement between both parties (article 251 KURD).
D. Nature of Society
This type of Vereening insurance is a mutually guaranteed insurance formed between the guaranteed members. Such insurance is mentioned in article 286 of the Code of Commercial Law (KUHD) stating that the insurance is subject to its approval and its rules.

The association of insurance is provided for in Articles 1635, 1654 and 1655 of the Civil Code (KUHPer), which can be concluded that mutual insurance collateral is a “Zadelijk Lichaam” whose insurance artany in society can act as a person and can hold any legal relationships with people Lawfully.

The insurance association may act in and out, ie into an insurance agreement with the members as guaranteed, and out with other legal acts, this agreement is subject to the provisions of the Commercial Code (KUHD), either with the members themselves or with others .
E. Nature of Company
The insurance that governs the nature of the company is a premium insurance which is held between the guarantor and guaranteed parties, without legal bond between guaranteed with other people who also become guaranteed parties to the guarantor.

In this case the guarantor is usually not an individual, but a corporate entity, which takes into account the profit and loss in action.

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