Prince Sultan University

College of Business Administration

Second Semester 2011 – 2012

COURSE OUTLINE

Course Code : Fin 330 Pre-requisite: Fin 301

Course Title :Principles of Insurance Dr. Anas Al Qudah

Credit Hours : 3

Web : http://info.psu.edu.sa/psu/fnm/aalqudah/

I. Course Description:

This course covers the basic concepts in risk management and insurance to hedge against the risks faced by individuals, businesses and insurance industry. It further explains the principles of individual life insurance and other major insurance programs like automobile insurance, homeowners insurance and health insurance programs. Coverage is also given to the issue of regulation in insurance industry. The subject also deals with the nature and treatment of insurable risks, insurance contracts and related issues.

II. Course Objectives: Having read this course, the students are expected to have a better understanding of the basic insurance terminology and common insurance policies. They will be able to learn about the various dynamics of insurance industry, underwriting process and types of insurance e.g. life insurance, auto insurance etc. The course is also expected to enable them understand insurance as a method to hedge against the risk.

Knowledge
Explain the various insurance fundamentals as an instrument to analyze and understand the concepts and issues in insurance industry.
Cognitive Skills
To enable the students to have an improved understanding of mechanics in the areas of liability, life and health insurance based on application of theory to the real life situations.
Interpersonal Skills & Responsibility
Recognize the value judgment process and diversity of opinion regarding issues across individuals to develop and strengthen the mind-sets towards mutual understanding, tolerance and ideas sharing.
Draw upon the resiliency of human approach and adopt a productive and supportive attitude in solution of problems in various types of insurance.
Numerical & Communication Skills
Put forward individual opinions and observations about theoretical and contemporary issues the various fields of insurance. Learn about calculations of premiums and loss payments methods.

III. Course Contents

Topics / No. of Weeks / Contact Hours
A.  Risk its Treatment and Insurance Mechanism
-  Meaning, Basic Categories of Risk
-  Chance of Loss, Peril and Hazard
-  Types of Pure Risks
-  Methods of Handling Risk.
-  Insurance and its features
-  Requirements of an Insurable Risk
-  Insurance Distinguished from Other Transactions
-  Types of Insurance, Social Benefits and Costs of Insurance
(Ch_1 and 2) / Week 1-2 / 6 hours
B.  Risk Management
-  Meaning of Risk Management
-  Objectives of Risk Management
-  Risk Management Process
-  The Changing Scope of Risk Management
-  Insurance Market Dynamics
-  Loss Forecasting
-  Financial Analysis in Risk Management Decision Making
-  Use of Technology in Risk Management
(Ch_ 3 and 4) / Week 3-4 / 6 hours
C.  Legal Principles and Analysis of Insurance Contracts
-  Principles of Insurance
-  Requirements of an Insurance Contract
-  Legal Characteristics
-  Basic Parts of an Insurance Contract
-  Insured, Endorsements and Riders
-  Deductibles, Coinsurance , Other Insurance Provisions
(Ch_5 and 6) / Week 5-6 / 6 hours
D.  The Liability Risk
-  Basis of Legal Liability
-  Law of Negligence
-  Specific Applications of the Law of Negligence
(Ch_7) / Week 7 / 3 hours
E.  Fundamentals of Life Insurance
-  Premature Death, Financial Impact across families
-  Amount of Life Insurance to Own
-  Methods for Protection
-  Types of Life Insurance Policies
-  Variations of Whole Life Insurance
(Ch_16) / Week 11-12 / 6 hours
F.  Contract Provisions in Life Insurance
-  Life Insurance contractual Provisions
-  Dividend Options
-  Nonforfeiture Options
-  Settlement Options
-  Additional Life insurance benefits
(Ch_17) / Week 13 / 3 hours
G.  Life Insurance Purchase Decisions
-  Determining the cost of Life Insurance
-  Rate of return on saving component
-  Taxation for Life Insurance
-  Shopping for Life Insurance
-  Calculation of Premiums (Appendix)
(Ch_18) / Week 14-15 / 6 hours
H.  Individual Health Insurance Coverages
-  Individual Health Insurance Coverages
-  Major Medical Insurance
-  Long-Term Care Insurance
-  Disability Income Insurance
-  Individual Medical Expense Contractual Provisions
-  Shopping for Individual health Insurance.
(Ch_20)
I.  Takaful: An Alternative to Conventional Insurance.
-  Introduction.
-  The Need for Takaful Cover.
-  The Sharī´ah Basis of Takaful.
-  How the Takaful System Works.
-  Takaful and Conventional Insurance Compared.
-  Status and Potential of the Takaful Industry.
-  Takaful Challenges.
-  Appendix: Fatāwa (Juristic Opinions) on different Aspects of Insurance.
(Ch_16)

IV. Course Components

Component / Contact Hours
Lecture / 45 hours

V. Teaching Strategies

Domain / Strategy
Knowledge / Lectures and Theoretical Discussions
Cognitive Skills / Case analysis
Interpersonal Skills & Responsibility / Group presentations, Plenary discussions,
Numerical & Communication Skills / Individual presentations and assignments

VI. Course Requirements

-  Preliminary and Final Examinations

-  Class participation in discussions and attendance

-  Participation in individual and group activities

-  Oral and written tests (quizzes, take-home assignment)

VII. Student Assessment

A. Assessment Task

Domain / Assessment Task
Knowledge / Quizzes and class discussions
Cognitive Skills / Examinations – essay type, MCQs, case analysis
Interpersonal Skills & Responsibility / Group project and critical analyses
Numerical & Communication Skills / Written assignments and presentations

B. Schedule of Assessment

Assessment / Assessment Task / Week Due / Proportion of Final Assessment
1 / Quizzes / Week 3 and 8 / 10%
2 / Assignment ( individual ) / Week 9 / 5%
3 / Assignment (Group) / On-going / 5%
4 / Preliminary Examinations / Week 6 11 / 40%
5 / Final Examination / Week 16 / 40%

Attendance: A regular student should attend all classes and lab sessions. A student may be drop from a course and denied entrance to its final examination if his attendance is under limit determined by the University Council. This limit cannot be less than 75% of classes and lab sessions assigned to each course during semester. A student denied entrance to a final examination due to excessive absences will be considered to have failed that course. If you come to class after 4 minutes when the class starts or leave before the class adjourns you will be considered absent for that session.

Item* Weight Absences (times)

Class attendance 5% 0-2= 5

3-4 = 3

5-8= 1

8 and more = 0

13(hours) = Forced drop-out of the

*No make-up tests without a written medical excuse or documentation of extraordinary circumstances. For the latter, please notify me prior to the exam. Failure to follow these procedures may result in a zero on an unexcused exam.

VIII. Learning Resources

A.  Main Sources:

George E. Rejda (2011) Principles of Risk Management and Insurance, 11th Edition; Boston: Pearson/Addison-Wesley.

Mohammad Ayub (2007) Understanding Islamic Finance. John Wiley.

Other Resource Materials:

1.  Mark S. Dorfman (2008) Introduction to Risk Management and Insurance. Ninth Edition, Pearson International edition, Pearson Education,

ISBN-10: 0132242273|ISBN-13: 9780132242271.

2.  Scott E. Harrington and Gregory R. Niehaus; Risk Management and Insurance, International Edition (2004); Irwin/McGraw-Hill.

3.  William, C. Arthur, Jr. Michael, L. Smith and Peter, C. Young (1998) Risk Management and Insurance, 8th Edition; Boston, MA: Irwin/McGraw-Hill.

4.  Journal of Risk and Insurance

5.  Risk Management Insurance Review

6.  Risk analysis

Electronic Materials, Web Sites etc

1.  www.iii.org

2.  www.sra.com

3.  www.insure.com

4.  www.insurancejournal.com

5.  www.riskinstitute.com

B.  Facilities Required

1.  Lecture room

2.  Multimedia with PC

3.  Whiteboard

Note: Dear Students:

1.  You can achieve a very good grade in this course by studying the book on a regular basis, attending classes frequently and by revising always whatever is done in the class.

2.  You will get a DN, once your level of absence reaches 9.

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