Final answer:
The insurance markets differ between India and other countries primarily in the role of government versus private firms in providing insurance, and in the regulatory environment. While India has a mix of public and private health insurance schemes, the U.S. relies heavily on private health insurance, despite government interventions to mitigate adverse selection. Car insurance is mandated in both India and many other countries.
Step-by-step explanation:
Differences Between Insurance in India and Other Countries
Insurance markets vary significantly between India and other countries, particularly in management, coverage, and regulations. In India, the government plays a key role in the insurance sector, with initiatives like Ayushman Bharat for health insurance, which is designed to cover the poor and vulnerable. On the other hand, in the United States, private firms are predominantly responsible for providing most health insurance. Moreover, government intervention is often necessary to address issues such as adverse selection and moral hazard in insurance markets globally.
It is common in many countries for car insurance to be legally required, and the same holds true for India. However, India's market also features a range of public and private sector insurance companies, offering a variety of policies with varying premiums and coverage. In contrast, countries like the United States have a more private sector-driven approach, where insurance firms must carefully manage the risks of providing coverage to avoid high-risk individuals unless mandated by law.
The United States also stands out as it doesn't have a widespread public health care system whereas Indian health insurance includes both private and governmental schemes. Another crucial distinction is that the Indian insurance industry is regulated by the Insurance Regulatory and Development Authority (IRDA), which imposes specific requirements on companies to ensure they are financially sound and able to pay out claims.