Professional Documents
Culture Documents
Life Insurance Corporation of India (LIC) is the largest life insurance company in
India and also the country's largest investor.; it is fully owned by the Government of
India.
It also funds close to 24.6% of the Indian Government's expenses. It was founded in
1956.
Headquartered in Mumbai, which is considered the financial capital of India, the Life
Insurance Corporation of India currently has 8 zonal Offices and 101 divisional
offices located in different parts of India, at least 2048 branches located in different
cities and towns of India along with satellite Offices attached to about some 50
Branches, and has a network of around one million and 200 thousand agents [1] for
soliciting life insurance business from the public,
History
The Oriental Life Insurance Company, the first corporate entity in India offering life
insurance cover was established in Calcutta in 1818 by Bipin Behari Dasgupta and
others. Europeans in India were its primary target market, and it charged Indians
heftier premiums.
The Bombay Mutual Life Assurance Society, formed in 1870, was the first native
insurance provider.
Other insurance companies established in the pre-independence era included
The first 150 years were marked mostly by turbulent economic conditions.
It witnessed, India's First War of Independence, adverse effects of the World War I
and World War II on the economy of India, and in between them the period of world
wide economic crises triggered by the Great depression.
The first half of the 20th century also saw a heightened struggle for India's
independence.
The aggregate effect of these events led to a high rate of bankruptcies and
liquidation of life insurance companies in India.
This had adversely affected the faith of the general public in the utility of obtaining
life cover.
The LIFE INSURANCE Act and the Provident Fund Act were passed in 1912,
providing the first regulatory mechanisms in the Life Insurance industry. The Indian
Insurance Companies Act of 1928 authorized the government to obtain statistical
information from companies operating in both life and non-life insurance areas. The
subsequent Insurance Act of 1938 brought stricter state control over an industry that
had seen several financially unsound ventures fail. A bill was also introduced in the
Legislative Assembly in 1944 to nationalize the insurance industry.
Nationalization
In 1955, parliamentarian Feroze Gandhi raised the matter of insurance fraud by
owner's of private insurance companies. In the ensuing investigations, one of India's
wealthiest businessmen, Ram Kishan Dalmia, owner of the Times of India
newspaper, was sent to prison for two months. Eventually, the Parliament of India
passed the Life Insurance of India Act on 1956-06-19, and the Life Insurance
Corporation of India was created on 1956-09-01, by consolidating the life insurance
business of 245 private life insurers and other entities offering life insurance
services. Nationalization of the life insurance business in India was a result of the
Industrial Policy Resolution of 1956, which had created a policy framework for
extending state control over at least seventeen sectors of the economy, including the
life insurance. The company began operations with 5 zonal offices, 33 divisional
offices and 212 branch offices.
Over its existence of around 50 years, Life Insurance Corporation of India, which
commanded a monopoly of soliciting and selling life insurance in India, created huge
surpluses, and contributed around 7 % of India's GDP in 2006.
The Corporation, which started its business with around 300 offices, 5.6 million
policies and a corpus of INR 459 million, has grown to 2,048 offices servicing around
180 million policies and a corpus of over INR 3.4 trillion.
The organization now comprises 2048 branches, 100 divisional offices and 8 zonal
offices, and employs over 1 million agents. It also operates in 12 other countries,
primarily to cater to the needs of Non Resident Indians.
With the change in the India's economic philosophy from the early 1990s, and the
subsequent relaxation of state control over several sectors of the economy, the
monopolistic position of the Life Insurance Corporation of India was diluted, and it
has had to compete with a number of other corporate entities, Indian as well as
transnational Life Insurance brands.
In the financial year 2006-07 Life Insurance Corporation of India's number of policy
holders are said to have crossed a whopping 200 million (fourth in terms of
population of the countries of the world)
GIC
Insurance is not the sale of products, but servicing customers.
It is a system, by which the losses suffered by a few are
spread over many,Exposed to similar risks.
Insurance is a protection against financial loss arising:on the
happening of an unexpected event. Insurance companies
collect premiumsto provide for this protection.
A loss is paid out of the premiums collected fromthe insuring
public and the Insurance Companies act as trustees to the
amountcollected.
The very fundamental principle of spreading of the risk is
actuallypracticed by the insurance companies by reinsuring
the risks that they haveinsured.
The opening up of the Insurance Sector to Private Companies,
has madeavailable more products and world class service
to Indian Customer.
This project has been made with an objective to give an
insight into various factsof General Insurance sector in
India.An attempt has been made to explain the apex body of
General Insurance. i.e.
General Insurance Corporation of India,
its structure, products and subsidiaries.
Also the review of latest entrants into insurance sector viz
private players likeTATA AIG General Insurance Company,
Reliance General Insurance Companylimited, Bajaj Allianz
General Insurance Company, IFFCO Tokio GeneralInsurance
Company, Royal Sundaram General Insurance Company
limited andICICI Lombard General Insurance Company have
been described in brief, Due tothe growth in the technological
sector of the country, the insurance companieshave started
July 2005 is been prepared and facts of the case are being
listed along with the effect of the particular situation on
theGeneral Insurance Companies is been justified.
GENERAL INSURANCE
With the opening up of the insurance industry to the private sector, the need for
a strong,independent and autonomous Insurance Regulatory Authority was felt.
As the enacting of legislation would have taken time, the then Government
constituted through aGovernment resolution an Interim Insurance Regulatory
Authority pending the enactmentof a comprehensive legislation.
The Insurance Regulatory and Development Authority Act, 1999 is an act to
provide forthe establishment of an Authority to protect the interests of holders
of insurance policies,to regulate, promote and ensure orderly growth of the
insurance industry and for mattersconnected therewith or incidental thereto and
further to amend the Insurance Act, 1938,the Life Insurance Corporation Act,
1956 and the General insurance Business(Nationalization) Act, 1972 to end the
monopoly of the Life Insurance Corporation of India (for life insurance
business) and General Insurance Corporation and its subsidiaries(for general
insurance business)