Professional Documents
Culture Documents
INTRODUCTION:
Insurance is a sharing device in which the losses of the few unfortunates is shared by the large
no. of persons exposed to the similar risks.
Insurance is a provision for the distribution of risks, i.e it is a financial provision against loss from
unavoidable disasters.
Insurance is a contractual arrangement whereby one party agrees to compensate another party for losses
or in other words it is a mechanism that reduces the consequences due to losses in respect of the assets.
Loss caused to Assets due to any peril is the risk that Asset is exposed.
Insurance does not protect the Assets but compensates the economic or financial loss.
Insurance covers tangible Assets and the concept can be extended to intangibles.
Contd..
CONTRIBUTION TO INDIAN ECONOMY:
Life Insurance is the only sector which garners long term savings.
Spread of financial services in rural areas and amongst socially less privileged.
pension sector.
Employment generation.
ORGIN OF INSURANCE:
Insurance appears simultaneously with the appearance of human society which includes food, clothing,
housing, education, medical care & security in the event of unemployment sickness etc.
Insurance in a modern money economy, in which insurance is part of the financial sphere.
Early methods of transferring or distributing risk were practiced by Chinese & Babylonian traders as
Savings out of life insurance funds are utilized in investments for growth of the country.
Looking to non-life side business, industry, trade would be seriously handicapped. In the absence of
It came into force with effect from 1st July 1939.
Life Insurance business of 154 Indian life offices, the Indian business 16 non-Indian insurers operating in
India and 75 provident Societies were taken over by the govt. of India.
LIC of India Act was passed by the parliament on 18.06.56 but it came into effect from 01.07.56.
2000 & the act provides for the establishment of the Authority.
Committee & it consists of not more than 25 members, excluding ex-officio members.
Contd..
The main feature of the Act is to provide simple, speedy and in expensive redressal to the consumer’s
grievances.
LIFE INSURANCE:
Life Insurance Corporation of India (LIC) was formed in September, 1956 by an Act of Parliament, viz.,
Life Insurance Corporation Act, 1956, with capital contribution from the Government of India.
Life Assurance is a contract between the policy owner and the insurer.
Life policies are legal contracts and the terms of the contract describe the limitations of the insured
events.
Life based contracts tend to fall into two major categories:
The General insurance business in India, on the other hand, can trace its roots to the Triton Insurance
Company Ltd., the first general insurance company established in the year 1850 in Calcutta by the British.
Contd..
Some of the important milestones in the general insurance business in India are:
1907: The Indian Mercantile Insurance Ltd. set up, the first company to transact all classes of general
insurance business.
1957: General Insurance Council, a wing of the Insurance Association of India, frames a code of conduct
for ensuring fair conduct and sound business practices.
1968: The Insurance Act amended to regulate investments and set minimum solvency margins and the
Tariff Advisory Committee set up.
1972: The General Insurance Business (Nationalisation) Act, 1972 nationalised the general insurance
business in India with effect from 1st January 1973.
Life Insurers ie Life Insurance Corporation of India (LIC) and General Insurers ie General
Insurance Corporation of India (GIC) GIC had four subsidiary companies.
With effect from Dec'2000, these subsidiaries have been de-linked from parent company and made as an
independent insurance companies. Oriental Insurance Company Limited, New India Assurance Company
Limited, National Insurance Company Limited and United India Insurance Company Limited.
The first batch of licenses were issued by the Insurance Regulatory and Development Authority (IRDA)
in 2001. As on June 2008 following are the players in the Indian Market.
The total no. of life insurers registered with the Authority had gone up to 22, while the total no. of