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INSURANCE

SCENARIO
PRESENTED
BY
R . R . JOSHI
WORLD INSURANCE PREMIUM
• YEAR-1999 US$2324 bn
• YEAR-2000 US$2444 bn
• YEAR-2005 US$3000 bn plus
• LIFE INSURANCE—60%
• NON-LIFE INSURANCE---40%
• GLOBAL PENETRATION—8% OF GDP
• 91% OF GLOBAL PREMIUM COMES FROM-NORTH
AMERICA/WESTERN EUROPE/OCEANA/JAPAN
• HIGHEST PER CAPITA OUTLAY-LIFE—US$3165(JAPAN)
• HIGHEST PER CAPITA OUTLAY-NON LIFE—US$1571
(SWITZERLAND)
INSURANCE STATISTICS
• INSURANCE MARKET PENETRATION
• DEVELOPED COUNTRIES—9% OF GDP
• DEVELOPING COUNTRIES—2.5% OF GDP
• INDIA----3.4% OF GDP
• LIFE PREMIUM IN INDIA—Rs.80000 crs.
• NON LIFE PREMIUM IN INDIA—Rs.20000
crs.
• No. of NON LIFE COMPANIES=12
• No.of LIFE INSURANCE COMPANIES=15
HISTORICAL BACKGROUND
• 1818--EUROPEANS STARTED ORIENTAL LIFE
INSURANCE COMPANY IN CALCUTTA
• 1870—BOMBAY MUTUAL LIFE INSURANCE (FIRST
INDIAN INSURANCE COMPANY) WAS STARTED IN
BOMBAY
• 1874—SIR PHEROZSHAH MEHTA FORMED
ORIENTAL GOVT.SECURITY LIFE INSURANCE
COMPANY
• 1912—INDIAN INSURANCE ACT WAS PASSED.IT
WAS AMENDED IN 1938 AND AGAIN IN 1950
• 1956—LIC WAS FORMED THROUGH THE
NATIONALISATION AND MERGER OF 154
INDIAN,16 NON-INDIAN AND 75 P/F SOCIETIES
• 1972---GIC AND FOUR SUBSIDIARIES WERE
FORMED BY THE NATIONALISATION AND MERGER
OF 107 G/I COMPANIES
INSURANCE REFORM ROUTE
• 1993- R.N.MALHOTRA COMMITTEE
WAS CONSTITUTED.
• 1994- MALHOTRA COMMITTEE
SUBMITS REPORT ON FINANCIAL
REFORMS IN INSURANCE SECTOR.
• 1996- INTERIM IRDA WAS
CONSTITUTED.
• 1998- INSURANCE OMBUDSMAN WAS
SET UP.
• 1999- IRDA BILL PASSED BY
PARLIAMENT AND BECAME A
IMPORTANT PROVISIONS OF
IRDA ACT - 2000
• MINIMUM PAID-UP CAPITAL FOR
LIFE/GENERAL INSURANCE COMPANY – Rs.
100 crs.
• MINIMUM PAID-UP CAPITAL FOR
REINSURANCE COMPANY – Rs. 200 crs.
• EQUITY REQUIREMENTS- INDIAN PARTNER
=74% AND FOREIGN PARTNER=26%
(MAX).
• REGULATIONS FOR BROKERS, AGENTS,
TPAs, SURVEYORS AND POLICY HOLDERS
PROTECTION INTRODUCED.