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Types of Insurance
History of Indian Insurance Regulator Acts
5. Regulations for Indian Insurers
7. Conclusion 8. References
Insurance may be described as a social device to reduce or eliminate risk of loss to life and property. Under the plan of insurance, a large number of people associate themselves by sharing risks attached to individuals. The risks, which can be insured against, include fire, the perils of sea, death and accidents and burglary. Any risk contingent upon these may be insured against at a premium commensurate with the risk involved. Thus collective bearing of risk is insurance.
TYPES OF INSURANCE
Insurance industry in India is broadly classified as Life Insurance:- policies protect individuals against the risk of life. Life 100 Insurance policies not only protects the insured’s family against his death but also provides a good means to avail tax benefit, avail loans from banks and acts, as a good saving tool to meet future needs. General Insurance:- on the other hand protects the property and casualty by covering losses from disasters and accidents thereby protecting from property damage and liability, providing the means for victims to resume their lives and businesses and contribute to the economy.
The various types of insurance available are – 1. Auto Insurance Two Wheeler Insurance Car Insurance Commercial Vehicle Insurance 2. Commercial Insurance Agriculture Insurance Fire Insurance Industrial Insurance Marine Insurance Shop Insurance 3. Home Insurance 4. Life Insurance Accident Insurance a. NRI Accident Insurance b. Personal Accident Insurance Health Care Insurance c. Medical Insurance d. Critical Illness Insurance Travel Insurance
HISTORY OF INDIAN INSURANCE
The business of life insurance in India in its existing form started in India in the year 1818 with the establishment of the Oriental Life Insurance Company in Calcutta. Some of the important milestones in the life insurance business in India are: 1912: The Indian Life Assurance Companies Act enacted as the first statute to regulate the life insurance business. 1928: The Indian Insurance Companies Act enacted to enable the government to collect statistical information about both life and non-life insurance businesses. 1938: Earlier legislation consolidated and amended to by the Insurance Act with the objective of protecting the interests of the insuring public. 1956: 245 Indian and foreign insurers and provident societies taken over by the central government and nationalized. LIC formed by an Act of Parliament, viz. LIC Act, 1956, with a capital contribution of Rs.5crore from the Government of India. 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. 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 (Nationalization) Act nationalized the general insurance business in India with effect from 1st January 1973. 107 insurers amalgamated and grouped into four companies viz. the National Insurance Company Ltd., the New India Assurance Company Ltd., the Oriental Insurance Company Ltd. and the United India Insurance Company Ltd. GIC incorporated as a company.
The insurance sector is governed by a number of acts The Insurance Act, 1938 The Insurance Act, 1938 was the first legislation governing all forms of insurance to provide strict state control over insurance business. Life Insurance Corporation Act, 1956
Even though the first legislation was enacted in 1938, it was only in 19 January 1956, that life insurance in India was completely nationalized, through a Government ordinance. The Life Insurance Corporation Act, 1956 effective from 1.9.1956 was enacted in the same year to, form Life Insurance Corporation after nationalization of the 245 companies (both Indian and foreign origin) into one entity. General Insurance Business (Nationalization) Act, 1972 The General Insurance Business (Nationalization) Act 1972 was enacted to nationalize the 100 odd general insurance companies and subsequently merging them into four companies. All the companies were amalgamated into National Insurance, New India Assurance, Oriental Insurance, United India Insurance.
Insurance Regulatory and Development Authority Act, 1999
Till 1999, there were not any private insurance companies in Indian insurance sector. The Govt. of India, then introduced the Insurance Regulatory and Development Authority Act in 1999, thereby deregulating the insurance sector and allowing private companies into the insurance. Further, foreign investment was also allowed and capped at 26% holding in the Indian insurance companies.
REGULATIONS FOR INDIAN INSURERS
To protect the interests of holder of insurance policy and to regulate, promote and ensure orderly growth of the insurance industry Insurance Regulatory and Development Authority (IRDA) was established. Under the new dispensation Indian insurance companies
in private sector were permitted to operate in India with the following conditions: Company is formed and registered under the Companies Act, 1956 The aggregate holdings of equity shares by a foreign company, either by itself or through its subsidiary companies or its nominees, do not exceed 26%, paid up equity capital of such Indian insurance company
The company's sole purpose is to carry on life insurance business or general insurance business or reinsurance business.
The minimum paid up equity capital for life or general insurance business is 100 crores The minimum paid up equity capital for carrying on reinsurance business has been prescribed as 200 crores
Some of the life insurance companies and general insurance companies including their web address is given below:Life Insurers Public Sector
Life Insurance Corporation of India Allianz Bajaj Life Insurance Company Limited Birla Sun-Life Insurance Company Limited HDFC Standard Life Insurance Co. Limited ICICI Prudential Life Insurance Co. Limited ING Vysya Life Insurance Company Limited Max New York Life Insurance Co. Limited MetLife Insurance Company Limited Om Kotak Mahindra Life Insurance Co. Ltd. SBI Life Insurance Company Limited TATA AIG Life Insurance Company Limited www.licindia.com
Websites Private Sector
www.allianzbajaj.co.in www.birlasunlife.com www.hdfcinsurance.com www.iciciprulife.com www.ingvysayalife.com www.maxnewyorklife.com www.metlife.com www.omkotakmahnidra.com www.sbilife.co.in www.tata-aig.com
General Insurers Public Sector
National Insurance Company Limited New India Assurance Company Limited Oriental Insurance Company Limited United India Insurance Company Limited Bajaj Allianz General Insurance Co. Limited ICICI Lombard General Insurance Co. Ltd. IFFCO-Tokio General Insurance Co. Ltd. Reliance General Insurance Co. Limited Royal Sundaram Alliance Insurance Co. Ltd. TATA AIG General Insurance Co. Limited Cholamandalam General Insurance Co. Ltd. Export Credit Guarantee Corporation
www.nationalinsuranceindia.com www.niacl.com www.orientalinsurance.nic.in www.uiic.co.in www.bajajallianz.co.in www.icicilombard.com www.itgi.co.in www.ril.com www.royalsun.com www.tata-aig.com www.cholainsurance.com www.ecgcindia.com
General Insurance Corporation of India
The Indian insurance industry has traveled a long way ever since businesses were regulated tightly & concentrated by few insurers of the public sector. The insurance industry is a key component of the financial infrastructure of an economy, and its viability and strengths have far reaching consequences for not only its money and capital markets,' but also for its real sector. The launch of new developments in the insurance industry saw many new international insurers entering the market. It also gave way to propagation of innovative goods & channels for distribution & the supervisory values rising. Indian per capita revenue is likely to grow up to more than 6% in coming 10 years & with developing awareness, the Indian insurance rate is estimated to rise at a striking rate in India. Till recently, only 20% of the Indian population is covered by different schemes of life insurance. It is also seen that the healthcare penetration rate as well as schemes of non-life insurance in Indian insurance market are well under the worldwide levels. These aspects show vast potential of the Indian insurance industry.