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Origin of insurance

• Insurance, as conceived as a method of

sharing of losses, embodying the principal of
co-op existed in early civilization.
• Aryan civilisation – loss of profits in crafts
industry was insured against by the viaalge co-
operatives in India.
• Contract safeguarding risk of transport by sea
or land were in existence under the auspices
of traders guilds & union
• Insurance – a technique providing protection
against the fortuious events for a consideration –
has origin in the “bottomry bonds” which were
issused by the Mediterranean merchants as early
as 4th century BC
• Ref to similar prctices in “Manab Dharma
Shastra”(code Manu) – rules for “Sea-form”
contracts which were observed by the traders
from Broach & Surat who set said in Indian –built
ships laden with Indian merchandise to Lanka,
Egypt & Greece.
1938 Introduction of a comprehensive Act called The Insurance Act,

1939 Insurance Rules were framed for effectuating the Insurance Act

1956 Government of India took over all life insurance companies

1968 The Insurance Act,1938 was amended to provide for social

control,minimum solvency margin and setting-up of Tariff
Advisory Committee [TAC]
1971 The General Insurance [Emergency Provisions] Act was passed
and Government of India took over management of general
Insurance business,pending nationalisation
1972 General Insurance Business [Nationalisation] Act was passed
1973 General Insurance Corpration of India [GIC] came into existence
as a Government Compny.A year later 107 insurers practicing
general insurance business were grouped and merged to from
four subsidiaries of GIC namely:
[1]National Insurance Company Ltd.
[2]The New India Assurance Company Ltd,
[3]The Oriental Fire and Insurance Company Ltd
[4]United India Fire And Insurance Company Ltd
1991 Introduction of Public Liability Insurance Act 1991 and Public
Insurance Rules 1991
1994 The Malhotar Committee [set up Govt. in 1993 under
chairmanship of Shri R.N. Maihotar,Governor of RIB,to examine
potential refroms that could be undertaken in the insurance
Sector and complement them with reforms initiated in other
sectors] submitted its report in January 1994 and recommended
establishment of a strong and effective insurance regulatory

1998 Insurance Ombudsman Redressal of Public Grievances Rules

1999 Based on the Malhotra Committee Rrport the Insurance Regulatory
and Development Authority [IRDA]Act, 1999 was passed in
December 1999 & The insurance Regulatory & Development
Authority(IRDA) was established to regulate, promote & insured
orderly growth of the insurance and reinsurance business.
2001 In addition to the existing Government insurance companise,private
sector companies were licenced by IRDA to conduct general
insurance business,
2002 General Insurance Business(Nationalisation)Amendment
Act,2002.The important amendment was that the subsidiaires GIC
were restructant as independent companies and GIC was converted
into a national reinsurer.
2003 This year witnessed the introduction of broker for the first time in
Indian insurance market.
Structure of Indian insurance market
• Govt. Insurance co.
• Pvt. Insurance co. - 26%
• Bokers
• Agents
• Loss Assessors – above 20000 license by IRDA
Non Life Insurance Segment