Insurance Sector

Dear all, in view of upcoming insurance exams, were are presenting you a brief write-up on insurance sector and companies in this sector.

In India, insurance has a deep-rooted history. It finds mention in the writings of Manu ( Manusmrithi), Yagnavalkya (Dharmasastra) and Kautilya ( Arthasastra ). The writings talk in terms of pooling of resources that could be re-distributed in times of calamities such as fire, floods, epidemics and famine. This was probably a pre-cursor to modern day insurance. Ancient Indian history has preserved the earliest traces of insurance in the form of marine trade loans and carriers’ contracts. Insurance in India has evolved over time heavily drawing from other countries, England in particular.

 Brief history of insurance sector 

The insurance sector in India has completed all the facets of competition – from being an open competitive market to being nationalized and then getting back to the form of a liberalized market once again. The history of the insurance sector in India reveals that it has witnessed complete dynamism for the past two centuries approximately.With the establishment of the Oriental Life Insurance Company in Kolkata, the business of Indian life insurance started in the year 1818. 

Important milestones in the Indian life insurance business
1912: The Indian Life Assurance Companies Act came into force for regulating the life insurance business. 
1928: The Indian Insurance Companies Act was enacted for enabling the government to collect statistical information on both life and non-life insurance businesses.
1938: The earlier legislation consolidated the Insurance Act with the aim of safeguarding the interests of the insuring public.
1956: 245 Indian and foreign insurers and provident societies were taken over by the central government and they got nationalized. LIC was formed by an Act of Parliament, viz. LIC Act, 1956. It started off with a capital of Rs. 5 crore and that too from the Government of India. The history of general insurance business in India can be traced back to Triton Insurance Company Ltd. (the first general insurance company) which was formed in the year 1850 in Kolkata by the British. 

Important milestones in the Indian general insurance business
1907: The Indian Mercantile Insurance Ltd. was set up which was the first company of its type to transact all general insurance business.
1957: General Insurance Council, an arm of the Insurance Association of India, framed a code of conduct for guaranteeing fair conduct and sound business patterns.
1968: The Insurance Act improved for regulating investments and set minimal solvency levels and the Tariff Advisory Committee was set up.
1972: The General Insurance Business (Nationalization) Act, 1972 nationalized the general insurance business in India. It was with effect from 1st January 1973.
107 insurers integrated 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 was incorporated as a company.

Insurance Repository in India
The Insurance Repository in India is a database of insurance policies. It allows policy holders to make revisions to a policy with speed and accuracy. It launched on 16 September 2013. It is the world’s first of its kind. India’s Insurance Regulatory and Development Authority has issued licenses to five entities to act as Insurance Repositories:
  • Central Insurance Repository Limited (CIRL)
  • SHCIL Projects Limited
  • Karvy Insurance repository Limited
  • NSDL Database Management Limited
  • CAMS Repository Services Limited

E-Insurance Account
E-Insurance account is the facility available to the policy holder to keep all of their insurance policies in a demat form by opening an account with an insurance repository, it`s a one point of contact for all of the insurance contracts, if any change is needed in any of the personal information then instead of going to an each insurer and submitting the request separately to each one of them, here through an e-insurance account, the policy holder can submit a request to an insurance repository for that change and it will be applicable for all the policies the policyholder posses.It works in a similar manner like we keep our securities-shares, mutual funds in an electronic form.

What type of an Insurance Policies can be kept in an E Insurance Account:

1.All of the below mention policies can be kept in an electronic form provided these have been issued   by the companies registered with Insurance Regulatory Development Authority(IRDA)
2.All the Life insurance policies including individual or group.
3. All the general insurance policies including individual or group.
4. Any other form of an insurance policy approved by an IRDA. 

Public Sector Insurance Companies

Life Insurance Corporation of India 
General Insurance Corporation of India 
National Insurance Co. Ltd. 
Oriental Insurance Co. Ltd. 
New India Assurance Co. Ltd. 
United India Insurance Co. Ltd. 

Life Insurance Corporation of India

Headoffice- Mumbai
Chairman – Shri S. K. Roy 
The Parliament of India enacted the Life Insurance Corporation Act on the 19th of June 1956, and the Life Insurance Corporation of Indian was established on 1st September, 1956, with the objective of spreading life insurance much more widely and in particular to the rural areas with a view to reach all insurable persons in the country, providing them adequate financial cover at a reasonable cost

General Insurance Corporation

Headoffice – Mumbai
Chairman – A K Roy
General Insurance Corporation of India (GIC Re) was approved as ‘Indian Reinsurer’ on 3rd November,2000. As an Indian reinsurer GIC has been giving reinsurance support to four public sector & other private general insurance companies.

The New India Assurance Co. Ltd.

Headoffice- Mumbai
Chairman – G.Srinivasan 
It is the “largest general insurance company of India on the basis of gross premium collection inclusive of foreign operations”.  It was founded by Sir Dorabji Tata in 1919, and was nationalised in 1973.

National Insurance Company Limited (NICL)

Headoffice- Kolkata
Chairman – Shri A.V. Girija Kumar
It is a state owned general insurance company in India. The company  was established in 1906 and nationalised in 1972. It’s portofolio consists of a multitude of general insurance policies, offered to a wide arena of clients encompassing different sectors of the economy.[3] Apart from being leading insurance provider in India, NICL also serves Nepal.

United India Insurance Company Limited 

Headoffice – Chennai
Chairman – Milind Kharat
under Department of Financial Services, Ministry of Finance (India), is a public sector General Insurance Company of India and one of the top General Insurers in Asia. With the net worth of Rs 5407 crores and profit of Rs 528 crores, the company has collected gross premium of Rs 9709 crores as of in the financial year 2013-14. The company has more than seven decades of experience in Non-life Insurance business and was formed to its present form by the merger of 22 companies, consequent to the nationalisation of General Insurance companies in India.

Oriental Insurance Company Ltd

Headoffice – New Delhi
Chairman – Dr. A.K.Saxena
 It was established on September 12, 1947 in the then Bombay. It was a completely owned subsidiary of Oriental Government Security Life Assurance Company Ltd. It was created with the mandate of executing its parent body’s general insurance operations.

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