The oldest existing insurance company in India is the National Insurance Company , which was founded in 1906, and is still in business.
The largest life-insurance company in India, Life Insurance Corporation of India is still owned by the government and carries a sovereign guarantee for all insurance policies issued by it.
The Government of India issued an Ordinance on 19 January 1956 nationalizing the Life Insurance sector and Life Insurance Corporation came into existence in the same year.
The General Insurance Corporation of India was incorporated as a company in 1971 and it commence business on 1 January 1973.
On 16th September 2013, IRDA launched ‘Insurance Repository’ services in India. It is a unique concept and first to be introduced in India. This system enables policy holders to buy and keep insurance policies in dematerialized or electronic form. Policy holders can hold all his insurance policies in an electronic format in a single account called electronic insurance account (eIA). Insurance Regulatory and Development Authority has issued licenses to five entities to act as Insurance Repository:
NSDL Database Management Limited, Central Insurance Repository Limited ( CIRL ), SHCIL Projects Limited, Karvy Insurance repository Limited, CAMS Repository Services Limited
The Insurance Act of 1938 was the first legislation governing all forms of insurance to provide strict state control over insurance business.Life insurance in India was completely nationalized on 19 January 1956, through the Life Insurance Corporation Act. All 245 insurance companies operating then in the country were merged into one entity, the Life Insurance Corporation of India.
The government then introduced the Insurance Regulatory and Development Authority Act in 1999, thereby de-regulating the insurance sector and allowing private companies. Furthermore, foreign investment was also allowed and capped at 26% holding in the Indian insurance companies.(Current 49%).
The primary regulator for insurance in India is the Insurance Regulatory and Development Authority (IRDA) which was established in 1999 under the government legislation called the Insurance Regulatory and Development Authority Act, 1999.
Life Insurance Corporation –
Life Insurance in India was nationalised by incorporating Life Insurance Corporation (LIC) in 1956. All private life insurance companies at that time were taken over by LIC.
In 1993, the Government of India appointed RN Malhotra Committee to lay down a road map for privatisation of the life insurance sector.
Types of Life Insurance in India
Term Insurance Policies –
The policy holder does not get any monetary benefit at the end of the policy term except for the tax benefits he or she can choose to avail of throughout the tenure of the policy. In the event of death of the policy holder, the sum assured is paid to his or her beneficiaries.
Money back policies are basically an extension of endowment plans wherein the policy holder receives a fixed amount at specific intervals throughout the duration of the policy. In the event of the unfortunate death of the policy holder, the full sum assured is paid to the beneficiaries.
Unit-linked Investment Policies (ULIP)
Unit linked insurance policies again belong to the insurance-cum-investment category where one gets to enjoy the benefits of both insurance and investment. While a part of the monthly premium pay-out goes towards the insurance cover, the remaining money is invested in various types of funds that invest in debt and equity instruments. ULIP plans are more or less similar in comparison to mutual funds except for the difference that ULIPs offer the additional benefit of insurance.
Pension policies let individuals determine a fixed stream of income post retirement.