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
➢ 1907: The Indian Mercantile Insurance Ltd. was set up which was the first company of its type to transact all general 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.
➢ 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.
The history of general insurance business in India can be traced... [continues]
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