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Saturday, April 9, 2016

History & Development Of Insurance In India - A Journey Down The Ages

In this article we look at the history and the different phases of development of Insurance Industry in India.

Insurance Industry in India has come a long way since the Oriental Insurance Company first began operating in India - way back in the year 1818. The Government of India now allows upto 49% Foreign Direct Investment (FDI) in Insurance.

The following is a tabular presentation of the significant developments in the Indian Insurance Industry till date:

Phase  Developments 
1818  The Oriental Insurance Company became the first company to start a life insurance business in India. 
1870  Enactment of the British Insurance Act, 1870 
1912  Enactment of Indian Life Assurance Companies Act, 1912 to regulate life insurance business in India. 
1928  The Indian Insurance Companies Act, 1928 gave powers to the Government to collect statistical information about both life and non-life business transacted in India by Indian and foreign investors. 
1938  Consolidation of earlier regulations and enactment of Insurance Act, 1938. It gave the Government control over the affairs of the insurers. A positive measure to protect interests of consumers. 
1950s  Nationalization of insurance business in India. Formation of the Life Insurance Corporation of India Ltd (LICI) in 1956 by consolidating over 200 insurance companies and provident societies. 
1957  Formation of the General Insurance Council. The council represented the collective interests of non-life insurance companies in India. 
1972  The General Insurance Business (Nationalization) Act, 1972 was passed. This led to the Nationalisation of all general insurance companies in India. This was followed by the formation of the General Insurance Corporation of India (GIC) on Nov, 22 1972. 
1993  Malhotra Committee recommends that the private sector and foreign companies (under joint venture with an Indian partner) be allowed to enter the Insurance industry. 
1999  Formation of Insurance Regulatory and Development Authority (IRDA) as an autonomous body to regulate and develop the insurance industry. IRDA was incorporated as a statutory body in April, 2000. 
2000  Insurance sector opened up in India to private players. Government also allows Foreign Direct Investment (FDI) in Insurance. 
2002  IRDA (Protection of Policyholders' Interests) Regulations 2002 issued with the objective of protecting the policyholders' interests. 

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