Insurance in India

 

Oriental Life Insurance Company, the first insurance company of India, was started by Europeans in Kolkata in 1818. The purpose of this company was to cater to the needs of European community. There was discrimination among the life of Europeans and that of Indians in the pre-independent era in India.  Higher premiums were charged for lives of Indians in comparison with the lives of foreigners. Later in 1870 Bombay Mutual Life Assurance Society, the first company for Indians was established who covered Indian lives at normal rates.

As soon as the twentieth century started, companies in this field started growing up like mushrooms. For the first time the insurance business was regulated in the year 1912 as the Life Insurance Companies Act, and the Provident Fund Act were passed in that year. According to the former Act, 1912, it became necessary that the premium rate tables and periodical valuations of companies should be certified by an actuary.
National Insurance Company Ltd., founded in 1906, is still in existence and doing business today. There were only two type of insurance viz. life i.e. LIC and general i.e. GIC.
General Insurance Company had four subsidiary companies. With effect from December 2000, these subsidiaries have been de-linked from parent company and made as independent companies: Oriental Insurance Company Limited, New India Assurance Company Limited, National Insurance Company Limited and United India Insurance Company Limited.
Insurance in India is still a growing sector with huge potential. This sector in India has gone through a number of phases and changes, particularly in the recent years when the Govt. of India in 1999 opened up the this sector by allowing private companies to solicit insurance and also allowing FDI up to 26%. Ever since, the Indian insurance sector is considered as a booming market with every other global company in this sector wanting to have a lion's share. Currently, the largest life insurance company in India is still owned by the government.

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