Life Insurance

• In 1912, the Life Insurance Companies Act and the Provident Fund Act were passed to regulate the insurance business

• The Life Insurance Companies Act 1912 made it compulsory that premium - rate tables and periodical  valuation of companies be certified by an actuary

• The Insurance Act 1938 was the first legislation enacted to regulate the conduct of insurance companies in India.

• Life Insurance business was nationalized on 1st September 1956 by merging 170 insurance companies and 75  Provident Fund  Societies and Life Insurance corporation of  India (LIC) was formed

• Non-Life Insurance business was nationalized in 1972  by amalgamating 106 insurers, General Insurance corporation of India (GIC) and its 4 subsidiaries was formed.

• Malhotra Committe and IRDA:
• Malhotra Committe - setup in 1993 to explore and recommend changes for development & it submitted the report in 1994
• IRDA - Insurance regulatory and  Development Authority was set up by an IRDA Act 1999as a statutory regulatory body for both life and non life.

• Life Insurance Industry Today:
• Life Insurance corporation of India(LIC) is a public sector company
• There are 23 life insurance companies in the private sector
• The postal department, under the Government of India, also transacts life insurance business via Postal Life Insurance, but is exempt from the purview of the regulator

• Insurance
•  Process of sharing the losses of few by many
• It is a contract between insurance company and the policy holder
• It is a risk transfer  mechanism