range of 34 activities are financed under various sectors.
Insurance, being an integral part of the financial sector, plays a significant role in India’s
economy. Apart from protection against mortality, property and casualty risks and providing a
safety net for individuals and enterprises in urban and rural areas, this sector encourages savings
and provides long-term funds for infrastructure development and other long gestation projects of
the country. The development of the insurance sector is necessary to support its continued
economic transformation. The public sector insurance companies operating in the sector are: 1.
Life Insurance Corporation; 2 National Insurance Company Limited; 3. Oriental Insurance
Company Limited; 4. United India Insurance Company Limited; 5. New India Assurance
Company Limited; 6. General Insurance Corporation of India Limited and 7 Agriculture
Insurance Company of India Limited.
Life Insurance Corporation of India
Life Insurance Corporation of India (LIC) was established by an Act of Parliament called
the Life Insurance Corporation of India Act, 1956. It is governed by the Insurance Act, 1938,
LIC Act, 1956, LIC Regulations, 1959 and Insurance Regulatory and Development Authority
Act, 1999. As on March 31, 2016, LIC has 08 zonal offices, 113 divisional offices, 2,048 branch
offices, 73 customer zones, 1,401 satellite offices and 1,240 mini offices in the country. LIC is
present in 14 countries abroad through branch offices/joint ventures companies and wholly
Relevant Website: www.licindia.in
Reforms in the Insurance Sector
The insurance sector was opened for private participation with the enactment of the
Insurance Regulatory and Development Authority Act, 1999. The Insurance Regulatory and
Development Authority of India (IRDAI) is functioning from its head office in Hyderabad,
Telangana. The core functions of the authority include: (i) licencing of insurers and insurance
intermediaries; (ii) financial and regulatory supervision; (iii) regulation of premium rates; and
(iv) protection of the interests of the policyholders: With a view to facilitate development of the
insurance sector, the authority has issued regulations on protection of the interests of policy
holders: obligations towards the rural and social sectors; micro insurance and licensing of agents,
corporate agents, brokers, surveyors and third party administrators. IRDAI has also laid down the
regulatory framework for registration of insurance companies, maintenance of solvency margin,
investments and financial reporting requirements. Since the opening up this sector for private and
foreign investment, the number of participants in the insurance industry has gone up from seven
insurers to sixty eight insurers as on 31st March 2018 operating in the life, general, and
reinsurance segments (including specialized insurers, namely Export Credit Guarantee
Corporation and Agricultural Insurance Company (AIC).
One of the key reforms undertaken in this sector is the passing of Insurance Laws
(Amendment) Act, 2015 which paved the way for major reform related amendments in the
Insurance Act, 1938, the General Insurance Business (Nationalization) Act, 1972 and the
Insurance Regulatory and Development Authority (IRDA) Act, 1999. The Insurance Laws
(Amendment) Act 2015 seamlessly replaced the Insurance Laws (Amendment) Ordinance, 2014.