ns ran e in ndia 13.3
This company was responsible to look after sector insurance companies to enter the
the National Agriculture Insurance Scheme sector (the government did it in 1999
(NAIS) which was launched in 1999. Since passing the IRDA Act).
January 2016, the company is looking after the (ii) Restructuring the LIC and the GIC and
newly launched PMFBY (Prime Minister Fasal cutting down the government’s holding
Bima Yojana)3 which subsumed the existing agri- in them to 50 per cent (no follow up
insurance schemes—the NAIS and the Modified still, but the private insurance companies
NAIS (of 2010). Till the AICIL was not set up, the demanding it anxiously. The NDA
agri-insurance responsibility of the government government had taken steps in this area,
was being looked after by the General Insurance but the UPA government has no such
Corporation (GIC). plans.) Late 2012, the government started
AICIL is jointly promoted by public sector sale of the LIC shares but to public sector
insurance companies and development financial undertakings—seen as a welcome move.
institutions—majority shares owned by the GIC (iii) Delinking GIC and its four subsidiaries
(35 per cent) and NABARD (30 per cent) while (which was done in 2000).
the four public sector general insurance companies (iv) Discarding the system of licensing of
own 8.75 per cent each in it. surveyors by the controller of Insurance.
(v) Restructuring the Tariff Advisory
Public sector insurAnce comPAnies Committee.
At present, there are 6 public sector insurance (vi) Setting up a regulatory anthority for the
companies in India. Out of it one deals in the insurance industry (the IRDA set up in
life segment (LIC); four are involved in the 2000).
non-life (general) insurance segment; and one
is the dedicated agri-insurer. Other than these irDA
companies, there is one re-insurance company, the The Insurance Regulatory and Development
GIC Re (wholly owned by the GoI). Authority (IRDA) was set up in 2000 (the Act
was passed in 1999) with one chairman and five
insurance reforms members (two as full time and three as part-
Under the process of economic reforms an time members) appointed and nominated by the
Insurance Reforms Committee (IRC) was set up government. The authority is responsible for the
in April 1993 under the chairmanship of the ex- regulation, development and supervision of the
RBI Governor R. N. Malhotra. The committee Indian insurance industry.
handed over its report (January 1994) with the As per the latest Annual Report 2014–15
following major suggestions:4 of the IRDA, presently, there are 52 insurance
companies in India of which 24 are involved in life
(i) Decontrolling insurance sector, i.e.,
insurance business while other 28 companies are
allowing Indian as well as foreign private
involved in non-life (general) segment. Insurance
3. Ministry of Finance, Union Budget 2016–17 (New industry of India is presently regulated under the
Delhi: Government of India, 2016); and Ministry of Insurance Laws (Amendment) Act, 2015. The Act
Finance, Economic Survey 2015-16 (New Delhi:
Government of India, 2016). increased the permissible limit of foreign direct
4. R. N. Malhotra headed Insurance Reforms Committee, investment (FDI) from 26 to 49 per cent in the
Government of India, N. Delhi, January 1994. insurance business. The FDI up to 49 per cent is