Life insurance is an important saving in an individual's long-term financial plan today! It is desired to secure the financial well-being of a family in the event of a policyholder's unexpected death. Life insurance has evolved over the years, providing a range of products with flexible features digitally. However, the deep routes can be traced to a strong history that shared major developments in the last few centuries. Hence, the history of insurance in India is sought after for its ever-evolving standards. Here is a detail about the history of insurance for your reference.

 

History Of Life Insurance in India

 

 

The history of insurance in India can be traced back to the exceptional ancient works such as Manusmrithi, Dharmasastra and Arthasastra. They have discussed the importance of collecting financial resources to distribute them among the people during distressing situations such as natural calamities like floods, famine, etc. Insurance in modern times has evolved dynamically in such thoughts and is based on several principles that were followed in different countries.,

 

• 1818 - 1870 - The life insurance company was first established in the city of Calcutta in the year 1818 and referred to as the Oriental Life Insurance Company. However, it could not succeed in its operations, which resulted in its closure in 1834. Further, in the Madras Presidency, Madras Equitable started the life insurance business in 1829.

 

• 1870 - 1912 - In 1870, the British Insurance Act(BIC) was enacted, and it paved the way for the establishment of companies in the Bombay Presidency, such as the Bombay Mutual, Empire Of India and Oriental. Many other foreign insurance companies and their offices were introduced in India, such as Royal Insurance, Albert Life Insurance, Liverpool, etc. The Indian companies were trying to establish their stand in life insurance policies, facing hard competition.

 

• 1912 - 1938 - The Indian Life Assurance Companies Act, 1912, was introduced to regulate the life business in India. And the Government of India took the initiative to publish the business and returns of the life insurance companies in India.
  
  In 1928, the Government enacted the Indian Insurance Companies Act to analyse the operations of life insurance as well as non-life insurance set up by foreign and Indian insurers and some of the prudent insurance societies. It was a major step in the history of insurance in India. Further, in 1938, the previous legislation was amended as the Insurance Act 1938, with the necessary provisions to regulate and control the functions of insurance providers in India.

 

• 1938 - 1956 - Many new insurance companies started doing business in India. The competition was increasing, which later also resulted in certain defaulting business activities. Therefore, the Indian Government decided to nationalise the insurance business sector by introducing the LIC (Life Insurance Corporation) of India. It included 154 Indian insurance providers, 75 provident societies and 16 Non - Indian insurance providers. Later, private players came into existence in the 90s.

 

History of General Insurance In India

 

The history of general insurance can be traced from the time when the Industrial Revolution affected the livelihood and businesses of various communities globally. Here is a detail about the evolution of general insurance.

 

• 1850 - Introduction of Triton Insurance Company Limited by the British in Calcutta.
• 1907 - Establishment of Indian Mercantile Insurance Limited worked on different types of general insurance.
• 1957 - General Insurance Council was established as a department of the Insurance Association of India. It introduced the rules of conduct to ensure fair business operations in India.
• 1968 - The Insurance Act was modified, and the Tariff Advisory Committee was introduced to regulate any investments and also set some minimum solvency margins.
• 1972 - The General Insurance Business(Nationalisation) Act was passed. It further led to the nationalisation of the general insurance business on 1st January 1973, which resulted in the merging of 107 insurers. The four companies that evolved were Oriental Insurance Company Limited, National Insurance Company Limited, United India Insurance Company Limited, and New India Assurance Company Limited. The General Insurance Corporation(GIC) of India was established later in 1973 to take ownership of these companies. The insurance business reached different stages of development until 1993 when certain reforms were planned for further growth and development.
• 1993 - The Government of India organised a committee to discuss and propose reforms and recommendations in the insurance industry. It was headed by RN Malhotra, former Governor of RBI.
• 1994 - The committee submitted the report and recommended introducing the private sector to the insurance sector and also mentioned that foreign companies may set up their businesses as joint ventures with the Indian insurance companies.
• 1999 - The IRDA (Insurance Regulatory And Development Authority) was constituted as an autonomous establishment that can regulate business and lead to the growth of India's insurance industry.
• 2000 - The IRDA was constituted as a statutory body. The intent was to:
  
  
  • Promote competition
  • Increase customer satisfaction
  • Reduce premium rates
  • Ensure financial safety of the Indian insurance companies
     

It opened the registrations for the companies. The ownership of foreign companies was restricted to 26 per cent. The regulatory body has been framing regulations u/s 114A of the Indian Insurance Act of 1938 to enhance the quality of insurance businesses in India. The companies that constituted GIC were de-linked and restructured to form independent companies. The GIC was transformed into a reinsurer in 2002.

 

Today, we see a great way ahead in the Indian insurance industry. Many private players provide varied life insurance plans with flexible features to secure people's well-being and contribute significantly to the country's GDP.

 

Life insurance in India has evolved with technological advancement to provide the best in class services today. With the life insurance details, you can claim the benefits at any time online. Moreover, it is comfortable and cost-efficient.

 

At Tata AIA Insurance, we have detailed the features and the benefits online, providing clear distinctions between the different categories of life insurance policies. Therefore, you can read, compare, and calculate the premium with our online premium calculators and determine the ideal product for your financial needs. The comprehensive life insurance products offer savings and investment benefits apart from the life insurance coverage.

 

Conclusion

 

The history of life insurance in India has evolved from its roots dating back several centuries to ensure financial protection for the people. The growth and development began in British India and evolved through current digital India today. You must understand the importance of its evolution through the centuries and realise its benefits to secure your family in your absence! 

 

L&C/Advt/2022/Oct/2449