Friday, November 11, 2011

Life Insurance in India

Life insurance is a agreement that pledges payment of an amount to the person assured or his nominee on the incident of the event insured against. Life insurance is also grate type of savings
         Life Insurance in its current form came to India from England in the year 1818. Oriental Life Insurance Company in progress by Europeans in Calcutta was the first life insurance company in  Indian. All the insurance companies recognized during that period were brought up with the purpose of looking after the needs of European community and Indian peoples were not being insured by these companies. However, afterward with the hard work of reputed people like Babu Muttylal Seal, the foreign life insurance companies started insuring Indian people. But Indian people were being treated as sub-standard lives and heavy extra premiums were being charged on them. Bombay Mutual Life Assurance Society heralded the birth of first Indian life insurance company in the year 1870, and enclosed Indian people at standard rates. Starting as Indian venture with extremely loyal motives, insurance companies came into existence to carry the message of insurance and social security through insurance to various sectors of society.
          Bharat Insurance Company (1896) was also one of such companies motivated by nationalism. The Swadeshi movement of 1905-1907 gave rise to more insurance companies. The United India in Madras, National Indian and National Insurance in Calcutta and the Co-operative Assurance at Lahore were reputable in 1906. In 1907, Hindustan Co-operative Insurance Company took its birth in one of the rooms of the Jorasanko, house of the great poet Rabindranath Tagore, in Calcutta. The Indian Mercantile, General Assurance and Swadeshi Life were some of the companies recognized during the same period. Prior to 1912 India had no legislation to regulate insurance business. In the year 1912, the Life Insurance Companies Act, and the Provident Fund Act were passed. The Life Insurance Companies Act, 1912 made it essential that the premium rate tables and periodical valuations of companies should be certified by an actuary. But the Act discriminated between foreign and Indian companies on many accounts, putting the Indian companies at a difficulty.
Some of the important milestones in the life insurance business in India are:
• 1818: Oriental Life Insurance Company, the first life insurance company in Indian.
• 1870: Bombay Mutual Life Assurance Society, the first Indian life insurance company started its business.
• 1912: The Indian Life Assurance Companies Act enacted as the first statute to control the life insurance business.
• 1928: The Indian Insurance Companies Act enacted to enable the government to collect arithmetical information about both life and non-life insurance businesses.
• 1938: Earlier legislation consolidated and amended to by the Insurance Act with the objective of shielding the interests of the insuring public.
• 1956: 245 Indian and foreign insurers and provident societies are taken over by the central government and nationalized. LIC formed by an Act of Parliament, viz. LIC Act, 1956, with a capital contribution of Rs. 5 crore from the Government of India.
• The General insurance business in India, on the other hand, can trace its roots to the Triton Insurance Company Ltd., the first general insurance company established in the year 1850 in Calcutta by the British.


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