Insurance in India

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Insurance in India

 Introduction

Insurance is coined from the word “Latin Securus” which means “Free from care”. It basically means the prevention of loss of lives (human life, human health) and non-living things like property, vehicles, expensive goods, etc. Insurance in India covers public and private sector organizations.

Types of Insurance

There are two types of Insurance

  • Life Insurance—It is further divided into Term Life, Money Back Policy, Unit-Linked Insurance Plan and Pension Plans
  • General Insurance— It is further divided into  (Health, Motor, Travel, Home, Fire) Insurance

Constitution

The Insurance is mentioned in the constitution of India in the seventh schedule as a Union list subject, it means that it can only be legislated by the central government. The Insurance sector also allows private companies to request insurance and allows Foreign Direct Investment.

History of Insurance

Insurance has a profound history in India. Our Ancient Guru, Manu, Yagnavalkya, and Kautilya have mentioned about Insurance in their text Manusmriti, Dharmasastra, and Arthasastra. The basis of the historical reference to insurance in these ancient Indian texts is the same that is you can collect resources and you can deploy in times of calamities such as fire, floods, epidemics, and famine. Recent History of Insurance started in 1818 when the Oriental Life Insurance was started by Anita Bhavsar in Kolkata.

Insurance, Health Insurance, Life Insurance
Insurance

Pre-Independence

We have seen discrimination in the premium charged on Foreigners and Indians in the Pre-Independence Era.  The first Indian Insurer, Bombay Mutual Life Assurance Society was established in 1870. In 1912, The Indian Life Assurance Companies Act was the first legal measure to regulate life business.

After Independence

On 19 Jan 1956, The Indian Government issued an ordinance nationalizing the Life Insurance sector, and thus, Life Insurance Corporation came into existence. The Life Insurance Corporation has an overall 245 Indian and Foreign Insurers. On 01st Jan 1973, General Insurance Business was Nationalized when General Insurance Business Act was passed by the Indian Government in 1972.

The LIC had a monopoly till the late 90s when the government planned to open the Insurance sector in the private sector.  Previously, there were two state insurers: Life Insurers and General Insurers. After December 2000, General Insurance companies are separated into four independent companies: Oriental Insurance Company Limited, New India Assurance Company Limited, National Insurance Company Limited, and United India Insurance Company Limited.

Scenarios after Privatization in Insurance Industry

After Private companies in the Insurance sector, things have changed quickly. ECGC (Export), ESIC(Employee), and AIC (Agriculture) provide insurance services for their distinct segments of markets. IRDA launched the “Insurance Repository” on 16 Sept 2013. Now, Policyholders can buy and keep insurance policies in an electronic format. IRDA has issued licenses to five entities to act as Insurance repository: CDSL Insurance Repository Limited, SHCIL Projects Limited, Karvy Insurance Repository Limited, NSDL Database Management Limited, CAMS Repository Services  Limited Legal structure.

Additionally, Foreign Investment was limited at 26% holding in the Indian Insurance companies.

Exams for  Insurance

All exams required Indian citizens, Age Limit between 21-30 years. However, NIACL exams for Assistant require 18-30 years and UIIC (Assistant) requires 18-28 years of age.

  • IRDA conducts Assistant Manager —This exam is not conducted every year. It depends upon the need of the company.

Please visit the website for further details

Institution for Insurance

There are various Institutes in India, where candidates get enrolled to become Insurance Professional

  • National Insurance Academy, Pune. It specializes in teaching, conducting research, and provide consulting services in the insurance sector.  It offers a two-year PGDM program in insurance.
  • Institute of Insurance and Risk Management, Hyderabad was established by the regulator IRDA
  • Amity School of Insurance, Banking and Actuarial Science, located in Noida and established in 2000, offers MBA programs in Insurance, Insurance and Banking and M.Sc / B.Sc. to a Post Graduate Diploma in Actuarial Sciences.
  • Pondicherry University offers MBA in Insurance Management
  • Birla Institute of Management Technology, Greater Noida   offers a PGDM-IBM program in insurance business management.
  • National Law University, Jodhpur offers a two-year MBA and one year MS program in insurance

Insurance Companies in India

Some of the Insurance companies were LIC, HDFC Standard Life Insurance, Max Life, ICICI Prudential, Kotak Mahindra, PNB Metlife, Acko General Insurance, Apollo Munich, Bajaj Allianz, Cigna TTK, ICICI Lombard, and many more

Conclusion

Insurance in India is not a new thing but is practiced long ago before the modern insurance Companies are introduced. Insurance is covered by our ancient gurus like Manu (Manusmriti), Yagnavalkya (Dharmasastra), and Kautilya (Arthasastra).

Abbreviation

  • IRDA—Insurance Regulatory Development and Authority.
  • ECGC–Export Credit Guarantee Corporation.
  • ESIC—Employees State Insurance Corporation.
  • CDSL—Central Depository Services (India) Ltd.
  • SHCIL—Stock Holding Corporation of India Ltd.
  • NSDL— National Securities Depository Ltd.
  • CAMS— Computer Age Management Services
  • AIC —    Agriculture Insurance Company
  • PGDM— Post Graduate Diploma in Management.

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