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Business » Insurance Companies in India
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Insurance Companies in India |
Insurance in India is a national matter, in which life and general insurance is yet a booming sector with huge possibilities for different global companies, as life insurance premiums account to 2.5% and general insurance premiums account to 0.65% of India's GDP.
The Indian Insurance sector has gone through many phases and changes, especially after 1999, when the Govt. of India opened up the insurance sector for private companies to solicit insurance, allowing FDI up to 26%. Since, the Insurance sector in India is considered as a flourishing market amongst global insurance companies.
Insurance Laws in India:
The Indian Government took different steps for the regulation of insurance in India by passing different insurance laws and acts. These include:-
- Life Insurance Companies Act, 1912
- Provident Fund Act 1912
- Insurance Act of 1938
- Life Insurance Corporation Act, 1956
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- General Insurance Business (nationalization) Act, 1972
- Development Authority and Insurance regulatory (IRDA) Act, 1999
Insurance Market in India:
In 1972, the General Insurance Company was nationalized with four major subsidiaries National Insurance Company, Oriental Insurance Company, New India Insurance Company, and United India Insurance Company.
Today Insurance Companies in India have grown manifold. The insurance sector in India has shown immense growth potential. Even today a giant share of Indian population nearly 80% is not under life insurance coverage, let alone health and non-life insurance policies. This clearly indicates the latent for insurance companies to grow their market in India.
Insurance Industry in India:-
In 1999, different reforms were suggested in the insurance industry in India. This has changed a lot of things for the insurance companies in India. These reforms were:
- Bringing down of the governments stake holding to 50%.
- Only the private companies with a minimum capital of Rs.100 crores should be allowed to enter the insurance sector.
- No insurance company can deal in both life and non-life insurance under the same business entity.
- Foreign Insurance Companies can come into India only in collaboration with domestic insurance companies.
- Interest should be paid on delays of payments by the insurance companies in case of non settlement of insurance claims.
- To bring greater freedom and a well-planned regulation to the insurance companies in India.
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