the p

2. What is insurance?
The definition of insurance can be made from two
points:
 Functional definition.
 Contractual definition.
FUNCTIONAL DEFINITION
 Insurance is a co-operative device to spread the
loss caused by a particular risk over a number of
persons who are exposed to it and who agree to
insure themselves against the risk.

3. Contractual Definition
In the words of justice Tindall, “Insurance is a
contract in which a sum of money is paid to
the assured as consideration of insurer’s
incurring the risk of paying a large sum upon
a given contingency.”

4. TYPE OF INSURANCE

5. LIFE INSURANCE
Life insurance is a written contract
between the insured and the insurer,
that provides for the payment of the
insured sum on the date of the maturity
of the contract or on the unfortunate
death of the insured, whichever occurs
earlier.

6. GENERAL INSURANCE
 General insurance or non-life
insurance policies, including automobile
and homeowners policies, provide
payments depending on the loss from a
particular financial event. General
insurance typically comprises any
insurance that is not determined to be
life insurance.

7. TYPES OF GENERAL INSURANCE
Health insurance
Business insurance
Automobile insurance
Fire insurance etc.

8. HEALTH INSURANCE
Just like one looks to safeguard
ones wealth, these policies ensure
guarding the insurer's health
against any calamities that may
cause long term harm to ones life
and even hamper ones earning
ability for a lifetime. Some
examples of this type of policy are
mediclaim policy, personal
accident, group accident, traffic
accident, etc.

9. Business Insurance
Risks of loss of profits/business, goods,
plant and machinery are most profound
in case of business. Under this head
they cover the most widely used
policies that cover a business from any
loss of the above kind. Some of these
policies are burglary insurance,
shopkeepers insurance, key-man
insurance, marine insurance, public
liability insurance, workmen
compensation insurance, air transit
insurance, fidelity guarantee insurance
etc.

10. Automobile Insurance
Auto Policy is required to be taken to
cover the risks that arise to the
owner, vehicle and third party. This
includes the Compulsory Vehicle
Policy (In India, by the Motor Vehicles
Act, every car owner is required to
covered against Act risks) and the
Comprehensive Vehicle Policy.

11. FIRE INSURANCE
This policy is required to be
taken to prevent any loss of
profits / property from
incidental fire. Eg: fire
insurance and fire
consequential loss policy.

12. HISTORY OF INSURANCE IN INDIA
04/19/13 12
Phase Period Industry
Phase I
a. Life Insurance
b. General Insurance
1818 to 1956
(about 138 yrs)
1850 to 1972
(about 122 yrs)
Many (245) private sector companies only,
competitive market.
Many (107) private sector companies only,
competitive market.
Phase II
a.Life Insurance
b.General Insurance
1956 to 2000
(about 44 yrs)
1972 to 2000
(about 28 yrs)
Nationalization, public sector or State
monopoly, only one company.
Nationalization, public sector monopoly, only
one company with its four subsidiaries.
Phase III
Life Insurance and
General Insurance
After 2000
Opened to the entry of private domestic and
foreign companies, mixed sector of public and
private sector units, oligopoly of public sector
companies (14 life insurance and 12 general
insurance companies)

13. HISTORY OF INSURANCE IN INDIA contd..
04/19/13 13
-1818 First life insurance company “Oriental Life Insurance
Company (in Calcutta).
- 1850 First general insurance company “Tritan Insurance
Company (in Calcutta)
- Till 1956/1972 life and general insurance industry grown in
terms of number of companies (life 245 and General 107 with
complete private sector ownership), the volume of premium,
investible resources, and so on. And both type of insurance
companies were competitive.
- The insurance was regulated through the Insurance Act, 1938.
- The picture changed after the Independence.

14. HISTORY OF INSURANCE IN INDIA contd..
04/19/13 14
- In 1956, 245 Indian and Foreign life insurers and provident
societies were nationalized, and new single entity namely
“LIC” was established by passing the LIC Act, 1956.
- Similarly, in 1972, 107 general insurers were nationalized
through the passing of General Insurance Business
(Nationalisation) Act, 1972.
- The existing 107 insurers were amalgamated and grouped into
Five companies, viz., National Insurance Company (NIC),
New India Assurance Company (NIAC), Oriental Insurance
Company (OIC), United India Insurance Company (UIIC),
and General Insurance Corporation (GIC).
- Then insurance industry transformed into monopoly and
Oligopolistic state or public sector insurance industry in India.

15. Life Insurance Corporation of India (LIC) was formed in
September 1956 by an Act of Parliament, LIC Act 1956 with
a contribution of Rs. 50 million.
The then Finance Minister Mr. C. D. Deshmukh while
piloting the bill for nationalization outlined the objectives of
LIC thus: “To conduct the business with utmost economy with
the spirit of trusteeship; to charge premium no higher than
warranted by strict actuarial considerations; to invest the
funds for obtaining maximum yield for the policy holders
consistent with safety of capital; to render prompt and
efficient service to policy holders thereby making Insurance
widely popular”.
04/19/13 15

16. LIC OF INDIA contd…
Presently the LIC has a network of seven zones; 100 divisions and
2,048 branches, personnel exceed seven lakhs employees and
over six lakhs agents.
Vision: A trans-nationally competitive financial conglomerate of
significance to societies and Pride of India.
Mission: To explore and enhance the quality of the life of people
through financial security by providing products and services of
aspired attributes with competitive returns and by rendering
resources for economic development.
Values: Caring and Courtesy, Initiatives and Innovation, Integrity
and Transparency, Quality and Returns, Participation and
Relationship, and Trustworthiness and Reliability
Culture: Agility (quickness), Adaptability, Collaboration,
Commitment, Discipline, Empowerment, Sensitivity, and
Excellence.
04/19/13 16

17. LIC OF INDIA contd…
Objectives
 Spread Life Insurance widely and in particular to the rural
areas.
 Maximise mobilization of people’s savings by making
insurance-linked savings adequately attractive.
 Deployment of funds to the best of advantage of the investors
as well as the community as whole, keeping in view national
priorities and obligations of attractive return.
 Conduct of business at most economy and with the full
realisation that the money belongs to the policyholders.
 Act as trustee of the insured public in their individual and
collective capacities.
04/19/13 17

18. PRINCIPLES AND INVESTMENT POLICY OF LIC’s
1. Security of funds, and
2. Maximization of return of investment,
04/19/13 18
Investment Policy
1. Central Govt. marketable securities being not less than 20%
2. Loans to Housing Bank including above (1) being not less than 25%
3. State Govt. securities including Govt. Guaranteed marketable
securities, inclusive of (2) above being not less than 50%
4. Socially oriented sectors including public sector, co-operative sector
house building by policyholders, own house scheme, inclusive of (3)
above not less than 75%
5. Private corporate sector, loans to policyholders for construction and
acquisition of immovable property 25%

19. INVESTMENT POLICY OF
LIC’s
04/19/13 19

20. INVESTMENT POLICY OF
LIC’s contd…
04/19/13 20

21. Working of insurance

22. LIC Products & Plans

23. Jeevan Anurag Komal Jeevan
CDA Endowment Vesting
at 21
Marriage Endowment Or
Educational Annuity Plan
CDA Endowment Vesting
18
Jeevan Kishore Jeevan Chhaya
Child Career Plan Child Future Plan
Child Fortune Plus

24. Jeevan Aadhar
Jeevan Vishwas
The Endowment Assurance Policy
The Endowment Assurance Policy-Limited Payment
Jeevan Mitra(Double Cover Endowment Plan)
Jeevan Mitra(Triple Cover Endowment Plan)
Jeevan Anand
New Janaraksha Plan
Jeevan Amrit

25. Jeevan Shree-I
Jeevan Pramukh
The Money Back Policy-20 Years
The Money Back Policy-25 Years
Jeevan Surabhi-15 Years
Jeevan Surabhi-20 Years
Jeevan Surabhi-25 Years
Bima Bachat
jeevan Bharati-1

26. The Whole Life Policy
The Whole Life Policy- Limited Payment
The Whole Life Policy- Single Premium
Jeevan Anand
Jeevan Tarang
Two Year Temporary Assurance Policy
The Convertible Term Assurance Policy
Anmol Jeevan-I
Amulya Jeevan-I

27. Jeevan Saathi Plus
Jeevan Saathi
Jeevan Nidhi
Jeevan Akshay-VI
New Jeevan Dhara-I
New Jeevan Suraksha-I

28. Wealth Plus
Market Plus I
Profit Plus
Money Plus-I
Child Fortune Plus
Jeevan Saathi Plus

29. MAJOR PLAYERS

30. PRIVATE SECTOR COMPANIES
-Several leading private sector companies have entered in the field
of insurance sector, both in life and non-life insurance.
-There are several MNCs, in Joint Venture with Indian private
sector firms, have started operations in a big way.
04/19/13 30
Private Players in the Life Insurance Business
Regd.
No.
Date of
Regd.
Name of the
Company
Who Owns it (in percentage)
101 23.10.00 HDFC Standard Life Standard Life, UK - 18 and HDFC – 82
104 15.11.00 Max New York Life New York Life - 26 and Max India – 74
105 24.11.00 ICICI Prudential Life Prudential, UK - 26 and ICICI Bank – 74
107 10.01.01 Om Kotak Mahindra Old Maruthi, South Africa – 26 and Kotak
Mahindra – 74
109 31.01.01 Birla Sunlife Sun Life of Canada–26 and Birla Capital– 74
110 12.02.01 Tata AIG AIG, US – 26 and Tatas – 74
111 30.03.01 SBI Life Cardif SA, France – 26 and State Bank of
India – 74
114 02.08.01 ING Vysya ING, Holland–26 and GMR Group, Hyd–54
and ING Vysya Bank–20

31. Regd.
No.
Date of
Regd.
Name of the
Company
Who Owns it (in percentage)
116 03.08.01 Allianz Bajaj Allianz AG, Germany – 26 and Bajaj Auto – 74
117 06.08.01 Metlife Metlife, US–26, Shapoorji Pallonji–30 and J&K
Bank–25
121 03.01.02 AMP Sanmar AMP, Australia–26 and Sanmar Group,
Chennai–74
122 03.01.02 Aviva Aviva PLC, UK– 26 and Dabur Investments – 74
*** *** Reliance Life
*** *** Bharathi AXA
127 06.02.04 Sahara India
Insurance
128 07.11.05 Shriram Life
Insurance
Private Players in the Life Insurance Business
CURRENT SCENARIO contd….

32. MARKET SHARE

33. •Growing at the rate of 15-20% annually
•75% population has no insurance
• Adds 7% to country’s GDP
•LIC market share come down to 75% and private insurers
increased over 24%
•Annuity or pension product have over 33% of market
•Unity linked insurance scheme have monopoly

34. GENERAL INSURANCE CORPORATION (GIC)
 Prior nationalization there were 68 Indian insurers (including
LIC) and 45 non-Indian insurers did the business.
 In Nov. 1972, the general insurance business was nationalized
by the General Insurance Business (Nationalized), Act 1972
(GIBNA) and vested in the hand of the GIC and its four
subsidiaries viz.
1. National Insurance Co. Ltd.,
2. New India Assurance Co. Ltd.,
3. Oriental Fire and General Insurance Co. Ltd., and
4. United India Insurance Co. Ltd.
 GIC was incorporated as a holding company in 1992.
 General Insurance Business is completely owned by the
government.
 The paid up capital of GIC was fully subscribed by the
Government and of four subsidiaries.
 It was controlled by a single organization with four subsidiaries.
04/19/13 34

35. G I C contd…
 GIC’s four subsidiaries:
1. National Insurance Co. Ltd.,
2. New India Assurance Co. Ltd.,
3. Oriental Fire and General Insurance Co. Ltd., and
4. United India Insurance Co. Ltd.
 The Govt of India took over Control, supervision, and policy
making is with GIC.
 The premium income for GIC comes mainly through the
obligatory reinsurance premium on a quota share basis from
subsidiaries on their direct business in India (almost 20% of
subsidiaries business come to GIC).
04/19/13 35

36. G I C contd…
TYPES AND STRUCTURE OF BUSINESS
- General insurance policies are not financial claims.
- There is no guarantee of renewal of policy on the same terms or
on any terms.
- The contract is short-term contract.
- The general insurance companies do not collect savings.
- Policy claims are unpredictable.
- Assets are held in relatively liquid form.
- GIC meets the requirements of industrial, manufacturing,
commercial, services, household, and agricultural sectors
through wide rage of 115 products, granting insurance coverage.
- GIC has been promoting insurance cover in the field of
livestock, poultry, sericulture, horticulture, pump sets, and
personal accidents.
04/19/13 36

37. PRINCIPLES AND INVESTMENT POLICY GIC
1. Central Govt. securities being not less than 20%
2. State Govt. securities and other government guaranteed
securities, including (1) above, being not less than 30%
3. Loans to HUDCO/DDA/GIC-HF and to state govts. For
housing and fire fighting equipment, not less than 15%
4. Market sector not more than 55%
04/19/13 37

38. I R D A
04/19/13 38

39. IRDA’S MISSION
To protect the interests of the policyholders, to regulate,
promote and ensure orderly growth of the insurance industry
and for matters connected therewith or incidental thereto.
04/19/13 39
Composition of Authority under IRDA Act, 1999
As per the section 4 of IRDA Act' 1999, Insurance Regulatory
and Development Authority (IRDA, which was constituted by
an act of parliament) specify the composition of Authority.
The Authority is a ten member team consisting of
a. a Chairman;
b. five whole-time members;
c. four part-time members,
(all appointed by the Government of India)

40. 04/19/13 40
Duties, Powers and Functions of IRDA
Section 14 of IRDA Act, 1999 lays down the duties, powers
and functions of IRDA.
1. Subject to the provisions of this Act and any other law for the
time being in force, the Authority shall have the duty to
regulate, promote and ensure orderly growth of the insurance
business and re-insurance business.
2. Without prejudice to the generality of the provisions
contained in sub-section (1), the powers and functions of the
Authority shall include:
a. issue to the applicant a certificate of registration, renew,
modify, withdraw, suspend or cancel such registration;

41. 04/19/13 41
Duties, Powers and Functions of IRDA contd…
b. protection of the interests of the policy holders in matters
concerning assigning of policy, nomination by policy
holders, insurable interest, settlement of insurance claim,
surrender value of policy and other terms and conditions of
contracts of insurance;
c. specifying requisite qualifications, code of conduct and
practical training for intermediary or insurance
intermediaries and agents;
d. specifying the code of conduct for surveyors and loss
assessors;
e. promoting efficiency in the conduct of insurance business;

42. 04/19/13 42
Duties, Powers and Functions of IRDA contd…
f. specifying the form and manner in which books of account
shall be maintained and statement of accounts shall be
rendered by insurers and other insurance intermediaries;
g. regulating investment of funds by insurance companies;
h. regulating maintenance of margin of solvency;
i. adjudication of disputes between insurers and
intermediaries or insurance intermediaries;
j. supervising the functioning of the Tariff Advisory
Committee;

43. CONCLUSION
 Growth of Indian economy is an investment
driven growth
 Opens a wide variety of investment
avenues
 Companies help to gain knowledge of
products and services
 Achieve a better standard for near future
life

44. THANK YOU

45. Article on
insurance