History of insurance in India

The history of insurance in India goes back to as before as 3000 B.C. During this prehistoric period insurance existed in the primitive form. The basic concept of insurance which was in the form of pooling and sharing were practiced in insurance in an unorganized manner during this period. When the insurance practice was started in India during this period, it was mainly in practice in joint families. Later, the concept followed in various regions and spread out even in the nuclear families.

The insurance gave them security during the sorrowful times when the family suffered from losses. This method of saving money in the joint families after spreading even to the nuclear families during the modern era gave birth to different forms of life insurance policies in the country. 

History of Insurance in Modern India:

The tale of insurance in modern India started during the 1800 AD. The foreign insurance agencies started a marine insurance business which led to the start of the modern history of insurance in India. 

1818: In the year 1818, the birth of the first insurance company in India took place. The name of the insurance company was, Oriental Life Insurance with its HQ ay Calcutta.

1870: In the year 1870, the history of insurance in India received a native touch with Bombay Mutual Life Insurance society becoming the first Indian insurance company to be established.

1912: The year of 1912 led to the beginning of The Indian Life Insurance Companies Act. The act regulates the business of Life Insurance in the country. 

1938: With the aim to protect the interests of the insured people the earlier consolidated legislation was amended by the Insurance Act. 

1956: The business of Life Insurance was nationalized on the 1st of September of 1956. The year of 1956 also witnessed the formation of LIC Act that led to the formation of Life Insurance Corporation of India. The Government of India made a capital contribution of rupees 5 crore. During that period a total of 170 companies and seventy-five provident fund societies were doing the business of life insurance in the country. During the period between 1956 and 1999 the LIC held the solo rights of doing the business of life insurance in the country. 

1972: The year of 1972 led to the nationalization of the non-life insurance in the country. The enactment of General Insurance Business Nationalization, the business of non-life insurance was also nationalized. The four subsidiaries of General Insurance Corporation of India were also set up. During that period a total of 106 insurers were doing the business of non-life insurance in the country and those were amalgamated with the formation of GIC’s four subsidiaries.

Commendable milestones in the history of insurance in India.

• In 1993 the establishment of the Malhotra committee took place. R.N Malhotra was the chairperson of the committee.
• The year of 1994, witnessed the publishing of recommendations by the Malhotra committee. 
• The year of 1995 led to the establishment of the Mukherjee committee.
• In 1996 the setting up of the (interim) Insurance Regulatory Authority (IRA) took place.
• The Mukherjee committee was set up in the year 1997 but wasn’t made public. 
• In the year 1997 the Indian Government transfers greater authorities to General Insurance Corporation, Life Insurance Corporation and the subsidiaries of those. It was with the respect to the flexibility of the insurance rules that were targeted to channelize the funds to the structure of infrastructure. 
• In the year of 1998, the cabinet decided to permit 40% of the foreign equity in the companies of private insurance.  
• In the year of 1999 the standing committee chaired by Mr. Murali Deora decided that the equity in the sector of private insurance should be limited to a total of 26%. The year also witnessed the renaming of the bill of IRA as Insurance Regulatory and Development Authority Bill. 
• The year of 1999 witnessed the clearance of the Bill of Insurance Regulatory and Development Authority.
• In the year 2000, the President of India gave assent to the Insurance Regulatory and Development Bill.

The above-mentioned are some of the commendable and notable milestones in the history of insurance in India.

Conclusion:

Even though the practice of insurance was present in the country since the prehistoric period, the regulation and the uniform of the sector came into force only during the year of 1818. Starting from the year of 1993 when the establishment of Malhotra committee took place till the year of 2000 when the Insurance Regulatory and Development Bill got the assent from the President of India, the developments in the history of insurance in India has been commendable.