Liberalization

The social, political, economical, and socio-economic policies are widely relaxed by the government under the hat of LIBERALIZATION. Liberalization means the lessening of conservation in restrictions and regulations by the government in the means of economic policy. Hence, the private forums take over a large amount of participation. Thus as an outcome, the encouragement of economic development stands in the utmost importance where the process of liberalization is to be called a process of removing control. On the other hand, the monopolies disappear with the presence of a versatile market in front of consumers. Because the market becomes an open one to compete with the best goods and services by all competing providers.

Liberalization meaning

The dawn of economic liberalization took place back in the year 1991 to expand and make a market-oriented economy. Windows for foreign investment became more lenient. Henceforth, partial or full privatization of government governing institutes, assets, labor quests, tax rebates, and majorly the businesses on the domestic and off-shore capital, came under an open sky of free trading markets.

Altogether, there has been a revolutionary change with the New Economic Strategy, of 1991. All areas were flooded with the impacts of this knock. A liberalized market splashed the intense economic effects on the country and investors, at the same time. It had been a beneficial ground for private sector companies to operate and modulate business transactions with fewer restrictions than ever it had.

Advantages and disadvantages of Liberalization in the insurance sector

The advantages of liberalization in insurance sectors are as follows –

Advantages of liberalization –

• Foreign exchange reserve gets increased after liberalization; this is due to the abolition of the restriction that was present previously.
• Tariffs and rates of interest are reduced after liberalization.
• After liberalization, there is no licensing system in the country.
• As a result of liberalization, there is massive economic growth in India.
• As foreign technologies are used after liberalization, the introduction of new technologies took place.
• Control over price due to the removal of tariffs leads to a low price for the customers.

Disadvantages of liberalization –

• Dependence on the foreign nation is increased after liberalization
• The main disadvantage of liberalization is economic instability. This is because if a foreign country changes the valuation of money, then India can face a huge loss from this.
• The industries after liberalization will depend on the raw materials which are cheap from foreign countries, which as a result will be a threat to the domestic sector.

The Insurance Act 1938

The insurance act 1938 started its work on 1st July 1939. For providing strict state rules or control over the business of insurance the legislation needs to govern all forms of insurance. The insurers who are investing their assets should invest only in approved investment policies that are mentioned under the act and the returns are submitted to IRDA in the listed format. The insurance Act 1948 was the first sort of legislation that governs all the other forms of insurance present in the Indian Insurance Policy. In the years 2002, 1999, 1972, 1968, 1956, and 1950 the original Insurance Act 1938 was amended. Unless the license is provided by the authority no one has the right to work as an insurance agent. For Chief Agents and Special Agents Section 42A provides for the registration. Under Section 42A after registration the certificates are issued, the certificate that is issued can be renewed and are valid for 12 months. The licensing of agents is contained in the Insurance Act, 1938. 

Conclusion

It is to conclude that liberalization means the lessening of conservation in restrictions and regulations by the government in the means of economic policy. Hence, the private forums take over a large amount of participation. On the 1st July 1939, the insurance act 1938 came into effect.