History of Lic - Sumeet

Company

LOGO HISTORY OF LIC TILL PRIVATIZATION

SUBMITTED TO

Prof. MEGHNA SURANA

PREPARED BY

SUMEET SINH

CHINTAN PANDYA

INC-SURAT

Company

LOGO

INTRODUCTION OF LIC

HISTORY OF LIC

FORMATION OF LIC

IMPORTANT MILESTONES IN THE

GENERAL INSURANCE

SUBSIDIARY COMPANIES

CURRENT STATUS

AWARDS

CONTENT

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INTRODUCTION OF LIC

The Life Insurance Corporation of India (LIC), a public sector enterprise, is the largest insurance company in India, selling insurance products and related services.

Each of its business products offered a variety of different plans to suit different customers and situations, Also provided social security schemes and pension schemes. Investment in LIC was considered by a majority of its customers to be reliable and secure.

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HISTORY OF LIC

The concept of life insurance came to India when two British insurance companies were established in the country - the Oriental Life Insurance Company (in Calcutta in 1818 By Bipin Behari Dasgupta and others ) and Bombay Life Assurance Company (in Bombay in 1823).

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IMPORTANT MILESTONES …

1912 - The Indian Life Assurance Companies Act enacted as the first statute to regulate the life insurance business.

1928 - The Indian Insurance Companies Act enacted to enable the government to collect statistical information about both life and non-life insurance businesses.

1938 - Earlier legislation consolidated and amended to by the Insurance Act with the objective of protecting the interests of the insuring public.

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Cont..IMPORTANT MILESTONES …

This legislation was lead to met requirement of insurance policy act like  

• statutory requirement of equity capital for companies carrying on life insurance business

• a ceiling on share holdings in such companies

• stricter control on investments• Submission of periodical returns relating to

investments and other such information to the controller. INC-SURAT

• Malpractices and Mismanagement had crept into the management of several of these companies. More than 50 private insurance companies had been liquidated or swindled the policyholders.

• There were complaints of different types of malpractices by many insurance companies like falsification and denial of claims, and inter-locking of funds.

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Cont..IMPORTANT MILESTONES …

• To protect the public, the government nationalized the insurance industry. On January 19, 1956, the management of the life insurance business of 245 Indian and foreign insurers and provident insurance societies then operating in India were taken over by the central government.

• By 1956, there were 154 life insurance companies in India.

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Cont..IMPORTANT MILESTONES …

FORMATION OF LIC

The Parliament of India passed the Life Insurance Corporation Act on the 19th of June 1956, and the Life Insurance Corporation of India was created on 1st September, 1956, with a capital contribution of Rs. 5 crore from the Government of India. with the objective of spreading life insurance much more widely and in particular to the rural areas with a view to reach all insurable persons in the country, providing them adequate financial cover at a reasonable cost.

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IMPORTANT MILESTONES IN THE GENERAL INSURANCE BUSINESS IN INDIA• 1907 - The Indian Mercantile Insurance Ltd.

set up, the first company to transact all classes of general insurance business.

• 1957 - General Insurance Council, a wing of the Insurance Association of India, frames a code of conduct for ensuring fair conduct and sound business practices.

• 1968 - The Insurance Act amended to regulate investments and set minimum solvency margins and the Tariff Advisory Committee set up.

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Conti…

• 1972 - The General Insurance Business (Nationalization) Act, 1972 nationalized the general insurance business in India with effect from 1st January 1973.

• 107 insurers amalgamated and grouped into four companies viz. the National Insurance Company Ltd., the New India Assurance Company Ltd., the Oriental Insurance Company Ltd. and the United India Insurance Company Ltd. GIC incorporated as a company.

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LIC OWNS THE FOLLOWING SUBSIDIARIES

1. Life Insurance Corporation of India International: This is a joint venture offshore company promoted by LIC which commenced operations in July, 1989 with the objectives of offering US$ denominated policies to cater to the insurance needs of NRIs and providing insurance services to holders of LIC policies currently residing in the Gulf.

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Conti…LIC OWNS THE FOLLOWING

SUBSIDIARIES

2. LIC Nepal: A joint venture company formed in 2001 with the Vishal Group of Industries, Nepal.

3. LIC Housing Finance: Incorporated in 19 June 1989, its main objective is to provide long term finance for construction or purchase of houses or apartments. It has a Dubai office.

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4. LIC Lanka: A joint venture company formed in 2003 with the Bartleet Group of Companies, Sri Lanka.

5. LICHFL Care Homes: A wholly owned subsidiary of LIC Housing Finance, it builds and operates "Assisted Community Living Centres" for senior citizens.

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Conti…LIC OWNS THE FOLLOWING

SUBSIDIARIES

CURRENT STATUS

Tracing the developments in the Indian insurance sector reveals the 360-degree turn witnessed over a period of almost 190 years.

The enforcement of New Economic Reforms in 1991 coupled with the formation of Insurance Regulatory and Development Authority Act (IRDA) of 2000 (which started issuing licenses to private life insurers ) has diluted the monopolistic attitude commanded by LIC.

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Conti…CURRENT STATUS

The only insurance company belonging to the public sector now has to compete with several other corporate entities of its kind which often are heavyweight Indian as well as Multinational Life Insurance Brands in themselves.

The Malhotra committee's recommendations in 1994 brought about a sea change in the industry.

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PROGRESS OF LIC

Headquartered in Mumbai, which is considered the financial capital of India, the Life Insurance Corporation of India currently has

a) 8 zonal Offices and

b)101 divisional offices located in different parts of India

c)2048 branches located in different cities and towns of India.

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d) Contributed around 7 % of India's GDP in 2006.

e) It also funds close to 24.6% of the Indian Government's expenses.

f) It has assets estimated of 5 Trillion Rupees.

g) 1.2 million agents and Employs over . 1,12,184

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Conti…PROGRSS OF LIC

h) In the financial year 2006-07 Life Insurance Corporation of India's number of policy holders are said to have crossed a whopping 200 million (fourth in terms of population of the countries of the world)

i) It also operates in 12 other countries.

j) The recent Economic Times Brand Equity Survey rated LIC as the No. 1 Service Brand of the Country.

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Conti…PROGRSS OF LIC

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The Corporation, which started its business with around

AWARDS

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Golden Peacock Innovative Product /

Service Award - 2009

Loyalty Awards - 2009

The monopolistic position of the Life Insurance Corporation of India was diluted, and it has had to compete with a number of other corporate entities However, it still manages to be the largest player in the Indian market, with the lion's share of 55%.

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