Insurance regulation formally began in India with the adoption of the Act Life Insurance Act 1912 and the Provident Fund 1912 companies. Several frauds during 20 and 30 of the insurance business in India desecrated . In 1938 , there were 176 insurance companies. The first comprehensive legislation was introduced with the Insurance Act of 1938 that allowed a strict state control over insurance business . The insurance business grew at a faster pace after independence. Indian companies have strengthened their hold on the case, but in spite of the growth was observed , insurance remained an urban phenomenon. |
In the world of business, commerce and industry, unjustified and unpredictable disasters can hit the revenue of the business drastically. The worst thing is that when these emergencies hit , employees and the company have to suffer financial loss through no fault of their own. Business organizations can benefit from the commercial insurance coverage . This insurance is an insurance policy to secure the company financially. This insurance coverage ensures that business operations continue to run smoothly even after a disaster.
The Government of India in 1956, brought together over 240 private life insurers and provident societies under one nationalized monopoly and Life Insurance Corporation ( LIC ) was born . Nationalization was justified on the grounds that it would create much needed funds for rapid industrialization. This was consistent with the path chosen by the government of the land and lead state.
The ( non-life ) insurance business continued to flourish with the private sector until 1972. Their operations were restricted to organized trade and industry in large cities . The general insurance industry was nationalized in 1972. With this, nearly 107 insurers were amalgamated and grouped into four companies - National Insurance Company, New India Assurance Company, Oriental Insurance Company and United India Insurance Company. These were subsidiaries of the General Insurance Company ( GIC ) .
The hedging policy of commercial insurance is a bit different than the usual insurance policies. Commercial insurance policies offer different cover risks such as fire, accident factory or well- being of workers . You can get a sanctioned cover that if your company has sufficient exposure to risk . For example, you do not need the cover of a maritime claim if there is no sea near your business . The only condition imposed on the application, is that the "accident" or an obstacle in the procedures of the company, would have occurred without the fault of the business organization .
It should be noted that the amounts of insurance premiums vary depending on the coverage that you avail . This premium is designed to meet the needs of the company and the actuary calculation, taking into account the individual characteristics of the company. Note that you may have to take several strategies , like all policies do not provide all possible guarantees .
The industry of life insurance was nationalized under the Insurance Corporation ( LIC ) Act on the life of India. In some ways, the LIC has become very flourishing . Apart from being a monopoly , it has some 60-70000000 insured. Given that the Indian middle class is on the order of 250 to 300 million , the LIC has managed to capture some 30 odd percent of it . Approximately 48% of the ICA clients are rural and semi -urban areas. It's probably not have occurred if the charter of the LIC are not explicitly stated in order to serve rural areas. A high savings rate in India is one of the exogenous factors that have contributed to the LIC to grow rapidly in recent years . Despite the savings rate is high in India ( compared to other countries with a similar level of development ) , the Indians have a high degree of risk aversion . Thus, nearly half of investment in physical assets (such as property and gold ) . About twenty- three percent are low-yielding ( but safe ) bank deposits. In addition, some 1.3 percent of GDP are savings vehicles related to the life insurance. This figure has doubled between 1985 and 1995.
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