22200474 History of Lic Sumeet

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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 LICFORMATION OF LIC

IMPORTANT MILESTONES IN THE

GENERAL INSURANCESUBSIDIARY COMPANIES

CURRENT STATUS

AWARDS

CONTENT

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INTRODUCTION OF LIC

The Life Insurance Corporation of India (LIC), apublic sector enterprise, is the largest insurancecompany in India, selling insurance products

and related services.Each of its business products offered a variety

of different plans to suit different customers andsituations, Also provided social security

schemes and pension schemes. Investment inLIC was considered by a majority of itscustomers to be reliable and secure.

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HISTORY OF LIC

The concept of life insurance came to Indiawhen two British insurance companies wereestablished in the country - the Oriental Life

Insurance Company (in Calcutta in 1818 ByBipin Behari Dasgupta and others ) andBombay Life Assurance Company (inBombay in 1823).

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IMPORTANT MILESTONES …

1912 - The Indian Life Assurance Companies Actenacted as the first statute to regulate the lifeinsurance business.

1928 - The Indian Insurance Companies Actenacted to enable the government to collectstatistical information about both life and non-lifeinsurance businesses.

1938 - Earlier legislation consolidated andamended to by the Insurance Act with the objectiveof 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 thecontroller.

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• Malpractices and Mismanagement had creptinto the management of several of thesecompanies. More than 50 private insurance

companies had been liquidated or swindledthe policyholders.

• There were complaints of different types of malpractices by many insurance companies

like falsification and denial of claims, andinter-locking of funds.

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• To protect the public, the governmentnationalized the insurance industry. OnJanuary 19, 1956, the management of the

life insurance business of 245 Indian andforeign insurers and provident insurancesocieties then operating in India were takenover by the central government.

• By 1956, there were 154 life insurancecompanies in India.

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FORMATION OF LIC

The Parliament of India passed the Life Insurance

Corporation Act on the 19th of June 1956, and theLife Insurance Corporation of India was created on1st September, 1956, with a capital contribution of Rs. 5 crore from the Government of India. with the

objective of spreading life insurance much morewidely and in particular to the rural areas with aview to reach all insurable persons in the country,providing them adequate financial cover at areasonable cost.

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IMPORTANT MILESTONES IN THE

GENERAL INSURANCE BUSINESS IN INDIA

• 1907 - The Indian Mercantile Insurance Ltd. setup, the first company to transact all classes of general insurance business.

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

• 1968 - The Insurance Act amended to regulateinvestments and set minimum solvency marginsand the Tariff Advisory Committee set up.

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Conti…

• 1972 - The General Insurance Business(Nationalization) Act, 1972 nationalized thegeneral insurance business in India with effectfrom 1st January 1973.

• 107 insurers amalgamated and grouped intofour companies viz. the National InsuranceCompany Ltd., the New India AssuranceCompany Ltd., the Oriental Insurance CompanyLtd. and the United India Insurance CompanyLtd. GIC incorporated as a company.

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LIC OWNS THE FOLLOWINGSUBSIDIARIES

1. Life Insurance Corporation of India

International: This is a joint ventureoffshore company promoted by LIC which

commenced operations in July, 1989 withthe objectives of offering US$denominated policies to cater to theinsurance needs of NRIs and providing

insurance services to holders of LICpolicies currently residing in the Gulf.

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Conti…LIC OWNS THE FOLLOWING

SUBSIDIARIES

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

3. LIC Housing Finance: Incorporated in 19June 1989, its main objective is to providelong 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 companyformed in 2003 with the Bartleet Group of Companies, Sri Lanka.

5. LICHFL Care Homes: A wholly ownedsubsidiary of LIC Housing Finance, itbuilds and operates "Assisted CommunityLiving Centres" for senior citizens.

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Conti…LIC OWNS THE FOLLOWING

SUBSIDIARIES



CURRENT STATUS

Tracing the developments in the Indianinsurance sector reveals the 360-degree turnwitnessed over a period of almost 190 years.

The enforcement of New Economic Reforms in

1991 coupled with the formation of InsuranceRegulatory and Development Authority Act(IRDA) of 2000 (which started issuing licenses toprivate life insurers ) has diluted the

monopolistic attitude commanded by LIC.

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Conti…CURRENT STATUS

The only insurance company belonging tothe public sector now has to compete withseveral other corporate entities of its kindwhich often are heavyweight Indian as wellas Multinational Life Insurance Brands in

themselves.The Malhotra committee's recommendations

in 1994 brought about a sea change in theindustry.

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PROGRESS OF LIC

Headquartered in Mumbai, which isconsidered the financial capital of India, theLife Insurance Corporation of India currentlyhas

a) 8 zonal Offices and

b)101 divisional offices located in different partsof India

c)2048 branches located in different cities andtowns of India.

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d) Contributed around 7 % of India's GDP in2006.

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 InsuranceCorporation of India's number of policy holders aresaid to have crossed a whopping 200 million (fourthin 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 LifeInsurance Corporation of India wasdiluted, and it has had to compete

with a number of other corporateentities However, it still manages to bethe largest player in the Indian market,

with the lion's share of 55%.

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22200474 History of Lic Sumeet

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