UNIVERSITY OF MUMBAI

PROJECT REPORT ONOVERVIEW OF INSURANCE SECTOR IN INDIA(FINANCIAL SERVICES)

MASTERS OF COMMERCE(BANKING AND FINANCE)SEMESTER 22014-15

SUBMITTED BYMiss. VISHAKHA HARISH MARUROLL NO.:31

PROJECT GUIDEMs. SHRADDHA SHUKLA

K.P.B HINDUJA COLLEGE OF COMMERCE315, NEW CHARNI ROAD, MUMBAI-400 004

M.Com (Banking and Finance)2ND SEMESTER

OVERVIEW OF INSURANCE SECTOR IN INDIA

SUBMITTED BYMiss. VISHAKHA HARISH MARUROLL NO: 31

CERTIFICATEThis is to certify that Ms. MARU VISHAKHA HARISH of M.Com BANKING AND FINANCE Semester- 2 [2014-2015] has successfully completed the Project on OVERVIEW OF INSURANCE SECTOR IN INDIA under the guidance of Ms. SHRADDHA SHUKLA

Project Guide________________

Course Coordinator________________

Internal Examiner________________

External Examiner________________

Principal________________

Date: ______Place: Mumbai

DECLARATION

I, Ms. VISHAKHA HARISH MARU student of M.Com-Banking and Finance, semester- 1 (2014-2015), hereby declare that I have completed the project on OVERVIEW OF INSURANCE SECTOR IN INDIAThe information submitted is true and original copy to the best of my knowledge.

VISHAKHA MARU

ACKNOWLEDGEMENT

I owe my special thanks to the Principle Dr. Chitra Natrajan and the Co-coordinator of M.com Dr. (Ms) Minu Madlani for giving me an opportunity for this project work. I would like to give my thanks to the Project Guide Ms. SHRADDHA SHUKLA for her guidance and kind assessment that she has provided me and the inspiration in valued guidance and ideas throughout the project. I am also thankful to the library staff of K. P. B. Hinduja College Of Commerce who co-operated with me and even all those seen and unseen hands and heads which helped me in her completion of this project.

INDEXSR- NO.TOPICSPAGE NO.

1INSURANCE IN INDIA1-6

2LIFE INSURANCE IN INDIA7-8

3LIST OF LIFE INSURANCE9-10

4FOREIGN DIRECT INVESTMENT IN INSURANCE SECTOR10

5INITIAL PUBLIC OFFERS RULES OF INDIAN INSURANCE COMPANIES11

6INDIAN LIFE INSURANCE OVERVIEW12-13

7NATIONAL INSURANCE COMPANY14-16

8LIFE INSURANCE COPERATION IN INDIA17-21

9GENERAL INSURANCE CORPORTION OF INDIA21-22

10NEW INDIAN ASSURANCE COMPANY23-24

11UNITED INDIAN INSURANCE25-29

12INSURANCE REGUATORY & DEVELOPMENT AUTHORITY OF INDIA30-31

13AGIRCULTURE INSURANCE IN INDIA32-33

14BIBLOGRAPHY34-35

CH:1 INSURANCE SECTOR IN INDIAINTRODUCTION

Insurance in Indiarefers to the market forinsuranceinIndiawhich covers both the public and private sector organisations. It is listed in theConstitution of Indiain the Seventh Schedule as aUnion Listsubject, meaning it can only be legislated by thecentral government.The insurance sector has gone through a number of phases by allowing private companies to solicit insurance and also allowing foreign direct investment. India allowed private companies in insurance sector in 2000, setting a limit onFDIto 26%, which was increased to 49% in 2014.However, the largest life-insurance company in India,Life Insurance Corporation of Indiais still owned by the government and carries a sovereign guarantee for all insurance policies issued by it.

HistoryIn India, insurance has a deep-rooted history. Insurance in various forms has been mentioned in the writings ofManu(Manusmrithi),Yagnavalkya(Dharmashastra) andKautilya(Arthashastra). The fundamental basis of the historical reference to insurance in these ancient Indian texts is the same i.e. pooling of resources that could be re-distributed in times of calamities such as fire, floods, epidemics and famine. The early references to Insurance in these texts have reference to marine trade loans and carriers' contracts.Insurance in its current form has its history dating back until 1818, whenOriental Life Insurance Company]was started by Anita Bhavsar inKolkatato cater to the needs of European community. The pre-independence era in India saw discrimination between the lives of foreigners (English) and Indians with higher premiums being charged for the latter. In 1870,Bombay Mutual Life Assurance Societybecame the first Indian insurer.The Government of India issued an Ordinance on 19 January 1956 nationalising the Life Insurance sector and Life Insurance Corporation came into existence in the same year. The Life Insurance Corporation (LIC) absorbed 154 Indian, 16 non-Indian insurers as also 75 provident societies245 Indian and foreign insurers in all. In 1972 with the General Insurance Business (Nationalisation) Act was passed by the Indian Parliament, and consequently, General Insurance business was nationalized with effect from 1 January 1973. 107 insurers were amalgamated and grouped into four companies, namely National Insurance Company Ltd., the New India Assurance Company Ltd., the Oriental Insurance Company Ltd and the United India Insurance Company Ltd. The General Insurance Corporation of India was incorporated as a company in 1971 and it commence business on 1 January 1973.The LIC had monopoly till the late 90s when the Insurance sector was reopened to the private sector. Before that, the industry consisted of only two state insurers: Life Insurers (Life Insurance Corporation of India, LIC) and General Insurers (General Insurance Corporation of India, GIC). GIC had four subsidiary companies. With effect from December 2000, these subsidiaries have been de-linked from the parent company and were set up as independent insurance companies:Oriental Insurance Company Limited,New India Assurance Company Limited,National Insurance Company LimitedandUnited India Insurance Company Limited.

Industry structureBy 2012 Indian Insurance is aUS$72 billion industry. However, only two million people (0.2% of the total population of 1 billion) are covered under Mediclaim, whereas in developed nations like USA about 75% of the total population are covered under some insurance scheme. With more and more private companies in the sector, this situation is expected to change. ECGC, ESIC and AIC provide insurance services for niche markets. So, their scope is limited by legislation but enjoy some special powers

Insurance RepositoryOn 16 September 2013, IRDA launched 'Insurance Repository' services in India. It is a unique concept and first to be introduced in India. This system enables policy holders to buy and keep insurance policies in dematerialized or electronic form. Policy holders can hold all his insurance policies in an electronic format in a single account called electronic insurance account (eIA). Insurance Regulatory and Development Authority has issued licenses to five entities to act as Insurance Repository:NSDL Database Management Limited, Central Insurance Repository Limited ( CIRL ), SHCIL Projects Limited, Karvy Insurance repository Limited, CAMS Repository Services Limited

Legal structureThe insurance sector went through a full circle of phases from being unregulated to completely regulated and then currently being partly deregulated. It is governed by a number of acts.The Insurance Act of 1938 was the first legislation governing all forms of insurance to provide strict state control over insurance business.Life insurance in India was completely nationalized on 19 January 1956, through the Life Insurance Corporation Act. All 245 insurance companies operating then in the country were merged into one entity, theLife Insurance Corporation of India.The General Insurance Business Act of 1972 was enacted to nationalize about 100 general insurance companies then and subsequently merging them into four companies. All the companies were amalgamated into National Insurance, New India Assurance, Oriental Insurance and United India Insurance, which were headquartered in each of the four metropolitan cities.Until 1999, there were no private insurance companies in India. The government then introduced the Insurance Regulatory and Development Authority Act in 1999, thereby de-regulating the insurance sector and allowing private companies. Furthermore, foreign investment was also allowed and capped at 26% holding in the Indian insurance companies.In 2006, the Actuaries Act was passed by parliament to give the profession statutory status on par with Chartered Accountants, Notaries, Cost & Works Accountants, Advocates, Architects and Company Secretaries.A minimum capital ofUS$80 million(Rs.400 Crore) is required by legislation to set up an insurance business.

AuthoritiesThe primary regulator for insurance in India is theInsurance Regulatory and Development Authority(IRDA) which was established in 1999 under the government legislation called theInsurance Regulatory and Development Authority Act, 1999 The industry recognises examinations conducted by IAI (for actuaries), III (for agents, brokers andthird-party administrators) and IIISLA (for surveyors and loss assessors). TAC is the sole data repository for the non-life industry. IBAI gives voice for brokers while GI Council and LI Council are platforms for insurers. AIGIEA, AIIEA, AIIEF, AILICEF, AILIEA, FLICOA, GIEAIA, GIEU and NFIFWI cater to the employees of the insurers. In addition, there are a dozen Ombudsman offices to address client grievances.

Insurance educationA number of institutions provide specialist education for the insurance industry, these include; National Insurance Academy, Pune, specialized in teaching, conducting research and providing consulting services in the insurance sector. NIA offers a two year PGDM program in insurance. NIA was founded as Ministry of Finance initiative with capital support from the then public insurance companies, both Life (LIC) and Non-Life (GIC, National, Oriental, United & New India). Institute of Insurance and Risk Management, Hyderabad, was established by the regulator IRDA. The institute offers Postgraduate diploma in Life, General Insurance, Risk Management and Actuarial Sciences. The institute is a global learning and research center in insurance, risk management, actuarial sciences. They provide consulting services for the financial industry. Amity School of Insurance Banking and Actuarial science (ASIBAS)of Amity University, located in Noida and established in 2000, offers MBA programs in Insurance, Insurance and Banking, and M.Sc./B.Sc. actuarial sciences to a Post Graduate Diploma in Actuarial Sciences. Pondicherry Universityis offering mba in insurance management. Pondicherry university is the only central university which offers insurance management in India. Birla Institute of Management Technologyis a graduate business school located in Greater Noida, established in 1988, offers a PGDM-IBM program in insurance business management. This program was launched in 2000 by the Centre for Insurance and Risk Management and is accredited by theInsurance Regulatory and Development Authority. Life Office Management Association (LOMA), USA is BIMTECH's educational partner and BIMTECH is an approved centre for LOMA examination. TheChartered Insurance Institute(CII), UK has accorded recognition (by way of credits) to the BIMTECH PGDM-IBM program. Their two year PGDM program in insurance business has been recognized as equivalent to the Associate level of theInsurance Institute of India, Mumbai. NLU, Jodhpur, offers a two year MBA and one year MS (for engineering graduates) program in insurance.IRDA controls all the Insurance business in India. They set up the structure and boundaries for the insurance companies to act within. Starting from licensing to approving the products, IRDA directs the companies in India. They also protect customer interests in the country.To become an insurance advisor in India insurance act 1938 mandates that the individual has to be "a Major with sound mind". After the advent of IRDA as Insurance Regulator it has framed various regulations viz training hours, examination and fees which are amended from time to time. Since November 2011 IRDA the Insurance Regulator in India has introduced a syllabus (IC-33) conceived and developed by CII, London. The syllabus mainly aims to make an Insurance Agent a financial professional. But almost all insurers are facing tough times making the candidates pass the examination which has become relatively tough.

CH:2 Life insurance in IndiaLife Insuranceis the fastest growing sector inIndiasince 2000 as Government allowed Private players and FDI up to 26% and recently Cabinet approved a proposal to increase it to 49%. Life Insurance in India was nationalised by incorporating Life Insurance Corporation (LIC) in 1956. All privatelife insurancecompanies at that time were taken over by LIC.In 1993, theGovernment of Indiaappointed RN Malhotra Committee to lay down a road map for privatisation of the life insurance sector.While the committee submitted its report in 1994, it took another six years before the enabling legislation was passed in the year 2000, legislation amending theInsurance Actof 1938 and legislating theInsurance Regulatory and Development Authority Actof 2000. The same year the newly appointed insurance regulator - Insurance Regulatory and Development AuthorityIRDAstarted issuing licenses to private life insurers.

1:Types of Life Insurance in IndiaInsurance products come in a variety of offerings catering to the investment needs and objectives of different kinds of investors. Following is the list of broad categories of life insurance products:

1.1Term Insurance PoliciesThe basic premise of aterm insurancepolicy is to secure the immediate needs of nominees or beneficiaries in the event of sudden or unfortunate demise of thepolicyholder. The policy holder does not get any monetary benefit at the end of the policy term except for the tax benefits he or she can choose to avail of throughout the tenure of the policy. In the event of death of the policy holder, the sum assured is paid to his or her beneficiaries. Term insurance policies are also relatively cheap to acquire compared to other insurance products.

1.2Money-back PoliciesMoney back policies are basically an extension of endowment plans wherein the policy holder receives a fixed amount at specific intervals throughout the duration of the policy. In the event of the unfortunate death of the policy holder, the full sum assured is paid to the beneficiaries. The terms again might slightly vary from one insurance company to another.

1.3Unit-linked Investment Policies (ULIP)Unit linked insurance policies again belong to the insurance-cum-investment category where one gets to enjoy the benefits of both insurance and investment. While a part of the monthly premium pay-out goes towards the insurance cover, the remaining money is invested in various types of funds that invest in debt and equity instruments. ULIP plans are more or less similar in comparison to mutual funds except for the difference that ULIPs offer the additional benefit of insurance.

1.4Pension PoliciesPension policies let individuals determine a fixed stream of income post retirement. This basically is a retirement planning investment scheme where the sum assured or the monthly pay-out after retirement entirely depends on the capital invested, the investment timeframe, and the age at which one wishes to retire. There are again several types of pension plans that cater to different investment needs. Now it is recognized as insurance product and being regulated by IRDA.

2:List of Life Insurers (as of June 2014)Apart from Life Insurance Corporation, the public sector life insurer, there are 23 other private sector life insurers, most of them joint ventures between Indian groups and global insurance giants.

2.1 Life Insurer in Public Sector1. Life Insurance Corporation of India

2.2 Life Insurers in Private Sector1. SBI Life Insurance2. PNB Metlife India Life Insurance3. ICICI Prudential Life Insurance4. Bajaj Allianz Life5. Max Life Insurance6. Sahara Life Insurance7. Tata AIG Life8. HDFC Life9. Birla Sun Life Insurance10. Kotak Life Insurance11. IndiaFirst Life Insurance12. Aviva Life Insurance13. Reliance Life Insurance Company Limited - Formerly known as AMP Sanmar LIC14. Exide Life Insurance - Formerly known as ING Vysya Life Insurance15. Shriram Life Insurance16. Bharti AXA Life Insurance Co Ltd.17. Future Generali Life Insurance Co Ltd18. IDBI Federal Life Insurance19. AEGON Religare Life Insurance20. DHFL Pramerica Life Insurance - Formerly known as DLF Pramerica Life Insurance21. CANARA HSBC Oriental Bank of Commerce22. Star Union Dia-ichi Life Insurance Co. Ltd23. Edelweiss Tokio Life Insurance Company Ltd.

3:Foreign Direct Investment (FDI) Policy in Insurance Sector:-As per the current (March 2006) FDI norms, foreign participation in an Indian insurance company is restricted to 26.0% of its equity / ordinary share capital. The Insurance Regulator has stipulated that foreign investment in Indian Insurance companies be limited to 26% of total equity issued (FDI limit) with the balance being funded by Indian promoter entities. The limit to foreign investment includes both direct and indirect investment and has been a cause of significant lobbying by foreign insurance companies for a change in regulations to increase the FDI limit to 49% of equity issued. Recently,In the Fiscal Budget of Modi Government of 2014-15 it has introduced 49.0% FDI which will bring in more investments in Insurance Sector.The Indian government has supported an increase in the FDI limit, which requires a change in the Insurance Act. The Union Budget for fiscal 2005 had recommended that the ceiling on foreign holding be increased to 49.0%.A change in the Insurance Act requires a passage of the bill in both houses of Parliament. The Indian government has tabled the bill in the Upper House of Parliament in August 2010.

3.1Initial Public Offer (IPO) rules for Indian Life Insurance CompaniesA key piece of legislation impacting on the Life Insurance industries capital raising abilities is the lock-in period of 10 years for investment to be limited to promoter group equity investments. Under the Insurance Guidelines, Indian Life Insurance companies can opt for a public issue of equity through an Initial Public Offer (IPO) after 10 years of operations.In October 2010, the securities market regulator, Securities and Exchange Board of India (SEBI), issued disclosure norms for Indian Life Insurance Companies seeking to make an initial public offer for sale of equity shares to the public.

3.2Indian life insurance industry overviewAll life insurance companies in India have to comply with the strict regulations laid out by Insurance Regulatory and Development Authority of India (IRDA).Life Insurance Corporation of India (LIC), the state owned behemoth, remains by far the largest player in the market. The private companies have come out with products called ULIPs (Unit Linked Investment Plans) which offer both life cover as well as scope for savings or investment options as the customer desires. These type of plans are subject to a minimum lock-in period of three years to prevent misuse of the significant tax benefits offered to such plans under the Income Tax Act. Comparison of such products with mutual funds would be erroneous.

3.3Commission / intermediation fees The maximum commission limits as per statutory provisions are:

3.4 Agency commission for retail life insurance business: 7- 25% for 1st year premium if the premium paying term is more than 20 years 7- 10% for 1st year premium if the premium paying term is more than 15 years 7- 10% for 1st year premium if the premium paying term is less than 10 years 7% - yr 2 and 3rd year and 3.5% - thereafter for all premium paying terms.

In case of Mutual fund related - Unit linked policies it varies between 1.5% to 6% on the premium paid: Maximum broker commission - 30% Referral fees to banks Max 55% for regular premium and 10% for single premium. However in any case this fee cannot be more than the agency commission as filed under the product. However, the above commission may be further subject to the product wise limits specified by IRDA while approving the product.

Ch:-3 National Insurance Company

National Insurance Company Limited(NICL) is a state ownedgeneral insurancecompany inIndia. The company headquartered atKolkatawas established in 1906 and nationalised in 1972 It's portofolio consists of a multitude of general insurance policies, offered to a wide arena of clients encompassing different sectors of the economy.Apart from being a leading insurance provider inIndia, NICL also servesNepal.

HistoryAfter nationalisation in 1972, NICL operated as a subsidiary ofGeneral Insurance Corporation of India(GIC). NICL was spun off as a distinct company under theGeneral Insurance Business (Nationalisation) Amendment Actin 2002.In April, 2004, NIC signed an agreement withNainital Bankfor distribution of its general insurance products through the bank's branches in Uttarakhand, Haryana and New Delhi.

Company profileNational Insurance Company Limited was incorporated in December 6, 1906 with its Registered office in Kolkata. Consequent to passing of theGeneral Insurance Business Nationalisation Act in 1972, 21 Foreign and 11 Indian Companies were amalgamated with it and National became a subsidiary of General Insurance Corporation of India (GIC) which is fully owned by the Government of India. After the notification of the General Insurance Business ans its India's largest gic company(Nationalisation) Amendment Act, on 7 August 2002, National has been de-linked from its holding company GIC and presently operating as an independent insurance companywholly owned by Govt of India. National Insurance Company Ltd (NIC) is one of the leading public sector insurance companies of India, carrying out non life insurance business. Headquartered in Kolkata, NIC's network of about 1000 offices, manned by more than 16,000 skilled personnel, is spread over the length and breadth of the country covering remote rural areas, townships and metropolitan cities. NIC's foreign operations are carried out from its branch offices in Nepal. Befittingly, the product ranges, of more than 200 policies offered by NIC cater to the diverse insurance requirements of its 14 million policyholders. Innovative and customised policies ensure that even specialised insurance requirements are fully taken care of. The paid-up share capital of National is100 crores. Starting off with a premium base of50 crores in 1974, NIC's gross direct premium income has steadily grown to about9000 crores rupees in the financial year 2012-13. National transacts general insurance business of Fire, Marine and Miscellaneous insurance. The Company offers protection against a wide range of risks to its customers. The Company is privileged to cater its services to almost every sector or industry in the Indian Economy viz. Banking, Telecom, Aviation, Shipping, Information Technology, Power, Oil & Energy, Agronomy, Plantations, Foreign Trade, Healthcare, Tea, Automobile, Education, Environment, Space Research etc. As of 2010, NICL has aAAArating from Indian rating agency,CRISIL, a subsidiary ofStandard and Poor'sCompany.[7][8]The gross premiums from underwriting by the company grew by 32.22% to over6,100 crores during theFinancial Year2010-2011. And Gross Premiun grew up to 10,000 crores during the financial year 2013-2014.[9]With this, the company was ranked second among general insurance companies operating in India, behindNew India Assurance, at the end of the 2014 Financial Year.[9]With about 1000 offices and 16,000 employees and agents, the company operates in all of India, and neighbouringNepal.[1]In 2008, the company signed a deal withHCL Technologiesworth almost400 crores to outsource the companysinformation technologyrequirements over 7 years.

Products and services

NICL has a range of coverage policies targeting different sectors Personal Insurance policies include medical insurance, accident, property and auto insurance coverage Rural Insurance policies provide protection against natural and climatic disasters for agriculture and rural businesses Industrial Insurance policies provide coverage for project, construction, contracts, fire, equipment loss, theft, etc. Commercial Insurance policies provide protection against loss and damage of property during transportation, transactions, etc.

AwardsThe Enterprise has been the recipient of various awards and accolades including: Business Leadership Award, 2012 byZNDTV Profit Digital Inclusion Awards 2012, Top 100 CISO Awards 2012, The Indian Insurance Awards 2013, 3rd Annual Edition, for - Best Under-served Market Penetration, Industry Champion - General Insurance - NSR Chandraprasad, CMD, NICL.

CH-4LIFE INSURANCE CO-OPERATION IN INDIALife Insurance Corporation of India(LIC) is an Indianstate-ownedinsurance groupandinvestment companyheadquartered inMumbai. It is the largest insurance company in India with an estimated asset value of1560482crore(US$240billion).As of 2013 it had total life fund of Rs.1433103.14 crore with total value of policies sold of 367.82 lakh that year.The company was founded in 1956 when theParliament of Indiapassed the Life Insurance of India Act that nationalised the private insurance industry in India. Over 245 insurance companies and provident societies were merged to create the state owned Life Insurance Corporation.

Founding The Oriental Life Insurance Company, the first company in India offering life insurance coverage, was established inCalcuttain 1818 by Bipin Behari Dasgupta and others. Its primary target market was the Europeans based in India, and it charged Indians heftier premiums.[3]Surendranath Tagore (son ofSatyendranath Tagore) had founded Hindusthan Insurance Society, which later became Life Insurance Corporation.[4]The Bombay Mutual Life Assurance Society, formed in 1870, was the first native insurance provider. Other insurance companies established in the pre-independence era included Postal Life Insurance (PLI) was introduced on 1 February 1884 Bharat Insurance Company (1896) United India (1906) National Indian (1906) National Insurance (1906) Co-operative Assurance (1906) Hindustan Co-operatives (1907) Indian Mercantile General Assurance Swadeshi Life (later Bombay Life) Sahyadri Insurance (Merged into LIC, 1986)

The first 150 years were marked mostly by turbulent economic conditions. It witnessed,India's First War of Independence, adverse effects of theWorld War IandWorld War IIon theeconomy of India, and in between them the period of world wide economic crises triggered by theGreat depression. The first half of the 20th century also saw a heightened struggle forIndia's independence. The aggregate effect of these events led to a high rate of andliquidationof life insurance companies in India. This had adversely affected the faith of the general public in the utility of obtaining life cover.

Nationalisation in 1955LIC Zonal Office, atConnaught Place, New Delhi, designed byCharles Correa, 1991.LIC Building at Chennai, was the tallest building in India when it was inaugurated in 1959In 1955, parliamentarianAmol Barateraised the matter of insurance fraud by owners of private insurance agencies. In the ensuing investigations, one of India's wealthiest businessmen, Sachin Devkekar, owner of theTimes of Indianewspaper, was sent to prison for two years.Eventually, theParliament of Indiapassed the Life Insurance of India Act on June 19, 1956 creating the Life Insurance Corporation of India, which started operating in September of that year. It consolidated the life insurance business of 245 private life insurers and other entities offering life insurance services, this consisted of 154 life insurance companies, 16 foreign companies and 75 provident companies. The nationalisation of the life insurance business in India was a result of theIndustrial Policy Resolution of 1956, which had created a policy framework for extending state control over at least seventeen sectors of the economy, including life insurance.

Growth From its creation, the Life Insurance Corporation of India, which commanded amonopolyof soliciting and selling life insurance in India, created huge surpluses, and by 2006 was contributing around 7% of India'sGDP. The Corporation, which started its business with around 300 offices, 5.7 million policies and acorpusof INR 45.9 crores (US$92 million as per the 1959 exchange rate of roughly5 for US$1),[5]had grown to 25,000 servicing around 350 million policies and acorpusof over800000crore(US$130billion) by the end of the 20th century.

Liberalisation In August 2000, theIndian Governmentembarked on a program to liberalise the Insurance Sector and opened it up for the private sector. Ironically, LIC emerged as a beneficiary from this process with robust performance, albeit on a base substantially higher than the private sector.In 2013 the First Year Premiumcompound annual growth rate(CAGR) was 24.53% while Total Life Premium CAGR was 19.28% matching the growth of the life insurance industry and also outperforming general economic growth. Products and servicesLIC offers a variety of insurance products to its customers such as insurance plans, pension plans, unit-linked plans, special plans and group schemes.[7]

OperationsToday,the LIC has 8 zonal offices, around 109 divisional offices, 2,048 branches and 992 satellite offices and corporate offices;[1]it also has 54 customer zones and 25 metro-area service hubs located in different cities and towns of India. It also has a network of 1,337,064 individual agents, 242 Corporate Agents, 79 Referral Agents, 98 Brokers and 42 Banks for soliciting life insurance business from the public.SloganLIC's sloganyogakshemam vahamyahais inSanskritlanguage which translates in English as "Your welfare is our responsibility". This is derived from ancient Hindu text, theBhagavad Gita's 9th chapter, 22nd verse.[8]The slogan can be seen in the logo, written inDevanagariscript.Awards and recognitions The Economic Times Brand Equity Survey 2012 rated LIC as the No. 6 Most Trusted Service Brand of India.[9] From the year 2006, LIC has been continuously winning the Readers' Digest Trusted brand award.[10] Voted India's Most Trusted brand in the BFSI category according to the Brand Trust Report for 4 continuous years - 2011-2014 according to theBrand Trust Report[Employees and AgentsAs on 31 March 2014, LIC had 1,20,388 employees, out of which 24,867 were women (20.65%).Category of employeesTotal NumberNo. of Women

Class-I Officers31,4206,292

Development Officers26,6211,033

Class III/IV employees62,34717,542

Total1,20,38824,867

A sLIC had 11,95,916 agents as on 31 March 2014, out of which the number of active agents were 11,32,677 (94.71%).Golden Jubilee FoundationLIC Golden Jubilee Foundation was established in 2006 as a charity organization. This entity has the aim of promoting education, alleviation of poverty, and providing better living conditions for the under privileged. Out of all the activities conducted by the organisation, Golden Jubilee Scholarship awards is the best known. Each year, this award is given to the meritorious students in standard XII of school education or equivalent, who wish to continue their studies and have a parental income less than100000(US$1,600). In News: About holdings in various companiesLIC holds shares worth about Rs 2.33 lakh crore in all the Nifty companies put together, but it lowered its holding in a total of 27 Nifty companies during the quarter.The cumulative value of LIC holding in these 27 companies fell by little over Rs 8,000 crore during the quarter shows the analysis of changes in their shareholding patterns.Individually, LIC is estimated to have sold shares worth Rs 500-1,000 crore in each of Mahindra & Mahindra, HDFC Bank, ICICI Bank, Tata Motors, L&T, HDFC, Wipro, SBI, Maruti Suzuki, Dr Reddys and Bajaj Auto.The insurance behemoth also trimmed holdings in Ambuja Cements, Cipla, TCS, Lupin and Asian Paints. A marginal decline was also witnessed in its stakes in companies such as IDFC, Hindustan Unilever, Grasim, ACC, BPCL, Bank of Baroda, Punjab National Bank, Sun Pharma and Tata Power.On the other hand, LIC further ramped up its stake in a total of 14 Nifty constituents with purchase of shares worth an estimated Rs 4,000 crore.The major companies where LIC has raised its stake include Infosys, RIL,Coal India Ltd and Cairn India. Other such companies are ITC, Power Grid Corp, NTPC, Siemens, Bharti Airtel and Hero MotoCorp.The state-run insurer also marginally hiked its exposure in Ultratech, Gail India, Ranbaxy, Kotak Mahindra Bank and HCL Technologies, while its shareholding remained almost unchanged in companies like ONGC, Tata Steel, BHEL and Reliance Infra.

CH-5 General Insurance Corporation of IndiaGIC of India (GIC Re)is the solereinsurancecompany in the Indian insurance market with over four decades of experience.GIC Re has its registered office and headquarters inMumbai.HistoryThe entiregeneral insurancebusiness in India was nationalised by theGovernment of India(GOI) through the General Insurance Business (Nationalisation) Act (GIBNA) of 1972. 55 Indian insurance companies and 52 other general insurance operations of other companies were nationalized through the act.[2]TheGeneral Insurance Corporation of India(GIC) was formed in pursuance of Section 9(1) of GIBNA. It was incorporated on 22 November 1972 under the Companies Act, 1956 as a private company limited by shares. GIC was formed to control and operate the business of general insurance in India.The GOI transferred all the assets and operations of the nationalized general insurance companies to GIC and other public-sector insurance companies. After a process of mergers and consolidation, GIC was re-organized with four fully owned subsidiary companies:National Insurance Company Limited,New India AssuranceCompany Limited,Oriental InsuranceCompany Limited andUnited India Insurance Company Limited.GIC and its subsidiaries had a monopoly on the general insurance business in India until the landmarkInsurance Regulatory and Development Authority Act(IRDA Act) of 1999 came into effect on 19 April 2000. This act also amended the GIBNA Act and Insurance Act of 1938. The act along with the amendments ended the monopoly of GIC and its subsidiaries and liberalized the insurance business in India.In November 2000, GIC was renotified as India's Reinsurer, but its supervisory role over its subsidiaries was ended. This was followed by theGeneral Insurance Business (Nationalisation) Amendment Actof 2002. Coming into effect from 21 March 2003, this amendment ended GIC's role as a holding company of its subsidiaries. The ownership of the subsidiaries was transferred to the Government of India.As a result of these reforms, GIC became the sole Re-Insurer in India, and is now calledGIC Re. Indian insurance companies are required by law to cede 5% of every policy value to GIC Re w.e.f. 1 April 2013, subject to some limitations and exceptions. GIC Re has diversified its operations and is now emerging as an important Re-Insurer inSAARCcountries,Southeast Asia,Middle EastandAfrica,EuropeandAmerica. GIC Re has also expanded its international operations through branches in London, Moscow, Dubai and Kuala Lumpur and is further planning to establish offices in key regions.As of 2012 GIC Re ranked 15th largest Reinsurer and 5th largest Aviation Reinsurer in the world (S&P Ratings). GIC Re has a rating of A- (Excellent) fromA. M. Bestfor its financial strength.As of 2014 GIC Re has been assigned National Scale AAA Reliability Rating And Global Scale iA- Credit Rating by Russian National Rating Agency (NRA).

CH:5 New India Assurance CompanyThe New India Assurance Co. Ltd., based inMumbai, is one of the fiveWholly Government of India ownedassurance companies of India.[4]It is the "largest generalinsurancecompany ofIndiaon the basis of gross premium collection inclusive of foreign operations". .[5]It was founded by Sir Dorabji Tata in 1919, and was nationalised in 1973.Previously it was a subsidiary of theGeneral Insurance Corporation of India(GIC). But when GIC became anre-insurancecompany as per theIRDAAct 1999, its four primary insurance subsidiariesNew India Assurance,United India Insurance, Oriental Insurance andNational Insurancegot autonomy.New India Assurance operates both in India and foreign countries. In the recent past it has collaborated with some of the leading public sector banks of India such asState Bank of India,Central Bank of India,Corporation BankandUnited Western Bankto increase its distribution network.OfficesThe company with its corporate office in Mumbai has about 31 regional offices, 397 divisional offices, 588 branches, 27 direct agent branches and 23 extension counters in the year 2011-2012 ]The number of regional offices of the company in the year 2011 stood at 28, with numerous other offices down the hierarchy of divisional offices, branch offices, direct agents branches, micro offices. Centralised claim processing offices called claims hubs are operated from 29 locations.Its overseas offices for the year 2011-2012 consisted of 19 branches, seven agencies, four associate companies and three subsidiary companies spread over 23 countries.Business PerformanceThe domestic gross premium procured for the period from April 2013 to March 2014 was Rs.11,540 crore with a growth of 15.00%, when compared to the same corresponding period pertaining to previous financial year and the globalgross premium stood at Rs.14,304 croreswith a growth of 14.40% over previous year. The company posted PAT (Profit After Tax) of Rs.1089 crores. The company paid a dividend of Rs.220 crores to the Government of India for the fiscal 13-14.Dividend paid to Government of India.The state owned company's achievements include;1) Procurement of highest Global Gross Premium of Rs.14,304 crores for the year 2013-2014. Maintaining the 'largest general Insurer in India' tag.2) Market leadership position for four consecutive decades3) The ratio of available solvency margin to required solvency margin standing at 250%4) Highest net profit of Rs.1089 crores5) Highest net worth of Rs.8,621 crores6) Highest assets - crossed Rs.53,000 crores7) Only Indian General Insurance Company to have presence in 22 countries8) Financial Strength rating of A-Excellent (Stable) by A.M Best -Europe.

IT SolutionThe company has teamed up withTCS BaNCSto provide a core insurance platform]The project is known as CWISS or Centralised Web based Insurance System Solution.For re-insurance, company uses RAMS software. RAMS stands for Re-insurance accounting and management system. This software is also developed by TCS BaNCS.

AwardsJ.D PowerAsia Pacific part ofMcGraw Hill Companieshas ranked New India Assurance Company Ltd, the highest in satisfying auto insurance customers.[11]The award relates to 2011 India Auto Insurance Customer Satisfaction Index Study wherein out of a 1000 point scale, the company scored 804.CH:6 United India InsuranceUnited India Insurance Company Limited(Wholly owned by Govt. of India) under Department of Financial Services,Ministry of Finance (India), is a public sector General Insurance Company of India andone of the top General Insurers in Asia. With the net worth of 5407 crores and profit of 528 crores, the company has collected gross premium of 9709 crores as of in the financial year 2013-14. The company has more than seven decades of experience in Non-life Insurance business and was formed to its present form by the merger of 22 companies, consequent to the nationalisation of General Insurance companies in India.

About the companyUnited India Insurance Company Limited was incorporated as a Company on 18 February 1938. General Insurance Business inIndiawas nationalized in 1972. A total of 12 Indian Insurance Companies, 4 Cooperative Insurance Societies and Indian operations of 5 Foreign Insurers, besides General Insurance operations of southern region ofLife Insurance Corporation of Indiawere merged with United India Insurance Company Limited. Afternationalizationthe company has grown by leaps and bounds and has a workforce of about 18000 employees spread across more than 1600 offices providing insurance cover to more than 2 Crore policy holders. The Company has variety of insurance products to provide insurance cover ranging from bullock carts to satellites.

United India Insurance Company has been in the forefront of designing and implementing complex covers to large customers, as in cases ofONGCLtd, GMR-Hyderabad International AirportLtd,Mumbai International AirportLtd Tirumala-TirupatiDevasthanam etc. It has been also the pioneer in taking Insurance to rural masses with large level implementation of Universal Health Insurance Programme ofGovernment of India& Vijaya Raji Janani Kalyan Yojana ( covering 45 lakhs women in the state ofMadhya Pradesh),TsunamiJan Bima Yojana (in 4 states covering 4.59 lakhs of families), National Livestock Insurance and many such schemes.

OfficesUnited India Insurance Company headquartered at Chennai has more than 1600 offices consisting of 26 Regional Offices, 8 Large Corporate Offices and several divisional, branch and micro offices. The company has also been operating large number of Service and TP hubs for dedicated service to motor policy claims and related assistance.Profit and performanceThe United India Insurance reported a significant jump in its profit after tax at Rs 528 crore for the financial year 2013-14. Gross premium collected for the year stood at 9609 crores, up by about 7% from the previous year. Net worth of the company also witnessed a steady increase to 5361 croresDuring the half-year period ended September 30, 2011, the company collected a total premium of Rs 4,033 crore, up by 27 per cent from Rs 3,178 crore in the year-ago period."We have set a target premium of Rs 8,000 crore this year," he said. On plans for the year 2011-12, he said the company would focus on retail, micro-small and medium enterprises and rural insurance segments. "We will focus on agency channel and bancassurance. Agency channel contributed 40 per cent and bancassurance 7 per cent (in the first half of the year). We expect it to increase in the years to come," he said. Replying to a question, he said the company would bid for the Tamil Nadu government's health insurance scheme. The investment income of the company for the first-half of the year stood at over Rs 803 crore as of September 30, 2011.A steep reduction in management expenses (to 25% from 37%) claims outgo and an increase in premium income across segments has enabled the company to post 57 percent growth in net profit for the first half of the current fiscal. United India earned Rs.803 crore from its investments during the first six months of the 2011-12. The market value of the company's investments at the end of second quarter stood at Rs.15,803 croreFuture plansLogging an average business growth of 27 percent in 2011-12, India's leading non-life insurer United India Insurance Company Ltd declared that it is targeting a gross premium of Rs.10,000 crore in fiscal year 2013-14 and sizeable reduction in underwriting losses - premium less claims outgo - to Rs.900 crore from last year's figure of Rs.1,760 crore.The company would focus the retail, and small and medium enterprises (SME) segments for growth. It is in the process of adding further to its 48,000 agents and also to open around 100 one-man offices across the country. Currently, there are 400 such micro-offices bringing in around Rs.275 crore premium.Company is waiting for approval from the insurance regulator IRDA to introduce three products under the health portfolioProductsPersonal policies Householder Personal accident Mediclaim Unimedicare Bhavishya arogyaCommercial policies Fire insurance Marine insurance Motor insurance Industrial insurance Liability insuranceAwards and recognitionsUnited India wins The Skoch Financial Inclusion Award 2013 for M-Power project in the ICT based innovation category. M-Power is a premium payment service running through mobile.United India gets Skoch award 2010: United India Insurance Company has won the award for successful implementation of the financial inclusion initiatives. The company has implemented theRashtriya Swasthya Bima Yojanain Kerala. Skoch awards, distributed by Skoch Consultancy Services, are meant to honour extraordinary achievements in governance, capacity building, empowerment, inclusive growth, citizen services delivery, technology, academics and change management. United India Insurance Company has been selected as one among the top threeGeneral insurancecompanies in Asia by Asia Insurance Review at the 14th Asia Insurance Industry Awards held in Bali, Indonesia.United India Insurance Co. Ltd. has been awarded the Best Non-Life Insurance Company byNDTV Profit-Business Leadership Awards 2010.United India Insurance Co. Ltd. has been awarded 'iAAA' rating for its claims paying ability byICRA(Investment Information and Credit Rating Agency) for the third successive year. This rating indicates company's highest claims paying ability, its strong fundamental and its overall financial strength for meeting the policy holders obligations.PCQuest, one of India's premierITmagazines has selectedMPLSVPNproject of UIIC as one of the best implementedITprojects in the year 2007. The details of the same are published in the June 2007 issue of thePCQuestmagazine.MPLSVPNproject of UIIC was selected after a rigorous screening process in which 250 IT projects of various companies in the country were evaluated. Subsequently, a jury of eminent personalities selected the top 21ITprojects implemented in 2007, in which theMPLSproject of UIIC figures prominently.

New ChallengesUS PresidentBarack Obamain India. Insurers to offer Rs 750 crore capacity for nuclear pool in India.The Republic Day visit of US PresidentBarack Obama, to India, has brought new challenges to the Indian Government owned general insurance industry, with nuclear energy risk capping.The proposed nuclear risk pool that will be set up in India will have five government-owned insurance companiesGeneral Insurance Corporation of India(GIC),New India Assurance,Oriental Insurance,National Insuranceand United India Insurance providing half the capacity for the Rs 1,500-crore pool. The rest will come from the central government. It is meant to insure the risks from nuclear reactors. There will be cover for both hot zones (radiation and nuclear reactors) and cold zones (outside reactor areas). At present, nuclear reactors in India have covers for zones outside the area of radiation and nuclear reactors. This is due to the lack of underwriting data on the liability for hot zones. Once the pool is in place, the premiums will go into the pool, and cover for hot zones and its liabilities will be provided.In 2010, Parliament passed the CLND Act, which creates a liability cap for nuclear plant operators for economic damage in the event of an accident. It also leaves nuclear suppliers free of most liability. Industry experts had said both nuclear operators and suppliers should be jointly held liable for civil damages in case of an accident.The Act also provides for state-runNuclear Power Corporation of India, which operates all the atomic power plants in India, to seek compensation from suppliers in case of an accident due to faulty equipment. TheKudankulam Nuclear Power PlantinTamil Nadu, the 21st atomic reactor in India, will not be covered under this pool because its contract was signed much before the Act was passed. However, this plant has been covered for its non-radiation or cold zones.Prime MinisterNarendra Modiin his statement at the joint press interaction with PresidentBarack ObamaofUnited States of America, said that theIndiaUnited States Civil Nuclear Agreement, was the centerpiece of our (India-US) transformed relationship, demonstrating new trust.National re-insurer General Insurance Corporation (GIC Re) plans to issue insurance-linked bonds to raise Rs. 750 crore for creating capacity for the proposed Indian Nuclear Insurance Pool. After breakthrough in the US-India civil nuclear deal, the government has asked GIC Re to ensure that the pool is operational immediately. Following the withdrawal of insurance and reinsurance capacity by foreign re-insurers for terrorism risk, in the international market post9/11, all the non-life insurers in India, along with the GIC Re, established the Terrorism Pool in 2002 to cover property damage and consequential loss arising out of any terror strike.

CH:7 Insurance Regulatory and Development Authority of IndiaInsurance Regulatory and Development Authority of India(IRDA) is anautonomousapex statutory body which regulates and develops theinsuranceindustry in India. It was constituted by aParliament of Indiaact calledInsurance Regulatory and Development Authority Act, 1999 and duly passed by theGovernment of India.The agency operates from its headquarters atHyderabad,Telanganawhere it shifted fromDelhiin 2001.IRDA batted for a hike in the foreign direct investment (FDI) limit to 49 per cent in the insurance sector from the erstwhile 26 per cent]The FDI limit in insurance sector was raised to 49% in July 2014.HistoryTheIRDA Act, 1999was passed as per the major recommendation of theMalhotra Committeereport (7 jan,1994) which recommended establishment of an independent regulatory authority for insurance sector in India. Later, It was incorporated as a statutory body in April, 2000. TheIRDA Act, 1999also allows private players to enter the insurance sector in India besides a maximum foreign equity of 26 per cent in a private insurance company having operations in India. The Insurance Bill proposes to raise the FDI limit in insurance sector to 49%. Proposed by UPA government in July 2013, it is still pending discussion in Rajya Sabha. It serves as an Authority to protect the interests of holders of insurance policies, to regulate, promote and ensure orderly growth of the insurance industry and for matters connected therewith. IRDA roleis to protect rights of policy holders & they provide registration certification to life insurance companies & responsible for renewal, modification, cancellation & suspension of this registered certificateOrganizational structure or Composition of AuthorityAs per the section 4 of IRDA Act' 1999, Insurance Regulatory and Development Authority (IRDA, which was constituted by an act of parliament) specify the composition of Authority.IRDAis a ten member body consisting of: A Chairman,-(T.S. Vijayan) Five whole-time members,-(R.K. Nair,M. Ram Prasad,S. Roy Chowdhary,D.D. Singh) Four part-time members,-(Anup Wadhawan,S.B. Mathur,Prof. V.K.Gupta,CA. Subodh Kr. Agarwal)All members are appointed by theGovernment of India.

Insurance RepositoryInsurance Repository is a facility to help policy holders buy and keep insurance policies in electronic form, rather than as a paper document.Insurance Repositories, like Share Depositories ormutual fundTransfer Agencies, will hold electronic records of insurance policies issued to individuals and such policies are called electronic policies or e Policies.

CH:8 Agricultural insurance in India

Agriculture in Indiais highly susceptible to risks like droughts and floods. It is necessary to protect the farmers from natural calamities and ensure their credit eligibility for the next season. For this purpose, theGovernment of Indiaintroduced many agricultural schemes throughout the country.Comprehensive Crop Insurance Scheme(CCIS)The Comprehensive Insurance Scheme (CIS) covered 15 states and 2 union territories. Participation in the scheme was voluntary. Around 5 million farmers and between 8-9 million hectares were annually covered by this scheme. If the actual yield in any area covered by the scheme fell short of the guaranteed yield, the farmers were entitled to anindemnityon compensation to the extent of the shortfall in yield. The General Insurance Corporation of India administered the scheme on behalf of theMinistry of Agriculture, Government of India.A major drawback of the scheme could be seen from the fact that out of all the all-India claims of Rs 1,623 crores,Gujaratalone received Rs. 792 crores for one single crop,groundnut.The scheme was scrapped in 1997.Experimental Crop InsuranceAn experimental crop insurance scheme was introduced in 1997-98, covering non-loanee small and marginal farmers growing specified crops in selected districts. The premium wassubsidized. The premium collected was about Rs. 3 crores and the claims amounted to Rs. 40 crores.The Government discontinued the scheme during 1997-98 itself.Farm Income Insurance SchemeThe Central Government formulated the Farm Income Insurance Scheme (FIIS) during 2003-04. The two critical components of a farmers income are yield and price. FIIS targeted these two components through a single insurance policy so that the insured farmer could get a guaranteed income.The scheme provided income protection to the farmers by insuring production and market risks. The insured farmers were ensured minimum guaranteed income (that is, average yield multiplied by the minimum support price). If the actual income was less than the guaranteed income, the insured would be compensated to the extent of the shortfall by theAgriculture Insurance Company of India. Initially, the scheme would cover only wheat and rice and would be compulsory for farmers availing crop loans. NAIS (explained in the section below) would be withdrawn for the crops covered under FIIS, but would continue to be applicable for other crops.The FIIS was withdrawn in 2004National Agriculture Insurance Scheme(NAIS)The Government of India experimented with a comprehensive crop insurance scheme which failed. The Government then introduced in 1999-2000, a new scheme titled National Agricultural Insurance Scheme (NAIS) or Rashtriya Krishi Bima Yojana (RKBY]NAIS envisages coverage of all food crops (cereals and pulses), oilseeds, horticultural and commercial crops. It covers all farmers, both loanees and non-loanees, under the scheme.Thepremiumrates vary from 1.5 percent to 3.5 percent of sum assured for food crops. In the case of horticultural and commercial crops, actuarial rates are charged. Small and marginal farmers are entitled to a subsidy of 50 percent of the premium charged- the subsidy is shared equally between the Government of India and the States. The subsidy is to be phased out over a period of 5 years.NAIS operates on the basis of1. Area approach- defined areas for each notified crop for widespread calamities.2. On individual basis- for localized calamities such as hailstorms, landslides, cyclones and floods.Under the scheme, each state is required to reach the level Gram Panchayat as the unit of insurance in a maximum period of 3 years.agriculture insurance corporation of India is implementing the scheme.

BIBLOGRAPHY

http://en.wikipedia.org/wiki/Insurance_in_Indiahttp://en.wikipedia.org/wiki/Life_Insurance_Corporation_of_Indiahttp://en.wikipedia.org/wiki/General_Insurance_Corporation_of_Indiahttp://en.wikipedia.org/wiki/New_India_Assurancehttp://en.wikipedia.org/wiki/National_Insurance_Companyhttp://en.wikipedia.org/wiki/United_India_Insurancehttp://en.wikipedia.org/wiki/Insurance_Regulatory_and_Development_Authority_of_Indiahttp://en.wikipedia.org/wiki/Life_insurance_in_Indiahttp://en.wikipedia.org/wiki/Agricultural_insurance_in_Indiawww.insurance.com