LIC

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LIC Agents Protest Against New Insurance Rules

About LIC

• Life Insurance Corporation of India (LIC) is the largest public sector life insurance company and institutional investor in India.
• Headquartered in Mumbai, it plays a crucial role in India’s financial market.
• Motto: “Yogakshemam Vahamyaham” (From the Bhagavad Gita) – “Your welfare is our responsibility.”
• Established in 1956 through the Life Insurance of India Act, which nationalized the insurance sector by merging 245 private insurers and provident societies into a single entity.
• LIC operates through 8 zonal offices in Delhi, Chennai, Mumbai, Hyderabad, Kanpur, Kolkata, Bhopal, and Patna.

Historical Background of the Indian Insurance Industry

• 1818: Oriental Life Insurance Company, the first life insurance company in India, was established.
• 1870: Bombay Mutual Life Assurance Society, the first Indian-owned life insurance company, was founded.
• 1912: Indian Life Assurance Companies Act was enacted to regulate life insurance businesses.
• 1928: Indian Insurance Companies Act was passed to enable the government to collect statistical data on life and non-life insurance companies.
• 1938: Insurance Act, 1938, was enacted to protect policyholders’ interests and regulate the sector.
• 1956: LIC was formed by merging 245 Indian and foreign insurance companies with an initial capital of ₹5 crore from the Government of India.
• Meanwhile, General Insurance in India began with the Triton Insurance Company Ltd. in 1850, established by the British in Calcutta.

Financial Services Institutions Bureau (FSIB)

• Established in 2022 by the Union Government to recommend appointments of whole-time directors and non-executive chairpersons in public sector financial institutions.
• Also advises on personnel management policies in these institutions.
• Vision: To promote corporate governance excellence in public sector financial institutions.
• Secretariat: Consists of a Secretary and four officers.

Insurance Regulatory and Development Authority of India (IRDAI)

• Statutory body formed under the IRDAI Act, 1999 for the supervision and regulation of the insurance sector.
• Powers & Functions:
  • Promotes competition to enhance consumer choice and fair pricing.
  • Ensures financial security of the insurance market.
  • Regulates entities under the Insurance Act, 1938, which is the primary law governing the insurance sector.
  • Other relevant laws include:
    • Marine Insurance Act, 1963 (governing marine insurance).
    • Public Liability Insurance Act, 1991 (covering liability insurance).

LIC FAQs

Q1. What is the Life Insurance Corporation of India (LIC)?

Ans. LIC is a state-owned insurance company established in 1956 after the nationalization of private insurance companies. It is the largest insurer in India, offering life insurance and investment services.

Q2. Why was LIC established?

Ans. LIC was created under the Life Insurance Corporation Act, 1956 to provide life insurance services and promote financial security for citizens.

Q3. Who regulates LIC?

Ans. LIC is regulated by the Insurance Regulatory and Development Authority of India (IRDAI) and operates under the Ministry of Finance, Government of India.

Source: TH