In economic terms, insurance refers to any measure taken to reduce risk.
In everyday language, insurance is provided by insurance companies, which offer coverage for either a person's life (life insurance) or for loss of assets or property (non-life or general insurance). Insurance policies are bought with fixed premiums.
In 1971, the government nationalised the private sector companies (107 Indian and foreign companies) playing in the general insurance segment and a government company, the General Insurance Corporation of India (GIC) was formed in 1972.
The GIC started operation on January 1,1973 with its four holding companies :
(i) National Insurance Company Ltd.
(ii) New India Assurance Company Ltd.
(iii) Oriental Fire and Insurance Company Ltd.
(iv) United India Insurance Company Ltd.
In the era of economic reforms, two major changes took place in this area—
(i) In November 2000, the GIC was notified as the Indian Reinsurer
(ii) In March 2002 the GIC was withdrawn from holding company status of the four public sector general insurance companies.
IRDA
THE CHALLENGE AHEAD
Reasons for underdevelopment of insurance :
As per the various volumes of the Annual Reports published by the IRDA and other Government documents, there have been several reasons responsible for the underdevelopment of the insurance penetration and density in the country—
Policy Initiatives
Committed to expand and strengthen, the insurance industry in the country (following the recommendations of the Malhotra Committee Report, 1993), the Government of India has taken the following policy initiatives in recent years:
THIRD PARTY INSURANCE
NEW INSURANCE SCHEMES
ROAD AHEAD
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