Life Insurance Corporation of India
INTRODUCTION
The new millennium has exposed the insurance sector to new challenges of competition and struggle for survival. The era of liberalization, privatization and globalisation has ended the monopolistic tendency in this sector. It has been over four years since the Indian insurance market has opened up and the new entrants into the market have set up their shops throughout the country.
Until the late nineties, the Indian insurance industry was under State control with no private participation. In April 1993 the Government of India appointed the Malhotra Committee to evaluate the insurance industry and to suggest its future direction. The Committee submitted its report in 1994, strongly recommending private participation in the industry. The discussion and efforts to open up the insurance market continued for about six years. The policymakers were in a ‘Catch 22’ situation. On the one hand, they wanted competition for the development and growth of the insurance sector, and on the other, they feared that the insurance premium would seep out of the country. Thus they adopted a cautious approach towards opening up the sector to foreign participation. Ultimately, the Insurance Regulatory and Development Act (IRDA) was passed in December 1999 and with this the globalisation of the Indian insurance sector became a reality. Certainly, these developments were bound to have an impact on Life Insurance Corporation (LIC) of India too. The present paper tries to review the current status of LIC in the changed competitive scenario of the insurance industry.
LIC of India: History and Present Position
Life insurance in its present form came to India from England in the year 1818, when the Oriental Insurance Company, the first corporate entity in India offering life insurance cover was established in Calcutta. From then onwards, for the next 138 years, several companies and societies were formed for providing life insurance cover. The period was marked by a
The new millennium has exposed the insurance sector to new challenges of competition and struggle for survival. The era of liberalization, privatization and globalisation has ended the monopolistic tendency in this sector. It has been over four years since the Indian insurance market has opened up and the new entrants into the market have set up their shops throughout the country.
Until the late nineties, the Indian insurance industry was under State control with no private participation. In April 1993 the Government of India appointed the Malhotra Committee to evaluate the insurance industry and to suggest its future direction. The Committee submitted its report in 1994, strongly recommending private participation in the industry. The discussion and efforts to open up the insurance market continued for about six years. The policymakers were in a ‘Catch 22’ situation. On the one hand, they wanted competition for the development and growth of the insurance sector, and on the other, they feared that the insurance premium would seep out of the country. Thus they adopted a cautious approach towards opening up the sector to foreign participation. Ultimately, the Insurance Regulatory and Development Act (IRDA) was passed in December 1999 and with this the globalisation of the Indian insurance sector became a reality. Certainly, these developments were bound to have an impact on Life Insurance Corporation (LIC) of India too. The present paper tries to review the current status of LIC in the changed competitive scenario of the insurance industry.
LIC of India: History and Present Position
Life insurance in its present form came to India from England in the year 1818, when the Oriental Insurance Company, the first corporate entity in India offering life insurance cover was established in Calcutta. From then onwards, for the next 138 years, several companies and societies were formed for providing life insurance cover. The period was marked by a