Life Insurance Corporation of India

TOP CONTRIBUTORS


The ===heading h3===Life Insurance Corporation of India (LIC) is the largest life insurance company in India and also the country's largest investor.; it is fully owned by the Government of India. It also funds close to 24.6% of the Indian Government's expenses. It was founded in 1956.

Headquartered in Mumbai, which is considered the financial capital of India, the Life Insurance Corporation of India currently has 8 zonal Offices and 101 divisional offices located in different parts of India, at least 2048 branches located in different cities and towns of India along with satellite Offices attached to about some 50 Branches, and has a network of around one million and 200 thousand agents [1] for soliciting life insurance business from the public,

History

The Oriental Life Insurance Company, the first corporate entity in India offering life insurance cover was established in Calcutta in 1818 by Bipin Behari Dasgupta and others. Europeans in India were its primary target market, and it charged Indians heftier premiums. 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

  • Bharat Insurance Company (1896)
  • United India (1906)
  • National Indian (1906)
  • National Insurance (1906)
  • Co-operative Assurance (1906)
  • Hindustan Co-operative (1907)
  • Indian Mercantile
  • General Assurance
  • Swadeshi Life (later Bombay Life)

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

The LIFE INSURANCE Act and the Provident Fund Act were passed in 1912, providing the first regulatory mechanisms in the Life Insurance industry. The Indian Insurance Companies Act of 1928 authorized the government to obtain statistical information from companies operating in both life and non-life insurance areas. The subsequent Insurance Act of 1938 brought stricter state control over an industry that had seen several financially unsound ventures fail. A bill was also introduced in the Legislative Assembly in 1944 to nationalize the insurance industry.

Nationalization

In 1955, parliamentarian Feroze Gandhi raised the matter of insurance fraud by owner's of private insurance companies. In the ensuing investigations, one of India's wealthiest businessmen, Ram Kishan Dalmia, owner of the Times of India newspaper, was sent to prison for two months. Eventually, the Parliament of India passed the Life Insurance of India Act on 1956-06-19, and the Life Insurance Corporation of India was created on 1956-09-01, by consolidating the life insurance business of 245 private life insurers and other entities offering life insurance services. Nationalization of the life insurance business in India was a result of the Industrial Policy Resolution of 1956, which had created a policy framework for extending state control over at least seventeen sectors of the economy, including the life insurance. The company began operations with 5 zonal offices, 33 divisional offices and 212 branch offices.

Current status

Over its existence of around 50 years, Life Insurance Corporation of India, which commanded a monopoly of soliciting and selling life insurance in India, created huge surpluses, and contributed around 7 % of India's GDP in 2006.

The Corporation, which started its business with around 300 offices, 5.6 million policies and a corpus of INR 459 million, has grown to 2,048 offices servicing around 180 million policies and a corpus of over INR 3.4 trillion.

The organization now comprises 2048 branches, 100 divisional offices and 8 zonal offices, and employs over 1 million agents. It also operates in 12 other countries, primarily to cater to the needs of Non Resident Indians.

With the change in the India's economic philosophy from the early 1990s, and the subsequent relaxation of state control over several sectors of the economy, the monopolistic position of the Life Insurance Corporation of India was diluted, and it has had to compete with a number of other corporate entities, Indian as well as transnational Life Insurance brands.

In the financial year 2006-07 Life Insurance Corporation of India's number of policy holders are said to have crossed a whopping 200 million (fourth in terms of population of the countries of the world)

Subsidiaries=

LIC owns the following subsidiaries: =

  • Life Insurance Corporation of India International: This is a joint venture offshore company promoted by LIC which commenced operations in July, 1989 with the objectives of offering US$ denomimated policies to cater to the insurance needs of NRIs and providing insurance services to holders of LIC policies currently residing in the Gulf. *LIC International operates in all GCC countries.
  • LIC Nepal: A joint venture company formed in 2001 with the Vishal Group of Industries, Nepal.
  • LIC Lanka: A joint venture company formed in 2003 with the Bartleet Group of Companies, Sri Lanka.
  • LIC Housing Finance: Incorporated in 19th June 1989, its main objective is to provide long term finance forconstruction or purchase of houses or apartments. It has a Dubai office.
  • LICHFL Care Homes: A wholly owned subsidiary of LIC Housing Finance, it builds and operates "Assisted Community Living Centres" for senior citizens.

Life Insurance Corporation of India