...INTRODUCTION INSURANCE SECTOR IN INDIA The Insurance sector in India governed by Insurance Act, 1938, the Life Insurance Corporation Act, 1956 and General Insurance Business (Nationalisation) Act, 1972, Insurance Regulatory and Development Authority (IRDA) Act, 1999 and other related Acts. With such a large population and the untapped market area of this population Insurance happens to be a very big opportunity in India. Today it stands as a business growing at the rate of 15-20 per cent annually. Together with banking services, it adds about 7 per cent to the country's GDP .In spite of all this growth the statistics of the penetration of the insurance in the country is very poor. Nearly 80% of Indian populations are without Life insurance cover and the Health insurance. This is an indicator that growth potential for the insurance sector is immense in India. It was due to this immense growth that the regulations were introduced in the insurance sector and in continuation "Malhotra Committee" was constituted by the government in 1993 to examine the various aspects of the industry. The key element of the reform process was Participation of overseas insurance companies with 26% capital. Creating a more efficient and competitive financial system suitable for the requirements of the economy was the main idea behind this reform. Since then the insurance industry has gone through many sea changes .The competition LIC started facing from these companies were threatening to the...
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...com/blogs Insurance Digest for LIC AAO 2016 Exam Dear readers, This Insurance Digest is complete Information of important terms and plan & Policies and history. The Insurance Digest is important and relevant for all Insurance exams like - LIC AAO 2016 Exam, NICL, NIACL, Insurance and other Insurance Exams. What is Insurance? - Insurance is defined as a contract between two parties whereby one party called insurer undertakes in exchange for a fixed sum called premium to pay the other party called insured a fixed amount of money after happening of a certain event. According to the Indian Contract Act 1872, “A Contract may be defined as an agreement between two or more parties to do or to abstain from doing an act, with an intention to create a legally binding relationship.” Benefits of Insurance – It safeguards your money. It ensures growth of money. Life insurance policies are broadly categorized into 2 types – Traditional Plans and Unit Linked Insurance Plans (ULIPs). History-of-Life-Insurance-Corporation (LIC) - Life Insurance Corporation (India) (LIC) is an Indian state-owned insurance group and investment company headquartered in Mumbai. The Life Insurance Corporation of India was founded in 1956 when the Parliament of India passed the Life Insurance of India Act that nationalized the private insurance industry in India. Over 245 insurance companies and provident societies were merged to create the state owned Life Insurance Corporation. The Life Insurance Companies...
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...banks wherein entities both from private and public sector shall be eligible to set up a bank through a wholly owned non operative financial holding company (NOFHC). The NOFHC shall be wholly owned by promoter/promoter group . The NOFHC shall hold the bank as well as all other financial services entities of the group. Entities /groups should have past record of sound credentials and integrity be financially sound and successful track record of 10 years . Criteria for applying license A business group which keen for applying for license should have a minimum paid up capital of Rs 500 crore. At the start of the banking operation, NOFHC should hold a minimum of 40% of equity for lock in period of 5 years .later it has to be brought down to 15% within 12 year from that onwards. The NOFHC will be registered as Non - banking finance company with RBI while the bank will be governed by the prudential regulations by RBI. NOFHC and bank shall not have any exposure to the promoter group. The bank shall not invest in the equity /debt capital instrument of any financial entities held by the NOFHC. However RBI put a stricter condition of having 25% of its branches in unbanked rural area. with population upto 9999 . New banks should achieve priority sector lending target of 40%. Foreign share holding in the new bank does not exceed 49% for the first five years after which it can be extended as per policy norms. In India 60% of population is away from banking services, ...
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...of Advanced System and Social Engineering Research ISSN 2278-6031, Vol 3, Issue 1, 2013, pp18-22 http://www.bipublication.com ADVANTAGES AND DISADVANTAGES OF PRIVATISATION IN INDIA Anant Kousadikar and Trivender Kumar Singh* *Jatan Swaroop PostGraduate College, Kayasthwada,Sikandrabad(U.P.), Distt: Bulandshar [Received-05/12/2012, Published-17/01/2013] ABSTRACT Privatization in generic terms refers to the process of transfer of ownership, can be of both permanent or long term lease in nature, of a once upon a time state-owned or public owned property to individuals or groups that intend to utilize it for private benefits and run the entity with the aim of profit maximization. In other words, it is a route from public or state ownership to private players or a group. From the other point of view, it is a strategy that provides advantages to a few at the price of many. However, this is always subjected to the circumstances involved. In this paper, the aim is to understand the major advantages and disadvantages of privatization in this country. Index Terms: Privatisation, advantages, Public administration. I. INTRODUCTION Privatization is a managerial approach that has attracted the interest of many categories of peopleacademicians, politicians, government employees, players of the private sector, and public on the whole. As per the opinion by the subject experts, privatization can be advantageous in terms of the higher flexibility and scope of innovation it offers along...
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...THE UNIVERSITY OF NOTTINGHAM Centre for Risk & Insurance Studies Privatization of the Insurance Market in India: From the British Raj to Monopoly Raj to Swaraj Tapen Sinha CRIS Discussion Paper Series – 2002.X Privatization of the Insurance Market in India: From the British Raj to Monopoly Raj to Swaraj by Tapen Sinha, Ph.D. ING Comercial America Chair Professor Instituto Tecnológico Autónomo de México Mexico City, Mexico and Professor, School of Business University of Nottingham, UK tapen@itam.mx, tapen@nottingham.ac.uk Abstract We examine the institution of insurance in India. Over the past century, Indian insurance industry has gone through big changes. It started as a fully private system with no restriction on foreign participation. After the independence, the industry went to the other extreme. It became a state-owned monopoly. In 1991, when rapid changes took place in many parts of the Indian economy, nothing happened to the institutional structure of insurance: it remained a monopoly. Only in 1999, a new legislation came into effect signaling a change in the insurance industry structure. We examine what might happen in the future when the domestic private insurance companies are allowed to compete with some foreign participation. Because of the time dependence of insurance contracts, it is highly unlikely that these erstwhile monopolies are going to disappear. Acknowledgement: I would like to thank Rebecca Benedict and Samik Dasgupta for their input in...
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...Tree Common ash (Fraxinus excelsior), a broad-leaved tree European larch (Larix decidua), a coniferous tree Lepidodendron, an extinct lycophyte tree In botany, a tree is a plant with an elongated stem, or trunk, supporting leaves or branches. In some usages, the definition of a tree may be narrower, including only woody plants, only plants that are usable as lumber, only plants above a specified height or only perennial species. At its broadest, trees include the taller palms, the tree ferns, bananas and bamboo. A tree typically has many secondary branches supported clear of the ground by the trunk. This trunk typically contains woody tissue for strength, and vascular tissue to carry materials from one part of the tree to another. For most trees it is surrounded by a layer of bark which serves as a protective barrier. Below the ground, the roots branch and spread out widely; they serve to anchor the tree and extract moisture and nutrients from the soil. Above ground, the branches divide into smaller branches and shoots. The shoots typically bear leaves, which capture light energy and convert it into chemical energy by photosynthesis, providing the food needed by the tree for its growth and development. Flowers and fruit may also be present, but some trees such as conifers instead have pollen cones and seed cones, and others such as tree ferns produce spores instead. Trees tend to be long-lived,[1] some reaching several thousand years old. The tallest known specimen on Earth...
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...iosrjournals.org Contribution of Insurance Sector to Growth and Development of the Indian Economy 1 1 2 Dr. M.Subba Rao, 2R. Srinivasulu M.Com, M.Phil, Ph.D Principal Sri Balaji P.G College (MBA) Anantapur – 515002 Andhra Pradesh - India M.Com, M.B.A Research Scholar Department of Commerce S.K University – Anantapur Andhra Pradesh India Abstract: For economic development, investment are necessary, investments are made out of savings. Insurance Company is a major instrument for the mobilization of savings of people particularly from the middle and lower income groups. These savings are channelized into investment for economic growth. Insurance serves a number of valuable economic functions that are largely distinct from other types of financial intermediaries. According to the official estimates, Indian economy is expected to grow at 7.6% (+/- 0.25%) in the fiscal year 2012–2013. However, leading financial organizations and economic think-tanks expect Indian economy to grow slower than official projections. The economy of India is the tenth-largest in the world by nominal GDP and the third largest by purchasing power parity (PPP). The country is one of the G-20 major economies and a member of BRICS. On a per capita income basis, India ranked 140th by nominal GDP and 129th by GDP (PPP) in 2011, according to the IMF. Fortunately, in the past few years, several interesting lines of research have begun to map the specific contributions of insurance to the economic growth process...
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...conviction that I have immensely benefited from the allotment of this topic. Contents S. No. Topic Page 1. Abbreviations 2. Table of Cases 3. Table of Statutes 4. Research Methodology 5. Introduction 6. Jurisprudential Study 7. Analysis on Indian Legal Provisions 8. Comparative Study 9. Conclusion 10. Suggestions 11. Bibliography Table of Abbreviations Sr.No Keyword Meaning 1 SC Supreme Court 2 HC High Court 3 IPC Indian Penal Code 4 Sec Section 5 v versus 6 www World wide web 7 i.e That is 8 etc Etcetera Table of Cases and Statutes Case Laws 1) Naz Foundation v Government of NCT of Delhi 2) Smt. Sarla v Mahendra Kumar 3) K.A. Abbas v Union of India 4) Aruna Shanbaug v Union of India 5) Ram Chandra Bhagat v State of Jharkhand 6) D. Veluswamy v D.Patchaiammal Acts/Conventions 1) The Indian Penal Code, 1860 2) The Protection of Women from Domestic Violence Act, 2005 3) Code of Criminal Procedure Act, 1973 4)...
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...Research Paper Economics Insurance Sector in India: Challenges and Opportunities Dr. NARESH RAMDAS MADHAVI ABSTRACT Associate Professor and Head Department of Economics Mahatma Phule A. S. C. College, Panvel, Dist. - Raigad Insurance sector in India is one of the growing sectors of the economy. India’s growing consumer class, rising insurance awareness, increasing domestic savings and investments are among the most critical factors that have positively driven the market penetration of the insurance product among its consumer segments. Both the life and non-life insurance in India, which were nationalized in the 1950s and 1960s respectively, which were liberalized in 1990s. Since the formation of IRDA and the opening of the insurance sector to private players in 2000, the Indian insurance sector has witnessed rapid growth. The opening up of the insurance sector has led to rapid growth of the sector. The total premium of the insurance industry has increased at a CAGR of 24.6 percent to reach INR 2,523.9 billion in 2009 KEYWORDS : Life Insurance, LIC, IRDA, Private Insurance Companies Introduction: The economic reforms initiated in the early 90s paved the way for the growth and opening up of the financial sector, which led to a sustained period of economic growth. The insurance industry was opened up for private players in 2000, and has seen tremendous growth over the past decade with the entry of global insurance majors. India is fast emerging as one of the world’s...
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...COLLEGE OF COMMERCE & ECONOMICS G. R. KARE ROAD, MARGAO - GOA INSURANCE SECTOR IN INDIA: THE PARADIGM SHIFT Meenakshi Bawa Lecturer, Department of Economics, M.E.S. College of Arts & Commerce, Zuarinagar, Goa The rapidly growing economic scene, the political attitude, cultural patterns, social values and rapid development in the Information Technology sector have brought about a significant transformation in the lifestyles in the urban and rural areas of our economy. These changes have introduced an element of uncertainty in the possible developments in all sectors; at the same time, the insurance sector also cannot remain untouched. In the present era of globalization, insurance companies face a dynamic global business environment. Radical changes are taking place due to the internationalization of activities, the appearance of new risks, new types of covers to match these new risk situations and innovative ideas on customer service. The low growth rates in developed markets, changing customer needs and the highly uncertain economic conditions in the developing world have been exerting pressure on insurers’ resources while testing their ability to survive. The globalization process has opened up new service markets to provide developing nations with opportunities for the expansion of trade and economic growth. Insurance has always been a politically sensitive subject in India. In fact, until 2000, the insurance industry was a government monopoly. But thereafter it has been...
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...Executive summary The life insurance industry in India is achieving a growth rate of about 4% annually. It is considered to be one of the fastest growing sectors. The changing socioeconomic demographics and consumer behavior along with increased frequency of natural calamities and disasters have been the main reasons for the growth of this Industry. Its assets as on 31.03.08 were valued at $185 billion with a total of 250 million policies sold and an employee turnover of 113000 and about 1.2 million agents. There are currently 22 life insurance companies with LIC being the only public company having a market share of almost 50%. ICICI comes in second with 10% followed by HDFC at 6%, SBI at 5%, Bajaj at 4%, Reliance at 4%, Birla at 4%, Max 3%, Tata 3%, Kotak 2%, Met 1% and the rest taking up 10% of the market share. As of 2006 FDI norms the foreign participation of Indian insurance companies is restricted to 26%. All the life insurance companies of India have to comply with the strict regulation laid out by the ‘IRDA’ which is the insurance regulatory board in India set up in 2000. The majority of the population in India is yet to be tapped leaving a huge growth potential for this industry. The insurance industry in India is both service based as well as product based. Risk management and product development are the main highlights of R&D in this industry. The life insurance industry is re shapping the retail distribution channel. The life insurers engage with prospects...
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...2013) ISSN: 2249-7382 ANALYSIS OF FDI IN INSURANCE SECTOR IN INDIA Yogita Sharma* ABSTRACT There is hardly a facet of the Indian psyche that the concept of ‘foreign’ has not permeated. This term, connoting modernization, international brands and acquisitions by MNCs in popular imagination, has acquired renewed significance after the reforms initiated by the Indian Government in 1991. Generally speaking FDI refers to capital inflows from abroad that invest in the production capacity of the economy and are “usually preferred over other forms of external finance because they are non-debt creating, non-volatile and their returns depend on the performance of the projects financed by the investors. FDI also facilitates international trade and transfer of knowledge, skills and technology. “Foreign direct investment is of growing importance to global economic growth. This Paper mainly focus on the Foreign Direct Investment in the Insurance sector and its significance in insurance sector in India . The Insurance sector in India has a great potential even during the downtrend and FDI flow is expected to rise in the mere future. This paper attempt to current status of fdi in insurance sector in India. Currently, only 26% of FDIs is permitted in insurance sector. The total insurance business would touch US$ 60 billion size. If insurance sector is opened up to an extent of 49% for FDIs, it is expected that FDI’s contribution to insurance business would touch nearly US$ 2 billion. ...
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...2015 Financial Analysis of Non-Life Insurance Sector in India New India Assurance Co. Ltd The Oriental Insurance Co. Ltd ICICI Lombard General Insurance Co. Ltd Financial Analysis of Non-Life Insurance Sector in India Executive Summary Insurance is not the sale of products, but servicing customers. It is a system, by which the losses suffered by a few are spread over many exposed to similar risks. Insurance is a protection against financial loss arising on the happening of an unexpected event. Insurance companies collect premiums to provide for this protection. A loss is paid out of the premiums collected from the insuring public and the Insurance Companies act as trustees to the amount collected. The very fundamental principle of spreading of the risk is actually practiced by the insurance companies by reinsuring the risks that they have insured. The opening up of the Insurance Sector to Private Companies has made available more products and world class service to Indian Customer. Some excerpts on Indian insurance sector are as follows: An attempt has been made in this paper to understand and discuss the various issues of the Indian General Insurance industry. In this regard, the group studied the performance of New India Assurance Co. Ltd., ICICI Lombard, and The Oriental Insurance Co. Ltd with the help of their financial statements. Also, keeping New India Assurance Co. Ltd as benchmark, the group made a comparative analysis using financial...
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...This Paper mainly focus on the Foreign Direct Investment in the Insurance sector in India. India has been rapidly adapting to the liberalization, and FDI is encouraged in almost all the economic activities. FDI inflow in the country is increasing. India has tremendous potential for absorbing greater flow of FDI in the coming years. The Insurance sector in India has a great potential even during the downtrend and FDI flow is expected to rise in the mere future. The performance of the Insurance Regulatory and Development Authority (IRDA) Act by the Indian Parliament in 1999 opened the entry for participation of private insurance companies and a limited participation of foreign insurance companies through joint ventures with Indian company. Life Insuranceis the fastest growing sectorin Indiasince 2000 as Government allowed Private players and FDI up to 26%. Keywords: FDI in insurance sector, Insurance Regulations, FDI advantages, FDI Disadvantages, Life Insurance market, FDI cap on Insurance. Introduction: The insurance sector has been a fast developing sector with substantial revenue growth in the non-life insurance market, but in spite of its huge population, India only accounts for 3.4% of the Asia-Pacific general insurance market's value. The cap on foreign companies equity stake in insurance joint venture is 26%, but is expected to rise to 49%. The investment pattern with regard to foreign direct investment (FDI) and inflows from non-resident Indians remains resilient...
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...“The effects of FDI on the Indian Insurance Industry” Abstract Chapter-1 1.1 Introduction In the world of increased competition and rapid technological changes, globalization has played a complimentary role over the past years. Globalization has encouraged more and more multinationals to adopt FDI. According to Charles W.L. Hill (1998) “FDI occurs when a firm invests directly in facilities to produce and market a product in a foreign country”. The growth of FDI is more than the growth of world trade and world output so role played by FDI in world economics is very vital. Patterson, N. and Montanjees, M. (2004) say that FDI is the most favoured form of external finance for the reason that it is non-debt creating, non- volatile and the outcome depends upon the projects performance initiated by investors. FDI is advantageous because it facilitates international trade and transfer of technology, knowledge and skills. The purpose of this study is to investigate factors that attract FDI. De Mello (1999) asserts that scope for business in a country, opportunities for expansion, market size etc are some of the factors that attract FDI. Growth rate of a company or an industry leads to magnetism of more and more investment as investors know that their investment is safe enough. According to Dunning, J. (1981) Availability of valuable and unique resources in an industry such as cheap production capacity, cheap skilled labour and advanced technology which are necessary for running...
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