Role of Life Insurance Corporation in Insurance Sector of India

By

Dhruva Ravani
Student
MBA Semester III
R.D. Gardi Department of Business Management
Rajkot

ABSTRACT
It is worth interesting to note that the origin of the concept of insurance is very old and
dates back almost 4500 years ago in the ancient empire of Babylonia. This concept
prevailed and developed during the medieval period in Europe. The emphasis of
insurance was on traders' merchants and seafarers in marine industries at that time to
provide them safety in terms of money against certain unseen risks including death. The
concept of insurance has its origin in Indian scriptures. The Vedas give the idea of
'Yougkshema' means a promise to provide community insurance to the risk bearers as
back as around 1000 B.C., which was practised by the Aryans.
In 1956 a radical step was taken by the central govt. regarding nationalization of
insurance industries which emerged as the Life Insurance of India the major objective of
this corporation was to give maximum benefits to maximum citizens of India by
providing them wide range of benefits against a number of risks. The details of Lick's
business during last 5 years are given in the paper, which are self – explanatory.
INTRODUCTION
Almost 4500 years ago, in the ancient Land of Babylonia, traders used to bear risk of the
caravan trade by giving loans that had to be later repaid with interest when the goods
arrived safely. In 2100 B.C. the code of Hammurabi granted legal status to the practice.
That perhaps, was how insurance made its beginning.
Life insurance had its origins in ancient Rome, Where citizens formed burial clubs that
would meet the funeral expenses of its members as well as help survivors by making
some payments.
In 1347, in Genoa, European maritime nations entered into the earliest known insurance
and decided to accept marine insurance as a practice. Back to the 17th century, in 1693,
astronomer Edmond Halley constructed the first mortality and compound interest. In
1756, Joseph Dodson reworked the table, linking premium rate to age. The 19th century
saw huge developments in the field of insurance, with newer products being devised to
meet the growing needs of urbanization and industrialization.
LIFE INSURANCE IN INDIA
Insurance in India can be traced back to the Vedas. For instance, Yougkshema, the name
of Life Insurance Corporation of India's corporate headquarters, is derived from the Rig
Veda. The term suggests that a form of 'community insurance' was prevalent around 1000
BC and practised by the Aryans.
Bombay Mutual Assurance Society, the first Indian life assurance society, was formed in
1870. Other companies like Oriental, Bharat and Empire of India were also set up in the
1870 – 90s.
The Insurance Act was passed in 1912, followed by a detailed and amended Insurance
Act of 1938 that looked into investments, expenditure and management of these
companies' funds.
By the mid – 1950s, there were around 170 insurance companies and 80 provident fund
societies in the country's life insurance scene. However, in the absence of regulatory
systems, scams and irregularities were almost a way of life at most of these companies'
funds.
As a result, the government decided to nationalise the life assurance business in India.
The Life Insurance Corporation of India was set up in 1956 to take over around 250 life
assurance companies. After the RN Malhotra Committee report of 1994 became the first
serious document calling for the re-opening up of the insurance sector to private players –
that the sector was finally opened up to private players in 2001.
WHAT IS LIFE INSURANCE
Life Insurance is a contract for payment of a sum of money to the person assured on the
happening of the event insured against. Usually the contract provides for the payment of
an amount on the date of maturity or at specified dates at periodic intervals or at
unfortunate death, if it occurs earlier. It is concerned with two hazards that stand across
the life- path of every person that of dying prematurely leaving a dependent family to
fend itself and that of living to old age without visible means of support.
GROWTH OF NEW BUSINESS

During the 1997-98 LIC sum assured through policies 63927.83 Crore Rs. In 1998-99
LIC sum assured 75606.26 Crore Rs. In 1999-00 LIC sum assured 91490.94 Crore Rs. In
2000-01 LIC sum assured 124950.63 Crore Rs. In 2001-02 LIC sum assured 192784.96
Crore Rs. We can see that LIC gets success in new business.
NUMBER OF POLICIES

In 1997-98 LIC's number of polices are 850.03 in lakh. In 1998-99 LIC'S number of
polices are 917.26 in lakh. In 1999-00 LIC's number of polices are 1013.89 in lakh. In
2000-01 LIC's numbers of policies are 1131.11 in lakh. In 2001-02 LIC's number of
policies 1258.76 in lakh. We can see that LIC's position is very good. Numbers of
policies are increased.

ANALYSIS OF INCOME

This chart shows various income of LIC. LIC gets 14.11 % income through first year
premium. LIC gets 40.74 % income from Renewal Premium. LIC gets 12.43 % income
from Single Premium. LIC gets 31.19 % income from investments. LIC gets income 1.53
% from Miscellaneous.
CONCLUTION
LIC gets achievement in various fields. We can see that LIC gets success in new
business. Numbers of policies are increased. We can see LIC's income from various
fields. Overall LIC has doing profitable business. But it is only LIC's own business. But it
is not compared with other's insurance institute. So it is not completed.

Role Of Life Insurance Adjuster

by Alec Morgan

The role of a life insurance adjuster begins from the time an individual files a
claim. It is the adjusters’ brains that work when planning for and processing a
claim. They have the power to decide what to do with a certain policy claim and
how to go about it.

After an individual makes a policy claim, the process is undertaken by an adjuster.

The claimant and witnesses may be interviewed along with the hospital records,
police records and examining the property damage in order to make an estimate on
the amount of the company’s liability. Other professionals like architects,
engineers, physicians, lawyers, accountants and construction workers may also be
consulted for more detailed opinion on the claim.

The life insurance adjusters gather information through photographs, statements

and video tape (written/audio). After the claim is evaluated and made legitimate,
the adjuster negotiates the deal with the claimant and finally settles the amount to
be reimbursed. It is the responsibility of the adjuster to defend the position of the
insurance company once the claim is filed by the insured.

Sometimes, there is a centralized claim center for companies. These centers are
like bodily injury is passed on to senior adjusters. In some cases an individual may
not take the help of the insurance company’s adjuster but hire a public adjuster.
These adjusters are meant to help the claimant in settling his claim for a fee. The
advantage of hiring such an adjuster is that they work for the interest of the client
instead of the company.

Author's Bio
Alec Morgan has been a part of the insurance industry for the past several years.
He has also written various insurance articles and is now a contributing writer for
www.allinsuranceprofessionals.com This site is an attempt to help budding
insurance professionals with the required information regarding different insurance
processes.

Life Insurance: Basics and Types

Life insurance is a type of financial security that guarantees monetary protection to

the insured and his family according to the terms and conditions of the policy. It is
important that every individual should have a life insurance policy according to his
budget because no one knows when an accident can happen.
What is Life Insurance?
People have various wrong conceptions about life insurance. They feel that life
insurance is needed during the latter years of one�s life. Life insurance is
actually an agreement between the insured and the insurer in which the policy
holder accepts to pay regular premium to the insurer. In return, the insurer
guarantees monetary protection to the insured in case of any accident or mishaps.
If the insured dies in accident, financial help is provided to his family members.
Thus, life insurance is necessary as it provides protection to not only you but also
to your family in case of any unwanted disaster.
Types of Life Insurance:
There are various types of policies and schemes prepared to suit the need of
different individual. You can avail the one that satisfy your budget and need. Life
insurance can be broadly divided into 3 types:
• Term life insurance
• Whole life insurance
• Universal life insurance
What is Term Life Insurance?
In this type of life insurance, financial coverage is provided for a certain period of
time according to the terms of the policy. When the term period gets over, the
policy holder can either end the policy or continue it by paying annual premiums.
Term life insurance does not provide permanent coverage but is good for those
who want temporary protection on a limited budget. If you are thinking of availing
a short term life insurance policy to pay off loans, term life insurance policy is the
right option for you. It can be renewed according to the policy holders wish and
need.
What is Whole Life Insurance?
In this type of life insurance, the insured is provided with permanent financial
protection. It is a long term insurance plan where the policy holder needs to pay
premiums annually. There are various types of whole life insurance that
individuals can avail in accordance to their needs such as Non-participating,
Participating, Indeterminate premium, Economic, Limited Pay, Single Premium
and Interest sensitive. But all life insurance companies may not offer all the types
of whole insurance policies stated above.
What is Universal Life Insurance?
This is a permanent life insurance plan which has flexible terms. It allows some of
the benefits such as death benefits, saving benefits to be reviewed and changed
according to the policy holder�s need. In this policy, the insured enjoys not only
benefits of term life insurance but also cash value (premiums that are above the
cost insurance are credited as cash value). You can choose from the 3 types of
universal life insurances, i.e. Single premium, fixed premium and flexible
premium, in accordance to your requirement.
Single premium universal life insurance: In single premium universal life
insurance, the policy holder pays a big premium amount at the beginning of the
policy. The policy remains active as long as the cost of insurance (COI) is covered
by the initially paid amount.
Fixed premium universal life insurance: In fixed premium universal life
insurance, the policy holder makes monthly or yearly payments of fixed amount
for a certain period of time.
Flexible premium universal life insurance: In this option of universal life
insurance, the policy holder can pay monthly premiums of his choice as long as the
minimum payment amount is covered.
Life insurance is therefore an essential step towards safeguarding the future of your
family. People should understand how these life insurance policies work and avail
the one that seems suitable to their needs. Take the help of a good insurance agent
who will help you with details of the policies available.
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Role of rural area
India’s largest government owned life insurance company, Life Insurance
Corporation of India (LIC), set a new target of selling 4 million micro insurance
policies this year. In a speech given at the SKOCH Banking, Financial Services
and Insurance Summit, LIC Chairman TS Vijayan said that two years ago, the
corporation had sold 0.8 million micro insurance policies and this year, planned to
increase its sales five fold.
LIC’s micro insurance product, ‘Jeevan Madhur’, is a life insurance plan, first
launched in 2006. Under the plan a minimum coverage of Rs5,000 (USD 110) and
a maximum of Rs30,000 (USD 650) can be obtained. Minimum premium
payments range from Rs25 (USD 0.55) per week to Rs250 (USD 5.5) yearly.
According to India Invest Incomes and Savings Survey 2007 by IIMS Dataworks,
a Noida-based retail finance research firm, insurance penetration in urban India is
47%, while it is only 27% in rural areas. In 2006, LIC entered into a memorandum
of understanding (MoU) with the Confederation of NGOs of Rural India (CNRI),
an apex body of Non-Governmental Organisations of rural India that has over
4,000 NGOs across the country. The MoU authorized the NGOs that are members
of the CNRI to distribute micro insurance to rural areas.
In his speech at the Summit, Vijayan underlined the high-cost of distribution in
rural areas, giving the estimated cost of distribution as double the cost of a policy.
Along with suggesting alternative distribution mechanisms such as privately
owned rural kiosks that serve as information centers, Vijayan also called for a
technology fund to be made available for micro insurance as there is one for
microcredit.
LIC was founded in 1956 and as of 2007, has total assets of USD 165 billion.
Headquartered in Mumbai, the corporation has 8 zonal offices and 101 divisional
offices located in different parts of India.
The summit was organized by SKOCH, a commercial strategy and management
consultancy company spread in eleven countries. SKOCH was founded in 1997
and in India extensively works towards ICT (information and communication
technology) led development.
By Ipek Kuran, Research Assistant
Review of Literature
1. Sumninder Kaur Bawa, Life Insurance Corporation of India : Impact of
Privatisation and Performance, Regal Publication New Delhi, 2007.
Contents: Preface. 1. Introduction. 2. Life insurance: review of
studies made. 3. Methodology for analysis. 4. Performance evaluation of Life
Insurance Corporation of India: I. Performance evaluation of LIC. II. Determinants
of performance of Life Insurance Corporation of India. 5. Productivity of Life
Insurance Corporation of India. 6. Investment portfolio of Life Insurance
Corporation of India. 7. Impact of privatisation on the performance of Life
Insurance Corporation of India. 8. Conclusions. Bibliography. Index.
"Life Insurance Corporation of India : Impact of Privatisation and
Performance presents an in-depth analysis of LIC's performance in respect of
various indicators since the policy of liberalisation was introduced in the country.
The productivity analysis of the corporation has been carried out using different
parameters. The portfolio management of the corporation has been studied in detail
in respect of loans and investments. The impact of privatisation on the performance
of LIC has been evaluated in terms of its market share in various parameters of
insurance vis-a-vis the private players. The book also identifies key determinants
of the performance of LIC and makes recommendations for improving it.
The book will be of immense use to students, teachers, researchers
and those involved in policy making for LIC." (jacket)
2.LIC for Social Sector Development/Sandhya Rani Mahapatra and Sovan
Kumar Patnaik. New Delhi, Sonali, 2007, xii, 108 p., tables, ISBN 81-8411-082-
0.
Contents: Preface. 1. Introduction. 2. Insurance and human welfare. 3. LIC of
India: growth and diversification. 4. Contribution of LIC to social sector and
economic development of India. Conclusions. References.
"The LIC of India has emerged as one of the important financial institutions
entrusted with the responsibility of financing economic growth of our country. It
has been playing a catalytic role in strengthening the financial and social fabric of
our nation. There has been a major thrust in the activities of LIC both at covering
the poorer and vulnerable sections of India socially through group insurance
scheme and investing the income for building infrastructure for socially oriented
projects.
Based on secondary sources of data the present work highlights the role of LIC
in the social sector development of our country. The analysis of various
dimensions of LIC finance has relevance to the future growth trend, their
implications on socio-economic development of our country. Such studies are of
much significance to the economists, researchers, policy makers and planners of
our country in formulating policy for accelerated development of the economy."
(jacket)
Insurance Law and Practice/Rajiv Jain and Rakhi Biswas. New Delhi, Vidhi,
2001, lxviii, 1084 p., ISBN 81-87310-40-5.
Contents: I. Genesis and growth of insurance law and liberalised private
sector investment policy and procedure: 1. Genesis of insurance law. 2.
Privatisation of insurance sector. 3. Investment in insurance sector. 4. Registration
of insurance company. 5. New provisions applicable to existing insurers. 6.
Obligations of insurers to rural and social sectors. 7. Advertisements and disclosure
norms for insurers. 8. Norms for insurers(s’) reinsurance. 9. Valuation of assets—
liabilities and solvency margins of insurers. 10. Preparation of financial statements
and auditor’s report by insurer in life insurance business. 11. Preparation of
financial statements by companies engaged in general insurance business. 12.
Actuary—role and challenges. 13. Licensing of insurance agents. 14. Insurance
surveyors and loss assessors. II. Conceptual review of legal maxims in
insurance sector: 1. Contract of insurance. 2. Principles of interpretation of
clauses in a policy. 3. Maxims applicable to insurance policies. 4. The policy. 5.
Premium. 6. Days of grace. 7. Insurable interest. 8. Void and voidable contracts. 9.
Risk. 10. Causes of loss. 11. Enforcement of claim. 12. Conditions in a policy. 13.
Motor insurance. 14. Accident insurance. 15. Agents. 16. Consumer Protection Act
and insurance. 17. Insurance Ombudsman scheme. 18. Income tax benefits
extended to policyholders. 19. Policies for non-resident Indians. 20. Insurance
education in India. III. Policies and schemes—life/health/non-life: 1. Life and
health-care policies. 2. Industries and corporate sector insurance policies. 3. Other
important policies. IV. Annotated laws relating to insurance sector: 1. Insurance
Regulatory and Development Authority Act, 1999: I. Preliminary. II. Insurance
regulatory and development authority. III. Transfer of assets, liabilities, etc., of
interim insurance regulatory authority. IV. Duties, powers and functions of
authority. V. Finance, accounts and audit. VI. Miscellaneous. 2. Insurance advisory
committee (meetings) regulations, 2000. 3. Insurance regulatory and development
authority (appointed actuary) regulations, 2000. 4. insurance regulatory and
development authority (actuarial report and abstract) regulations, 2000. 5.
Insurance regulatory and development authority (licensing of insurance agents)
regulations, 2000. 6. Insurance regulatory and development authority (assets,
liabilities and solvency margin of insurers) regulations, 2000. 7. Insurance
regulatory and development authority (general insurance, reinsurance) regulations,
2000. 8. Insurance regulatory and development authority (registration of Indian
insurance companies) regulations, 2000. 9. Insurance regulatory and development
authority (insurance advertisements and disclosure) regulations, 2000. 10.
Insurance regulatory and development authority (obligations of insurers to rural or
social sectors) regulations, 2000. 11. Insurance regulatory and development
authority (meetings) regulations, 2000. 12. Insurance regulatory and development
authority (preparation of financial statements and auditor’s report of insurance
companies) regulations, 2000. 13. Insurance regulatory and development authority
(investment) regulations, 2000. 14. Insurance surveyors and loss assessors
(licencing, professional requirements and code of conduct) regulations, 2000. 15.
Insurance regulatory and development authority (life insurance-reinsurance)
regulations, 2000. 16. Insurance Act, 1938. 17. Life Insurance Corporation Act,
1956. 18. General Insurance Business (Nationalisation ) Act, 1972. 19. Insurance
Ombudsman Redressal of Public Grievances Rules, 1998. 20. The Personal
Injuries (Compensation Insurance) Act, 1963. 21. Relevant sections of the Motor
Vehicle Act, 1988. 22. Relevant sections of the Indian Contract Act, 1872. 23.
(The) Marine Insurance Act, 1963. 24. Public Liability Insurance Act, 1991. V.
Glossary of terms and expressions generally used in or in connection with
insurance. Glossary.
Recent Trends in Insurance Sector in India/edited by K. Ravichandran. Delhi,
Abhijeet Pub., 2007, xvi, 256 p., tables, ISBN 81-89886-26-4.
Contents: Foreword/S. Gidwani, P. Sivaprakasam and S. Nakkiran. Preface. 1.
The trend of recent trends in insurance sector in India--an analytical view/M.
Karthikeyan. 2. Term insurance schemes of LIC of India and other insurance
companies--a comparative study/S. Banumath and G. Karunanithi. 3. Trends in life
insurance industry--unit linked insurance products/Sankara Raman Narayanan. 4.
Emerging challenges in insurance sector/S. Mythili. 5. Indian general insurance
business in detariffed era/P. Kamaraj and B. Tamilmani. 6. Present trends in
insurance industry in India/K. Dhevan and A. Shanmugasundaram. 7. FDI in
insurance--the Indian perspective/V. Bharathiraja, M. Sasi Siddharth and R.
Muruganandham. 8. Insurance sector: question of its financial stability?/Aravind S.
and Chandra Sekhar Kancheti. 9. Performance of Life Insurance Business in
India/B. Manoharan. 10. Bancassurance--emerging challenges/R. Varadarajan and
K. Natarajan. 11. Bancassurance--a new buzzword/C. Anitha and J. Esther Rajathi.
12. Bancassurance--the most challenging insurance distribution channel with
special reference to ICICI Prudential Life/G. Parimalarani. 13. Health insurance for
sustainable living: need of the hour/S. Kumar, M. Sathis Kumar G and
Ramaswamy S. 14. Health insurance in India: opportunities, challenges and
concerns/B. Revathy. 15. The unorganised labourers and insurance/A.
Balakrishnan and P.G. Balasubramanian. 16. Crop insurance: a risk management
tool/Frank Ratna Kumar. 17. Crop insurance a safety net for beleaguered
farmers/P. Sivaprakasam and D. Karthika. 18. Insurance information system: an
emerging model/R. Sudharsana Raamanujan, P. Nandakumar and T. Suthakar. 19.
CRM--a boon for insurance/A. Savarimuthu and M. Revathi Bala. 20. Customer
satisfaction on the services provided by life insurance corporation of India in
Namakkal branch of Tamilnadu/D.R. Chitra, T. Saraswathi and K. Devan. 21.
Basic Insurance Knowledge (BIK) for growth and development of insurance
industry in rural India/Samwel Kakuko Lopoyetum and P. Selvamani. 22. CRM in
life insurance corporation of India/Jelsy Josep, M. Uma Maheswari and L.
Ethirajan. 23. Health insurance products: challenges and opportunities/P.
Vijiyalakhsmi. List of contributors.
"This introduction of new economic policy and consequent financial sector
reforms have brought number of changes in Insurance sector. This sector hitherto
owned by the life insurance corporation of India and other General Insurance
Companies of the Government of India have been opened to private partners. The
formation of IRDA, partnership with insurance business and banking business and
the introduction of micro insurance have given new thrust to this sector. All these
trends have increased the competition both in life and non-life insurance business,
which resulted in more choice for consumers. These trends need in-depth analysis
and documentation for policy formulation and future direction. The book has the
following objectives:
• To create out the historical development of insurance sector
• To analyze the trends in insurance sector before and after the privatization
• To analyze the business performance of insurance companies in public,
private and cooperative sectors
• To analyze the trends in bancassurance
It is hoped that this edited book will fulfill the requirements of students and
executives in insurance education." (jacket)
Insurance in India : Changing Policies and Emerging Opportunities/P.S.
Palande, R.S. Shah and M.L. Lunawat. New Delhi, Response Books, 2003, 492
p., ISBN 81-7829-267-X.
Contents: Preface. 1. The growth and development of the Indian insurance
industry. 2. The debate about opening up. 3. Preparing for the competitive
environment. 4. Proactive and focused strategies of the industry. 5. The new range
of products and services. 6. Evolving markets and strategies. 7. Investment of
funds—constraints and skills. 8. Regulation of the insurance business. 9. The
government as a facilitator of change. 10. The emerging scenario. Annexure.
Glossary. Select bibliography. Index.
"Ever since the nationalization of the life insurance industry in 1956 and of non-
life business in 1973, Indian consumers have had to live with the state-owned Life
Insurance Corporation and the General Insurance Corporation (and its four
subsidiaries) as the only providers of insurance. Now that private participation in
this sector has been allowed once again, it has created a great deal of excitement
due to the enormous potential that the industry holds. As a consequence, the
industry has changed completely in the recent past—twenty new entrants armed
with new products and a few others waiting in the wings.
"This timely book provides a comprehensive and up-to-date picture of the
insurance industry. The authors first trace the origin and working of the insurance
industry, and the factors that led to its nationalization. They then closely analyze
recent developments, the transformation that has taken place after reforms, and
provide a macro perspective on this industry. The authors also examine the
measures taken by the existing public sector insurance companies to restructure
themselves in the present scenario, and provide an overview of the present and
likely policies of the new players that have entered the market. In conclusion the
book offers suggestions about the future of the industry in terms of:
• Its potential and possible growth;
• Initiatives needed to give a further impetus to the industry;
• The products and services offered;
 • Regulatory issues; and
• The evolving market strategies in the context of the highly competitive
environment.
"Written in a concise and absorbing manner, this is perhaps the first study of the
insurance industry to be written in the post-reform era. It will be of enormous
interest and use to students of insurance and general management, insurance
intermediaries and professionals in the insurance and financial services sector."
(jacket)
Insurance in India/S.K. Bali. New Delhi, A.K. Pub., 2008, viii, 248 p., ISBN 81-
906358-3-7.
Contents: Preface. 1. Introduction. 2. Life Insurance Corporation of India. 3.
Life insurance. 4. Insurance industry at present. 5. Significance of life insurance. 6.
Non-life (general) insurance. 7. Other types of insurance. 8. Future prospects.
Bibliography. Index.
"The Indian insurance industry book provides insightful analysis, market
overview, industry structure and outlook of life and non-life insurance industries in
the country. Richly laden with quantitative analysis, the report provides the reader
with a rudimentary preface to Indian insurance industry. The closely summarized
Indian market report of insurance sector is designed to offer a macro level picture
of the trends, challenges, market structure/basics, and recent mergers and
acquisitions, and strategic corporate developments witnessed by the industry. The
report examines the leading companies' footing in insurance markets at regional
level, along with their annual written premiums and/or market shares. Regional key
and niche Bajaj Allianz, General Insurance Co., ICICI Prudential Life Insurance
Co. Ltd., and Life Insurance Corp. of India." (jacket)
History of Life Insurance Industry in India
In the year 1999 under the impact of globalization the Indian Laws allowed the
entry of Private players in the Life Insurance industry. While this ended the
monopoly of LIC in the Life Insurance business, this was heralded as a
revolutionary decision. Whereas this has not been so. It is only that the wheel has
taken a full circle.

When Life Insurance business was nationalized in 1956, there were 245 private
companies and PF societies which were transacting the business. Why did the
Government take this action? Your guess is as good as mine.

The business of Insurance company is to bring together people sharing the same
risk, collecting their share of contribution (premium) to the common risk and
compensate those who suffer from a risks (death) or maturity of term (survival
benefit). In order words the insurance business has higher component of the
modern day term of “corporate social responsibility” and lesser component
towards “profit”.
As of now there are 16 new life insurance companies of which only SBI Life
Insurance is making profit. Rest of them despite of heavy media glitz are yet to
break even !!!

A Life Insurance policy creates a financial asset which can be purchased in

installments. However this has got a unique facility under which in case of death,
the outstanding installments need not be paid by the legal heirs.

Life Insurance Policy is a movable, marketable and liquid asset. It can be

transferred or mortgaged. Loans can be taken against a policy.

LIC Nagpur division tops in corporate business

Nagpur (PTI): The Nagpur division of Life Insurance Corporation of
India (LIC) has topped in the country for doing 150 per cent sales in
corporate business sector, according to LIC's Senior Divisional
Manager P Das Gupta.
"The division has done a business of Rs 341 crores during first three
months (April to June) which was 150 per cent of the target," Das
Gupta, told PTI.
Going by the current trend, the Nagpur division may touch Rs 500
crores in the same sector during the fiscal 2009-10, he said.
Meanwhile, the LIC has launched Jeevan Sathi plus, a joint market
linked plan for the benefot of customers.
Claiming to be first of its kind in the industry, LIC has said the Jeevan
Sathi Plus was on unit linked insurance policy (ULIP) platform and
offers the insured the benefts of markets linked return.
In its plan, the couple can take the insurance cover for their lives under
a single policy. The proposer under the plan shall be called Principal
Life Assured (PLA) and other life (wife/husband) shall be called Spouse
Life Assured (SLA).
The minimum annualised premium will be Rs 10,000 increasing
thereafter in multiples of Rs 1000. A minimum monthly premium will
be Rs 1,000. Alternatively a single premium can be paid subject to a
minimum of Rs 40,000, a press release from LIC said.
New Delhi: It’s an Indian woman’s life, and less likely to be protected
by insurance cover.
Data collected by Mint shows that women constitute 20-30% of total
lives covered by the country’s life insurers, including Life Insurance
Corp. of India, or LIC, the largest insurer by premium collected.
There are many reasons put forward to explain why such a gender gap
exists, from the fact that many Indian women are home-bound to their
relatively low exposure to risks. “Indian society doesn’t recognize the
value of a woman. Importance is not given to a woman unless she is
earning and therefore, when the question comes up for insurance, it is
very difficult to get women insured,” said S.B. Mathur, secretary general
of Life Insurance Council, an umbrella body. “In group insurance
schemes, however, the coverage of women is higher because the
government pays the premium and they automatically get covered.”
According to the 2001 census, there are 933 women per 1,000 males in
India—48% of India’s billion-plus population. In comparison, women
had a lower weightage in a life insurance market of Rs2.2 trillion, or
4.4% of gross domestic product, at the end of March.
“In LIC, around 28% of total lives covered are women,” said a senior
official of LIC, who didn’t want to be identified because he is not
allowed to talk to media. “The figures have risen recently after women
in metro cities started working, otherwise around five years back, the
percentage was as low as 18-19%. Insurance penetration among women
is not sufficient in India.”
Coverage is low with private insurers, too. “Around 24% of our
customers are women,” said Gaurang Shah, managing director of Kotak
Mahindra Old Mutual Life Insurance Co. Ltd. “Women do not come out
so often, resulting in low penetration.”
Rajiv Jamkhedkar, chief executive of Aegon Religare Life Insurance Co.
Ltd, says, “Insurance coverage of women is relatively on the lower
side...because financial matters are still decided by male members of the
family. Currently, around 18% of total lives insured with us are
women.”
“Around one third of our customers are women and this number has
shown increasing trend over last few years,” said Debashis Sarkar,
director, marketing, products and corporate affairs, with Max New York
Life Insurance Co. Ltd.
LIC also offers Jeevan Bharati I, a policy designed for women, but there
are few takers. “The response to Jeevan Bharati I is not quite
encouraging,” said another LIC official. “We have sold around 1 lakh
policies so far.” LIC now manages around 23 crore policies.
Jeevan Bharati is an insurance policy exclusively for women, and has a
combination of endowment and mediclaim policies. Certain women-
specific problems such as some critical illnesses are covered only under
this policy.
“Women do not take only women-specific policies, they take other
policies, too,” said LIC managing director Thomas Mathew T. “We have
17 lakh self-help groups covering women. We are also planning to
launch several women-specific policies in future.”
LIC has a few group policies especially designed for women, such as
Aanganwadi Karyakarti Bima Yojana and Janashree Bima Yojana (with
add-on benefits for women). The latest report by a parliamentary
committee on empowerment of women, which was presented in Lok
Sabha and Rajya Sabha late last year, stated that “the response of
intended beneficiaries to these schemes is far from promising”. The
report says the committee feels that either there is something amiss with
the conceptualization of the scheme, or the government has not taken
adequate measures to reach the targeted beneficiaries.
The report says there has been a decrease in the coverage of women
under Janashree Bima Yojana, from 5,93,324 in 2004-05 to 4,78,050 in
2005-06. “Janashree Bima Yojana is meant for a head of the family, so
insurance coverage for women is very low under the scheme,” said an
official in charge of group business, who didn’t want to be identified
because he is not allowed to talk to the media.

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 History of LIC
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
The Life Insurance Corporation of India (LICI) is the largest life insurance company in India; it
is fully owned by the Government of India. It was founded in 1956.
Headquartered in Mumbai, which is considered the financial capital of India, the Life Insurance
Corporation of India currently has 7 zonal Offices and 100 divisional offices located in different
parts of India, at least 2048 branches located in different cities and towns of India, and has a
network of around one million agents [1] for soliciting life insurance business from the public.

• 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 affects 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.
In 1957, the new Corporation was involved in India's first financial scam, where the stock
speculator Haridas Mundhra got LIC to invest Rs 1.2 crores (about USD 3.2 million at the time) in
the shares of six troubled companies belonging to Mundhra. The resulting scandal resulted in the
resignation of the finance minister, and a considerable loss of prestige for the government.