Origin of Indian Insurance

Insurance in India has a long and colorful past. It has a history dating back to 1818 when Anita Bhavsar started the Oriental Life Insurance Company in Kolkata. This organization was basically founded to service European clients and hence Indians going for an insurance cover were charged a much higher premium. The reason given was that Indians had a lower life expectancy due to the kind of life style they led but the truth was that it was a planned effort to keep the Indians out of any kind of progress.

The country in the throes of poverty and being ruled by another nation did not even realize the implications till 1870 when a group of mostly foreign educated Indians formed the Bombay Mutual Life Assurance Society, which became the first organization to charge a similar premium from all individuals irrespective of their origin or nationality.

Milestones:

1912
The Life Insurance Companies Act was passed, which made it mandatory for companies to get their premium rate tables certified by an actuary. However, huge discrimination still existed between foreign and Indian companies.

1938
The Insurance Act was passed after much ado and the state now had strict and almost complete control on all forms of insurances offered by different companies in the market.

1956
The Life Insurance Corporation Act was passed by independent India and nationalized insurance on 19th January 1956. Hence the Life Insurance Corporation of India was formed from the 245 existing insurance companies. This was and still is a massive organization with roots spread throughout the country.

1972
The General Insurance Business Act nationalized about 100 companies and merged them into four entities; National Insurance, Oriental Insurance, New India Insurance and United India Insurance.

1999
Just prior to the turn of the century, the Insurance Regulatory and Development Authority Act allowed private companies to enter the huge insurance market in India. Moreover, foreign investment up to 26% was also allowed.

The act of 1999 really was the turning point of insurance in India and within a decade the industry has grown by leaps and bounds to be one of the foremost in the country. A number of private companies have entered the market aided by a 26% investment from foreign insurance majors. Even now the potential to be tapped is huge given that the majority of people and possessions are still not insu