Life insurance in India

Life insurance in India

Life Insurance is the fastest growing sector in India since 2000 as Government allowed Private players and FDI up to 26%. Life Insurance in India was nationalised by incorporating Life Insurance Corporation (LIC) in 1956. All private life insurance companies at that time were taken over by LIC.

In 1993 the Government of Republic of India appointed RN Malhotra Committee to lay down a road map for privatisation of the life insurance sector.

While the committee submitted its report in 1994, it took another six years before the enabling legislation was passed in the year 2000, legislation amending the "Insurance Act" of 1938 and legislating the "Insurance Regulatory and Development Authority Act" of 2000. The same year that the newly appointed insurance regulator - Insurance Regulatory and Development Authority [http://www.irdaindia.org/ IRDA] -- started issuing licenses to private life insurers.

List of Life Insurers (as of Sept, 2006)

Apart from Life Insurance Corporation, the public sector life insurer, there are 17 other private sector life insurers, most of them joint ventures between Indian groups and global insurance giants.

;Life Insurer in Public Sector

#Life Insurance Corporation of India

;Life Insurers in Private Sector

# [http://www.iciciprulife.com ICICI Prudential Life Insurance]
# [http://www.bajajallianzlife.co.in/ Bajaj Allianz Life, Pranav,Surat 1]
# [http://www.maxnewyorklife.com/ Max New York Life Insurance]
# [http://www.saharalife.com/ Sahara Life Insurance]
#Tata AIG Life
#HDFC Standard Life
#Birla Sunlife
#SBI Life Insurance
#Kotak Mahindra Old Mutual Life Insurance
#Aviva Life Insurance
#Reliance Life Insurance Company Limited - Formerly known as AMP Sanmar LIC
#Metlife India Life Insurance
#ING Vysya Life Insurance

#Shriram Life Insurance
#Bharti AXA Life Insurance Co Ltd
#Future Generali Life Insurance Co Ltd
#IDBI Fortis Life Insurance Co Ltd
#Aegon Religare Life Insurance Co Ltd
#DLF and Pramerica ( will soon Launch the operations)
#CANARA HSBC OBC LIFE INSURANCE COMPANY

Foreign Direct Investment (FDI) Policy in Insurance Sector

As per the current (Mar 06) FDI norms, foreign participation in an Indian insurance company is restricted to 26.0% of its equity / ordinary share capital. The Union Budget for fiscal 2005 had recommended that the ceiling on foreign holding be increased to 49.0%. However, the matter is still under discussions.

Indian life insurance industry overview

All life insurance companies in India have to comply with the strict regulations laid out by Insurance Regulatory and Development Authority of India (IRDA). Therefore there is no risk in going in for private insurance players. In terms of being rated for financial strength like international players, only ICICI Prudential is rated by Fitch India at National Insurer Financial Strength Rating of AAA(Ind) with stable outlook indicating the highest claims paying ability rating.

Life Insurance Corporation of India (LIC), the state owned behemoth, remains by far the largest player in the market. Among the private sector players, ICICI Prudential Life Insurance(JV between ICICI Bank and Prudential PLC) is the largest followed by Bajaj Allianz Life Insurance Company Limited (JV between Bajaj Group and Allianz). The private companies are coming out with better products which are more beneficial to the customer. Among such products are the ULIPs or the Unit Linked Investment Plans which offer both life cover as well as scope for savings or investment options as the customer desires.Further, these type of plans are subject to a minimum lock-in period of three years to prevent misuse of the significant tax benefits offered to such plans under the Income Tax Act. Hence, comparison of such products with mutual funds would be erroneous.

Commission / intermediation fees

*The maximum commission limits as per statutory provisions are:

Agency commission for retail life insurance business:
***7- 50% for 1st year premium if the premium paying term is more than 20 years
***7- 10% for 1st year premium if the premium paying term is more than 15 years
***7- 10% for 1st year premium if the premium paying term is less than 10 years
***7% - yr 2 and 3rd year and 3.5% - thereafter for all premium paying terms.

In case of Mutual fund related - Unit linked policies it varies between 1.5% to6% on the premium paid.

**Agency commission for retail pension policies:
***7.5% for 1st year premium and 2.5% thereafter

*Maximum broker commission - 30%

*Referral fees to banks – Max 55% for regular premium and 10% for single premium. However in any case this fee cannot be more than the agency commission as filed under the product.

*However, the above commission may be further subject to the product wise limits specified by IRDA while approving the product.


Wikimedia Foundation. 2010.

Игры ⚽ Поможем написать курсовую

Look at other dictionaries:

  • Insurance in India — Insurance is a federal subject in India and has a history dating back to 1818. Life and general insurance in India is still a nascent sector with huge potential for various global players with the life insurance premiums accounting to 2.5% of the …   Wikipedia

  • Life Insurance Corporation of India — Infobox Company company name = Life Insurance Corporation of India company company type = Government owned corporation foundation = September 1, 1956 location = Headquarters in Mumbai, India (Various other locations in India and abroad) key… …   Wikipedia

  • Max New York Life Insurance — Saravana Max New York Life Insurance Type Private Industry Financial Services Founded 2000 Founder(s) …   Wikipedia

  • New York Life Insurance Company — Type Mutual Industry Insurance: Life Annuity Founded 1845 …   Wikipedia

  • China Life Insurance Company — This article is about China Life Insurance Company in Mainland China . For China Life Insurance Company in Taiwan, see China Life Insurance Company (Taiwan). China Life Insurance Company Limited 中国人寿保险股份有限公司 Type Public (SEHK:  …   Wikipedia

  • Reliance Life Insurance Company Limited — Infobox Company company name = Reliance Life Insurance Company Limited company type = Private limited company location = Headquarters in Chennai, India (Various other locations in India) key people = Mr. P Nandagopal (CEO) industry = Life… …   Wikipedia

  • Mutual Life Insurance Co of New York v The Rank Organisation Ltd — Mutual Life Insurance Co. of New York v The Rank Organisation Ltd. [1985] BCLC 11 is a UK company law case dealing with oppression (or unfair prejudice) under s.20 Companies Act 1948 (now s.994 Companies Act 2006). Goulding J delivered the… …   Wikipedia

  • Insurance in the United States — refers to the market for risk in the United States of America. Some main features of insurance could be said to be, *the benefit provided by a particular kind of indemnity contract, called an insurance policy; *that is issued by one of several… …   Wikipedia

  • India — /in dee euh/, n. 1. Hindi, Bharat. a republic in S Asia: a union comprising 25 states and 7 union territories; formerly a British colony; gained independence Aug. 15, 1947; became a republic within the Commonwealth of Nations Jan. 26, 1950.… …   Universalium

  • Insurance — This article is about risk management. For Insurance (blackjack), see Blackjack. For Insurance run (baseball), see Insurance run. In law and economics, insurance is a form of risk management primarily used to hedge against the risk of a… …   Wikipedia

Share the article and excerpts

Direct link
Do a right-click on the link above
and select “Copy Link”