lic-life insurance corporation

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LIC-Life Insurance Corporation

Some of the important milestones in the life insurance business in

India are:1818: Oriental Life Insurance Company, the first life insurance company on

Indian soil started functioning.(Anita ha!sar in "ol#ata$

18%&: om'ay utual Life Assurance )ociety, the first Indian life insurancecompany started its 'usiness.

1*1+: The Indian Life Assurance Companies Act enacted as the first statute to

regulate the life insurance 'usiness.

1*+8: he Indian Insurance Companies Act enacted to ena'le the go!ernment to

collect statistical information a'out 'oth life and non-life insurance 'usinesses.

1*8: arlier legislation consolidated and amended to 'y the Insurance Act /ith

the o'0ecti!e of protecting the interests of the insuring pu'lic.

1*2: +3 Indian and foreign insurers and pro!ident societies are ta#en o!er 'y

the central go!ernment and nationali4ed. LIC formed 'y an Act of 5arliament,

!i4. LIC Act, 1*2, /ith a capital contri'ution of 6s. Crore from the

7o!ernment of India.


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O'0ecti!es

o mo'ili4e maimum sa!ings of the people 'y ma#ing insured sa!ings more attracti!e.

o etend the sphere of life insurance and to co!er e!ery person eligi'le for insurance

under insurance um'rella.

o act as trustees of the insured pu'lic in their indi!idual and collecti!e capacities.

5romote all employees and agents of the LIC, in the sense of participation and 0o'

satisfaction through discharge of their duties /ith dedication to/ards achie!ement of LIC

o'0ecti!es.

o ensure economic use of resources collected from policy holders.

o conduct 'usiness /ith utmost economy and /ith the full reali4ation that the money

'elong to the policy holders.


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Organization and Management:

LIC /ith its central office in um'ai and se!en 9onal offices

at Mumbai, Kolkata, elhi, Chennai !"derabad, Kanpur

and #hopal operates through 1&& di!isional offices in

important cities and +&38 'ranch offices. As on arch 1,

+&13 LIC had +.18 million agents spread o!er the country.

LIC also entered the international insurance mar#et and

opened its offices in ngland, auritius and i0i.


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Acti!ities of LIC

he LIC su'scri'es to and under/rites the shares, 'onds and de'entures of

se!eral financial corporations and companies and grants term-loans. It

maintains a relationship /ith other financial institutions such as I;I,


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In!estment 5olicy

he in!estment policy of the LIC of India should 'ring a fair return

to policy holders consistent /ith safety. )ince the funds at the

disposal of the LIC are in the nature of the trust money, they should

'e in!ested in such securities /hich do not diminish in !alue and

gi!e the highest possi'le return.

In other /ords, principles of safety, yield, li=uidity and distri'ution

should 'e ta#en into consideration /hile in!esting insurance funds.

he /ay in /hich these funds are in!ested is a great significance not

only to policy holders 'ut also to the entire economy.


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7IC-7eneral Insurance Corporation

1*&%: he Indian ercantile Insurance Ltd. set up, the first company to

transact all classes of general insurance 'usiness.

1*%: 7eneral Insurance Council, a /ing of the Insurance Association of

India, frames a code of conduct for ensuring fair conduct and sound business

practices.

1*28: he Insurance Act amended to regulate in!estments and set minimum

solvency margins and the Tariff Advisory Committee set up.

1*%+: he 7eneral Insurance usiness (>ationali4ation$ Act, 1*%+

nationali4ed the general insurance 'usiness in India /ith effect from 1st


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A'out 7IC

he 7eneral Insurance Corporation (7IC$ /as formed 'y Central

7o!ernment in 1*%+. ?ith effect from @anuary 1, 1*% the erst/hile 1"

Indian and foreign insurance companies #ho #ere operating in the country

prior to nationali$ation% /ere grouped into four operating companies,

namely,

(a$ >ational Insurance Company Limited.

('$ >e/ India Assurance Company Limited.

(c$ Oriental Insurance Company Limited.

(d$


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A'out 7IC Cont..

?ith head offices at Kolkata, Mumbai, $e% elhi and Chennai,

respecti!ely 7IC /hich /as the holding company of the four pu'lic sector

general insurance companies has since 'een delin#ed from the later and

has 'een appro!ed as the Indian 6einsurerB since >o!em'er +&&&. All

the four entities are 7o!ernment companies registered under Companies

Act.

he 7eneral Insurance 'usiness has gro/n in spread and !olume after

nationali4ation. he tour companies ha!e +, 2** 'ranch offices, 1,2&

di!isional offices and *+ regional offices spread all-o!er the country.


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Acti!ities of 7IC

)ome of the schemes in operation of the 'enefit of poor are the

personal account insurance, social securit" scheme, hut

insurance scheme for poor families in rural areas and crop

insurance scheme&

esides the domestic mar#et, the 7IC is presently operating in

12 countries directly through 'ranches or agencies and in 13

countries through su'sidiary and associate companies. he /holly

o/ned su'sidiary of 7IC #no/n as Indian International Insurance

5ri!ate Limited, set up in 1*88 in )ingapore, has gro/n into a

leading company in the )ingapore mar#et.


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unctioning Of 7IC (6egulated 'y the 'elo/ ma0or

Acts$

he Companies Act,1*2

Insurance Act,1*8

7eneral Insurance usiness (>ationali4ation$Act,1*%+

7eneral Insurance usiness (>ationali4ation$ Amendment

Act,+&&+

Insurance 6egulatory and ;e!elopment Authority

Act,1***


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;epartment of an Insurance Organi4ation

7eneral ;epartments


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1 A$ Actuarial: Calculation of 5remium, 5olicy

reser!es, orfeiture alues, ;i!idends etc..it

conducts !arious mathematic studies and determine

rates, they de!elop ne/ insurance products, and thehead office /ill ha!e full fledged actuarial

department

$


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C$ )ales and ar#eting: Delps in maintaining and

promoting the distri'ution system and to de!elop ne/

products, to reach the corporate goals..

;$ Accounting: 5ro'lemEECreation of 6)6) andCO>I>7>CI) /hich are pro'a'ilistic and therefore

difficult to predictEE I6;A inancial )tatement ormat

$In!esting and inancing: Crucial and ;omain functionF

Interest rates guaranteed to policy holder, 5ortfolio ofin!estment(ortgages, common stoc#,go!t. securities,

corporate 'ond, real estate..$


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$ Legal: Counseling and claims ,I6;A 6ules and

regulation.

7$ Claims: erifying and settling Claims,they must

'e a/are of 6especti!e co!erage, a'ility to=uantify losses, litigation and su'rogation are dealt

'y them

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