Company

LOGO HISTORY OF LIC TILL PRIVATIZATION

SUBMITTED TO
Prof. MEGHNA SURANA

PREPARED BY
SUMEET SINH
CHINTAN PANDYA
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 CONTENT
Company
LOGO
INTRODUCTION OF LIC
HISTORY OF LIC
FORMATION OF LIC
IMPORTANT MILESTONES IN THE
GENERAL INSURANCE
SUBSIDIARY COMPANIES
CURRENT STATUS
AWARDS
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 INTRODUCTION OF LIC

 The Life Insurance Corporation of India (LIC), a

public sector enterprise, is the largest insurance
company in India, selling insurance products
and related services.
 Each of its business products offered a variety
of different plans to suit different customers and
situations, Also provided social security
schemes and pension schemes. Investment in
LIC was considered by a majority of its
customers to be reliable and secure.

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 HISTORY OF LIC

 The concept of life insurance came to India

when two British insurance companies were
established in the country - the Oriental Life
Insurance Company (in Calcutta in 1818 By
Bipin Behari Dasgupta and others ) and
Bombay Life Assurance Company (in
Bombay in 1823).

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 IMPORTANT MILESTONES …

 1912 - The Indian Life Assurance Companies Act

enacted as the first statute to regulate the life
insurance business.
 1928 - The Indian Insurance Companies Act
enacted to enable the government to collect
statistical information about both life and non-life
insurance businesses.
 1938 - Earlier legislation consolidated and
amended to by the Insurance Act with the objective
of protecting the interests of the insuring public.

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 Cont..
IMPORTANT MILESTONES …

This legislation was lead to met requirement of

insurance policy act like
• statutory requirement of equity capital for
companies carrying on life insurance business
• a ceiling on share holdings in such companies
• stricter control on investments
• Submission of periodical returns relating to
investments and other such information to the
controller.

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 Cont..
IMPORTANT MILESTONES …

• Malpractices and Mismanagement had crept

into the management of several of these
companies. More than 50 private insurance
companies had been liquidated or swindled
the policyholders.
• There were complaints of different types of
malpractices by many insurance companies
like falsification and denial of claims, and
inter-locking of funds.

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 Cont..
IMPORTANT MILESTONES …

• To protect the public, the government

nationalized the insurance industry. On
January 19, 1956, the management of the
life insurance business of 245 Indian and
foreign insurers and provident insurance
societies then operating in India were taken
over by the central government.
• By 1956, there were 154 life insurance
companies in India.

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 FORMATION OF LIC
The Parliament of India passed the Life Insurance
Corporation Act on the 19th of June 1956, and the
Life Insurance Corporation of India was created on
1st September, 1956, with a capital contribution of
Rs. 5 crore from the Government of India. with the
objective of spreading life insurance much more
widely and in particular to the rural areas with a
view to reach all insurable persons in the country,
providing them adequate financial cover at a
reasonable cost.

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 IMPORTANT MILESTONES IN THE
GENERAL INSURANCE BUSINESS IN INDIA
• 1907 - The Indian Mercantile Insurance Ltd. set
up, the first company to transact all classes of
general insurance business.
• 1957 - General Insurance Council, a wing of the
Insurance Association of India, frames a code of
conduct for ensuring fair conduct and sound
business practices.
• 1968 - The Insurance Act amended to regulate
investments and set minimum solvency margins
and the Tariff Advisory Committee set up.

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Conti…
• 1972 - The General Insurance Business
(Nationalization) Act, 1972 nationalized the
general insurance business in India with effect
from 1st January 1973.
• 107 insurers amalgamated and grouped into
four companies viz. the National Insurance
Company Ltd., the New India Assurance
Company Ltd., the Oriental Insurance Company
Ltd. and the United India Insurance Company
Ltd. GIC incorporated as a company.

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 LIC OWNS THE FOLLOWING
SUBSIDIARIES

1. Life Insurance Corporation of India

International: This is a joint venture
offshore company promoted by LIC which
commenced operations in July, 1989 with
the objectives of offering US$
denominated policies to cater to the
insurance needs of NRIs and providing
insurance services to holders of LIC
policies currently residing in the Gulf.

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 Conti…
LIC OWNS THE FOLLOWING
SUBSIDIARIES

2. LIC Nepal: A joint venture company

formed in 2001 with the Vishal Group of
Industries, Nepal.
3. LIC Housing Finance: Incorporated in 19
June 1989, its main objective is to provide
long term finance for construction or
purchase of houses or apartments. It has
a Dubai office.

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 Conti…
LIC OWNS THE FOLLOWING
SUBSIDIARIES

4. LIC Lanka: A joint venture company

formed in 2003 with the Bartleet Group of
Companies, Sri Lanka.
5. LICHFL Care Homes: A wholly owned
subsidiary of LIC Housing Finance, it
builds and operates "Assisted Community
Living Centres" for senior citizens.

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 CURRENT STATUS
 Tracing the developments in the Indian
insurance sector reveals the 360-degree turn
witnessed over a period of almost 190 years.
 The enforcement of New Economic Reforms in
1991 coupled with the formation of Insurance
Regulatory and Development Authority Act
(IRDA) of 2000 (which started issuing licenses to
private life insurers ) has diluted the
monopolistic attitude commanded by LIC.

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 Conti…
CURRENT STATUS

 The only insurance company belonging to

the public sector now has to compete with
several other corporate entities of its kind
which often are heavyweight Indian as well
as Multinational Life Insurance Brands in
themselves.
 The Malhotra committee's recommendations
in 1994 brought about a sea change in the
industry.

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 PROGRESS OF LIC
Headquartered in Mumbai, which is
considered the financial capital of India, the
Life Insurance Corporation of India currently
has
a) 8 zonal Offices and
b)101 divisional offices located in different parts
of India
c) 2048 branches located in different cities and
towns of India.

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 Conti…
PROGRSS OF LIC

d) Contributed around 7 % of India's GDP in

2006.
e) It also funds close to 24.6% of the Indian
Government's expenses.
f) It has assets estimated of 5 Trillion
Rupees.
g) 1.2 million agents and Employs over .
1,12,184

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 Conti…
PROGRSS OF LIC

h) In the financial year 2006-07 Life Insurance

Corporation of India's number of policy holders are
said to have crossed a whopping 200 million (fourth
in terms of population of the countries of the world)
i) It also operates in 12 other countries.
j) The recent Economic Times Brand Equity
Survey rated LIC as the No. 1 Service
Brand of the Country.

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The Corporation, which started its
business with around

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 AWARDS

Golden Peacock Loyalty Awards -

Innovative Product / 2009
Service Award - 2009

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The monopolistic position of the Life
Insurance Corporation of India was
diluted, and it has had to compete
with a number of other corporate
entities However, it still manages to be
the largest player in the Indian market,
with the lion's share of 55%.

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