OBJECTIVES
The major objective behind doing this project is to get a clear view about how General insurance corporation of India came into existence, is organized and managed, its objectives, lending terms and conditions, lending purposes, challenges faced and tackled.
LIMITATIONS
The study of the project is limited to the GIC RE. It renders the limited information provided by the officials, books and websites. Time, length and depth of the study were limited in making the project to the requirement of Mumbai University.
The data for this project is obtained in two ways- primary source and secondary source.
1: INSURANCE
1.1 Introduction
Insurance is a form of risk management primarily used to hedge against the risk of a contingent, uncertain loss. Insurance is defined as the equitable transfer of the risk of a loss, from one entity to another, in exchange for payment. An insurer is a company selling the insurance; the insured, or policyholder, is the person or entity buying the insurance policy. The amount to be charged for a certain amount of insurance coverage is called the premium. Risk management, the practice of appraising and controlling risk, has evolved as a discrete field of study and practice. The transaction involves the insured assuming a guaranteed and known relatively small loss in the form of payment to the insurer in exchange for the insurer's promise to compensate (indemnify) the insured in the case of a financial (personal) loss. The insured receives a contract, called the insurance policy, which details the conditions and circumstances under which the insured will be financially compensated.
Insurance may be described as a social device to reduce or eliminate risk of life and property. Under the plan of insurance, a large number of people associate themselves by sharing risk, attached to individual. The risk, which can be insured against include fire, the peril of sea, death, incident, & burglary. Any risk contingent upon these may be insured against at a premium commensurate with the risk involved. Insurance is actually a contract between 2 parties whereby one party called insurer undertakes in exchange for a fixed sum called premium to pay the other party happening of a certain event. Insurance is a contract whereby, in return for the payment of premium by the insured, the insurers pay the financial losses suffered by the insured as a result of the occurrence of unforeseen events. With the help of insurance, large number of people exposed to a similar risk makes
contributions to a common fund out of which the losses suffered by the unfortunate few, due to accidental events, are made good.
Insurance in India
The insurance sector in India has come a full circle from being an open competitive market to nationalization and back to a liberalized market again. Tracing the developments in the Indian insurance sector reveals the 360 degree turn witnessed over a period of almost two centuries.
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. 1956: 245 Indian and foreign insurers and provident societies taken over by the central government and nationalized. LIC formed by an Act of Parliament, viz. LIC Act, 1956, with a capital contribution of Rs. 5 crore from the Government of India.
The General insurance business in India, on the other hand, can trace its roots to the Triton Insurance Company Ltd., the first general insurance company established in the year 1850 in Calcutta by the British. Some of the important milestones in the general insurance business in India are:
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. 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.
Insurance industry, as on 1.4.2000, comprised mainly two players: the state insurers:
Life Insurers:
General Insurers:
General Insurance Corporation of India (GIC) (with effect from Dec'2000, a National
Reinsurer)
GIC had four subsidiary companies, namely (with effect from Dec'2000) these subsidiaries have been de-linked from the parent company and made as independent insurance companies.
1. 2. 3. 4.
The Oriental Insurance Company Limited The New India Assurance Company Limited, National Insurance Company Limited United India Insurance Company Limited.
The entire general insurance business in India was nationalized by General Insurance Business (Nationalization act), 1972(GIBNA). The Government of India (GOI), through nationalization took over the shares of 55 Indian insurance companies and the undertaking of 52 insurers carrying on general insurance business. General Insurance Corporation of India was formed in the pursuance of Section 9 (1) of GIBNA. It was incorporated on 22 November 1972 under the companies act, 1956as a private company limited by shares.GIC was formed for the purpose of superintending, controlling and carrying on the business of the general insurance. As soon as GIC was formed, GOI transferred all the shares it held of the general insurance companies to GIC. Simultaneously, the nationalized undertakings were transferred to Indian insurance companies. After a process of mergers among Indian insurance companies, four companies were left as fully owned subsidiary companies of GIC (1) National Insurance Company limited (2) The New India Assurance company limited (3) The Oriental Insurance Company limited (4) United India Insurance company limited. The next landmark happened on 19 April 2000, when the insurance regulatory and development authority act, 1999 (IRDAA) came into force. This act also introduced amendment to GIBNA and the insurance act 1938. An amendment to GIBNA removed the exclusive privilege of GIC and its subsidiaries carrying of general insurance in India. In November 2000, GIC is renotified as the Indian Reinsurance and through administrative instruction, its supervisory role over subsidiaries was ended. With the general insurance business (nationalization) Amendment Act 2002 came into force from March 21 2002 GIC ceased to be the holding company of its subsidiaries. There ownership was vested with Government of India.
National Insurance New India Assurance Oriental insurance United India Insurance Agriculture Insurance Company of India Ltd
Private
o o o o o o o o o o
Bajaj Allianz General Insurance ICICI Lombard General Insurance IFFCO-Tokio General Insurance Reliance General Insurance Royal Sundaram Alliance Insurance TATA AIG General Insurance Cholamandalam General Insurance Export Credit Guarantee Corporation HDFC Chubb General Insurance Star Health and Allied Insurance Company Ltd
2: General Insurance
There is a evolutionary change in the technology that has revolutionized the entire insurance sector. Insurance industry is a data-rich industry, and thus, there is a need to use the data for trend analysis and personalization. With increased competition among insurers, service has become a key issue. Moreover, customers are getting increasingly sophisticated and tech-savvy. People today dont want to accept the current value propositions, they want personalized interactions and they look for more and more features and add ones and better service The insurance companies today must meet the need of the hour for more and more personalized approach for handling the customer. Today managing the customer intelligently is very critical for the insurer especially in the very competitive environment. Companies need to apply different set of rules and treatment strategies to different customer segments. However, to personalize interactions, insurers are required to capture customer information in an integrated system. With the explosion of Website and greater access to direct product or policy information, there is a need to developing better techniques to give customers a truly personalized experience. Personalization helps organizations to reach their customers with more impact and to generate new revenue through cross selling and up selling activities. To ensure that the customers are receiving personalized information, many organizations are incorporating knowledge database-
repositories of content that typically include a search engine and lets the customers locate the all document and information related to their queries of request for services. Customers can hereby use the knowledge database to manage their products or the company information and invoices, claim records, and histories of the service inquiry. These products also may be able to learn from the customers previous knowledge database and to use their information when determining the relevance to the customers search request. There is a probability of a spurt in employment opportunities. A number of web-sites are coming up on insurance, a few financial magazines exclusively devoted to insurance and also a few training institutes being set up hurriedly. Many of the universities and management institutes have already started or are contemplating new courses in insurance. Life insurance has today become a mainstay of any market economy since it offers plenty of scope for garnering large sums of money for long periods of time. A well-regulated life insurance industry which moves with the times by offering its customers tailor-made products to satisfy their financial needs is, therefore, essential if we desire to progress towards a worry-free future.
3.1 INTRODUCTION
The General Insurance Corporation of India (GIC), a public sector enterprise, was also the largest non-life insurance company and one of the largest financial institutions in India. GIC used to sell non-life insurance products and related services. In 2001, GIC reported a gross direct premium1income of Rs 107.72 billion. By April 2002, GIC had a net worth of Rs 23 billion. GIC had been operating through its four subsidiaries - National Insurance Company Limited, New India Assurance Company Limited, Oriental Insurance Company Limited and United India Insurance Company Limited till December 2000. GIC and its subsidiaries had a network of more than 4,208 offices in India and their customer interface included agents, development officers and employees at its branch, divisional and regional offices of its four subsidiaries. The company had a workforce of 85,000. GIC also operated in the international markets in more than 30 countries, either through branches or subsidiaries. GIC offered a variety of non-life insurance policies in the fire, marine, theft, and other miscellaneous segments. It also offered health insurance through its Mediclaim policy.
While some of the policies offered by GIC, like motor insurance, were mandatory, others were designed exclusively for specific segments - for instance, the rural insurance, which included insurance cover for huts, cattle and livestock, hens and crops. In November 2000, with the liberalization of the insurance industry, GIC became a national reinsurer - the official body for undertaking reinsurance business for all private and government organizations in the insurance industry.
Many private players had entered the general insurance market, which led to a significant increase in competition. Competition was expected to be more intense in the non-life segment than the life segment, as the term of the non-life policies was very short, and customers could
switch between companies. Based on the recommendation of the consultants - PriceWaterhouse Coopers and MP Chitale - all the subsidiaries of GIC were restructured, in December 2000, as independent insurance companies. At the same time, the General Insurance Public Sector Association3 was formed to deal with the common issues related to the four subsidiaries. After the restructuring, New India Assurance Company, one of the four subsidiaries of GIC, became India's largest non-life insurer.
3.2 HISTORY
The entire general insurance business in India was nationalized by the Government of India (GOI) through the General Insurance Business (Nationalization) Act (GIBNA) of 1972. 55 Indian insurance companies and 52 other general insurance operations of other companies were nationalized through the act. The General Insurance Corporation of India (GIC) was formed in pursuance of Section 9(1) of GIBNA. It was incorporated on 22 November 1972 under the Companies Act, 1956 as a private company limited by shares. GIC was formed to control and operate the business of general insurance in India. The GOI transferred all the assets and operations of the nationalized general insurance companies to GIC and other public-sector insurance companies. After a process of mergers and consolidation, GIC was re-organized with four fully owned subsidiary companies: National Insurance Company Limited, Assurance Company Limited, Oriental Insurance Company Limited and United India Insurance Company Limited. GIC and its subsidiaries had a monopoly on the general insurance business in India until the landmark Insurance Regulatory and Development Authority Act (IRDA Act) of 1999 came into effect on 19 April 2000. This act also amended the GIBNA Act and Insurance Act of 1938. The act along with the amendments ended the monopoly of GIC and its subsidiaries and liberalized the insurance business in India. In November 2000, GIC was renotified as India's Reinsurer, but its supervisory role over its subsidiaries was ended. This was followed by the General Insurance Business (Nationalization) Amendment Act of 2002. Coming into effect from 21 March 2003, this amendment ended GIC's role as a holding company of its subsidiaries. The ownership of the subsidiaries was transferred to the Government of India, which in turn divested its stake in the companies through listings on Indian stock exchanges. As a result of these reforms, GIC became the sole Re-Insurer in India, and is now called GIC Re. Indian insurance companies are required by law to cede 10% of every policy value to GIC Re, subject to some limitations and exceptions. GIC Re has diversified its operations and is now emerging as an important Re-Insurer in SAARC countries, Southeast Asia, Middle
East and Africa. GIC Re has also expanded its international operations through branches in London and Moscow. GIC Re has a rating of A- (Excellent) from A. M. Best for its financial strength.
Vision
To be a leading global reinsurance and Risk solution provider
Mission
To achieve our Vision by -Building long term mutually beneficial relationship with business partners -Practicing fair business ethics and values -Applying state- of the- art technology, processes including enterprise risk management and
Core Value
-Trust and mutual respect -professional excellence -integrity and transparency -commitment -responsive service
married women not covered) 2. 3. of unmarried Women Rs.25, 000/- to the nominee, legal heir. Death of married woman not covered.
PERMANENT TOTAL DISABLEMENT OF THE INSURED WOMEN ONLY 1. 2. 3. Permanent Total Disablement Rs.25, 000/Loss of one limb of one eye or loss of two limbs or both eyes Rs.25, 000/Loss of one limb/sight in one eye Rs.12, 500/-
DEATH OR DISABILITY BY ACCIDENT WOULD INCLUDE death and P.T.D. arising out of: 1. 2. Slipping /falling off mountainous terrain. Biting by (a) Insects (b) Snakes, (c) Animals
3.
Drowning/Washing away by (a) Floods, (b) Landslides, (c) Rockslides (d) Earthquake, (e)
Cyclone, (f) Other Convulsions of nature/calamities 4. 5. 6. Murder Terrorist activities Any other accidental causes
DEATH IN CASE OF WOMEN (it also includes death and or P.T.D.) Caused by 1. 2. 3. 4. 5. 6. Surgical Operations such as Sterilization Caesarian Hysterectomy Cancer Operations arising from removal of breasts Child Birth, not beyond a period of seven days from the date of surgical operations.
Age: 10 years to 75 years Premium Rating @ Rs.15/- per woman per annum for Basic Cover @ Rs.23/- per woman per annum for Combined cover. Rajrajeshwari Mahila Kalyan Policy is provided by all the subsidiary government companiesOriental Insurance, New India Assurance, United India Insurance, National India Insurance in all the states of the country.
Rs.15/- p.a. 3. Insurance protection is not for the girl child but for
her parents; however, benefit will accrue to the child. 4. Death of parent/s would include death arising out of or traceable to slipping and/or falling
from mountainous terrain; biting by insects, snakes and/or animals; drowning or washing away in floods, landslides, rockslides, earthquake, cyclone and/or natural calamities; rape, murder and terrorist activities covered; any other accidental causes; 5. a) b) c) d) Death of mother of the child caused by surgical operations such as Sterilization Caesarean, Removal of uterus and removal of breast/s due to cancer, At the time of child birth are also covered provided that death occurs within a period of
6.
In case of death of either or both the parents due to an accident as above, sum Insured will
be deposited in the name of the insured girl child and she will get benefit as unde AGE 1 to 5 years BENEFITS Rs. 1,200 p.a. PAYABLE TO surviving parents or guardian for looking after the need of the child 6 to 11 years Rs. 1,200 p.a. surviving parent or guardian if the girl is admitted in school and expenses are incurred on her education 12 to 17 yrs Rs. 2,400 p.a. surviving parent or guardian if the girl child is admitted in school and the expenses are incurred on her education 18 years Balance in credit to the insured girl child
7.
In the event of discontinuation of studies between 6 and 17 years, the Scholarship will not
be paid; instead, on completion of 18 years the Balance amount in here credit will be paid to her as lump sum. 8. In the case of death of the girl child before attaining the age of 18 years, Balance amount
standing to the credit of the girl child would be paid to the surviving parent or guardian. Note: One girl child below the age of 18 in a family could be covered. Policies can be issued individually or as a group.
3) UNIVERSAL HEALTH INSURANCE SCHEME For BPL Families Oriental Insurance Company has been nominated by Govt. of India to provide Universal Health Insurance Scheme to the people who are below poverty line in the States of Delhi, Haryana, Himachal, J & K, Punjab, Rajasthan, U.P., and Uttaranchal & Chandigarh (UT). Scope of Cover: This policy has three covers as under: 1. Medical reimbursement: The Policy provides reimbursement of hospitalization expenses uptoRs.30; 000/- to an individual/family with sub limits (Maximum per illness Rs.15000/-. The benefit of the family will operate on floater basis i.e. the total reimbursement of Rs.30; 000/- can be availed of individually or collectively by members of the family. 2. Personal Accident Cover: Coverage for Death of the Earning Head of the family due to accident: Rs.25, 000/-. 3. Disability Cover: If the earning head of the family is hospitalized due to an accident/illness compensation of Rs.50/- per day will be paid per day of hospitalization up to a maximum of 15 days after a waiting period of 3 days. Age limit: 3 months to 65 years. Category Premium Subsidy by Payable GOI For an individual Rs.165/-per annum Rs. 200/For a family up to 5 Rs.248/- per annum Rs. 300/-(Including the first 3dependant children) For a family up to 7 Rs.330/- per annum Rs. 400/-(Including the first 3dependent children and dependent parents)
Main Exclusions: All pre-existing diseases and diseases contracted during the first 30days from the commencement date of the policy. 1. Some of the diseases such as Cataract, Benign Prostatic Hypertrophy, Hysterectomy, Hernia, Hydrocele, Piles, Sinusitis, and Congenital Internal Disease are not covered in the first year of the policy. 2. Corrective, cosmetic or aesthetic dental surgery or treatment. 3. Cost of spectacles, contact lens and hearing aid.
Claim Settlement: The Claims are to be settled by a Third Party Administrator (TPA) mentioned in the schedule or by the Insurance Company and to be made cashless as far as possible through listed hospitals.
4) Rural Policies
Rural policies provide wide policies to the rural areas. They cover a vast area of the rural areas. These policies are provided by all the four subsidiary companies and are applicable in all the states of the country. They are as following-
CATTLE INSURANCE
Cattle Insurance was governed under Market Agreement as devised by GIC and the rates, terms, conditions etc. all were applicable to all the four Insurance Companies. However, w.e.f May 2003, it is no longer under Market Agreement. This policy covers indigenous cross bred and exotic cattle owned by private owners, various financial institutions, dairy farms, cooperatives, corporate dairies etc. The word cattle include Milch, Cows and Buffaloes calves and heifers, stud bulls, bullocks and he-buffaloes and mithuns. Age group is specified for all the animals. The evaluation of the animal is done by a veterinary surgeon.
calves/heifers from one day to 32 months. The valuation depends upon the age of the cow and is fixed according the age of the calf. All terms and conditions applicable to cattle are applicable here also. Minimum coverage is taken from 12 months however this is not an annual policy.
CAMEL INSURANCE
The camels are covered against death due to accident or disease as per Standard Cattle Insurance Policy. The maximum S.I. is restricted to Rs.3000/-.
PIG INSURANCE
All indigenous, cross-bred and exotic pigs are covered however under scheme category exotic animals are not covered. The age group is from 4 months to 3 years. The coverage is against death due to accident or disease. Exclusions as per Cattle Policy apply here also. Permanent total disablement, breeding and furrowing risks are not covered. Vaccination in applicable diseases is compulsory. Evaluation depends upon the age of the animal. Animals are identified by means of small brass buttons ear tags.
POULTRY INSURANCE
This is also governed by Market Agreement, amongst all the four subsidiary companies. The policy shall provide indemnity against death of birds due to accident (including fire, lightning, flood, cyclone, strike, riot and civil commotion and terrorism) or diseases contracted or occurring during the period of insurance. The word Poultry includes layers, broilers and hatchery birds, which are exotic and cross-bred. Indigenous and non-descript birds will not be insured.
BENEFITS (A) Death due To Accident Rs. 10,000/(B) Total irrecoverable loss of use of 2 limbs or Rs. 10,000/- one eye and one limb due to accident (C) Total irrecoverable loss of one eye or one limb Rs. 5,000/(D) Permanent total disablement due to accident Rs.10, 000/-
EXCLUSIONS Company shall not be liable for: i). Compensation under more than one of the sub clauses (A), (B), (C) & (D) in respect of same injury/disablement. ii). Payment of compensation in respect of
injury/disablement directly or indirectly arising out of or contributed to by or traceable to any disability existing on the date of issue of the policy. iii). Death/injury/disablement of the insured from: (a) Intentional self injury, suicide or attempted suicide. (b) Whilst under the influence of intoxicating liquor or drugs. (c) Directly or indirectly caused by insanity.
(d) Arising or resulting from the insured committing any breach of law with criminal intent. iv). Compensation arising out of war and allied perils. v.)Death or bodily injury arising out of ionizing radiation or contamination by radioactivity from any source whatsoever. Policy is available on long-term basis also and is also subject to group discount and long-term discount.
6) HUT INSURANCE
APPLICABILITY This insurance applies only to those huts used for dwellings and constructed in rural areas with financial assistance from Banking/ Cooperative / Government Institutions. It can also apply to a selected area or cluster of huts for which proposal should be referred to H.O. SCOPE OF COVER Against loss or damage due to fire, (including fire resulting from explosion and short circuiting), lightning, and explosion of boiler or gas used for domestic purpose only, earthquake, flood, inundation, storm, tempest, cyclone and other allied perils, riot and strike damage, malicious damage, aircraft and impact damage. SUM INSURED The maximum sum insured will be Rs.6000/-of which Rs.5000/- can be for structure and Rs.1000/- for contents. However, it should be noted that the sum insured on the structure should be so fixed that it is not more than 20% of the financed or subsidy amounts or market value of structure whichever is less, not exceeding Rs.5000/-. PREMIUM Rs.3/- per thousand on the sum insured. However, under a policy the premium should not be less than Rs.30/Above mentioned rural policies are designed by government to cover the risk of the rural population. These policies are specially designed to provide the risk coverage in all the states of the country. There is a wide range of rural policies which are offered by Oriental Insurance, New India Assurance, National Insurance & United India Insurance.
Mediclaim Insurance is a cover which takes care of medical expenses following Hospitalization/Domiciliary Hospitalization of the Insured in respect of the following situations: (A) In case of a sudden illness (B) In case of an accident (C) In case of any Surgery which is required in respect of any disease which has arisen during the policy period. The major benefit for taking a Group Mediclaim policy is that the insured gets a Group discount; hence the premium per person is lower. Covered Risks: This cover is a hospitalization cover and reimburses the medical expenses incurred in respect of covered disease /surgery while the insured was admitted in the hospital as an in patient. The cover also extends to pre- hospitalization and post- hospitalization for periods of 30 days and 60 days respectively Major Exclusions: Any pre-existing disease, any expense incurred during first 30 days of cover except injury due to accident, all expenses incurred in respect of any treatment relating to pregnancy and child birth. Treatment for Cataracts, Benign prostatic hypertrophy, Hysterectomy, Menorrhagia or Fibromyoma, Hernia, Fitula of anus, Piles, Sinusitis, Asthma, Bronchitis, All Psychiatric or Psychosomatic disorders are excluded from the scope of the cover.
During the year 1998-99, a total number of 8,128 claims involving an amount of Rs. 1.84 crores were settled. Covered Risks: This policy provides compensation in the event of insured sustaining injuries, solely and directly from an accident. Major Exclusions: Intentional self injury, suicide or attempted suicide, Death or disablement resulting from child birth and pregnancy; Accident while the insured is under the influence of intoxicating liquor or drugs; War and allied perils.
treatment, was introduced w.e.f. 12th August, 1996. Covered Risks: This cover is a hospitalization cover and reimburses the medical expenses incurred in respect of covered disease /surgery while the insured was admitted in the hospital as an in patient. The cover also extends to pre- hospitalization and post- hospitalization for periods of 30 days and 60 days respectively Major Exclusions: Any pre-existing disease, any expense incurred during first 30 days of cover except injury due to accident, all expenses incurred in respect of any treatment relating to pregnancy and child birth. Treatment for Cataracts, Benign prostatic hypertrophy, Hysterectomy, Menorrhagia or Fibromyoma, Hernia,Fitula of anus ,Piles, Sinusitis, Asthma, Bronchitis, All Psychiatric or Psychosomatic disorders are excluded from the scope of the cover. Health policies are one of the most popular policies of government general insurance sector. These policies provide a big amount of premium to the insurance companies. Health insurance as it is different from other segments of insurance business is more complex because of serious conflicts arising out of adverse selection, moral hazard, and information gap problems. Health insurance is typically annual and has to be renewed yearly. Policy, which is not renewed in time lapses and a new policy, has to be taken out.
Mr. M. V. Nair
Mr. G. Srinivasan
Dr Sunil Gupta
GIC's main role is to set broad policies to influence and manage the general insurance industry. It functions as a holding company, not as a subsidiary. This means that GIC doesn't sell insurance products, but maintains control over other companies that do sell insurance products through the four subsidiary companies it formed. The only products the GIC sells are insurance policies to the aviation industry, which was a part of government's share of the general insurance industry prior to the passage of GIA. The four subsidiary companies are known as the Oriental Insurance Company Limited, United India Insurance Company Limited, National Insurance Company Limited, and New India Assurance Company. In addition to these, GIC also formed the Asset Management Company that's responsible for managing the GIC Mutual Fund, GIC Housing Finance, and Export Credit Guarantee Corporation.
Reinsurance
The only reinsurance provider in India is GIC. It provides reinsurance to the country's major insurance companies, thereby underwriting their risk and losses. In fact, every insurance company must award 20 percent of its reinsurance business to GIC. Its reinsurance role has expanded internationally over the years, and now it sells policies to other countries in Africa, Southeast Asia, and the Middle East, among others.
In 1999, the Indian Parliament passed another bill called the Insurance Regulatory and Development Act (IRDA), which opened up the general insurance industry to private companies and established investment guidelines GIC insurers must follow. The IRDA allows private companies to sell products in India, essentially deregulating the general insurance industry. The only restriction placed on private, foreign-owned companies is they're limited to holding just 26 percent of the market share. This move has greatly increased competition within the general insurance industry market, and has forced GIC to revamp its organizational structure and business approaches to accommodate these changes. In addition to opening up the general insurance industry market, the IRDA also stipulates that GIC insurers must diversify their investments to provide greater security.
Status
India's recent economic boon and improved standard of living of its people has increased the demand for insurance products. By lifting the ban imposed by GIA that nationalized the general insurance industry, the Indian government is hopeful that greater competition will make insurance products more widely available, and thus help support the country's economic growth.
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BROSHURES
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