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In India, Insurance is a national matter, in which life and general insurance is yet a
booming sector with huge possibilities for different global companies, as life insurance
premiums account to 2.5% and general insurance premiums account to 0.65% of India's
GDP. The Indian Insurance sector has gone through several phases and changes,
especially after 1999, when the Govt. of India opened up the insurance sector for private
companies to solicit insurance, allowing FDI up to 26%. Since then, the Insurance sector
in India is considered as a flourishing market amongst global insurance companies.
However, the largest life insurance company in India is still owned by the government.
The history of Insurance in India dates back to 1818, when Oriental Life Insurance
Company was established by Europeans in Kolkata to cater to their requirements.
Nevertheless, there was discrimination among the life of foreigners and Indians, as higher
premiums were charged from the latter. In 1870, Indians took a sigh of relief when
Bombay Mutual Life Assurance Society, the first Indian insurance company covered
Indian lives at normal rates. Onset of the 20th century brought a drastic change in the
Insurance sector.
In 1912, the Govt. of India passed two acts - the Life Insurance Companies Act, and the
Provident Fund Act - to regulate the insurance business. National Insurance Company
Ltd, founded in 1906, is the oldest existing insurance company in India. Earlier, the
Insurance sector had only two state insurers - Life Insurers i.e. Life Insurance
Corporation of India (LIC), and General Insurers i.e. General Insurance Corporation of
India (GIC). In December 2000, these subsidiaries were de-linked from parent company
and were declared independent insurance companies: Oriental Insurance Company
Limited, New India Assurance Company Limited, National Insurance Company Limited
and United India Insurance Company Limited.