You won’t believe it but since ancient times, insurance is a part of our Indian culture. Like banking, investment, and trade, insurance also boasts a deep-rooted history of the ancient ages. To elaborate on this, neighbors and community members were obliged to help if someone’s house was damaged by a storm or a person was hurt by a natural disaster. This assistance came in the form of food, shelter, processing, etc. Over time, this process was streamlined into what we today call insurance.
The contemporary form of Life Insurance originated in India from England in 1818. The Oriental Life Insurance Company started in Calcutta in the year 1818 by Europeans, was the very first life insurance company in India. Today, we are going to talk about the history of life insurance in India.
Whether you believe it or not… since ancient times, life insurance is a very essential part of Indian culture. It is just like those of banking, but the only difference is that life insurance is like investment and trade. Life insurance has a deep-rooted insurance history in India.
Table of Contents
- History of Life Insurance in India
- Here Is A Brief Periodic Presentation Of The History Of Life Insurance In India
- – History Of Life Insurance In India In The Year 1818
- – History Of Life Insurance In India In The Year 1912
- – History Of Life Insurance In India In The Year 1938
- – History Of Life Insurance In India In The Year 1950s
- – History Of Life Insurance In India In The Year 1972
- – History Of Life Insurance In India In The Year 1999
History of Life Insurance in India
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The history of insurance in India is more than thousands of years old. There is a mention of a concept in the Rig-Veda called “YOGAKSHEMA” which means security, prosperity, and well-being of people. Not only in Rig-Veda, but also in Arthashastra, Manusmrithi, and Dharmashastra insurance was mentioned.
In those ancient times insurance generally denotes to sharing of possessions that could have been re-distributed in the times of any kind of natural disasters such as floods, fire, famine, and epidemics. This was the initial form of modern-day life insurance history in India.
Here Is A Brief Periodic Presentation Of The History Of Life Insurance In India:
Source:- vipinkhandelwal . com
– History Of Life Insurance In India In The Year 1818
In the year 1818, the first insurance company “Oriental Life Insurance Company in India” was established at Calcutta (now Kolkata) in India. It was the first modern life insurance company/first insurance company of India. Similarly, the “Madras Equitable Assurance Company” in Madras (Chennai) and “Bombay Life Assurance Company” of Bombay (now Mumbai) were established in 1829 and 1823 respectively.
Indians had to pay a very high premium as compared to the British residents, in the early days. “Bombay Life Insurance Company” was the very first insurance company, which was established by Indian. This company had started insuring Indian individuals without charging any additional premiums.
– History Of Life Insurance In India In The Year 1912
The life insurance industry was highly irregular during the early years of this century. It was only in 1912 that the Indian Life Insurance Companies Act, 1912 was passed. This act conducted insurance and eventually made it obligatory for a premium to be certified by the clerk and company valuation.
– History Of Life Insurance In India In The Year 1938
There were approximately 176 insurance companies in India by the year 1938. The total turnover of these 176 insurances was approximately INR 300/- corer. This was at the time when the Insurance Act 1938 was passed, which was the first part of the legislation covering both life insurance and general insurance in India.
The IRDAI puts the rules under Section 114 A of Insurance Act, 1938.
– History Of Life Insurance In India In The Year 1950s
Although the demand for nationalization of BMA companies was going on for a while, the nationalization of insurance was achieved only after the Life Insurance Act of 1956. On September 1, in the year 1956, Life Insurance Corporation of India / LIC of Life Insurance Corporation India was established for all Indians.
– History Of Life Insurance In India In The Year 1972
In the year 1972, the General Insurance Business (Nationalization) Act was passed which nationalized all general insurance companies in India. At that time 107 companies were merged with 4 companies. These four companies are as follows:
- Oriental Insurance Company Limited
- New India Assurance Company Limited
- United India Insurance Company Limited
- National Insurance Company Limited
– History Of Life Insurance In India In The Year 1999
According to the recommendations made by the Malhotra Committee, two things happened in the year 1999. These are:
- The private sector was allowed to enter the insurance business
- The Insurance Regulatory and Development Authority of India (IRDAI) was formed.
IRDAI was incorporated in April 2000 and it is now an autonomous body that works for the insurance industry in India.
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