India Life Insurance sector came into existence with the nationalization of Life Insurance Corporation (LIC) in 1956. At that time, all private companies were taken over by LIC. Henceforth, the private insurance companies remained subdued under the towering leadership of LIC until year 2000 when the Insurance Act of 1938 was amended to the Insurance Regulatory and Development Authority Act (IRDA) of 2000. From this time onwards, the IRDA started issuing licenses to private life insurers.
While LIC is the is the sole operator in the public sector, the following is the list of private companies in the Life Insurance Sector in India as on September,2006:
Foreign Direct Investment (FDI) Policy in Indian Life Insurance sector
The FDI norms presented in 2006, restricts the foreign participation in an Indian Insurance Company to 26 % of the latter's share capital. Although the LIC still remains the largest player in the market, the private companies are emerging with a bunch of lucrative policies and investment opportunities for people belonging to all sections of the society. Such policies are promoted through attractive marketing strategies while are luring the society at large. A special mention in this regard needs to be made of the Unit Linked Investment Plans (ULIPs ) that offers life cover as well as scope for savings and investment. Moreover, such plans are subjected to a minimum lock-in period of three years to prevent mis usage of significant tax benefits. The commission or intermediation fees received by agents are enough to keep the latter interested.
