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The Story of Life Insurance

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Life Insurance came to India from England in the year 1818 in its modern form. The first Insurance company was Oriental Life Insurance Company started by Europeans in Calcutta. These insurance company was set up to fulfill the need of the Indians but only the European gained from these insurance company. People like Babu Muttylal after their efforts the foreign life insurance companies started insuring Indian lives. Indians were being treated as sub-standard lives and heavy extra premiums were being charged on them. After the immense hard work the first Indian Life Insurance company was established Bombay Mutual Life Assurance Society in the year 1870, and covered Indian lives at normal rates.

Starting as Indian enterprise with highly patriotic motives, insurance companies came to carry the message of insurance and social security through insurance to various sectors of society. Bharat Insurance Company (1896) was one such companies inspired by nationalism. Due to swadeshi movement more insurance company came up. The United India in Madras, National Indian and National Insurance in Calcutta and the Co-operative Assurance at Lahore were established in 1906. New insurance company came up which was Hindustan Co- operatice insurance company in 1907 in joransko. In the same period more company came into existence The Indian Mercantile, General Assurance and Swadeshi Life (later Bombay Life). 1912 was the year when the insurance companies act and provident fund act was passed. The act was biased and discriminated between Indian and foreign companies on many object and the Indian companies was put into disadvantage.

The insurance company saw a growth in their early twenties. The estimate of the insurance company was around 44 and in that period it rose to 176 companies and the total business in force rose to 298crore from 22.44 crore. All the life insurance company and non-life insurance company was governed by the insurance act 1938 so that it is strictly controlled. Many a times people demanded for nationalization of life insurance company but they failed but in the future the bill was passed and the life insurance act got amended in the legislative assembly. However, when the bill was passesd after that in the year 1956 on 19th January the life insurance in India was nationalized.

At the time of nationalization about 154 Indian insurance companies, 16 non-Indian companies and 75 provident were operating. Nationalization was accomplished in two stages; initially the management of the companies was taken over by means of an Ordinance, and later, the ownership too by means of a comprehensive bill. 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, the objective of this act was 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.

In the year 1956 LIC had 5 zonal offices, 33 divisional offices and 212 branch offices, apart from its corporate office. Since life insurance contracts are long term contracts and during the currency of the policy it requires a variety of services need was felt in the later years to expand the operations and place a branch office at each district headquarter. Large no. of new branches were opened in different places. As a result of re-organisation servicing functions were transferred to the branches, and branches were made accounting units. It worked wonders with the performance of the corporation. LIC growth rate crossed to 1000 crore from 200.00 crore from new business in 1957 and it took 10 more year to cross 2000.00 crores. With the re-organisation of LIC the company growth rate in 1985-86 crossed to 7000.00 crore.

In the present scenario LIC functions with 2048 fully computerized branch offices, 113 divisional offices, 8 zonal offices, 1381 satallite offices and the Corporate office. LIC’s Wide Area Network covers 113divisional offices and attach all the branches from a Metro Area Network. LIC has tied up with some Banks and Service providers to offer on-line premium collection facility in selected cities. LIC’s ECS and ATM premium payment facility is an addition to customer convenience. Info Centres have been commissioned at Mumbai, Ahmedabad, Bangalore, Chennai, Hyderabad, Kolkata, New Delhi, Pune and many other cities. With a creative power of providing easy access to its policyholders, LIC has launched its SATELLITE SAMPARK offices.

LIC continues to be the presiding life insurer even in the liberalized scenario of Indian insurance and is moving fast on a new growth trajectory surpassing its own past records. LIC has issued over one crore policies during the current year. It has crossed the milestone of issuing 1,01,32,955 new policies by 15th Oct, 2005, posting a healthy growth rate of 16.67% over the corresponding period of the previous year.

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