History of Lic

7/31/2019 History of Lic

1/8

History:

INTRODUCTION OF LIC:

The Life Insurance Corporation of India (LIC), a public

sector enterprise, is the largest insurance company in India,

sell ing insurance products and related services.

Each of its business products offered a variety of d ifferent

plans to suit different customers and s ituations, also provided

social security schemes and pension schemes. Investment in

LIC was considered by a majority of its customers to be

reliable and secure.

The concept of l ife insurance came to India when two British

insurance companies were established in the country - the

Oriental Life Insurance Company (in Calcutta in 1818 By

Bipin Behari Dasgupta and others) and Bombay Life

Assurance Company (in Bombay in 1823).

IMPORTANT MILESTONES:

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.

This legislation was lead to met requirement of insurance

policy act l ike


2/8

Statutory requirement of equity capital for companies

carrying on life insurance business.

A ceil ing on share holdings in such companies.

Stricter control on investments.

Submission of periodical returns relating to investments and

other such information to the controller.

Malpractices and Mismanagement had crept into the

management of several of these companies. More than 50

private insurance companies had been liquidated or swindledthe policyholders.

There were complaints of different types of malpractices by

many insurance companies like falsif ication and denial of

claims, and inter-locking of funds.

To protect the public, the government nationalized the

insurance industry. On

January 19, 1956, the management of the life insurancebusiness of 245 Indian and

Foreign insurers and provident insurance societies then

operating in India were taken

Over by the central government.

By 1956, there were 154 Life Insurance Companies in India.

FORMATION OF LIC:

The Parliament of India passed the Life Insurance

Corporation Act on the 19th of June 1956, and the Life


3/8

Insurance Corporation of India was created on 1st

September, 1956, with a capital contribution of Rs. 5 crore

from the Government of India. With the

objective of 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.

LIC OWNS THE FOLLOWING SUBSIDIARIES:

1. Life Insurance Corporation of India International:

This is a joint venture offshore company promoted by LIC

which commenced operations in July, 1989 with the

objectives of offering US$ denominated policies to cater to

the insurance needs of NRIs and providing insurance services

to holders of LIC policies currently residing in the Gulf.

2. LIC Nepal:

A joint venture company formed in 2001 with the Vishal Group

of

Industries, Nepal.

3. LIC Housing Finance:

In corporated in 19 June 1989, its main objective is to

provide long term finance for construction or purchase of

houses or apartments. It has a Dubai office.

4. LIC Lanka:

A joint venture company formed in 2003 with the Bartleet

Group of Companies, Sri Lanka.

5. LICHFL Care Homes:

A wholly owned subsidiary of LIC Housing Finance, it builds

and operates "Assisted Community Living Centres" for senior

cit izens.


4/8

CURRENT STATUS:

Tracing the developments in the Indian insurance sectorreveals the 360-degree turn

witnessed over a period of almost 190 years.

The enforcement of New Economic Reforms in 1991 coupled

with the formation of Insurance Regulatory and Development

Authority Act (IRDA) of 2000 (which started issuing licenses

to private life insurers ) has diluted the monopolistic attitude

commanded by LIC.

The only insurance company belonging to the public sector

now has to compete with

several other corporate entit ies of its kind which o ften are

heavyweight Indian as well

as Multinational Life Insurance Brands in themselves.

The Malhotra committee's recommendations in 1994 brought

about a sea change in the industry.

PROGRESS OF LIC:

Headquartered in Mumbai, which is considered the financ ial

capital of India, the

Life Insurance Corporation of India currently has:

a) 8 zonal Offices and

b) 101 divisional offices located in different parts of India

c) 2048 branches located in different cit ies and towns of

India.

d) Contributed around 7 % of India's GDP in 2006.


5/8

e) It also funds close to 24.6% of the Indian Government's

expenses.

f) It has assets estimated of 5 Tril l ion Rupees.

g) 1.2 mill ion agents and Employs over 1,12,184.

h) In the financial year 2006-07 Life Insurance Corporation of

India's number of policy holders are said to have crossed a

whopping 200 mill ion (fourth in terms of population of the

countries of the world)

i) It also operates in 12 other countries.

j) The recent Economic Times Brand Equity Survey rated LIC

as the No. 1 Service Brand of the Country .

The monopolistic position of the Life Insurance Corporation of

India was diluted, and it has had to compete with a number of

other corporate entit ies However, it sti l l manages to be the

largest player in the Indian market, with the lion's share of55%.

Vision and Mission :

Mission:

"Explore and enhance the quality of l ife of people through

financial security by providing products and services of

aspired attributes with competit ive returns, and by rendering

resources for economic development."

Vision:


6/8

"A trans-nationally competit ive financial conglomerate of

significance to societies and Pride of Ind ia."

Achievements and Awards :

Awards Received in 2010-11

CNBC Awaz Consumer AwardET Brand Equity Award for Top

Brand in Insurance Category


7/8

Outlook Money Award for BestLife Insurer

AIMA High Performance Award

Readers Digest Trusted BrandGolden Peacock Award for

Corporate Governance

Power Brand AwardGlobal Youth Marketing Awardfor Most preferred LifeInsurance Company

Shoppers & Consumers InsightAward

MY FM Stars of Industry Awardfor Excellence in Life Insurance


8/8

World Brand Congress Award forBrand Excellence

World HRD Congress Award forInnovative HR practices

ABCI Award for House Magazine

Yogakshema

INDY's Gold Award for House

Magazine Yogakshem

Documents

History of Lic