LIC-Life Insurance Corporation

Some of the important milestones in the life insurance business in

India are:
1818: Oriental Life Insurance Company, the first life insurance company on
Indian soil started functioning.(Anita Bhavsar in Kolkata)
1870: Bombay Mutual Life Assurance Society, the first Indian life insurance
company started its business.
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.
1956: 245 Indian and foreign insurers and provident societies are taken over by
the central government and nationalized. LIC formed by an Act of Parliament,
viz. LIC Act, 1956, with a capital contribution of Rs. 5 Crore from the
Government of India.

Objectives
To mobilize maximum savings of the people by making insured savings more attractive.
To extend the sphere of life insurance and to cover every person eligible for insurance
under insurance umbrella.
To act as trustees of the insured public in their individual and collective capacities.
Promote all employees and agents of the LIC, in the sense of participation and job
satisfaction through discharge of their duties with dedication towards achievement of LIC
objectives.
To ensure economic use of resources collected from policy holders.
To conduct business with utmost economy and with the full realization that the money
belong to the policy holders.

Organization and Management:

LIC with its central office in Mumbai and seven Zonal offices
at Mumbai, Kolkata, Delhi, Chennai Hyderabad, Kanpur
and Bhopal operates through 100 divisional offices in
important cities and 2048 branch offices. As on March 31,
2014 LIC had 2.18 million agents spread over the country.
LIC also entered the international insurance market and
opened its offices in England, Mauritius and Fiji.

Activities of LIC
The LIC subscribes to and underwrites the shares, bonds and debentures of
several financial corporations and companies and grants term-loans. It
maintains a relationship with other financial institutions such as IDBI, UTI,
IFCI, etc. for coordination of its investment.
The LIC is a powerful factor in the securities market in India. It subscribes to
the share capital of companies, both preference and equity and also to
debentures and bonds. Its shareholding extends to a majority of large and
medium sized non-financial companies and is significant in size.
It is no doubt to say that the LIC acts as a kind of downward stabilizer of the
share market, as the continuous inflow of fresh funds enables it to buy even
when the share market is weak.

Investment Policy

The investment policy of the LIC of India should bring a fair return
to policy holders consistent with safety. Since the funds at the
disposal of the LIC are in the nature of the trust money, they should
be invested in such securities which do not diminish in value and
give the highest possible return.

In other words, principles of safety, yield, liquidity and distribution

should be taken into consideration while investing insurance funds.
The way in which these funds are invested is a great significance not
only to policy holders but also to the entire economy.

GIC-General Insurance Corporation

1907: The Indian Mercantile Insurance Ltd. set up, the first company to

transact all classes of general insurance business.

1957: General Insurance Council, a wing of the Insurance Association of

India, frames a code of conduct for ensuring fair conduct and sound business
practices.
1968: The Insurance Act amended to regulate investments and set minimum

solvency margins and the Tariff Advisory Committee set up.

1972: The General Insurance Business (Nationalization) Act, 1972

nationalized the general insurance business in India with effect from 1st

About GIC
The General Insurance Corporation (GIC) was formed by Central
Government in 1972. With effect from January 1, 1973 the erstwhile 107
Indian and foreign insurance companies who were operating in the country
prior to nationalization, were grouped into four operating companies,
namely,
(a) National Insurance Company Limited.
(b) New India Assurance Company Limited.
(c) Oriental Insurance Company Limited.
(d) United Insurance Company Limited.

About GIC Cont..

With head offices at Kolkata, Mumbai, New Delhi and Chennai,

respectively GIC which was the holding company of the four public sector
general insurance companies has since been delinked from the later and
has been approved as the Indian Reinsurer since 3 November 2000. All
the four entities are Government companies registered under Companies
Act.

The General Insurance business has grown in spread and volume after
nationalization. The tour companies have 2, 699 branch offices, 1,360
divisional offices and 92 regional offices spread all-over the country.

Activities of GIC
Some of the schemes in operation of the benefit of poor are the
personal account insurance, social security scheme, hut
insurance scheme for poor families in rural areas and crop
insurance scheme.
Besides the domestic market, the GIC is presently operating in
16 countries directly through branches or agencies and in 14
countries through subsidiary and associate companies. The wholly
owned subsidiary of GIC known as Indian International Insurance
Private Limited, set up in 1988 in Singapore, has grown into a
leading company in the Singapore market.

Functioning Of GIC (Regulated by the below major

Acts)

The Companies Act,1956

Insurance Act,1938
General Insurance Business (Nationalization)Act,1972
General Insurance Business (Nationalization) Amendment
Act,2002
Insurance Regulatory and Development Authority
Act,1999

Department of an Insurance Organization

General Departments

1 A) Actuarial: Calculation of Premium, Policy

reserves, Forfeiture Values, Dividends etc..it
conducts various mathematic studies and determine
rates, they develop new insurance products, and the
head office will have full fledged actuarial
department
B) Underwriting: Selecting, Classifying and rating
risk. the major task of underwriting department are
to select a portfolio of risk which will contribute to
profit and surplus to insurer.

C) Sales and Marketing: Helps in maintaining and

promoting the distribution system and to develop new
products, to reach the corporate goals..
D) Accounting: Problem>>Creation of RESERVES and
CONTINGENCIES which are probabilistic and therefore
difficult to predict>> IRDA Financial Statement Format
E)Investing and Financing: Crucial and Domain function
Interest rates guaranteed to policy holder, Portfolio of
investment(Mortgages, common stock,govt. securities,
corporate bond, real estate..)

F) Legal: Counseling and claims ,IRDA Rules and

regulation.
G) Claims: Verifying and settling Claims,they must
be aware of Respective coverage, ability to
quantify losses, litigation and subrogation are dealt
by them