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LIFE INSURERS
Public Sector
Life Insurance Corporation of India
Private Sector
Allianz Bajaj Life Insurance
Company Limited,
Birla Sun-Life Insurance Company
Limited,
HDFC Standard Life Insurance Co.Limited,
ICICI Prudential Life Insurance Co.
Limited,
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ING Vysya Life Insurance Company Limited,Max New York Life Insurance Co. Limited,
MetLife Insurance Company Limited,
Om Kotak Mahindra Life Insurance Co. Ltd.
SBI Life Insurance Company Limited
TATA AIG Life Insurance Company Limited,AMP Sanmar Assurance Company Limited,
Dabur CGU Life Insurance Co. Pvt. Limited,
GENERAL INSURERS
Public Sector
National Insurance Company Limited
New India Assurance Company LimitedOriental Insurance Company Limited
United India Insurance Company Limited
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PRIVATE SECTORBajaj Allianz General Insurance Co. Limited
ICICI Lombard General Insurance Co. Ltd.
IFFCO-Tokio General Insurance Co. Ltd.
Reliance General Insurance Co.Limited
Royal Sundaram Alliance Insurance Co. Ltd.
TATA AIG General Insurance Co. Limited
Cholamandalam General Insurance Co. Ltd.
Export Credit Guarantee Corporation
HDFC Chubb General Insurance Co. Ltd.
REINSURER
General Insurance Corporation of India
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Indian insurance sector to touch Rs.20 bn mark
by 2010August 15th, 2008 - 12:59 pm ICT by IANS (INDIAN ASIAN NEWS
SERVICE)
New Delhi, Aug 15 (IANS) Indias insurance business will reach a level
of Rs.20 billion in the next two years from the current level of Rs.500
billion, according to an industry lobby. A growth of over 200 percent
is likely to be seen in Indian insurance business by 2009-10 in which
private insurance business would grow at 140 percent in view ofaggressive marketing techniques, said a report by the Associated
Chambers of Commerce and Industry of India (Assocham).
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The state-owned insurance companies growth rate
will be 35-40 percent, the study said.
According to Assocham, in the last couple of years, the
insurance sector had grown by 175 percent and thetrend will emerge still better because of huge potential.
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On account of intense marketing strategies adopted
by private insurance players, the market share of state-
owned insurance companies like GIC (General
Insurance Corp), LIC (Life Insurance Corp) and others
have already come down to 70 percent in last four-five
years from over 97 percent, and more intense
competition is likely to be witnessed in the nearfuture, Assocham president Sajjan Jindal said.
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The private insurance players entry into insurancesector is still restricted since India has yet to open it up
liberally. But even then, their rate of return to their
subscribers and policy holders is estimated at about 35
percent against 20 percent of domestic insurancecompanies, Jindal added.
Moreover, the state-run companies have limited
number of policies to offer to their subscribers while the
private players offer many more policies with premium
amount and maturity period, he added.
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Interestingly, the private sector insurance playershave started exploring the rural markets in which
until recently the state-run companies had the
monopoly.
The chamber has projected that in rural markets, the
share of private insurance players would increase
substantially.At present, Indias life insurance premium, as a
percentage of GDP, was 1.8 percent against 5.2
percent in the US, 6.5 percent in Britain and eight
percent in South Korea.
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IRDA ACT 1999This Act was passed by Parliament in December 1999 and it
received presidential assent in Jan.2000.it provides for establishment
of the Authority to protect the interest of holders of Insurancepolicies to regulate promote ,and ensure orderly growth of insurance
industry and for matters connected therewith or incidental thereto.
Under this act, an authority called IRDA has been established
which replaces controller under Insurance Act 1938
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As per section 2 of the Act various terms have been defined as
follows:
(a) Appointed day means the date on which theAuthority is established
(b) Authority means the Insurance Regulatory and
Development Authority
(c) Chairperson means the chairperson of the Authority
(d) Fund means the Insurance Regulatory andDevelopment Authority Fund
(e) Interim Insurance Regularity Authority means the
Insurance Regularity
Authority set up by the Central Government through
Resolution No.17(2)/94- Insurance v, dated the 23rd January, 1996
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(f) Intermediary or Insurance Intermediary includes
Insurance brokers, reinsurance brokers, insurance consultants, surveyors
and loss assessors
(g) Member means a whole time or a part time member of the
Authority and Includes the Chairperson
(h) notification means prescribed by rules made under in
the Official Gazette(i) prescribed means prescribed by rules made under this Act
(j) regulations means the regulations made by the Authority
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The Authority shall be body corporate by the aforesaid name having perpetual
succession and a common seal with power to enter into a contract and sure
or be sued.The Authority shall consist of the following members namely:
(a) Chairperson
(b) Not more than 5 whole time members
(c) Not more than 4 part time members to be appointed by the Central Govt.
from amongst persons of ability, integrity and standing who have knowledgeor experience in life insurance, general insurance, actuarial science, finance,
economics, law accountancy, administration or other discipline which would
in the opinion of the Central Govt. be useful to the Authority (section 4).
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The Chairman tenure will be for 5 years and he will be
eligible for reappointment till he attains the age of 65 years.
The appointment of members will be for 5 years and
they will be eligible for reappointment till he attains the age
of 65 years.
The Central Government can remove any member of theAuthority under section 6 of the Act if he is:
(a) Adjudged as an insolvent
(b) Has become physically or mentally incapable of
acting as a member
(c) Has been convicted
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(d) Has acquired such financial or other interest which
affect prejudicially his function as a member
(e) Has so abused his position as to render his continuation
in office detrimental to the public interest.
The salary and allowance to the members will be
prescribed by the government (section 7).According to section 8 of the Act the chairperson
and the whole time members cannot accept any
appointment without Govt. approval within 2 years from
the date on which he ceased to be in office.
As per Section 9 of the Act the Chairperson shall
have the powers of general superintendence and
direction in respect of all administrative matters of
Authority.
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Powers and Functions of the authority shall
include(a) issue to the applicant a certificate of registration, renew, modify,withdraw, suspend or cancel such registration;
(b) Protection of the interests of the policy holders in matters
concerning assigning of the policy, nomination by policy holders,
insurable interest, settlement of insurance claim, surrender value
of policy and other terms and conditions of contracts of
insurance;
(c) Specifying requisite qualification, code of conduct and practical
training for the intermediary or insurance intermediaries andagents;
(d) Specifying the code of conduct for surveyors and loss assessors;
(e) Promoting efficiency in the conduct of insurance business;
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(f) Promoting and regulating professional organisations connected
with the insurance and reinsurance business;
(g) Levying fees and other charges for carrying out the purposes ofthis act;
(h) Calling for information from, undertaking inspection of,
conducting enquiries and investigations including audit of the
insurers, intermediaries, insurance intermediaries and other
organisations connected with insurance business;
(i) Control and regulation of the rate, advantage, terms and
conditions that may be offered by insurers in respect of general
insurance business not so controlled and regulated by the Tariff
Advisory Committee under section 64U of the InsuranceAct,1938(4 of 1938);
(j) Specifying the form and manner in which books of account shall
be maintained and statement of accounts shall be rendered by
insurers and other insurance intermediaries;
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(k) Regulating investment of funds by insurance
companies;
(l) Regulating maintenance of margin of solvency;(m) Adjudication of disputes between insurers and
intermediaries or insurance intermediaries;
(n) Supervising the functioning of the Tariff Advisory
(o) Specifying the percentage of premium income of the
insurer to finance schemes for promoting and regulatingprofessional organizations referred to in clause (f);
(p) Specifying the percentage of life insurance business
and general insurance business to be undertaken by the
insurer in the rural or social sector; and
(q) Exercising such other powers as may be prescribed.
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Impact of the Opening Up of the Insurance SectorOn October 23, 2000, the Government of India created history once
again through the IRDA, by returning insurance business to privatecompanies which had been abolished way back in 1956. At that time
LIC was the only corporation providing life insurance to the people of
this country. Although its own business grew, the people it sought to
serve remained largely unsatisfied and unhappy. As the Indianpopulace grew, the LIC also grew, but there was also an increasing
clamour for removing the monopoly of the LIC. People basically
wanted better service and a wider range of products. But LIC failed
on both counts. Despite these shortcomings, LIC continued to grow
on account of four factors, viz. the sheer need for insurance, the taxbenefits it gave taxpayers, the savings factor and its monopoly status.
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Before market liberalization, LIC sold mostly savings with
premiums being tax-deductible in the hands of theconsumers. Protection business was a relatively small
proportion of its total business and riders were not popular.
Not surprisingly, the new companies have introduced a wider
range of products along with more need-based selling
techniques. Some companies are selling protection plans in
abundance. Most companies are offering a choice of riders,
covering benefits such as accidental death, critical illness,
waiver of premium, total and permanent disability, and
guaranteed insurability. Several of the new players havealready launched unit-linked products. For instance, Birla
Sunlifes portfolio has unit-linked products which incorporate
certain guarantees.
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Before liberalization, distribution was entirely via agencies. The
focus of many of the entrants has been to implement multi-
channel strategies, including a significant bancassuranceelement. An interesting development has been the proactive
response ofLIC to its competitors. The private players are
bringing international experience, new technology, new
channels of distribution and new products. The ground rules in
the insurance business are being redefined. The existing publicsector players are gearing up with matching strategies so as to
face the competition. The majority of insurance companies
today are under tariff. This means that insurance companies
cannot price the product to suit the customer or customer
group. The way to serve the customer is to segment the market
and offer the correct product at the correct price to that market
segment.