History of Lic
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Transcript of History of Lic
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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
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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
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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.
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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.
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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:
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"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
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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
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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