STUDY MATERIAL INSURANCE PART-2

STUDY MATERIAL INSURANCE PART-2

History
The control on general insurance business started with the insurance act 1938, setting up the
government control. In 1968 it was amended to add more provisions to and also Add Tariff
Advisory Committee. This Tariff Advisory Committee now fixes the rates terms and conditions
for many branches of general insurance like Fire, Engineering, Marine, Hull and Workmen
compensation insurance.

In 1972, the General Insurance (Business Nationalization) Act was passed. It set up GIC and its
subsidiaries. 107 private companies were merged into GIC and its subsidiaries and these
companies included both Indian and foreign companies. General Insurance Corporation was
formed as company under the Companies Act unlike LIC, which was setup as corporation.

The GIC has only one office in Mumbai and is the holding companies for all the subsidiaries. It
formulates general policy guidelines for general insurance industry and control the investment
and reinsurance policy of the companies.

GIC had four subsidiary companies, namely (with effect from Dec'2000, these subsidiaries have
been de-linked from the parent company and made as independent insurance companies.
1. The Oriental Insurance Company Limited
2. The New India Assurance Company Limited
3. National Insurance Company Limited
4. United India Insurance Company Limited.
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In April 1993, the govt setup a high power committee headed by R. N. Malhotra, former
Governor of Reserve Bank of India. The committee submitted its report to the ministry on 7th
January 1994.
On 23rd January 1996, The Insurance Regulatory Authority was set up by a Government order.
N. Rangachari has taken over the function of the controller of the Insurance also. In that capacity
he has the controlling authority over the General Insurance and Life Insurance business in India.
In the budget speech of July 1996, the govt formally announced its plans to open the Insurance
Industry and also the intention of bringing an Insurance Regulatory Authority Bill 1996.
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Insurance Regulatory and Development Authority Act 1999
(IRDA)
An Act to provide for the establishment of an Authority to protect the interest of the policy
holders of insurance policies, to regulate, promote and ensure orderly growth of the insurance
industry and for matters concerned there with or incidental thereto and further to amend
Insurance Act 1938, and General Insurance Business (Nationalisation) Act 1972.
On 26th August 1998 the Reddressal of public Grievances Rules 1998 was issued by the
Insurance Division, Ministry of Finance by which the Govt of India setup the Insurance
ombudsman scheme for GIC and LIC. This will handle cases against Industry from the public
and would take over a large part of the consumer forums. The scope limited to personnel lineses of insurance i.e. Policies taken on individual capacity. Insurance Industry has Ombudsmen in 12
cities. Each Ombudsman is empowered to redress customer grievances in respect of insurance
contracts on personal lines where the insured amount is less than Rs. 20 lakhs, in accordance
with the Ombudsman Scheme.
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PART1: http://bankexamdiscussion.blogspot.com/2015/01/study-material-insurance-part-1.html

PART3: http://bankexamdiscussion.blogspot.com/2015/01/study-material-insurance-part-3.htm