ESIC SSO mains exam is scheduled to held on 15th of December. So, you must have an overview of Insurance in India. Here we have provided some of the most important one-liners related to Insurance in India. These will be very beneficial for ESIC SSO Mains exam. So, get ready to grab the most important information related to Insurance in India.
Before we get down to one-liners, let’s understand two important terms:
- Insurance Penetration
- Insurance Density
Insurance Penetration is defined as the ratio of premium underwritten in a given year to the gross domestic product (GDP) in that year.
The Insurance Penetration is generally measured in US Dollars for the convenience of comparison. As per 2017, the Insurance Penetration in India is about 3.69 percent of GDP while the Global Insurance Penetration is 6.1 percent of GDP.
Insurance Density is defined as the ratio of Premium underwritten in a given year to the total population of the country.
As per 2017, the Insurance Density in India is US $ 55, while the global Insurance Density is US $ 662.
Now take a look at One-liners
- Anything that is used to cut down the risk is called as Insurance.
- Insurance can be broadly classified into three categories i.e. Life Insurance, General Insurance, Re-insurance.
- Insurance helps the government in pooling the resources as premium from the general pubic.
- Life Insurance business in India was nationalised in 1956 with opening of Life Insurance Corporation (LIC) of India by the government. Opening of the private life insurance companies was prohibited at that time. The nationalization of the life insurance business was motivated by two objectives. First one was to spread the message of Life Insurance for greater social security and the second one was to mobilize people’s savings (as premium) for nation building.
- General Insurance private companies were nationalised in 1971 and the GIC i.e. General Insurance Corporation of India was established in 1972 with four holding companies. The four holding companies of GIC were National Insurance Company Limited, New India Assurance Company Limited, Oriental Fire and Insurance Company Limited and United India Insurance Company Limited.
- While in November 2000, GIC was notified as the Indian re-insurance company to be known as GIC Re and later in March 2002, the GIC was withdrawn form holding company status of the four public sector general insurance companies.
- The dedicated agriculture insurance company know as Agriculture Insurance Company of India Limited (AICIL) was set up by the Government of India in December 2002. The Pradhan Mantri Fasal Bima Yojana is looked after by the AICIL. The 35 percent shares of AICIL are owned by GIC, 30 percent by NABARD and 8.75 each by the four public sector general insurance companies.
- Insurance Reforms Committee was set up by the government in April 1993 under the chairmanship of ex-RBI Governor R.N. Malhotra. This committee recommended the setting up of regulatory authority for the insurance industry and later in 2000 IRDAI was set up as per IRDAI Act 1999.
- There are 5 members in Insurance Regulatory and Development Authority other than the chairman. Out of the five, two are full time members while the three are part time members. All the members as well as the chairman are appointed by the Government of India.
- Insurance Industry in India is presently regulated under the Insurance Laws (Amendment) Act, 2015. This act increased the permssible limit of Foreign Direct Investment i.e. FDI from 26 to 49 percent.
- GIC Re is the only re-insurance company in country till now. However, in March 2016 IRDAI gave initial approval (known as R1 in regulatory parlance) to four foreign re-insurance companies.
- DICGC i.e. Deposit Insurance and Credit Guarantee Corporation of India was established in 1978 after merging Deposit Insurance Corporation and Credit Guarantee Corporation.
Other Important articles related to Insurance
- Deposit Insurance and Credit Guarantee Corporation
- Types of Life Insurance
- IRDAI: Structure & Functions