1818 --- Oriental Life Insurance Co, the first life insurance company in India, started functioning.
1870 --- Bombay Mutual Life Assurance Society, the first Indian life insurance company started its business.
1912 --- The Indian Life Assurance Companies Act created as the first law 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 --- Previous laws consolidated and amended by the Insurance Act to protect the interests of the public.
1956 --- 245 Indian, foreign insurers and provident societies taken over by the central government and nationalized. LIC formed by an Act of Parliament.
1907 --- The Indian Mercantile Insurance Ltd. set up --- the first company to deal in all kinds of general insurance business.
1957 --- General Insurance Council frames a code of conduct for fair conduct and sound business practices.
1968 --- The Insurance Act amended to regulate investments and set minimum solvency margins. Tariff Advisory Committee set up.
1972 --- The General Insurance Business Act, 1972 nationalised the general insurance business in India w.e.f. January 1, 1973.
107 insurance cos. were amalgamated and grouped into four companies viz. National Insurance Company Ltd., New India Assurance Company Ltd., Oriental Insurance Company Ltd. and United India Insurance Company Ltd. GIC incorporated as a company.
The journey has come a full circle now. The re-opening of the insurance sector had begun in the early 1990s and in the last decade, more and more areas have been opened up. In 1993, the GoI had set up a committee under RN Malhotra, former Governor of RBI, to recommend reforms in the insurance sector. The goal of the panel was to complement the reforms in the financial sector. The committee submitted its report in 1994 wherein it recommended that the private sector be allowed to enter the insurance industry. The panel recommended that the foreign companies be allowed to enter by floating Indian companies, preferably a joint venture with Indian partners.
Following the recommendations, in 1999, the Insurance Regulatory and Development Authority (IRDA) was created as an autonomous body to regulate and develop the insurance industry. The IRDA was incorporated as a statutory body in April, 2000, based in Hyderabad. The goals of IRDA include promoting competition to enhance customer satisfaction through better choice and lower premiums, while ensuring the financial security of the insurance market.
The IRDA opened up the market in August 2000 by inviting applications for registrations. The foreign companies were allowed ownership of up to 26%. The Authority can frame regulations under Section 114A of the Insurance Act, 1938 and from 2000 onwards, it has enacted framed various regulations for the industry.
The Insurance Regulatory and Development Authority (IRDA) Act, 1999 spells out its mission as:
1. To protect the interests of and secure fair treatment to policyholders.
2. To promote speedy and orderly growth of the insurance industry (including annuity and superannuation payments) for the benefit of the common man, and to provide long term funds for accelerating economic growth.
3. To set, promote, monitor and enforce high standards of integrity, financial soundness, fair dealing and competence of those it regulates.
4. To ensure speedy claim settlement, to prevent insurance frauds and other malpractices and implement effective grievance redressal machinery.
5. To encourage fairness, transparency and orderly conduct in insurance business and build a reliable management information system for high standards of financial soundness among the players.
6. To initiate suitable action wherever such standards are inadequate or ineffective.
7. To bring optimum self-regulation in the working of the industry in line with the needs of prudential regulation.