Life Insurance Corporation Of India Case Study

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Life Insurance Corporation is of special importance in India because of its unique position. In September 1956, 245 insurance companies were amalgamated and unified into one single organization. This was birth of „Life Insurance Corporation of India‟. The nationalization of life insurance was another milestone on the road, the country had chosen in order to reach its goal of socialistic pattern of society. Into the lives of millions in the rural areas, it introduced a new sense of awareness of building for the future in the spirit of calm confidence which insurance along can give. It is a measure conceived in a genuine spirit of service to the people. It is for the people to respond, confound the doubters and make it a resound success.
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Malhotra committee was appointed by the government to look into all the aspects of insurance industry in India. The committee too opined that in its about 40 years of existence, LIC had been able to insure only 22 percentage of the insurable population. A moot reason may be the lack of competition. Further, the monopoly has resulted in lack of sensitivity to the policy holders and there is a greater scope for product innovation and service improvement. The committee recommended a number of measures to revamp LIC of India. It also recommended allowing outside insurance companies to operate in India with an Indian partner. After a great deal of discussion, finally, the Lok Sabha has enacted the Insurance Regulatory and Development Authority Act, 1999. In terms of the act, the Insurance Regulatory and Development Authority is being set-up to regulate and develop the insurance industry by opening it up to the private sector. Foreign insurance companies can enter into the insurance sector in India only with an Indian partner, as a joint-venture, with a capital contribution up to a maximum of 26% of the capital in the joint venture. The various principles of Life Insurance Corporation

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