Liberalisation show Awareness in field of in Life Insurance

Commerce

Insurance sector in India has been facing revolutionary changes in terms of its nature, scope, business, profitability, regulation and transparency. In 1994, the Malhotra Committee has submitted its report to make regulations for the entry of private sector; to permit the foreign companies in India to increase healthy competition, to encourage new products and services in the insurance sector and to establish a competent authority to control and regulate the insurance sector. Finally, in 1999, Insurance Development and Regulation Authority (IDRA) Act was passed and IDRA was setup. So far IDRA has been permitted the license to 23 Companies. In the beginning private companies were allowed with foreign participation, which was limited to share up to 26%, now this share has been increased upto 49%. After a decade of liberalisation, it is relevant to know its impact on the life insurance business in India. The share of Life Insurance Corporation has been squeezed, although there is growth in its business in terms of number of policies and amount of premium. Insurance Sector in India is passing through an exciting and challenging phase. The insurance services that were mostly confined to urban areas were expanded to rural areas also. After the entry of new generation in Private Sector Insurance, the Public Sector Insurance has positioned itself in such way that it is at par in terms of profitability and growth along with Private Sector. Not only Private Insurance has rapidly increased their customer base during last 14 years, but also they have increased their penetration to small cities. Due to this penetration general public also has access to Insurance through LIC & private insurance companies.

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