- the Life Assurance Companies Act 1912 which obliged insurers to ensure that all premium rate tables and periodical company valuations were certified by an actuary
- the Insurance Act 1938
- the Marine Insurance Act1948
- the Life Insurance Corporation Act 1956 which nationalised all life offices, placing their business under the state-owned company, the Life Insurance Corporation of India (LIC)
- certain provisions of the General Insurance Business (Nationalisation) Act 1972 (which nationalised non-life insurance) still apply, for example to non-admitted insurances
- the Insurance Regulatory and Development Authority Act1999 which introduced a private insurance market ending the monopoly created in 1972 of the nationalised companies
- the Insurance (Amendment) Act 2002
- the Public Liability Insurance Act 1991 obliging the manufacturers of hazardous materials to insure against the risk of third party liability arising out of their activities
- the Motor Vehicle Act 1988 imposing compulsory third party liability insurance cover on the owners of all types of vehicles which are driven on the public highway
- the Workmen’s Compensation Act 1923 (renamed in 2009 the Employee’s Compensation Act 1923)
- the Life Insurance Corporation Act (Amendment) Act 2011
There has been one new act of parliament (the Life Insurance Corporation Act (Amendment) Act 2011) affecting insurance recently.
The Insurance Regulatory and Development Authority Act 1999 set up the IRDA as the insurance industry regulator, giving it power over supervision of insurance companies including their registration, terms and conditions of policies and carrying on of insurance business. The IRDA also supervises insured pensions and annuities as well as private medical insurance.
In 2003 a new regulatory body to supervise pensions was established, called the Pension Fund Regulatory and Development Authority (PFRDA). It was announced that the PFRDA would supervise both the public and the private pension industries, but until the latter becomes operational, an interim PFRDA was appointed by executive ordinance. It is still in existence, pending enactment of the Pension Fund Regulatory and Development Authority Bill.
Admitted / Non-admitted
Non-admitted insurance is not permitted unless a specific or general permission has been granted to the policyholder, in the case of general insurance by the Central Government, and in the case of life insurance by the Reserve Bank of India. Exceptions are made in the case of export marine cargo. There are no requirements for reinsurance companies to be admitted or to establish deposits or trust funds in India.
- Motor third party liability.
- Third party liability for manufacturers of hazardous materials.
- Professional indemnity for direct brokers, reinsurance brokers and stockbrokers.
- Aviation carriers’ liability.
- Professional indemnity for mutual fund managers.
- Residential structures in Mumbai.
In early 2001 the independent General Insurance Council was set up with both public and private sector insurance company members and currently has 23 members (the four state-owned composite offices, the Export Credit & Guarantee Corporation, Agriculture Insurance Co and 17 private companies). The executive committee consists of all the non-life company chief executives together with two representatives of the Insurance Regulatory and Development Authority.
Life offices are represented by the Life Insurance Council, to which all 22 life offices belong.
Premium rates in respect of all motor third party insurance (for private cars, two wheelers and commercial vehicles) are subject to a mandatory tariff. Terrorism insurance is also subject to a tariff.
Premium Taxes and Charges
All non-life classes and life policies are subject to a 12.36% service tax.
Hindi or English.
With the passage of a series of legislative reforms in recent years, the Indian insurance market now has a full range of distribution channels. Since the first licences were issued to applicants in early 2003, the IRDA has registered 302 brokers including six that are devoted entirely to reinsurance.
The Life Insurance Corporation of India (LIC) has traditionally sold life business using individual agents who are effectively tied agents, and most of the private insurers have followed this method. Individual agents account for almost 98% of LIC’s individual business and just over 50% of the private companies’ individual life portfolios.