India General Insurance

The India general insurance sector has witnessed robust growth in the recent past due to a booming economy and a rise in people’s standard of living. The General Insurance Corporation of India is loaded with the responsibility to supervise and manage the general insurance business in India.

India General Insurance: Historical Evolution

India general insurance was nationalized with the General Insurance Business (Nationalization) Act of 1972. By this process of nationalization, the government of India took charge of about 55 insurance companies in the country and about 52 insurers who were in the general insurance business. The General Insurance Corporation of India saw its inception from Section 9(1) of GIBNA.

With the formation of the General Insurance Corporation (GIC), the government’s shares related to general insurance were transferred to it. The merger of the general insurance companies led to the formation of the four subsidiaries under the General Insurance Company of India. They were the National Insurance Company Limited, the New India Assurance Company Limited, the Oriental Insurance Company Limited and the United India Insurance Company Limited.

Another turning point in the history of India general insurance was the setting up of the Insurance Regulatory and Development Authority Act of 1999 (IRDAA).

India General Insurance: Business Operations

Domestic Reinsurance Business: The General Insurance Corporation of India is the only reinsurance provider in the nation. It offers reinsurance to the major insurance companies in India. On every policy that is issued, GIC receives a 20% statutory cession. The treaty and facilitative programs of many companies are led by the General Insurance Corporation of India.

International Reinsurance Business: The General Insurance Corporation of India has expanded its business operations the world over. They have started to provide reinsurance solutions to the SAARC (South Asian Association for Regional Cooperation) countries, Southeast Asia, the Middle East and Africa.

Investment and Fund Management: The investments that are made through the General Insurance Corporation of India abide by the Insurance Act and the IRDA Act.

IRDA Regulations on Investment

According to the IRDA regulations, the insurer under the General Insurance Corporation should invest his money in the following way:

20% of the investments should get diverted to Central Government Securities.

30% of the investments should be in state government and other guaranteed securities.

5% investment should be made in the housing sector and state government loans.

10% of the investment should be done in the infrastructure and the social sector.