Origin, Growth and Development of Insurance Sector in India
Content
Chapter 3 Origin, Growth & Development of Life Insurance Industry in India
3.1 Introduction
3.2 Need of Life Insurance
3.3 How Life Insurance Works
3.4 Origin of Insurance
3.5 Origin and Development of Life Insurance in India
3.6 Growth of Life Insurance in India
3.7 Product Innovation by Private Life Insurance Companies
3.8 Service Orientation of New Life Insurance Companies
3.9 Some Developments in Insurance Sector:
3.10 Selected References
12
3.1 Introduction:
Insurance can be defined as a social device to eliminate risk of loss of life and property. The general definition of insurance given by social scientists as a device to protect against risks, or a provision against inevitable contingencies or a cooperative way of spreading risks. Definitions based on economic or business orientation define insurance as a social device providing financial compensation for the effects of misfortune, payments being made from the accumulated contributions of all parties in the scheme. The legal definition defines insurance as a contract to indemnify the losses on happening of certain contingencies in future. It is a contractual relationship to secure against risks. According to the Insurance Act, 19381, life insurance refers to the contract of insurance on human life, under which if any individual‟s death, other than accident, or happening of any event concerning to human life, a certain amount is guaranteed to be paid to assured or his/her legal representative.
3.2 Need of Life Insurance:
Human life is uncertain. Life has many pleasant and unpleasant possibilities. To secure against unpleasant possibilities has been of the utmost requirement of human being. But in the past it was very difficult to provide against such eventualities that might happen. Risk to life and property was also very high. Governments provides a degree of safety to its citizens, but state provided security against only some hazards of life, but it does not indemnify people against any loss or damage that they may suffer from these. Insurance provides compensation in the event of loss or damage and a premium is charged as the price thereof. The aim of insurance is social aimed to remove or reduce the hardships which might befall us through accidents and vicissitudes of life.
1
Government of India (1949) “The Insurance Act. 1938, (Act 4 of 1938)”, Ministry of Law, Government of India , the
Manager, Government of India Publication, Simla.
13
3.3 How Life Insurance Works:
A life office must maintain sufficient stock of money from which to pay claims as they arise. This stock is called the life fund. This fund is like a reservoir continuously fed by the regular premiums paid in by the policy holders and by returns on the investment of the fund. It would obviously be very bad management to leave money idle in the fund. The fund is invested to earn as high a return-interest and dividends-as possible without taking undue risks with the capital. Consequently life funds spread their investments very widely over the whole field of government securities, sound commercial undertakings, shares, property, loans and so forth. Only by making as sure as possible of future income from premiums and investments can a life fund income be sure of paying all the claims upon it far away into the future. Prudent management will gradually collect more money than it is going to be actually needed to pay out all the claims upon it. From time to time the fund is valued and the size of the surplus is calculated. This surplus is entirely, if gradually, distributed among policy holders in the case of a mutual office. In the case of a proprietary office, 9/10th of the surplus is distributed to the shareholders. The actual proportions vary a little from one office to another.
3.4 Origin of Insurance: 2
Records of origin and early history of insurance are non-existent. It is believed that the earliest form of insurance seems to be of marine and land insurance. Travellers by land and sea were insured against the risk of property to which they were exposed due to the fear of pirates and robbers. Many traders could not meet the engagements of the principals and according to their contracts became slaves of the latter. Attempts to relieve this intolerable situation, were made in Babylonia and India at a fairly early stage of history. We find provisions in the codes of Manu and of Hammurabi whereby, a trader who is robbed on a journey through no negligence or connivance on his part was directed to be set free from debt in respect of both capital and interest and making a solemn declaration.3 The summary of the provisions of the codes of Manu and Hammurabi shows how the contracts of Bottomry and Respondentia were approximated.4
2 3 4
Ray R.M (1941), “Life Insurance in India, its History, Law, Practice & Problems”, Allied Publishers, Bombay. Ray R.M (1941), “Life Insurance in India, its History, Law, Practice & Problems”, Alli ed Publishers, Bombay. For the modern definition of contracts of Bottomry and Resondentia, refer Encyclopedia Britannica.
14
The codes of Hammurabi were as follows: 1. The contract applied to land traffic only. 2. The contract was for a true loan and not a partnership and in others for a loan with a limited period. 3. The merchandise or money advanced was under the custody of and used by the trader and not retained by the lender. 4. The rate of interest was very much high, usually 100% than charged on ordinary loans which was at times limited to 20%, the period of time having no effect. 5. The trader was free from liability for the debt on the happening of a contingency provided for in the contract. The Manab Dharma Shashtra states the following: 1. The contract applied to sea-borne and land carried traffic. 2. The rate of interest in all the cases was arranged with regard to risks to be run and the length of time for which the money was required. 3. The rate of interest or the value of risk was fixed by valuers skilled in sea voyages or journeys by land who were able to proportion the rate to the time required and the risk to be incurred. 4. The rate of interest was specified in the contract. 5. The borrower was excused payment not only if he was robbed of his goods but also if the goods did not arrive in good order at the place or time agreed upon by the contracting parties. It has been stated that the Sanskrit term „Yoga-Kshema‟ meaning insurance is found in Rig Veda5 and that some kind of commercial insurance was practiced by the Aryan tribes of India nearly three thousand years ago. The fact that the state is to concern itself with the welfare of its subjects proves that they had „Yogaksheman‟ is something like the idea of a welfare state to ensure the Yogaksheman of the subjects is one of the foremost duties of the state.
5
Rigveda is an ancient Indian sacred collection of Vedic Sanskrit hymns. It is counted among the four canonical
sacred texts of Hinduism known as the Vedas. Some of its verses are still recited as Hindu prayers, at religious functions and other occasions, putting these among the world's oldest religious texts in continued use. http://en.wikipedia.org/wiki/Rigveda.
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The early development of insurance was spasmodic and usually in fields other than life. Man‟s attention was directed against those risks which at the moment seemed to require attention. He could see that the vessel in which he did his trade might never come back home. His house maybe burnt down or broke into by robbers and bandits. These were contingencies that might happen any day, but death and its consequences were matters somewhat remote and beyond his control and extremely disagreeable to contemplate.
The early history of life insurance is enveloped in the mists of antiquity. Collective cooperation among persons exposed to a particular risk, in order to share that risk has been a very old system of human civilization. The Aryans had evolved a system of village and community life which was proof against the ravages of time and gave sustenance to everyone. Kautilya‟s6 Arthashastra7 is one of the first books to look at the economic impacts of natural calamities. He categorised the various calamities plaguing India around 300 B.C. as “fire, floods, epidemics and famine”. He also recognised that some calamities cause greater damage than others like fire destroys a village or part of a village whereas floods carry off hundreds of villages. Similarly, epidemics devastate only a part (of the country) and can be remedied, whereas famine causes troubles to the whole (of the country). Kautilya recommended that the king also store food and grains and distribute them to people affected by calamities. This pooling of resources that could re-distribute during calamities is probably a pre-curser to modern-day insurance. His work also mentions that the king should maintain children, aged persons and persons in distress when they are helpless, as also the woman who has borne no child and the sons of one who has when these are helpless.
3.5 Origin and Development of Life Insurance in India:8
In India, insurance has a deep-rooted history. It finds mention in the writings of Manu (Manusmrithi), Yagnavalkya (Dharmasastra) and Kautilya (Arthasastra). The writings, talk in terms
6
Also called Chanakya or Vishnugupta, Hindu statesman and philosopher who wrote a classic treatise on polity,
Arthashastra (“The Science of Material Gain”), a compilation of almost everything that had been written in India up to his time regarding artha (property, economics, or material success).
http://www.britannica.com/EBchecked/topic/313486/Kautilya
7 8
http://www.swaveda.com http://www.irda.gov.in/ADMINCMS/cms/NormalData_Layout.aspx?page=PageNo4&mid=2.
16
of pooling of resources that could be re-distributed in times of calamities such as fire, floods, epidemics and famine. This was probably a pre-cursor to modern day insurance. Ancient Indian history has preserved the earliest traces of insurance in the form of marine trade loans and carriers‟ contracts. Insurance in India has evolved over time heavily drawing from other countries, England in particular. In the beginning, the life insurance companies which were started were few and far between and their scale of operations was also very limited. But with the turn taken by the 20th century, the growth of Indian insurance enterprise became more rapid and its early foundations were laid, though it continued to be in an infant stage till the return of peace in 1918. The post war decade (1919-1928) was a period of steady but limited growth, but during the years 1929-1938, India had a life insurance boom, and no less than sixty-eight9 life insurance companies operating in 1955 in the country had been established in this decade. The table number 1.4 below shows the important insurance milestones in India in 20th Century.
Table No. 3.1 Milestones of Insurance Regulations in the 20th Century in India Year 1912 1938 1956 1972 1993 1994 1995 1996 Significant Regulatory Event The Indian Life Insurance Company Act. The Insurance Act: Comprehensive Act to regulate Insurance business. Nationalization of Life Insurance business. Nationalization of General Insurance business. Setting up of Malhotra Committee. Recommendations of Malhotra Committee. Setting up of Mukherjee Committee. Setting up of (interim) Insurance Regulatory Authority (IRA). Recommendations of the IRA. 1997 The Government gives greater autonomy to Life Insurance Corporation, General Insurance Corporation and its subsidiaries with regard to the restructuring of Boards and flexibility in investment norms aimed at channeling funds to the infrastructure sector. 1997
9
Mukherjee Committee Report submitted but not made public.
Agarwala A. N. (1960), “Insurance in India: A Study of Insurance Aspect of Social Security in India”, Allahabad
Law Journal Press, Allahabad.
17
1998
The Cabinet decides to allow 40% foreign equity in Private Insurance Companies26% to Foreign Companies and 14% to Non-Resident Indians (NRI‟s), Overseas Corporate Bodies (OCB‟s) and Foreign Institutional Investors (FII‟s.)
1999
The Standing Committee headed by Murali Deora (Member of Parliament) decides that foreign equity in Private Insurance should be limited to 26%. The IRA bill is renamed, The Insurance Regulatory and Development Authority (IRDA) Bill.
1999 2000
Cabinet clears IRDA Bill. President gives assent to the IRDA Bill.
Source: Bhole L. M. (2004), “Financial Institutions and Markets”, Tata McGraw-Hill Publishing House, New Delhi.
Life insurance penetration in India is low as compared to some of the developed countries. Life Insurance penetration premium 10 forms just 4% of the India‟s GDP. There are few reasons for the slow development of modern system of insurance in India. 1. The joint family system applies the principle of insurance. It automatically provides for invalids and widows. 2. Life insurance appeared to conflict with the Indian way of thinking and tradition. 3. Poverty and ignorance has also hindered the growth and expansion of insurance business in India. 4. Insurance means accumulation of funds and their investment on long term. But until recently opportunities for such investments were limited in India.
3.6 Growth of Life Insurance in India:11
During recent times, the Indian economy has been performing well and the momentum of growth has picked up particularly since liberalisation was initiated in the 1990s. Though the overall growth rate during the last decade has fluctuated, yet it remained well above many emerging economies of the world. With further reforms initiated in the early 1990s, there has been a significant structural change in the macro economy and in the process service sector has emerged as the leading sector and engine of growth. India is one of the countries in the world which has achieved a high growth rate in domestic savings and a higher propensity to save by household sector has been maintained over the period. The Domestic
10 11
IRDA Annual Report 2008-2009. Narayanan H (2008) “Indian Insurance- A Profile”, Jaico Publishing House, Mumbai.
18
Savings Rate in India12 as a percentage to Gross Domestic Product (GDP) at market prices was 23.31% during the ninth five year plan (1997-2002) which increased to 26.84% during the tenth five year plan period (2002-2007). The positive growth in the economy, expansion of the service sector and increase in household savings all contributed significantly to the high growth of domestic savings. This is having a positive effect on the life insurance sector in India.
Table 3.3 Key Market Indicators for the Indian Insurance Market Minimum Paid up Equity Capital for a Life Rs.100 Crores Insurance and a General Insurance Company Equity Restriction Foreign Promoter can hold up to 26 percent of the Equity Registration Restriction Geographical Restriction Composite Registration not available None for new companies. They can operate all over the country. Indian Insurance Market opening for Private August Companies Inflation adjusted Growth in Total Premium in India Insurance Services Contribution to India‟s Gross Domestic Product (GDP) Source: IRDA Annual Reports 2008-2009, 2009-2010, 2010-2011, 2011-2012 http://www.irda.gov.in 2000 with invitation for
application for registration. 13 % (2006-07)
along with Banking Services 7%
3.7 Product Innovation by Private Life Insurance Companies:
Private life insurance companies have brought totally a new concept of insurance, i.e., insurance linked with investment. Apart from conventional insurance plans introduced by the private insurance companies, a number of new plans such as Unit Linked Investment Plans (ULIPs) and Pension Plans have become popular among Indian clients. Most of the new private life insurance companies have launched market linked plans to attract Indian investors.
12
http://www.planningcommission.nic.in/plans/planrel/fiveyr/10th/volume1/10th_vol1.pdf
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The Unit Trust of India (UTI) launched the Unit Linked Insurance Plan (1971). This plan was designed for any resident in India between ages 12 to 55 years planning to save between Rs. 6000 to Rs. 75000. Persons over 55 years of age can go in for a 10 year plan. No medical examination was necessary. A small part of the contribution is utilised for providing life cover and the balance is invested in units. In case the person dies before the end of the plan period, the legal heirs will be entitled to the units to his/her credit and the amount of the insurance cover. Unit linked policies are offered by LIC as well as the other private life insurance companies in India. They have become popular. Such plans are called by various names like universal, unbundled or flexible. They are popular especially in times when the stock market is booming. Insurance companies offer a choice of funds like secured, balanced and risk with different risk profiles depending on the different patterns of investment in equities, debts and liquid assets. The policy holder is allocated units, which are valued every day. Many life insurance companies have also started Pension Plans which are in the form of ULIPs. Such pension plans being a unit linked plan, the premiums which the insured pays are subject to investment risks associated with the stock markets. The unit prices of such funds may increase or decrease, reflecting changes in the stock markets. In 2009-2010, various life insurance companies launched a set of ULIPs that guarantee returns based on the highest net asset value (NAV) during the policy term. These schemes look attractive since the uncertainty arising from the stock markets seems to be capped. In such policies the companies lock the NAV at the highest point during the term of the policy. But this benefit comes at a cost. Insurance companies charge more in order to provide the guaranteed returns. These schemes guarantee the highest NAV but not the highest returns. Unlike regular ULIPs, these schemes do not provide wide range of product categories, such as equity-oriented growth funds, balance funds and debt funds. These schemes are structured in such a manner that the collected funds can be invested either in equities, in debt instruments or in money-market instruments in proportions varying from zero to 100%. Insurance companies that have launched such schemes need to review their assets periodically. The funds have to be moved from one asset class to another. Thus, the returns for the scheme will depend on the company‟s fund allocation strategy. Schemes which have maximum exposure in equities in initial years may provide better returns than the schemes having larger exposure to debt instruments at the beginning depending upon the equity markets. Such schemes are beneficial for such investors who want to enjoy equity returns with added protection. But the benefits of highest guarantee NAV are available only if the policy holder stays till the policy matures.
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3.8 Service Orientation of New Life Insurance Companies:13
Life insurance companies send a premium reminder notice to the policy holder before the due date. A payment reminder call is made when policies are due for payment. Policy holders can also view their policy information through the company‟s website by registeri ng themselves. Policy holders can send their queries by using email (electronic mail), which is available on the website of the companies or even through a traditional postal mail. Companies also use SMS (short messaging service) and E-mail alerts for the following details regarding policies: issuance of policy, alert for the ECS (electronic clearing service) debit on policy holder‟s account, confirmation of the receipt of renewal premium payment, dispatch of policy documents, any outstanding requirements for policy issuance, confirmation on policy servicing requests for address change, change of mode of payment, change of nominee, loan status, surrender details, policy reinstatement, switch redirection. The net asset value of unit linked insurance policies is also provided on the website of the company.
Policy holders can register their grievances related to products and services with the Complaints Redressal Cell at the company‟s office. The objective of this unit is to ensure effective complaint handling. This complaint management and redressal cell is responsible for registering and following up the complaints for resolution. Policy holders are also provided a toll free national telephone number for registering their complaints or to seek any information. Complaints can also be emailed or can also be written and submitted to the concerned branches of the company, or by writing to the Complaints Officer. All complaints received from various sources are registered and unique complaint identity is created which is intimated to the customer. Additional information if required, (for resolving the complaint), is sought from the complainant. The complaints cell escalates the complaint to the concerned and follow-up the same until the matter is resolved. Companies try to resolve the complaints within two weeks. Companies duly intimate the complainant in case the resolution gets delayed beyond the prescribed time on account of any unforeseen circumstances. If the complainant is not satisfied with the response of the company, he/she can approach the insurance ombudsman whose details are provided by the company itself. As far as claims are concerned a quick settlement process depends on the satisfactory production of documents and necessary requirements by the claimant.
13
http://www.inglife.co.in/ & http://www.hdfcinsurance.com/
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3.9 Some Developments in Insurance Sector:
Postal Life Insurance:14 Postal Life Insurance was started in 1884 as a welfare measure for the employees of Posts and Telegraphs Department by the Government of India. Due to the popularity of its schemes, various departments of Central and State Governments were extended its benefits. Postal Life Insurance is open for all employees of Central and State Governments, Nationalized Banks, Public Sector Undertakings, Financial Institutions, Municipal Corporations, Zilla Parishads, Educational Institutions aided by the Government. The various schemes are: Endowment Assurance, Whole Life Assurance, Convertible Whole Life Assurance, Anticipated Endowment Assurance, Joint Life Endowment Assurance, and Children‟s Policy. B. Rural Postal Life Insurance: On 24th March, 1995, the benefits of Postal Life Insurance were extended to rural populace of the country under the banner of Rural Postal Life Insurance. Rural Life Insurance Schemes are such as Endowment Assurance (Gram Santosh), Whole Life Assurance (Gram Suraksha), Convertible Whole Life Assurance (Gram Suvidha), Anticipated Assurance (Gram Sumangal ) , Anticipated Endowment Scheme (Gram Priya) and Children‟s Policy. C. Bancassurance:15 The Bank Insurance Model (BIM), also sometimes known as Bancassurance, is the term used to describe the partnership or relationship between a bank and an insurance company whereby the insurance company uses the bank sales channel in order to sell insurance products. BIM allows the insurance company to maintain smaller direct sales teams as their products are sold through the bank to bank customers by bank staff.
Bank staff, rather than an insurance salesperson, become the point of sale/point of contact for the customer. Bank staff are advised and supported by the insurance company through product information, marketing campaigns and sales training. Both the bank and insurance company share the commission. Insurance policies are processed and administered by the insurance company.
14 15
http://www.indiapost.gov.in/PLI.html http://rbidocs.rbi.org.in/rdocs/Publications/PDFs/80595.pdf
22
BIM differs from Classic or Traditional Insurance Model (TIM) in that TIM insurance companies tend to have larger insurance sales teams and generally work with brokers and third party agents. An additional approach, the Hybrid Insurance Model (HIM), is a mix between BIM and TIM. HIM insurance companies may have a sales force, may use brokers and agents and may have a partnership with a bank.
Under this arrangement, banks are appointed as corporate agents, empanelled with one insurance company to sell its products. Banks, with their existing customer base, can leverage on their existing relationships, to convert customers into policyholders. The bank usually earns a high commission on the first premium paid by each customer and a marginal trailing commission on renewal premiums till the maturity of the policy, for regular premium plans. And a one-time commission is paid in case of the single premium policies.
One disadvantage that may come up in this model is that banks, after allying with one insurance company may discontinue it to set up their own venture. Changing insurance partners due to attractive benefits offered by a competing insurer is also not ruled out. Mergers and takeover situations may also lead to a change in bancassurance partners.
The IRDA (Insurance Regulatory and Development Authority) has allowed the banks to act as agents for one life and general insurer, each.
The following table shows the tie up between life insurance companies and banks in India under the bancassurance model.
Table No. 3.4 Bancassurance Tie-ups in India No. Name of Life Insurance Company 1 2 HDFC Standard Life Insurance Co. Ltd. Max New York Life Insurance Co. Ltd. New India Cooperative Bank ■ The A.P. Mahesh Cooperative Urban Bank ■ The Thane Janta Sahakari Bank ■ Yes Bank ■ Citizen Credit Co-op bank Ltd. ■ Punjab & Maharashtra Co-op Name of the Bank under Bancassurance tie up ■ HDFC Bank ■ Saraswat Bank, Indian Bank.
23
Bank Ltd ■ The Zoroastrian Co-operative Bank Ltd. ■ People Cooperative Bank Ltd. 3 ICICI Prudential Life Insurance Co. Ltd. ICICI Bank ■ Jalgaon Peoples Co-op Bank, Ratanagiri District Central Co-op Bank ■ Ballia Kshetriya Co-operative Bank ■ Renuka Nagrik Sahakari Bank ■ Bhandara Urban Co-operative Bank. 4 Kotak Mahindra Old Mutual Life Insurance Ltd. 5 6 7 Birla Sun Life Insurance Co. Ltd. Tata AIG Life Insurance Co. Ltd. SBI Life Insurance Co. Ltd. Kotak Mahindra Bank ■ The Ratnakar Bank Ltd. ■ The Malkapur Urban Co-op Bank Limited ■ Dombivli Nagari Sahakari Bank Ltd. Nagar Urban Co-operative Bank Ltd. ■ The Chikhli Urban Co-op Bank Ltd. United Bank of India ■ Cooperative Bank Ltd. Andhra Pradesh Grameena Vikas Bank Arunachal Pradesh Rural Bank ■ ■ Cauvery The Orissa State
Kalpatharu Grameena Bank ■ Ellaquai Dehati Bank ■ Langpi Dehangi Rural Bank ■ Malwa Grameen Bank ■ Mizoram Rural Bank ■ Parvatiya Grameena Bank ■ Purvanchal Gramin Bank ■ Samastipur Kshetriya Gramin Bank ■ Saurashtra Gramin Bank ■ State Bank of Bikaner and Jaipur ■ State Bank of Hyderabad ■ State Bank of India ■ State bank of Indore ■ State Bank of Mysore ■ State Bank of Patiala ■ State Bank of Tranvancore ■ Uttranchal Gramin Bank ■ Vananchal Gramin Bank. 8 9 10 11 12 ING Vysya Life Insurance Co. Ltd. Bajaj Allianz Life Insurance Co. Ltd. MetLife Insurance Co. Ltd. Reliance Life Insurance Co. Ltd. Aviva Life Insurance Co. Ltd. ING Vysya Bank Ltd. Standard Chartered Bank ■ Syndicate Bank ■ The Cosmos Cooperative Bank Ltd., Axis Bank ■ Barclays ■ Jammu & Kashmir Bank Ltd. ■ Karnataka Bank Ltd. --ABN AMRO Bank ■ The Lakshmi Vilas Bank Ltd. ■ Punjab & Sind Bank ■ IndusInd Bank
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■ Bank of Rajashtan ■ DBS Bank ■ Shree Warna Sahakari Bank Bank ■ ■ Prime Cooperative ■ ■ Goa State Vasantdada ■ Surat Nizamabad DCCB
Cooperative Bank ■ Janaseva Sahakari Bank ■ MP Rajya Sahakari Bank Shetkari Bank ■ Krishna Sahakari Bank ■ Ichalkaranji Janata Sahakari Bank Central Co-operative Bank ■ District Cooperative Bank ■ Sabarkanta District Rajkot Nagrik Sahakari Bank ■ Kakinada District Central Cooperative Bank ■ Nasik Merchant Cooperative Bank ■ Surendranagar District Central Cooperative Bank ■ Nellore District Central Cooperative Bank ■ Kashi Gomti Samyut Gramin Bank ■ Madhya Bihar Gramin Bank ■ Bihar Kshetriya Gramin Bank ■ Rajasthan Gramin Bank ■ ■ Ranchi Kunti District Co-operative ■ Bank ■ Singbhum Central Co-operative Bank Patliputra Central Co-operative Bank ■ Maharastra Godavari Gramin Bank ■ Vidarbha Keshetriya Gramin Bank Mahila Sahakari Bank. 13 Life Insurance Corporation of India (LIC) Kozhikode District Cooperative Bank ■ Jila Sahakari Kendriya Bank Maryadit Dewas ■ Jila Sahakari Kendriya Bank Maryadit Khargone ■ Indian Overseas Bank ■ City Union Bank Ltd. ■ Corporation Bank ■ Central Bank of India ■ Satara District Central Cooperative Bank ■ The Bharat Cooperative bank (Mumbai) Ltd. ■ Bank of Maharashtra ■ Dena Bank ■ UCO Bank ■ Allahabad Bank ■ The West Bengal State ■ Bihar State Cooperative Bank Ltd. ■ Andaman & Nicobar State Cooperative Bank Cooperative bank Ltd.
Source: Web Sites of the above mentioned Companies as on February 2010.
Bhagyalakshmi
25
3.10 Selected References:
1. Agarwala A. N. (1960), “Insurance in India: A Study of Insurance Aspect of Social Security in India”, Allahabad Law Journal Press, Allahabad.
2. Government of India (1949) „The Insurance Act. 1938, (Act 4 of 1938)‟, Ministry of Law, Government of India, The Manager Government of India Publication, Shimla. 3. Government of India (1949), „The Insurance Act. 1938, (Act 4 of 1938)‟, Ministry of Law, Government of India, the Manager, Government of India Publication, Simla. 4. http://en.wikipedia.org/wiki/Rigveda. 5. http://rbidocs.rbi.org.in/rdocs/Publications/PDFs/80595.pdf 6. http://www.britannica.com/EBchecked/topic/313486/Kautilya 7. http://www.britannica.com/EBchecked/topic/396125/Mughal-dynasty. 8. http://www.indiapost.gov.in/PLI.html 9. http://www.inglife.co.in/ 10. http://www.irda.gov.in/ 11. http://www.swaveda.com 12. IRDA Annual Report 13. IRDA Annual Report 2006-2007 14. IRDA Annual Report 2007-08 15. IRDA Annual Report 2008-2009. 16. IRDA Annual Report 2009-10 17. IRDA Annual Report 2010-2011 18. IRDA Annual Report 2011-12 19. IRDA Annual Report 2007-2008. 20. IRDA Handbook on Indian Insurance Statistics - 2007-2008. 21. Narayanan H (2008), „Indian Insurance- A Profile‟, Jaico Publishing House, Mumbai. 22. Ray R. M (1941), „Life Insurance in India, its History, Law, Practice & Problems‟, Allied Publishers, Bombay.
_______________________
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3.1 Introduction
3.2 Need of Life Insurance
3.3 How Life Insurance Works
3.4 Origin of Insurance
3.5 Origin and Development of Life Insurance in India
3.6 Growth of Life Insurance in India
3.7 Product Innovation by Private Life Insurance Companies
3.8 Service Orientation of New Life Insurance Companies
3.9 Some Developments in Insurance Sector:
3.10 Selected References
12
3.1 Introduction:
Insurance can be defined as a social device to eliminate risk of loss of life and property. The general definition of insurance given by social scientists as a device to protect against risks, or a provision against inevitable contingencies or a cooperative way of spreading risks. Definitions based on economic or business orientation define insurance as a social device providing financial compensation for the effects of misfortune, payments being made from the accumulated contributions of all parties in the scheme. The legal definition defines insurance as a contract to indemnify the losses on happening of certain contingencies in future. It is a contractual relationship to secure against risks. According to the Insurance Act, 19381, life insurance refers to the contract of insurance on human life, under which if any individual‟s death, other than accident, or happening of any event concerning to human life, a certain amount is guaranteed to be paid to assured or his/her legal representative.
3.2 Need of Life Insurance:
Human life is uncertain. Life has many pleasant and unpleasant possibilities. To secure against unpleasant possibilities has been of the utmost requirement of human being. But in the past it was very difficult to provide against such eventualities that might happen. Risk to life and property was also very high. Governments provides a degree of safety to its citizens, but state provided security against only some hazards of life, but it does not indemnify people against any loss or damage that they may suffer from these. Insurance provides compensation in the event of loss or damage and a premium is charged as the price thereof. The aim of insurance is social aimed to remove or reduce the hardships which might befall us through accidents and vicissitudes of life.
1
Government of India (1949) “The Insurance Act. 1938, (Act 4 of 1938)”, Ministry of Law, Government of India , the
Manager, Government of India Publication, Simla.
13
3.3 How Life Insurance Works:
A life office must maintain sufficient stock of money from which to pay claims as they arise. This stock is called the life fund. This fund is like a reservoir continuously fed by the regular premiums paid in by the policy holders and by returns on the investment of the fund. It would obviously be very bad management to leave money idle in the fund. The fund is invested to earn as high a return-interest and dividends-as possible without taking undue risks with the capital. Consequently life funds spread their investments very widely over the whole field of government securities, sound commercial undertakings, shares, property, loans and so forth. Only by making as sure as possible of future income from premiums and investments can a life fund income be sure of paying all the claims upon it far away into the future. Prudent management will gradually collect more money than it is going to be actually needed to pay out all the claims upon it. From time to time the fund is valued and the size of the surplus is calculated. This surplus is entirely, if gradually, distributed among policy holders in the case of a mutual office. In the case of a proprietary office, 9/10th of the surplus is distributed to the shareholders. The actual proportions vary a little from one office to another.
3.4 Origin of Insurance: 2
Records of origin and early history of insurance are non-existent. It is believed that the earliest form of insurance seems to be of marine and land insurance. Travellers by land and sea were insured against the risk of property to which they were exposed due to the fear of pirates and robbers. Many traders could not meet the engagements of the principals and according to their contracts became slaves of the latter. Attempts to relieve this intolerable situation, were made in Babylonia and India at a fairly early stage of history. We find provisions in the codes of Manu and of Hammurabi whereby, a trader who is robbed on a journey through no negligence or connivance on his part was directed to be set free from debt in respect of both capital and interest and making a solemn declaration.3 The summary of the provisions of the codes of Manu and Hammurabi shows how the contracts of Bottomry and Respondentia were approximated.4
2 3 4
Ray R.M (1941), “Life Insurance in India, its History, Law, Practice & Problems”, Allied Publishers, Bombay. Ray R.M (1941), “Life Insurance in India, its History, Law, Practice & Problems”, Alli ed Publishers, Bombay. For the modern definition of contracts of Bottomry and Resondentia, refer Encyclopedia Britannica.
14
The codes of Hammurabi were as follows: 1. The contract applied to land traffic only. 2. The contract was for a true loan and not a partnership and in others for a loan with a limited period. 3. The merchandise or money advanced was under the custody of and used by the trader and not retained by the lender. 4. The rate of interest was very much high, usually 100% than charged on ordinary loans which was at times limited to 20%, the period of time having no effect. 5. The trader was free from liability for the debt on the happening of a contingency provided for in the contract. The Manab Dharma Shashtra states the following: 1. The contract applied to sea-borne and land carried traffic. 2. The rate of interest in all the cases was arranged with regard to risks to be run and the length of time for which the money was required. 3. The rate of interest or the value of risk was fixed by valuers skilled in sea voyages or journeys by land who were able to proportion the rate to the time required and the risk to be incurred. 4. The rate of interest was specified in the contract. 5. The borrower was excused payment not only if he was robbed of his goods but also if the goods did not arrive in good order at the place or time agreed upon by the contracting parties. It has been stated that the Sanskrit term „Yoga-Kshema‟ meaning insurance is found in Rig Veda5 and that some kind of commercial insurance was practiced by the Aryan tribes of India nearly three thousand years ago. The fact that the state is to concern itself with the welfare of its subjects proves that they had „Yogaksheman‟ is something like the idea of a welfare state to ensure the Yogaksheman of the subjects is one of the foremost duties of the state.
5
Rigveda is an ancient Indian sacred collection of Vedic Sanskrit hymns. It is counted among the four canonical
sacred texts of Hinduism known as the Vedas. Some of its verses are still recited as Hindu prayers, at religious functions and other occasions, putting these among the world's oldest religious texts in continued use. http://en.wikipedia.org/wiki/Rigveda.
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The early development of insurance was spasmodic and usually in fields other than life. Man‟s attention was directed against those risks which at the moment seemed to require attention. He could see that the vessel in which he did his trade might never come back home. His house maybe burnt down or broke into by robbers and bandits. These were contingencies that might happen any day, but death and its consequences were matters somewhat remote and beyond his control and extremely disagreeable to contemplate.
The early history of life insurance is enveloped in the mists of antiquity. Collective cooperation among persons exposed to a particular risk, in order to share that risk has been a very old system of human civilization. The Aryans had evolved a system of village and community life which was proof against the ravages of time and gave sustenance to everyone. Kautilya‟s6 Arthashastra7 is one of the first books to look at the economic impacts of natural calamities. He categorised the various calamities plaguing India around 300 B.C. as “fire, floods, epidemics and famine”. He also recognised that some calamities cause greater damage than others like fire destroys a village or part of a village whereas floods carry off hundreds of villages. Similarly, epidemics devastate only a part (of the country) and can be remedied, whereas famine causes troubles to the whole (of the country). Kautilya recommended that the king also store food and grains and distribute them to people affected by calamities. This pooling of resources that could re-distribute during calamities is probably a pre-curser to modern-day insurance. His work also mentions that the king should maintain children, aged persons and persons in distress when they are helpless, as also the woman who has borne no child and the sons of one who has when these are helpless.
3.5 Origin and Development of Life Insurance in India:8
In India, insurance has a deep-rooted history. It finds mention in the writings of Manu (Manusmrithi), Yagnavalkya (Dharmasastra) and Kautilya (Arthasastra). The writings, talk in terms
6
Also called Chanakya or Vishnugupta, Hindu statesman and philosopher who wrote a classic treatise on polity,
Arthashastra (“The Science of Material Gain”), a compilation of almost everything that had been written in India up to his time regarding artha (property, economics, or material success).
http://www.britannica.com/EBchecked/topic/313486/Kautilya
7 8
http://www.swaveda.com http://www.irda.gov.in/ADMINCMS/cms/NormalData_Layout.aspx?page=PageNo4&mid=2.
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of pooling of resources that could be re-distributed in times of calamities such as fire, floods, epidemics and famine. This was probably a pre-cursor to modern day insurance. Ancient Indian history has preserved the earliest traces of insurance in the form of marine trade loans and carriers‟ contracts. Insurance in India has evolved over time heavily drawing from other countries, England in particular. In the beginning, the life insurance companies which were started were few and far between and their scale of operations was also very limited. But with the turn taken by the 20th century, the growth of Indian insurance enterprise became more rapid and its early foundations were laid, though it continued to be in an infant stage till the return of peace in 1918. The post war decade (1919-1928) was a period of steady but limited growth, but during the years 1929-1938, India had a life insurance boom, and no less than sixty-eight9 life insurance companies operating in 1955 in the country had been established in this decade. The table number 1.4 below shows the important insurance milestones in India in 20th Century.
Table No. 3.1 Milestones of Insurance Regulations in the 20th Century in India Year 1912 1938 1956 1972 1993 1994 1995 1996 Significant Regulatory Event The Indian Life Insurance Company Act. The Insurance Act: Comprehensive Act to regulate Insurance business. Nationalization of Life Insurance business. Nationalization of General Insurance business. Setting up of Malhotra Committee. Recommendations of Malhotra Committee. Setting up of Mukherjee Committee. Setting up of (interim) Insurance Regulatory Authority (IRA). Recommendations of the IRA. 1997 The Government gives greater autonomy to Life Insurance Corporation, General Insurance Corporation and its subsidiaries with regard to the restructuring of Boards and flexibility in investment norms aimed at channeling funds to the infrastructure sector. 1997
9
Mukherjee Committee Report submitted but not made public.
Agarwala A. N. (1960), “Insurance in India: A Study of Insurance Aspect of Social Security in India”, Allahabad
Law Journal Press, Allahabad.
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1998
The Cabinet decides to allow 40% foreign equity in Private Insurance Companies26% to Foreign Companies and 14% to Non-Resident Indians (NRI‟s), Overseas Corporate Bodies (OCB‟s) and Foreign Institutional Investors (FII‟s.)
1999
The Standing Committee headed by Murali Deora (Member of Parliament) decides that foreign equity in Private Insurance should be limited to 26%. The IRA bill is renamed, The Insurance Regulatory and Development Authority (IRDA) Bill.
1999 2000
Cabinet clears IRDA Bill. President gives assent to the IRDA Bill.
Source: Bhole L. M. (2004), “Financial Institutions and Markets”, Tata McGraw-Hill Publishing House, New Delhi.
Life insurance penetration in India is low as compared to some of the developed countries. Life Insurance penetration premium 10 forms just 4% of the India‟s GDP. There are few reasons for the slow development of modern system of insurance in India. 1. The joint family system applies the principle of insurance. It automatically provides for invalids and widows. 2. Life insurance appeared to conflict with the Indian way of thinking and tradition. 3. Poverty and ignorance has also hindered the growth and expansion of insurance business in India. 4. Insurance means accumulation of funds and their investment on long term. But until recently opportunities for such investments were limited in India.
3.6 Growth of Life Insurance in India:11
During recent times, the Indian economy has been performing well and the momentum of growth has picked up particularly since liberalisation was initiated in the 1990s. Though the overall growth rate during the last decade has fluctuated, yet it remained well above many emerging economies of the world. With further reforms initiated in the early 1990s, there has been a significant structural change in the macro economy and in the process service sector has emerged as the leading sector and engine of growth. India is one of the countries in the world which has achieved a high growth rate in domestic savings and a higher propensity to save by household sector has been maintained over the period. The Domestic
10 11
IRDA Annual Report 2008-2009. Narayanan H (2008) “Indian Insurance- A Profile”, Jaico Publishing House, Mumbai.
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Savings Rate in India12 as a percentage to Gross Domestic Product (GDP) at market prices was 23.31% during the ninth five year plan (1997-2002) which increased to 26.84% during the tenth five year plan period (2002-2007). The positive growth in the economy, expansion of the service sector and increase in household savings all contributed significantly to the high growth of domestic savings. This is having a positive effect on the life insurance sector in India.
Table 3.3 Key Market Indicators for the Indian Insurance Market Minimum Paid up Equity Capital for a Life Rs.100 Crores Insurance and a General Insurance Company Equity Restriction Foreign Promoter can hold up to 26 percent of the Equity Registration Restriction Geographical Restriction Composite Registration not available None for new companies. They can operate all over the country. Indian Insurance Market opening for Private August Companies Inflation adjusted Growth in Total Premium in India Insurance Services Contribution to India‟s Gross Domestic Product (GDP) Source: IRDA Annual Reports 2008-2009, 2009-2010, 2010-2011, 2011-2012 http://www.irda.gov.in 2000 with invitation for
application for registration. 13 % (2006-07)
along with Banking Services 7%
3.7 Product Innovation by Private Life Insurance Companies:
Private life insurance companies have brought totally a new concept of insurance, i.e., insurance linked with investment. Apart from conventional insurance plans introduced by the private insurance companies, a number of new plans such as Unit Linked Investment Plans (ULIPs) and Pension Plans have become popular among Indian clients. Most of the new private life insurance companies have launched market linked plans to attract Indian investors.
12
http://www.planningcommission.nic.in/plans/planrel/fiveyr/10th/volume1/10th_vol1.pdf
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The Unit Trust of India (UTI) launched the Unit Linked Insurance Plan (1971). This plan was designed for any resident in India between ages 12 to 55 years planning to save between Rs. 6000 to Rs. 75000. Persons over 55 years of age can go in for a 10 year plan. No medical examination was necessary. A small part of the contribution is utilised for providing life cover and the balance is invested in units. In case the person dies before the end of the plan period, the legal heirs will be entitled to the units to his/her credit and the amount of the insurance cover. Unit linked policies are offered by LIC as well as the other private life insurance companies in India. They have become popular. Such plans are called by various names like universal, unbundled or flexible. They are popular especially in times when the stock market is booming. Insurance companies offer a choice of funds like secured, balanced and risk with different risk profiles depending on the different patterns of investment in equities, debts and liquid assets. The policy holder is allocated units, which are valued every day. Many life insurance companies have also started Pension Plans which are in the form of ULIPs. Such pension plans being a unit linked plan, the premiums which the insured pays are subject to investment risks associated with the stock markets. The unit prices of such funds may increase or decrease, reflecting changes in the stock markets. In 2009-2010, various life insurance companies launched a set of ULIPs that guarantee returns based on the highest net asset value (NAV) during the policy term. These schemes look attractive since the uncertainty arising from the stock markets seems to be capped. In such policies the companies lock the NAV at the highest point during the term of the policy. But this benefit comes at a cost. Insurance companies charge more in order to provide the guaranteed returns. These schemes guarantee the highest NAV but not the highest returns. Unlike regular ULIPs, these schemes do not provide wide range of product categories, such as equity-oriented growth funds, balance funds and debt funds. These schemes are structured in such a manner that the collected funds can be invested either in equities, in debt instruments or in money-market instruments in proportions varying from zero to 100%. Insurance companies that have launched such schemes need to review their assets periodically. The funds have to be moved from one asset class to another. Thus, the returns for the scheme will depend on the company‟s fund allocation strategy. Schemes which have maximum exposure in equities in initial years may provide better returns than the schemes having larger exposure to debt instruments at the beginning depending upon the equity markets. Such schemes are beneficial for such investors who want to enjoy equity returns with added protection. But the benefits of highest guarantee NAV are available only if the policy holder stays till the policy matures.
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3.8 Service Orientation of New Life Insurance Companies:13
Life insurance companies send a premium reminder notice to the policy holder before the due date. A payment reminder call is made when policies are due for payment. Policy holders can also view their policy information through the company‟s website by registeri ng themselves. Policy holders can send their queries by using email (electronic mail), which is available on the website of the companies or even through a traditional postal mail. Companies also use SMS (short messaging service) and E-mail alerts for the following details regarding policies: issuance of policy, alert for the ECS (electronic clearing service) debit on policy holder‟s account, confirmation of the receipt of renewal premium payment, dispatch of policy documents, any outstanding requirements for policy issuance, confirmation on policy servicing requests for address change, change of mode of payment, change of nominee, loan status, surrender details, policy reinstatement, switch redirection. The net asset value of unit linked insurance policies is also provided on the website of the company.
Policy holders can register their grievances related to products and services with the Complaints Redressal Cell at the company‟s office. The objective of this unit is to ensure effective complaint handling. This complaint management and redressal cell is responsible for registering and following up the complaints for resolution. Policy holders are also provided a toll free national telephone number for registering their complaints or to seek any information. Complaints can also be emailed or can also be written and submitted to the concerned branches of the company, or by writing to the Complaints Officer. All complaints received from various sources are registered and unique complaint identity is created which is intimated to the customer. Additional information if required, (for resolving the complaint), is sought from the complainant. The complaints cell escalates the complaint to the concerned and follow-up the same until the matter is resolved. Companies try to resolve the complaints within two weeks. Companies duly intimate the complainant in case the resolution gets delayed beyond the prescribed time on account of any unforeseen circumstances. If the complainant is not satisfied with the response of the company, he/she can approach the insurance ombudsman whose details are provided by the company itself. As far as claims are concerned a quick settlement process depends on the satisfactory production of documents and necessary requirements by the claimant.
13
http://www.inglife.co.in/ & http://www.hdfcinsurance.com/
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3.9 Some Developments in Insurance Sector:
Postal Life Insurance:14 Postal Life Insurance was started in 1884 as a welfare measure for the employees of Posts and Telegraphs Department by the Government of India. Due to the popularity of its schemes, various departments of Central and State Governments were extended its benefits. Postal Life Insurance is open for all employees of Central and State Governments, Nationalized Banks, Public Sector Undertakings, Financial Institutions, Municipal Corporations, Zilla Parishads, Educational Institutions aided by the Government. The various schemes are: Endowment Assurance, Whole Life Assurance, Convertible Whole Life Assurance, Anticipated Endowment Assurance, Joint Life Endowment Assurance, and Children‟s Policy. B. Rural Postal Life Insurance: On 24th March, 1995, the benefits of Postal Life Insurance were extended to rural populace of the country under the banner of Rural Postal Life Insurance. Rural Life Insurance Schemes are such as Endowment Assurance (Gram Santosh), Whole Life Assurance (Gram Suraksha), Convertible Whole Life Assurance (Gram Suvidha), Anticipated Assurance (Gram Sumangal ) , Anticipated Endowment Scheme (Gram Priya) and Children‟s Policy. C. Bancassurance:15 The Bank Insurance Model (BIM), also sometimes known as Bancassurance, is the term used to describe the partnership or relationship between a bank and an insurance company whereby the insurance company uses the bank sales channel in order to sell insurance products. BIM allows the insurance company to maintain smaller direct sales teams as their products are sold through the bank to bank customers by bank staff.
Bank staff, rather than an insurance salesperson, become the point of sale/point of contact for the customer. Bank staff are advised and supported by the insurance company through product information, marketing campaigns and sales training. Both the bank and insurance company share the commission. Insurance policies are processed and administered by the insurance company.
14 15
http://www.indiapost.gov.in/PLI.html http://rbidocs.rbi.org.in/rdocs/Publications/PDFs/80595.pdf
22
BIM differs from Classic or Traditional Insurance Model (TIM) in that TIM insurance companies tend to have larger insurance sales teams and generally work with brokers and third party agents. An additional approach, the Hybrid Insurance Model (HIM), is a mix between BIM and TIM. HIM insurance companies may have a sales force, may use brokers and agents and may have a partnership with a bank.
Under this arrangement, banks are appointed as corporate agents, empanelled with one insurance company to sell its products. Banks, with their existing customer base, can leverage on their existing relationships, to convert customers into policyholders. The bank usually earns a high commission on the first premium paid by each customer and a marginal trailing commission on renewal premiums till the maturity of the policy, for regular premium plans. And a one-time commission is paid in case of the single premium policies.
One disadvantage that may come up in this model is that banks, after allying with one insurance company may discontinue it to set up their own venture. Changing insurance partners due to attractive benefits offered by a competing insurer is also not ruled out. Mergers and takeover situations may also lead to a change in bancassurance partners.
The IRDA (Insurance Regulatory and Development Authority) has allowed the banks to act as agents for one life and general insurer, each.
The following table shows the tie up between life insurance companies and banks in India under the bancassurance model.
Table No. 3.4 Bancassurance Tie-ups in India No. Name of Life Insurance Company 1 2 HDFC Standard Life Insurance Co. Ltd. Max New York Life Insurance Co. Ltd. New India Cooperative Bank ■ The A.P. Mahesh Cooperative Urban Bank ■ The Thane Janta Sahakari Bank ■ Yes Bank ■ Citizen Credit Co-op bank Ltd. ■ Punjab & Maharashtra Co-op Name of the Bank under Bancassurance tie up ■ HDFC Bank ■ Saraswat Bank, Indian Bank.
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Bank Ltd ■ The Zoroastrian Co-operative Bank Ltd. ■ People Cooperative Bank Ltd. 3 ICICI Prudential Life Insurance Co. Ltd. ICICI Bank ■ Jalgaon Peoples Co-op Bank, Ratanagiri District Central Co-op Bank ■ Ballia Kshetriya Co-operative Bank ■ Renuka Nagrik Sahakari Bank ■ Bhandara Urban Co-operative Bank. 4 Kotak Mahindra Old Mutual Life Insurance Ltd. 5 6 7 Birla Sun Life Insurance Co. Ltd. Tata AIG Life Insurance Co. Ltd. SBI Life Insurance Co. Ltd. Kotak Mahindra Bank ■ The Ratnakar Bank Ltd. ■ The Malkapur Urban Co-op Bank Limited ■ Dombivli Nagari Sahakari Bank Ltd. Nagar Urban Co-operative Bank Ltd. ■ The Chikhli Urban Co-op Bank Ltd. United Bank of India ■ Cooperative Bank Ltd. Andhra Pradesh Grameena Vikas Bank Arunachal Pradesh Rural Bank ■ ■ Cauvery The Orissa State
Kalpatharu Grameena Bank ■ Ellaquai Dehati Bank ■ Langpi Dehangi Rural Bank ■ Malwa Grameen Bank ■ Mizoram Rural Bank ■ Parvatiya Grameena Bank ■ Purvanchal Gramin Bank ■ Samastipur Kshetriya Gramin Bank ■ Saurashtra Gramin Bank ■ State Bank of Bikaner and Jaipur ■ State Bank of Hyderabad ■ State Bank of India ■ State bank of Indore ■ State Bank of Mysore ■ State Bank of Patiala ■ State Bank of Tranvancore ■ Uttranchal Gramin Bank ■ Vananchal Gramin Bank. 8 9 10 11 12 ING Vysya Life Insurance Co. Ltd. Bajaj Allianz Life Insurance Co. Ltd. MetLife Insurance Co. Ltd. Reliance Life Insurance Co. Ltd. Aviva Life Insurance Co. Ltd. ING Vysya Bank Ltd. Standard Chartered Bank ■ Syndicate Bank ■ The Cosmos Cooperative Bank Ltd., Axis Bank ■ Barclays ■ Jammu & Kashmir Bank Ltd. ■ Karnataka Bank Ltd. --ABN AMRO Bank ■ The Lakshmi Vilas Bank Ltd. ■ Punjab & Sind Bank ■ IndusInd Bank
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■ Bank of Rajashtan ■ DBS Bank ■ Shree Warna Sahakari Bank Bank ■ ■ Prime Cooperative ■ ■ Goa State Vasantdada ■ Surat Nizamabad DCCB
Cooperative Bank ■ Janaseva Sahakari Bank ■ MP Rajya Sahakari Bank Shetkari Bank ■ Krishna Sahakari Bank ■ Ichalkaranji Janata Sahakari Bank Central Co-operative Bank ■ District Cooperative Bank ■ Sabarkanta District Rajkot Nagrik Sahakari Bank ■ Kakinada District Central Cooperative Bank ■ Nasik Merchant Cooperative Bank ■ Surendranagar District Central Cooperative Bank ■ Nellore District Central Cooperative Bank ■ Kashi Gomti Samyut Gramin Bank ■ Madhya Bihar Gramin Bank ■ Bihar Kshetriya Gramin Bank ■ Rajasthan Gramin Bank ■ ■ Ranchi Kunti District Co-operative ■ Bank ■ Singbhum Central Co-operative Bank Patliputra Central Co-operative Bank ■ Maharastra Godavari Gramin Bank ■ Vidarbha Keshetriya Gramin Bank Mahila Sahakari Bank. 13 Life Insurance Corporation of India (LIC) Kozhikode District Cooperative Bank ■ Jila Sahakari Kendriya Bank Maryadit Dewas ■ Jila Sahakari Kendriya Bank Maryadit Khargone ■ Indian Overseas Bank ■ City Union Bank Ltd. ■ Corporation Bank ■ Central Bank of India ■ Satara District Central Cooperative Bank ■ The Bharat Cooperative bank (Mumbai) Ltd. ■ Bank of Maharashtra ■ Dena Bank ■ UCO Bank ■ Allahabad Bank ■ The West Bengal State ■ Bihar State Cooperative Bank Ltd. ■ Andaman & Nicobar State Cooperative Bank Cooperative bank Ltd.
Source: Web Sites of the above mentioned Companies as on February 2010.
Bhagyalakshmi
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3.10 Selected References:
1. Agarwala A. N. (1960), “Insurance in India: A Study of Insurance Aspect of Social Security in India”, Allahabad Law Journal Press, Allahabad.
2. Government of India (1949) „The Insurance Act. 1938, (Act 4 of 1938)‟, Ministry of Law, Government of India, The Manager Government of India Publication, Shimla. 3. Government of India (1949), „The Insurance Act. 1938, (Act 4 of 1938)‟, Ministry of Law, Government of India, the Manager, Government of India Publication, Simla. 4. http://en.wikipedia.org/wiki/Rigveda. 5. http://rbidocs.rbi.org.in/rdocs/Publications/PDFs/80595.pdf 6. http://www.britannica.com/EBchecked/topic/313486/Kautilya 7. http://www.britannica.com/EBchecked/topic/396125/Mughal-dynasty. 8. http://www.indiapost.gov.in/PLI.html 9. http://www.inglife.co.in/ 10. http://www.irda.gov.in/ 11. http://www.swaveda.com 12. IRDA Annual Report 13. IRDA Annual Report 2006-2007 14. IRDA Annual Report 2007-08 15. IRDA Annual Report 2008-2009. 16. IRDA Annual Report 2009-10 17. IRDA Annual Report 2010-2011 18. IRDA Annual Report 2011-12 19. IRDA Annual Report 2007-2008. 20. IRDA Handbook on Indian Insurance Statistics - 2007-2008. 21. Narayanan H (2008), „Indian Insurance- A Profile‟, Jaico Publishing House, Mumbai. 22. Ray R. M (1941), „Life Insurance in India, its History, Law, Practice & Problems‟, Allied Publishers, Bombay.
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