The document summarizes the liberalization of the Indian insurance industry following reforms in 2000. It established the Insurance Regulatory and Development Authority (IRDA) to regulate the industry and encourage competition. IRDA has roles in supervising insurers, promoting development, and protecting customers. The reforms led to growth in the private insurance sector, though LIC and other public insurers still dominate the market. The industry is now larger and more competitive with improved products and customer service.

1. INDIAN INSURANCE INDUSTRY-POST
LIBERELISATION SCENARIO
Presented by :
M.S.NARAYAN,
Development Officer, LIC of India,
Mandya Branch, Mandya.

2. LIBERALISATION OF INDIAN
INSURANCE MARKET
• In July 2000, immediately after the first
meeting of the Insurance Advisory
committee, 11 essential regulations relevant
for players entering the Indian market were
notified.
• In October 2000, six licenses to new players
in the life and non-life sectors were issued.
• India thus became a liberalized insurance
market.

3. THE IRDA BILL
• A fresh Bill was introduced by the new government in the
second half of 1999 by incorporating the provisions of
the Insurance Regulatory Authority Bill 1998 and the
amendments suggested by the standing committee on
finance.
• The amendments pertained to foreign equity being
restricted to 26%; name of IRA being changed to IRDA
as also emphasis on development of social, rural and
unorganized sectors.
• The IRDA Bill was passed in December 1999 and
became an Act in April 2000.

4. CONSTITUTION OF IRDA
1 - CHAIR PERSON
5 - WHOLE TIME MEMBERS
5 - PART TIME MEMBERS
TENURE 5 YEARS

5. PURPOSE OF
REGULATION
THE PURPOSE OF REGULATIONS ARE TO,
ENSURE PROTECTION OF CUSTOMER INTEREST
ENSURE FINANCIAL SOUNDNESS OF INSURANCE COMPANIES,WITH A
VIEW TO AVOID INSOLVENCY
ENSURE HEALTHY COMPETION& GROWTH OF INSURANCE MARKET
REGULATE APPOINTMENT,CONDUCT &PERFORMANCE OF
INTERMEDIARIES
WEED OUT INEFFICIENT FIRMS FROM THE MARKET
ENSURE A FAIR PREMIUM RATE
ENSURE EQUITABLE ALLOCATION OF PROFIT TO THE CUSTOMERS

6. ROLES OF IRDA
SUPERVISORY ROLE
REVIEW OF BUSINESS OPERATIONS
REVIEW OF ACCOUNTIG STANDARDS
REVIEW OF OVERALL CORPORATE PERFORMANCE
ISSUE OF EARLY WARNING SIGNALS
INTERVENTIONARY ROLE
ENFORCING COMPLIANCE TO THE ACT
ENSURING OBLIGATORY INSURANCE COVERAGE
ENSURING RETENTION OF SURPLUS WITHIN THE COUNTRY
INVESTMENT STIPULATIONS
ENSURING GROUND RULES FOR COMPANY CONSTITUTION
PROMOTIONAL ROLE
TO ACT AS FECILITATOR
TO PROVIDE ENCOURAGEMENT TO NEW ENTRANTS
TO ENSURE MANDATORY INSURANCE COVER
TO INTEGRATE LOCALMARKET WITH GLOBAL MARKET
TO ENSURE ADEQUATE RETURNS TO POLICY HOLDERS

7. MANDATES OF IRDA
THE IRDA POSSESSES THE AUTHORITY TO
• ISSUE CERTIFICATION OF REGISTRATION TO INSURER
• RENEW THE CERTIFICATE OR MODIFY OR WITHDRAW OR
SUSPEND OR CANCEL SUCH REGISTRATION AS THE
CIRCUMSTANCES MAY BE,
• CONDUCT INSPECTION/AUDIT OF
INSURERS/INTERMEDIARIES AND OTHER ORGANISATIONS,
• REGULATE INVESTMENT FUNDS,
* REGULATE MAINTANANCE OF SOLVENCY MARGINS,
* ADJUDICATE THE DISPUTES,

8. MANDATES OF IRDA
THE IRDA IS ALSO AUTHORISED TO,
* STIPULATE PERCENTAGE OF BUSINESS FROM RURAL/SOCIAL
SECTOR,
*ESTABLISH ADVISORY COMMITTEE CONSISTING OF NOT
MORE THAN 25 MEMBERS AS EX-OFFICIO PARTICIPANTS
TO ADVISE THE IRDA ON ALL MATTERS OF THE AC
* STIPULATE PERCENTAGE OF BUSINESS FROM RURAL/SOCIAL
SECTOR,
*ESTABLISH ADVISORY COMMITTEE CONSISTING OF NOT
MORE THAN 25 MEMBERS AS EX-OFFICIO PARTICIPANTS
TO ADVISE THE IRDA ON ALL MATTERS OF THE AC

9. GOVERNANCE OF IRDA
IRDA IS BOUND BY THE FOLLOWING.
COMPTROLLER &AUDITOR GENERAL SHALL AUDIT ITS ACCOUNTS
CENTRAL GOVT. SHALL GIVE DIRECTIONS ON QUESTIONS OF POLICY
TO BE FOLLOWED
GOVT. CAN SUPERSEDE THE IRDA IF NECESSARY FOR A PERIOD OF
NOT EXCEEDING SIX MONTHS AND GOVT. CAN APPOINT A
CONTROLLER OF INSURANCE IN THAT PERIOD
IT SHOULD SUBMIT A REPORT TO THE GOVT.ON ITS ACTIVITIES
DURING THE FINANCIAL YEAR WITHIN 9 MONTHS FROM THE
CLOSING DATE
THE CHAIRPERSON,MEMBERS,OFFICERS & EMPLOYEES SHALL BE
DEEMED TO BE THE PUBLIC SERVANTS

10. DOMINANCE OF LICI & GIC.
COs.
LICI
Pvt. Cos.
N-India
National
United
Oriental
Pvt.Cos
LICI
Pvt. Cos.
76.91%
23.09%
31.3% 68.7%
41.24%
Market Share of Policies in 2010-11
Market Share of Premium in 2010-11
2010-2011
Market Share of 4 GIC Cos. 58.76%
Market Share of Pvt.Cos. 41.24%
New India 16.66% National 14.36%
United India 14.97% Oriental 12.77%
LIFE INSURANCE GENERAL
INSURANCE

11. AWARDs & ACCOLADEs FOR LIC OF INDIA
2010-2011.
“Most Preferred Life Insurance Company of the Year’’ at the CNBC Awaaz
Consumer Awards fifth time in a row.
Outlook Money Award for“ Best Life Insurer” third time in a row.
“Best Life Insurance Company of the Year’’– NDTV Profit Business
LeadershipAwards-2010.
AIMA- High Performance Award.
READER’S DIGEST- Most Trusted Brand Award.
Golden Peacock Award for Corporate Governance.
World Brand Congress Award FOR Brand Excellence.
World HRD Congress Award for Innovative HR Practices.
Shoppers and Consumers Insight Award
CORP. OFFICE- MUMBAI
ZONAL OFFICES -8
DIVISIONAL OFFICES-113
BRANCH OFFICES-2048
SATTELITE OFFICES-340
Customer Zones-54
Metro Area Service Units-25
Over 13 Lakh Agents.
TOTAL ASSETS –
Rs 13.25trillion
I.e., 295.48Billion US$

12. MAJOR PRIVATE PLAYERs IN
LIFE INsURANCE MARKET
Reliance
Bajaj-AL.
ICICI- Pru
Birla-SL
OTHERS
Reliance Life 17.12% Bajaj Allianz 13.88% ICICI Pru 12.15% Birla Sun life 09.05%
Other 18 Private Insurers 47.79%
23.05% OF TOTAL INDIAN LIFE INSURANCE
MARKET IS SHARED BY 22 PRIVATE COMPANIES

13. LIC’S CLAIM PERFORMANCE
• During 2010-11, LIC, the public sector insurance
behemoth settled 97.5 per cent of death claims,
whereas claims pending stood at 1.47 per cent.
• Overall, LIC settled 99.6 per cent of the total
claims in the last financial year. And 95 per cent
of the death claims were settled within 15 days
of intimation.
• In total in 2010-11, LIC has settled around 18.3
million claims amounting to Rs 53,000 crore,
which includes survival benefits, maturity and
death claims. Of this, Rs 6,000 crore accounted
for 721,000 death claims.

14. ThE CLAIM REPudIATION
RATIO
The claim repudiation ratio is a measure of death claims rejected.
The claim repudiation ratio has improved over the last financial year in
insurance industry.
LIC still remains the benchmark when it comes to settling death
claims. However, major private players are also fast catching up.
During 2010-11, LIC improved its repudiation ratio for death claims to
1.09 per cent from 1.21 per cent in the previous year.
Among the private players, ICICI Prudential Life was the best performer
in terms of claims repudiation ratio, whereas HDFC Life’s claims
settlement ratio was the highest, respectively.

15. FuTuRE INduSTRY PROSPECTS
• CONVENTIONAL INSURANCE
• PENSIONS & ANNUITIES
• HEALTH INSURANCE
• GROUP INSURANCE
• MICRO INSURANCE
• REINSURANCE
• RISK MANAGEMENT

16. M.S.NARAYAN,
Development Officer,
LIC of India,
Mandya Branch, Mandya.