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REGULATIONS IN INDIA.
SELSIYA AMULRAJ
SWETHA VADIVEL
VIJAYALAKSHMI THEVAR
RAJESHWARI
WHAT IS INSURANCE ?
• Earlier to the Insurance Act 1938, the insurance business was carried by the
insurance companies in accordance with the principles of the Company Law,1913.
When the business started growing the need for independent law was noticed and
the Insurance Act 1938 was legislated.
• The Insurance Act, 1938 was passed by the legislature on 26 February, 1938 and it
came in force on 1July, 1938.
• The Insurance Act has 120 sections and 8 schedules. It also extends to whole of
India.
• It is an Act to consolidate and amend the law relating to the business of insurance.
LICENSING CONDITIONS OF INSURANCE.
• Under the Act, it is mandatory that only an Indian insurance company can
carry on an insurance business in India.
• An insurance company is an company which is registered under the
Companies Act 1956
• In Companies Act 1956, the aggregate foreign equity shares does not exceed
26% and whose sole purpose is to carry on a life, general or reinsurance
business.
TWO STAGES OF LICENSING PROCESS
• To assure full protection to the policy holders and to spread the life insurance widely to the
rural areas and to the socially and economically backward classes.
• To encourage and mobilize the public savings by making insurance-linked savings adequately
attractive.
• To create liquidity position to the public and also to act as trustees of the insured public in
their individual and collective capacities.
• To motivate saving habits among the public and meet the various life insurance needs to the
community.
MARINE INSURANCE ACT, 1963
• Marine Insurance covers the loss or damages of ships, cargo,
terminals, and any transport by which the property is
transferred, acquired between the points of origin and the
destination.
• Marine Insurance is the earliest well developed kind of
insurance and it essentially provides cover for the losses
suffered due to Marine Perils.
• The Indian ‘Maritime Insurance Act’ 1963 is based on the
original ‘Marine Insurance Act’ 1906 of U.K.
GENERAL INSURANCE CORPORATION OF INDIA.
• The General Insurance Corporation Act, 1972 was enacted by by
the Parliament and came into force from 20th September, 1972.
• This act provides acquisition and transfer of shares of Indian
insurance companies.
• It also undertakes of other existing insurers in order to serve
better needs of the economy by securing the development of
general insurance business in the best interest.
• General Insurance Corporation of India is for the purpose of
superintending, controlling, and carrying on the business of general
insurance.
FUNCTIONS OF GIC OF INDIA.
• It carries of any part of the general insurance business, if it thinks it desirable to do so.
• It also helps in aiding, advising and assisting the acquiring companies in the matter of
setting up of standards of conduct and sound practice in general insurance business.
• It helps in advising the acquiring companies in the matter of controlling their expenses
including the payment of commission and other expenses.
• Advising the companies in the matter of the investment of their funds.
• Issuing directions of acquiring companies in relation to the conduct of general insurance
business.
INSURANCE REGULATORY AND DEVELOPMENT
AUTHORITY ACT, 1999.
• The Insurance Regulatory and Development Authority of
India(IRDA) is an autonomous, statutory body tasked with
regulating and promoting the insurance and re-insurance industries
in India.
• This act provides for the registration of insurance companies,
maintenance and security of accounts and valuation reports,
investments.
• It also helps in utilisation of funds permissible, limits on
expenditure, approval of premium rates and verifying solvency
margins.
DUTIES, POWERS AND FUNCTIONS OF IRDA.