Life Insurance Corporation of India
The Life Insurance Corporation (LIC) of India founded in 1956 is the largest life insurance company in India owned solely by the Government of India. Headquartered in Mumbai, which is considered the financial capital of India, LIC presently has 7 Zonal Offices and 100 Divisional Offices situated all around the country. In addition to an even distribution of 2048 branches located in different towns and cities of India, LIC also has a network of around one million agents who solicit life insurance policies to the public.
History of LIC of India
The first 150 years of the British Rule in India were characterized by turbulent economic conditions. The first war of independence in 1857, the World Wars 1 and 2 (1914-1918 and 1939-45) and India’s national struggle for freedom in between had adverse effect on the economy. In addition to this the period of world wide economic crisis in between the two World Wars termed as the period of Great Depression led to the high rate of bankruptcies and liquidation of most Life Insurance Companies in India that existed during that time. These occurrences led to loss of faith in insurance of the people of India.
The Life Insurance Companies Act and Provident Fund Act both passed in 1912 provided regulatory mechanisms to the Life Insurance Industry in India for the first time. After undergoing several other such reforms in the following decades and nearly a decade after India achieved independence, the Parliament of India passed the Life Insurance of India Act on 19 th June, 1956 following which the Life Insurance Corporation (LIC) of India on 1 st September of the same year. The Company began its operations with 5 Zonal Offices , 33 Divisional Offices and 212 Branch Offices .
Present Status of LIC of India
Existing as a towering insurance company for over 50 years, LIC has acquired almost monopoly power in the solicitation and sale of life insurance policies in India. In addition to the summary regarding the present stature provided at the beginning, LIC has extended its activities in 12 countries other than India with the objective of catering to the insurance needs of Non Resident Indians.
The enforcement of New Economic Reforms in 1991 coupled with the formation of Insurance Regulatory and Development Authority Act (IRDA) of 2000 (which started issuing licenses to private life insurers ) has diluted the monopolistic attitude commanded by LIC. The only insurance company belonging to the public sector now has to compete with several other corporate entities of its kind which often are heavyweight Indian as well as Multinational Life Insurance Brands in themselves.
The other subsidiary companies under LIC are:
* Life Insurance Corporation (LIC) of India International – A joint venture offshore company promoted by LIC which commenced its operations in July, 1989 with the objective of offering policies denominated in US $ to NRIs residing in the Gulf.
* LIC Nepal – Formed in 2001 in joint venture with Vishal Group of Industries, Nepal.
* LIC Lanka – Formed in 2003 in joint venture with Bartleet Group of Companies, Sri Lanka
* LIC Housing Finance – Established in 19 th June,1989 in Dubai with the objective of providing long term finance for construction of houses or apartments.
* LIC Housing Finance Limited Care Homes – A wholly owned subsidiary of LIC Housing Finance which builds “Assisted Community Living Centers” for senior citizens.
With its ever-expanding operations, LIC has set an example for other Public Sector Undertakings of India to follow.
