Due to rise in the standard of living and boom in the economy there has been a drastic growth on the India General insurance sector. To manage and supervise the General Insurance Business in India the responsibility was given to General Insurance Corporation of India.
History of the evolution of India General India Insurance:
The General Insurance Business (Nationalisation) Act of 1972 nationalised the India General Insurance. Through nationalisation the government undertook 22 insurers and 55 insurance companies in the general insurance business. The General Insurance Corporation of India (GIC) was established under Section 9(1) of GIBNA.
The shares held in general insurance were transferred to General insurance Company. Due to the merger of the general insurance company four subsidiaries were formed under the GIC namely United India Insurance company ltd, National Insurance Company Limited, Oriental Insurance Company Limited and New India Assurance.
The Insurance Regulatory and Development Authority Act of 1999 (IRDAA) coming into being became a turning point for India General insurance.
Being the sole reinsurer in the domestic reinsurance market for insurance company receiving a statutory cession of 20% is one of the leading facultative and treaty programmes.
The GIC has expanded it business internationally providing reinsurance to the Middle East, South East Asia and Africa.
Investment under IRDA Regulations:
The insurer must invest money according to the IRDA regulations.
30% investment goes to State government and other guaranteed securities, 20% to Central Government securities, 10% to infrastructure and social sector and 5% to housing sector and state government loans.