Life Insurance coverage Company of India (LIC) is the biggest public sector insurance coverage firm in India. Till October 24, 2000, the insurance coverage sector was closed to personal sector corporations. Right now, in 2022 there are 24 life insurance coverage corporations within the nation, together with LIC.
On Sunday, February 13, LIC filed its Draft Pink Herring Prospectus (DRHP) through which it has said that it’s going to provide 316 million-plus fairness shares to buyers. This sale is a part of the central authorities’s plan to fund capital expenditure and to carry down the fiscal deficit. At this stage, some key particulars resembling worth band are but to be disclosed.
With a lot buzz round LIC’s upcoming IPO, let’s in the present day a take a look at the important thing developments that led to the start and progress of LIC in India.
1818- India’s First Life Insurance coverage Firm Opened
- 1 1818- India’s First Life Insurance coverage Firm Opened
- 2 1870- Bombay Mutual Life Assurance Society
- 3 1912- Indian Insurance coverage Statutory Act
- 4 1956- Beginning of LIC
- 5 What Occurred After The LIC Act was Handed?
- 6 1995- First On-line Programs Incorporation
- 7 1999- IRDA Act Handed
- 8 2000- Insurance coverage Sector Opened to Non-public Sector
- 9 2009- IIM-Ahmedabad Govt MBA
- 10 2013- IT Upgrades
- 11 2014- LIC’s Fleet of Vehicles
- 12 2020- Model Worth at $8.1 Billion
- 13 2021- LIC IPO
Oriental Life Insurance coverage Firm was an English insurance coverage firm that was opened in Calcutta (now Kolkata) to cater to the insurance coverage wants of the British and different Europeans. Indians had been charged a heavy premium to insure their lives. This firm, nonetheless, closed down in 1834. An insurance coverage firm is nothing however an organization that distributes the chance amongst its policyholders and prices a premium from all of them in return for doing that. It’s reported that Oriental Life Insurance coverage couldn’t alter its danger distribution successfully and, due to this fact, needed to shut down.
1870- Bombay Mutual Life Assurance Society
This was the primary insurance coverage firm began by an Indian citizen. The corporate charged a nominal premium for insuring folks’s lives. This was additionally the yr when the British Insurance coverage Act, 1870 was enacted in London.
1912- Indian Insurance coverage Statutory Act
By 1912 there have been loads of overseas insurance coverage corporations working in India. To guard their pursuits, the Indian authorities underneath British Rule determined to herald a legislature to manage this sector. The Indian Life Assurance Act, 1912 was handed. This Act was later amended in 1934 to incorporate extra complete provisions.
1956- Beginning of LIC
9 years after India attained freedom from British rule, the Authorities of India issued an Ordinance on January 19, 1956 to nationalise 154 Indian insurers, 16 non-Indian insurers, and 75 provident societies (whole 245). On June 19, 1956, the LIC Act was handed and on September 1 the identical yr, LIC was shaped with an preliminary capital of Rs 5 crore. LIC began with 5 zonal places of work, 33 divisional places of work, and 212 department places of work.
What Occurred After The LIC Act was Handed?
For some time, there was no Act or regulation concerning the insurance coverage sector. In 1972, the Basic Insurance coverage Enterprise (Nationalisation) Act, 1972 was handed to nationalise the overall insurance coverage sector.
Listed here are a few of the latest developments that affected LIC too and made it into the corporate that we all know in the present day:
1995- First On-line Programs Incorporation
To assist policyholders and for the comfort of different stakeholders, LIC began a brand new on-line coverage report accessing the system from July 1995. Policyholders might now view their coverage standing report, see immediate acceptance of their premium, and in addition get revival and mortgage quotations on demand.
1999- IRDA Act Handed
In its report, the Malhotra Committee mentioned that there must be an autonomous regulatory physique to supervise the developments within the insurance coverage sector because the sector was to be opened to personal sector corporations. The IRDA ACT, 1999 was handed within the Parliament based mostly on this report. Irda stands for Insurance coverage Regulatory and Growth Authority of India, which is the insurance coverage regulator.
2000- Insurance coverage Sector Opened to Non-public Sector
The insurance coverage sector was opened up for overseas direct funding and personal sector, although overseas possession in any insurance coverage firm may very well be a most of 26 per cent.
2009- IIM-Ahmedabad Govt MBA
On account of extreme competitors from overseas corporations and their extremely expert managers, LIC determined to sponsor an Govt MBA course from IIM-Ahmedabad for its managers.
2013- IT Upgrades
To compete with new-age insurance coverage corporations, LIC upgraded each front-end and back-end purposes. The prevailing Digital Entrance Finish Software Package deal system was written in COBOL programming language, which has been there since 1959. The improve contract was awarded to Indian IT main Wipro.
2014- LIC’s Fleet of Vehicles
Some advertising and improvement managers and staff used to get a automotive for advertising and different enterprise necessities. Nevertheless, on account of a change in revenue tax prerequisite provisions, hundreds of LIC staff would have needed to pay extra revenue tax once they bought this automotive underneath the inner LIC scheme. So, the insurer proposed to spend Rs 1 crore to switch again 6,000 vehicles to itself. Doing so made LIC the one company organisation then to have so many vehicles underneath its personal title.
2020- Model Worth at $8.1 Billion
Based on a report by London-based Model Finance, a consultancy firm, LIC’s model worth was estimated at $8.1 billion. LIC is the one Indian firm to be featured among the many world’s high 10 most valued insurance coverage corporations.
2021- LIC IPO
The LIC preliminary public providing (IPO) is about to be the biggest IPO of India ever. The Authorities of India plans to supply 5 per cent of its fairness stake in LIC. The market’s urge for food for such a giant IPO could, nonetheless, have dampened because of the latest IPOs of a number of loss-making new-age corporations. On account of this, the scale of the problem Shouldn’t be but determined. However the IPO is predicted to be so enormous that the market regulator, the Securities and Change Board of India (Sebi), needed to amend the Difficulty of Capital and Disclosure Guidelines (ICDR) as simply 10 per cent stake in LIC was price greater than Rs 1 lakh crore. The brand new guidelines had been made in order that the IPO dimension could be Rs 10,000 crore plus 5 per cent of the incremental market capitalisation quantity past Rs 1 lakh crore for very massive corporations.