National Insurance Awareness Day 2023: 28 June: National Insurance Awareness Day is marked yearly on June 28th to create awareness of insurance, which provides a layer of security to guard against various situations, and the advantages of investing in an insurance plan. The day also serves as a reminder to people to check if all their insurance payments (or renewals) are up to date.
About the Insurance
Insurance is a legal agreement (financial tool) between two parties – the insurer (Insurance Company/provider) and the insured (Policy holder), also known as insurance coverage or insurance policy, in which the insurer provides financial coverage for the losses of the insured that s/he may bear under certain circumstances.
Evolution of Insurance in India:
- The Oriental Life Insurance Company was founded in Calcutta (now Kolkata, West Bengal) in 1818, marking the beginning of the life insurance industry in India.
- In 1914, the Government of India (GoI) started publishing returns of Insurance Companies in India.
- The Indian Life Assurance Companies Act of 1912 was the first statutory regulation of the life insurance industry.
- In 1956, an ordinance was issued nationalising the Life Insurance sector and Life InsuranceCorporation (LIC) came into existence
- The LIC of India was formed by an Act of Parliament (LIC, Act 1956), with a capital contribution of Rs. 5 Crores from GoI.
Note: The minimum paid-up equity capital of insurance companies is Rs.100 Crore. If the application is made for the business of Reinsurance, there must be documentary evidence proving that the paidup capital of the business is at least Rs. 200 crore.
Insurance penetration in India
i. According to the Economic Survey 2022-23, which was released on January 31, 2023, insurance penetration in India has increased from 2.7% in 2000 to 4.2% in 2020 and 3.2% in 2021.
Note: Insurance penetration is measured as the percentage of insurance premiums to Gross Domestic Product (GDP)
ii. In 2021, the total global insurance premiums rose by 3.4% in real terms, with the non-life insurance sector witnessing a 2.6% rise.
iii. Global premium growth in the life insurance industry is expected to be 4.5%.
Important takeaways for all competitive exams:
- Life Insurance Corporation (LIC) Establishment- 1956;
- Life Insurance Corporation (LIC) Chairperson- Siddhartha Mohanty;
- Life Insurance Corporation (LIC) Headquarters- Mumbai, Maharashtra.
