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The
entire general insurance business in India was
nationalised by General Insurance Business (Nationalisation)
Act, 1972 (GIBNA). The Government of India (GOI),
through Nationalisation took over the shares of
55 Indian insurance companies and the undertakings
of 52 insurers carrying on general insurance business.
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General Insurance Corporation of India (GIC)
was formed in pursuance of Section 9(1) of GIBNA.
It was incorporated on 22 November 1972 under
the Companies Act, 1956 as a private company
limited by shares. GIC was formed for the purpose
of superintending, controlling and carrying
on the business of general insurance.
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As
soon as GIC was formed, GOI transferred all the
shares it held of the general insurance companies
to GIC. Simultaneously, the nationalised undertakings
were transferred to Indian insurance companies.
After a process of mergers among Indian insurance
companies, four companies were left as fully owned
subsidiary companies of GIC (1) National Insurance
Company Limited, (2) The New India Assurance Company
Limited, (3) The Oriental Insurance Company Limited,
and (4) United India Insurance Company Limited. |
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The
next landmark happened on 19th April 2000, when
the Insurance Regulatory and Development Authority
Act, 1999 (IRDAA) came into force. This act also
introduced amendment to GIBNA and the Insurance
Act, 1938. An amendment to GIBNA removed the exclusive
privilege of GIC and its subsidiaries carrying
on general insurance in India. |
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-In November 2000,
GIC is renotified as the 'Indian Reinsurer' and
through administrative instruction, its supervisory
role over subsidiaries was ended. With the General
Insurance Business (Nationalisation) Amendment Act
2002 (40 of 2002) coming into force from March 21,
2002 GIC ceased to be a holding company of its subsidiaries.
Their ownership were vested with Government of India. |
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Regulatory
Framework : |
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The functioning of GIC has to be within the
regulations of the following major Acts:
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-General Insurance Business (Nationalisation)
Act, 1972
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-General Insurance
Business (Nationalisation) Amendment Act. 2002. |
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-Insurance Regulatory
and Development Authority Act, 1999 |
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General insurance
policies, including automobile and homeowners policies,
provide payments depending on the loss from a particular
financial event. General insurance typically comprises
any insurance that is not determined to be life
insurance. |
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