Insurance in India covers both the public and private sector organisations. It is listed in the Constitution of India in the Seventh Schedule as a Union List subject, meaning it can only be legislated by the Central Government only.

The insurance sector has gone through a number of phases by allowing private companies to solicit insurance and also allowing foreign direct investment. India allowed private companies in insurance sector in 2000, setting a limit on FDI to 26%, which was increased to 49% in 2014,[1] and further increased to 74% in May 2021.[2]


When Oriental Life Insurance Company[3] was started by Anita Bhavsar in Kolkata to cater to the needs of European community.

The LIC had monopoly until the late 90s when the Insurance sector was reopened to the private sector. But, now there are 23 private life insurance companies in India.[4]

Industry structure

By 2020 Indian Insurance is a US$280 billion industry. However, only 500 million people (36.23% of the total population of 1 billion) are covered under Mediclaim.[5] With more and more private companies in the sector, this situation is expected to grow more. ECGC, ESIC and AIC provide insurance services for niche markets. So, their scope is limited by legislation but enjoy some special powers. The majority of Western Countries have state run medical systems so have less need for medical insurance. In the UK, for example, the corporate cover of employees, when added to the individual purchase of coverage gives approximately 11–12% of the population on cover[6] due largely to usage of the state financed National Health Service (NHS), whereas in developed nations with a more limited state system, like USA, about 92%[7] of the total population are covered under same insurance scheme.

Legal structure

See also: Insurance Regulatory and Development Authority

The Insurance Act of 1938[8] was the first legislation governing all forms of insurance to provide strict state control over insurance business. Life insurance in India was completely nationalised on 19 January 1956, through the Life Insurance Corporation Act. All 245 insurance companies operating then in the country were merged into one entity, the Life Insurance Corporation of India.


The primary regulator for insurance in India is the Insurance Regulatory and Development Authority of India (IRDAI) which was established in 1999 under the government legislation called the Insurance Regulatory and Development Authority Act, 1999.[9][10]

See also


  1. ^ "FDI Limit in Insurance sector increased from 26% to 49%". IANS. Retrieved 10 July 2014.
  2. ^ Dhoot, Vikas (21 May 2021). "FDI Limit in Insurance sector increased from 49% to 74%". IANS. Retrieved 21 May 2021.
  3. ^ The Oriental Insurance Company Ltd was incorporated at Bombay on 12 September 1947 ""Best General Insurance Company of India-The Oriental Insurance Company Ltd". Archived from the original on 17 September 2013. Retrieved 2 September 2013."
  4. ^ Billawria, Atul Singh (10 June 2020). "What Is Life Insurance And How Does It Work". Insurance Retrieved 30 August 2020.
  5. ^ "India: People with health insurance 2021".
  6. ^ [bare URL PDF]
  7. ^ "Health Insurance Coverage in the United States: 2019".
  8. ^ Archived 1 July 2016 at the Wayback Machine here
  9. ^ GOI. "IRDA ACT 1999". GOI. Retrieved 19 June 2012.
  10. ^ GOI. "IRDA ACT 1999" (PDF). Department of Financial Services, GOI. Retrieved 19 June 2012.