2. ⦿ Health insurance is a type of insurance that covers the cost
of medical and surgical expenses incurred by an insured
person. It provides financial protection against unexpected
medical expenses, such as hospitalization, doctor's visits,
prescription drugs, and diagnostic tests. Health insurance
policies vary widely in terms of coverage, premiums,
deductibles, co-payments, and other factors.
⦿ In many countries, including the United States, health
insurance is often provided by employers as a benefit to
their employees. In other countries, such as Canada and
the United Kingdom, health care is provided by the
government through a nationalized health care system.
Private health insurance is also available in many
countries, which can be purchased by individuals or
families to supplement or replace government-provided
health care.
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3. DEFINITION OF HEALTH INSURANCE
⦿It is one of the methods of financing the
healthcare
⦿“The reduction or elimination of the
uncertain risk of loss for the individual or the
household by combining a larger number of
similarly exposed individuals or households
who are included in a common fund that
makes up the loss caused to any one
member”
⦿ # ILO (International labour organization)- 1996
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4. EVOLUTION OF INSURANCE SECTOR
IN INDIA
⦿1818 – Advent of life insurance business in
India.
Oriental Life Insurance company setup in
Calcutta. It failed in 1834.
⦿1829 – Madras Equitable started life
insurance business in Madras Presidency.
⦿1870 – British Insurance Act was enacted.
This era was dominated by foreign insurance
offices namely Albert life assurance, Royal
Insurance, London Globe insurance.
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5. ⦿ 1912 – Indian Life Assurance Companies Act
⦿ 1914 – Government of India started publishing returns
of Insurance companies in India . Government started
collecting statistical information about both life and
non-life business transacted in India by Indian and
foreign insurers.
⦿ 1938 – Insurance Act . The Act had comprehensive
provisions for effective control over the activities of
insurers
⦿ 1950 – Insurance Amendment Act which abolished
Principal agencies. This era saw huge competition
among large number of insurance companies. Also,
there were allegations of corrupt practices. Hence,
GoI decided to nationalise insurance business.
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6. ⦿ 1956- Life Insurance sector nationalised and Life Insurance
Corporation (LIC) came into existence. The LIC absorbed
154 Indian, 16 non-Indian insurers as also 75 provident
societies -245 Indian and foreign insurers in all. The LIC
had monopoly till the late 90s.
⦿ 1957 – General Insurance Council (GIC) was formed to
frame a code of conduct for ensuring fair conduct and
sound business practices.
⦿ 1972 – General Insurance Business( Nationalization) Act
⦿ 1973 – 107 insurers were amalgamated and grouped into
four companies, namely National Insurance Company Ltd. ,
New India Assurance Company Ltd, Oriental Insurance
company Ltd and United India Insurance Ltd.
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7. PROCESS OF RE-OPENING
⦿ The process of reopening of the sector had
begun in the early 1990s. In 1993, The
government of India set up a committee under
the chairmanship of Mr R N Malhotra, former
governor of RBI, to propose recommendations for
reforms in the insurance sector.
⦿ 1994 – Malhotra Committee recommended
private sector to enter the insurance industry.
They stated that foreign companies be allowed
to enter by floating Indian companies, preferably
a joint venture with Indian partners
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8. INSURANCE REGULATORY AND
DEVELOPMENT AUTHORITY (IRDA)
⦿1999 – IRDA was constituted as an
autonomous body to regulate and develop
the insurance sector.
⦿2000 – the IRDA was incorporated as a
statutory body. The key objective of the
IRDA include promotion of competition so as
to enhance customer satisfaction through
increased consumer choice and lower
premiums, while ensuring the financial
security of the insurance market.
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9. THE DAWN OF NEW MILLENIUM
⦿August 2000 – The IRDA opened the market
for foreign companies to register themselves
with allowed ownership of up to 26%.
⦿December 2000 – the subsidiaries of the GIC
of India were restructured as independent
companies and at the same time GIC was
converted into a national re-insurer.
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