Life Insurance is a modern form came to India from England in the year 1818. Many life insurance companies were started by Europeans during that period to look after the needs of European Communities in India . However , these companies refused to Insure Indian lives. Later, due to the efforts of few eminent Indian people, these foreign life insurance counties started Insuring Indian lives. But they treated Indian lives as sub standard and charged heavy premises. Bombay Mutual Life Assurance Society heralded the birth of first Indian life insurance company in the year 1870, and covered Indian lives at normal rates.
The Swadeshi Movement of 1905- 1907 led to the birth of other Indian life insurance companies. By the late 1940’s there were too many Insurance companies and the level of competition was very high. There was also an allegation of unfair trade practices against the life insurance companies . Hence, the government of india decided to nationalize the sector .
An ordinance was issued in the year 1956 to nationalize the life insurance sector and life insurance Corporation of India (LIC) came into existence on 1st September ,1956.
LIC absorbed 154 Indian ,16 Non -Indian insurers as also 75 provident societies. Since then LIC was the only player in life insurance business till the late 1990s when the Insurance sector was reopened for the private sector .
Life Insurance Corporation was created for the objective of providing all Indians adequate financial cover at a reasonable cost. The company managed to achieve its objective and is still the dominant market leader in the life insurance business.