The concept of insurance in India dates back to the era of Kautilya, Manu & Yagnyaklvaya. During that period the idea of insurance was based on pooling of resources such as wood, food products, clothes, etc which can be redistributed in the time of crisis. The concept which dates back to our ancestral times has evolved on itself over time by drawing experiences from other countries. This advancement of insurance led to the birth of life insurance during 1818. The first company which started life insurance was Oriental Life insurance-Calcutta. After this many such Indian & foreign companies like Bombay mutual, Empire of India, Oriental insurance, etc dominated the market.
The regulation of insurance in India started in the year 1912 by the establishment of India life assurance act which was implemented to enable the government to collect all relevant statistical information’s related to all form of insurance being conducted by Indian & foreign companies. The nationalization of life insurance sector started in the year 1956 by the establishment of life corporation of India. Later on, the nationalization of general insurance was done in the year 1972 by amalgamating 107 insurers. The growth of the insurance sector has seen a paradigm shift since the date of its inception. Several amendments had been made & regulations have been devised in order to control the business & also to work in favor of the clients. The gradual & steady growth in the sector leads to the formation of a committee under the chairmanship of former governor of RBI who can regulate & see the reforms in the sector. The recent development under the chairmanship of RBI governor in the year 1993 proposed that the private sector should be allowed to enter into the insurance sector. It was also proposed in the report that in case any foreign company wants to do business, then they will have to do a joint venture or collaboration with the Indian company.
The recommendations of former RBI governor committee were well taken & that led to the development of IRDA which is now the supreme authority for regulating the insurance sector.