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The General Insurance Company
The business of general
insurance is the monopoly of General Insurance Corporation of India
(GIC), owned by the Government of India. This entity is a single
organisation with four subsidiaries. GIC was incorporated as a holding
company in 1992 under the General Insurance Act, 1972. The insurance
business is subject to regulations under the Insurance Act. 1938, and
General Insurance Act, 1972. Being a fully owned subsidiary of GOI, the
paid-up capital of the GIC is fully subscribed by the govt, and GIC, in
turn owns fully, the paid-up capital of its four subsidiaries.
Before nationalisation in November, 1972, a number of Indian and many foreign companies did general insurance business in India and this business was linked with their branches abroad. In addition, this product was also offered by LIC, some mutual companies and cooperative societies In fact, on the eve of nationalisation, 68 Indian (including LIC)and 45 non-Indian entities carried out insurance business in India. Nationalisation saw the business of all these organisations absorbed by the General Insurance Company (GIC) with its four subsidiaries viz.,
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National Insurance Co. Ltd.
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New India Assurance Co. Ltd.
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Oriental Fire and General Insurance Co. Ltd.
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United India Insurance Co. Ltd.
These subsidiaries carry out the entire general insurance business in the country and cede 20% of it to GIC through the obligatory reinsurance premium on a quota share basis. GIC's direct business is only in the form of aviation insurance.
The general insurance business is mainly of three types:
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Marine,
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Fire and,
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Miscellaneous.
As of now, fire insurance contributes the largest share in the business, although its share has been going down. Miscellaneous business has been the growth area with health insurance assuming increasing importance in terms of potential. Marine insurance is relatively less important in India.
Acknowledging the trend of growth in miscellaneous business, GIC has recently come out with a host of new policies/plans/schemes. Personal Accident Policy for Visitors in Bank Premises, Mediclaim, Householders' Comprehensive Insurance Policy, Professional Indemnity Insurance, insurance against liability and contingency for members of stock exchanges and joint stock companies, Rejection Insurance on marine products, Nuclear Insurance Pool for insurance of nuclear power plants and other nuclear related risks, hut insurance, and Personal Accident Insurance Social Security Scheme are examples of such policies. GIC has also become active in mutual funds and housing as GIC Mutual Fund, GIC Grih Vitta Ltd. Floating of Loss Prevention Association of India Ltd., and the National Insurance Academy are some of the other long term customer friendly activities.