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GIC

The General Insurance Business (Nationalization) Act of 1972 nationalized the general insurance industry in India. The Government took over 55 insurance companies and merged them into four main subsidiaries owned by the General Insurance Corporation of India (GIC). In 2000, the Insurance Regulatory and Development Authority Act removed GIC's monopoly and allowed private companies to enter the market. GIC's role changed to only reinsuring policies, and in 2002 its ownership of the four subsidiaries was transferred to the Government of India.

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118 views2 pages

GIC

The General Insurance Business (Nationalization) Act of 1972 nationalized the general insurance industry in India. The Government took over 55 insurance companies and merged them into four main subsidiaries owned by the General Insurance Corporation of India (GIC). In 2000, the Insurance Regulatory and Development Authority Act removed GIC's monopoly and allowed private companies to enter the market. GIC's role changed to only reinsuring policies, and in 2002 its ownership of the four subsidiaries was transferred to the Government of India.

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darius_dsz
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The entire general insurance business in India was nationalized by the General Insurance

Business (Nationalization) Act, 1972 (GIBNA). The Government of India (GOI), through
Nationalization took over the shares of 55 Indian insurance companies and the undertakings of
52 insurers carrying on general insurance business.

General Insurance Corporation of India (GIC) was formed in pursuance of Section 9(1) of
GIBNA. It was incorporated on 22 November 1972 under the Companies Act, 1956 as a private
company limited by shares. GIC was formed for the purpose of superintending, controlling and
carrying on the business of general insurance.

As soon as GIC was formed, GOI transferred all the shares it held in the general insurance
companies to GIC. Simultaneously, the nationalized undertakings were transferred to Indian
insurance companies. After a process of mergers among Indian insurance companies, four
companies were left as fully owned subsidiary companies of GIC (1) National Insurance
Company Limited, (2) The New India Assurance Company Limited, (3) The Oriental Insurance
Company Limited, and (4) United India Insurance Company Limited

The next landmark happened on 19 April 2000, when the Insurance Regulatory and
Development Authority Act, 1999 (IRDAA) came into force. This act also introduced an
amendment to GIBNA and the Insurance Act, 1938. An amendment to GIBNA removed the
exclusive privilege of GIC and its subsidiaries for carrying on general insurance in India.

In November 2000, GIC was renotified as the Indian Reinsurer and through administrative
instruction, its supervisory role over subsidiaries was ended.

With the General Insurance Business (Nationalization) Amendment Act 2002 (40 of 2002)
coming into force from March 21, 2003 GIC ceased to be a holding company of its subsidiaries.
Their ownership was vested with the Government of India.

General Insurance Corporation of India or GIC of India was incorporated in 1972 to supervise
and control the general insurance business in India. All the general insurance companies were
merged into four main subsidiaries of GIC namely:
o National Insurance Company.
o New India Assurance Company Ltd.

o Oriental Insurance Company Ltd.

o United India Insurance Company Ltd

These four companies were renotified independent business activities in November 2000 after
the implementation of IRDA (Insurance Regulatory and development Authority) Act. In 2002,
the General Insurance Corporation of India ownership was ceased and the holding was vested to
the Government of India.
The key businesses of GIC include:

Domestic Reinsurance Business:


GIC is the only reinsurer in the domestic reinsurance sector, providing reinsurance to direct
general insurance companies. A statutory cession of 20% on every policy (subject to certain
terms) is given to GIC.

International Reinsurance:
General Insurance Corporation Of India, through its effective reinsurance services has earned
accolades as well as clientele in global trade centres especially in SAARC countries including
Maldives, Kenya, Malaysia, Mauritius, Middle East, Africa and Sri Lanka. GIC has
representative offices in London and Moscow.

Investment and Funds Management:


The investments made by GIC are strictly within the corporate policy. The management of the
funds is undertaken in house within General Insurance Corporation India.

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