India, the one plus billion population country, has the largest number of life insurance policies in force in the world. The overall premium growth rate was around 11.96% annually, and together with banking services, it contributed around 8% to the country's GDP for the past three years from 2005-2008. Even though the world is reeling through recession, no one has doubts on the future of the insurance sector. This article deals with the past, the present and the future of the life insurance industry in India.

The evolution of insurance sector in India can be mainly divided into three stages: a) From the colonization period to the nationalization of LIC in the year 1956, b) Monopoly of LIC until 2000, c) IRDA and the period of private insurance companies. The history of the insurance sector in India has come a full circle—from being an open competitive market to nationalization and back to the liberalized market again. The objective of this article is to analyze these trends.

In India, insurance began in 1818 with life insurance being transacted by an English company, the Oriental Life Insurance Co. Ltd. The credit for being the first Indian insurance company goes to the Bombay Mutual Assurance Society Ltd., in the year 1870. This was followed by the Bharat Insurance Co., in 1876 in Delhi, the Empire of India in 1897 in Mumbai, the United India in Chennai, the National Indian and the Hindustan Cooperative in Kolkata. The Indian Life Assurance Companies Act in 1912 was the first statute to regulate the life insurance business.

The Indian Insurance Companies Act (1928) enabled the government to collect statistical information about both life and non-life insurance businesses. It was amended in the year 1938, with the objective of protecting the interests of the insuring public. (The 1939 Act, popularly known as the Insurance Act, 1938, was later amended in the year 2002).

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