The Life Insurance Corporation Act, 1956

Most Indians know a life policy by one name, and on the bond of that policy sits a promise that the Government of India itself will pay if the insurer cannot. That promise comes from a short section of the Life Insurance Corporation Act, 1956, the statute that took every life insurer in the country into one public corporation. Why was the business nationalised, what does the Corporation do, and what happened to its monopoly?

In two minutes

The Life Insurance Corporation Act 1956 nationalised life insurance by transferring the controlled business of all insurers to a statutory Corporation (ss.3, 7, 30), with the general duty to carry on life insurance business to the best advantage of the community (s.6), Central Government guarantee of policy sums (s.37) and an exclusive privilege that ended with the IRDA Act 1999 (s.30A).

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