Insurance Sector in India: IRDA, Products, and Penetration
TOPIC CLASSIFICATION
Subject: Indian Economy - Financial Sector
Sub-topic: Insurance Sector - IRDAI, Products, Market Structure, and Penetration
Mains GS Paper-III: Indian economy - banking, insurance, and financial market reforms.
EXAMINER REASONING
Insurance is a key component of India's financial sector reforms. Prelims tests: IRDAI (establishment year 1999, statutory status 2000), the Malhotra Committee, FDI limits (now 74% under automatic route), and regulatory structure (IRDAI vs. RBI for bancassurance). Mains questions focus on: (a) financial inclusion through insurance, (b) low penetration despite high growth - causes and remedies, (c) the role of IRDAI in consumer protection, (d) the Pradhan Mantri Fasal Bima Yojana (PMFBY) as a specific scheme. The 2024 FDI hike to 74% is the latest structural hook.
Core Concept
Structure of Indian Insurance:
| Sector | Description |
|---|---|
| Life Insurance | LIC (public) + 24 private companies |
| Non-Life (General) | 30+ companies incl. 7 public (New India, United India, National, Oriental - under consolidation) |
| Reinsurance | GIC Re (sole domestic reinsurer) |
| Health Insurance | Standalone (Star Health, Care, etc.) + composite insurers |
| IRDAI | Regulator - Insurance Regulatory and Development Authority of India... |
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