Indian economy and industry has undergone significant transformation since 1991-moving away from state controlled to a competitive market economy. The most remarkable of this transformation has been noted in the financial sector, particularly, in the Indian Insurance Industry which has opened up to all competitors-integrating financial services to the global economy. IRDA was established in 1999 to protect the interest of policyholders for promoting and ensuring orderly growth of the insurance industry and for matters connected therewith and also to amend the Insurance Act 1938, LIC Act 1956 and G.I. Business Act 1972. Under IRDA Act, 1999, Indian Insurance company means, any insurer being a company which is formed and registered under the companies Act, 1956, in which the aggregate holding of equity shares by a foreign company do not exceed 26% paid up equity capital of such Indian Insurance company and whose sole purpose is to carry on life or general or re-insurance business. Enhancement of this 26% to 49% is at higher level discussion stage. FDI cannot be viewed from the financial perspective alone. It brings experience sharing, technology up gradation, specialized skills, better operational efficiency, improved perceptions by reinsurance companies, and faster evolution of industry. Since Indian Insurance market is getting integrated into Global Insurance Industry, we must analyze and understand the prospects of Insurance business in India in the light of following trends as described and in tabular forms.
