Insurance as a concept was first discussed in India in early works like the Manusmriti, Arthashastra and Dharmashastra. Therefore it has been a part of Indian society for a very long time. The Oriental Insurance Company was the first insurance company in the country and was set up in Kolkata back in 1818. It mainly catered to the European community’s needs. In 1870, Bombay Mutual Life Assurance Society was set up as the first Indian Insurance Company. The National Insurance Company is the oldest existing insurance company in the country and it was established in 1906.
The legal framework of the insurance sector in India has run a complete circle from being unregulated to completely regulated and presently, partly deregulated. A number of legislations govern Insurance Law in the country. The first law to govern all types of insurance was the Insurance Act, 1938. It provided for strict state control over all insurance businesses. The Life Insurance Corporation then completely nationalized Life Insurance in India in 1956. The General Insurance Business (Nationalisation) Act, 1972 was brought in with the objective of nationalizing 100 general insurance companies that were then merged to form four companies headquartered in the four metropolitan cities. These were, the National Insurance Company, the New India Assurance Company, the Oriental Insurance Company and United India Insurance Company. It was not until 1999 that private insurance companies were also allowed. The Insurance Regulatory and Development Authority Act, 1999 was brought in that deregulated the insurance sector and allowed private companies to participate.