Departmental insurances are prevalent in different departments of the Central and State governments. The postal department of the country has its own system of insurances under which the employees of post-offices are insured, Similarly, the postal department as a carrier of goods has also provided insurance for the goods to be despatched.
These insurances are not compulsory in India. The State Governments of different states have provided life insurance to their respective employees. Apart from this, the State Governments have also provided sickness maternity, disability, medical and pension insurances to respective employees.
In India two corporations are established under separate Acts to deal with the insurance business.
(A) The Life Insurance Corporation of India Act, 1956 had provided for life insurance legislation for life insurance business conducted by the Life Insurance Corporation of India established under the said Act. It started its functions since Sept. 1, 1956. It owns all the life insurance business (including annuities) in India.
(B) The general Insurance Corporation of India established under the General Insurance Corporation of India Act, 1972 into four distinct companies which are :
(i) National Insurance Companies Ltd.
(ii) New India Insurance Companies Ltd.
(iii) Oriental Fire and General Insurance Companies Ltd. and
(iv) United India Fire and General Insurance Companies Ltd.
These companies would work separately maintaining their distinct features but they are controlled and guided by the General Insurance Corporation of India.
This is a neo-techno scheme of nationalization where the companies are also to work freely in the market.
They will suffer and gain their own losses and profits. The monopoly on the concern, may be corporation, has gone in this new technique. These companies will be subsidiary to the G.I.C. (The General Insurance Corporation).
Employees State Insurance Corporation
This corporation was established in 1948. This corporation provides social insurance to labourers of factories who are getting less than four hundred rupees per month.
They are provided a definite assistance in sickness, maternity, disability, medical expenses and assistance to dependents.
Deposit Insurance Corporation
This corporation was established in 1962. It provides protection to the depositors of a bank. In case the bank fails, the depositors can get returned their deposits up to rupees ten thousand.
Companies were established by the government according to the provision of Indian Companies Act. In 1957, export risk insurance corporation was established to insure the export risks.
The name of this company was converted to Export Credit and Guarantee Corporation in 1964. Now all the general insurance business are conducted by the said four government companies.