With reference to the history of the insurance sector in India, consider the following statements: 1. The Life Insurance Corporation of India (LIC) was formed in 1956 following the nationalization of the life insurance business through a single Act of Parliament. 2. The nationalization of the General Insurance business in 1971 also led to the creation of the General Insurance Corporation of India (GIC), which currently functions as the sole Public Sector General Insurer in the country. Which of the statements given above is/are correct? |ForumIAS

Q. With reference to the history of the insurance sector in India, consider the following statements:
1.The Life Insurance Corporation of India (LIC) was formed in 1956 following the nationalization of the life insurance business through a single Act of Parliament.
2.The nationalization of the General Insurance business in 1971 also led to the creation of the General Insurance Corporation of India (GIC), which currently functions as the sole Public Sector General Insurer in the country.
Which of the statements given above is/are correct?

[A] 1 only

[B] 2 only

[C] Both 1 and 2

[D] Neither 1 nor 2

Answer: A

Notes:

Explanation:

Statement 1: Correct. The life insurance business was nationalized in 1956, leading to the formation of LIC.

Statement 2: Incorrect. While the general insurance business was nationalized in 1971 (General Insurance Business Nationalisation Act, 1972) and GIC was created as the holding company, GIC was subsequently converted into a reinsurance company in 2000. Today, there are several Public Sector General Insurers (e.g., New India Assurance, United India Insurance, Oriental Insurance, and National Insurance), which were subsidiaries of GIC until they were delinked.

Post-Mains Strategy Session by Mr. Ayush Sinha | ForumIAS