Insurance in India is regulated only by the Central Government and is available for a wide variety of contingent situations. Read on to know more.

The history of insurance in India goes back to several thousand years. Insurance has its roots in the following works – Manusmrithi (written by Manu), Dharmashastra (written by Yagnavalkya), and even Arthashastra (written by Kautilya). These works speak of the pooling of resources that can be distributed in times of need or calamities like fire or flood. This probably was the earliest root of modern-day insurance. There is also evidence that Indians in ancient times practiced the concepts of marine trade loans and carriers’ contracts. Insurance practices in India have not only been drawn from ancient times but also heavily adapted from British practices. 

Principles of Insurance

There are six fundamental principles of insurance. They are:

Insurable Interest: 

The right to insure by an insurer arises out of a payment that is made by the insured to the insurer and is legal

Utmost good faith: 

This is the endeavor to disclose all facts in good faith to the insurer

Proximity cause:

An active and efficient cause that a chain of events could lead to without intervention


Indemnification by the insurer to the insured to ensure that the insured would be in the same state before the calamity


Transfer of right to the insurer once the claim is paid


The right of the insurer to bear equally, the responsibility to the insured by another party of choice by the insurer

History of Insurance in Modern India

The history of insurance in modern times in India goes back to 1818 when the Oriental Life Insurance was set up in modern-day Kolkata. There is evidence to point to its failure in 1834. Another company was set up in Madras Presidency in 1829 by the name Madras Equitable to supply life insurance which was restricted only to the Madras Presidency. There was the British Insurance Act that was enacted in 1870 that saw the birth of Bombay Mutual in 1871, Oriental in 1874, and Empire of India in 1897. These three companies were operational in the Bombay Presidency. It was during this time that foreign companies did active business in India. Some of the popular insurance companies running in India at the time were Albert Life Assurance, Royal Insurance, Liverpool, and London Globe Insurance. The Indian insurance companies found the going rather hard at that time due to strong competition from the foreign players. 

Insurance Regulatory and Development Authority 

The Insurance Regulatory and Development Authority was constituted in the year 2000. This is a regulatory authority that was constituted to regulate and develop the insurance industry in the country. 

With the opening of the insurance industry, foreign companies can also enter the Indian market with a 26% stake partnering with an Indian operator. With this opening of the market, 34 companies are offering general insurance products and 24 life insurance companies.

Types of Insurance

Fundamentally there are only two types of insurance – life insurance and general insurance. 

General insurance is the coverage that is provided for other than the death of the individual.  Under general insurance, the following types of insurance are available: Health Insurance, Motor Insurance, Home Insurance, Fire Insurance, and Travel Insurance. General insurance is that type of insurance that covers liabilities that are created due to the operation of a bike, car, or any other vehicle. It also covers losses due to a fire, earthquake, riot, etc. The losses that can be covered include loss to home, health, and similar.

Life insurance covers against the unfortunate event of death or disability of the insured. Under life insurance, the following types of insurance are available: Term life insurance, Whole life insurance, Endowment plans, Unit-linked insurance plans, child plans, and pension plans. 


Insurance offers protection in most unfortunate events that occur to us like loss of life or disability. There are sound principles on which insurance is offered, these are the six fundamental principles of insurance. There are different types of insurance in India and primarily life and General insurance. There are different policies under each. In India the insurance industry is regulated by the Insurance Regulatory and Development Authority.