Sanjana Mahesh, LLM, Reva University, Bengaluru, Karnataka
ABSTRACT
Insurance is a type of risk management that is principally used to protect against the risk of a contingent and unpredictable loss. Insurance is defined as the transfer of a reasonable risk of loss from one organization to another for a consideration. Insurance is essentially a contract in which the losses of a few people are shared among a group of people who are all exposed to the same risks. It is a safeguard against financial loss as a result of an unanticipated event. In exchange for the insurer's pledge to repay or indemnify the insured in the event of a big, possibly unexpected loss, the insured assumes a guaranteed and known, relatively minor loss in the form of payment to the insurer. Insurance provides security and safety against loss in the case of a specific incident as a social security instrument. Following independence, the Life Insurance Corporation Act of 1956 and the General Insurance Business (Nationalization) Act of 1972 were established to nationalize India's life insurance and general insurance industries. On the proposal of the Malhotra Committee, the insurance sector was opened to private insurance organizations in the latter decade of the previous century. Following the privatization, both public and private sector firms were permitted to operate under the supervision of the Insurance Regulatory and Development Authority of India (IRDAI), which was constituted under the IRDAI Act of 1999. The insurance industry's liberalization, privatization, and globalization have resulted in much more fierce competition and rapid expansion. This expansion requires the establishment of an effective legal framework to regulate, promote, and assure the smooth growth of the insurance industry in India. In our country, insurance law is codified in a variety of statutes, regulations, judicial decisions, and decrees issued by quasi-judicial authorities such as the Consumer Forum. Some laws, such as the Indian Contract Act of 1872 and the Insurance Act of 1938, deal with the formulation of insurance contracts. Insurance Act 1938 and Insurance Regulatory and Development Authority of India Act, 1999 are two laws that regulate and oversee the insurance industry. Some laws address specific types of insurance, such as the Life Insurance Corporation Act of 1956, the General Insurance Business (Nationalization) Act of 1972, and the Marine Insurance Act of 1963, while others, such as the Public Liability Insurance Act of 1991 and the Motor Vehicle Act of 1988, address liability insurance. Apart from that, the IRDAI has developed many regulations to control various aspects of insurance since its beginning. The existence of a diverse set of insurance laws suggests a segmented rather than a comprehensive approach to the regulation of the insurance industry in India.
