The Indian insurance sector operates under the statutory oversight of the Insurance Regulatory and Development Authority of India (IRDAI), established pursuant to the Insurance Regulatory and Development Authority Act, 1999 (Act No. 41 of 1999). Evolving from the nationalization milestones of the Life Insurance Corporation Act, 1956 (unifying 245 private entities into LIC on September 1, 1956) and the General Insurance Business (Nationalisation) Act, 1972 (creating GIC and four operating subsidiaries), comprehensive market deregulation commenced following the R.N. Malhotra Committee Report of 1994. Headquartered in Hyderabad since 2001, IRDAI administers the Insurance Act, 1938, regulating life, general, and health insurers alongside specialized reinsurers like GIC Re. Legislative amendments in 2015 and 2021 liberalized Foreign Direct Investment (FDI) thresholds from 26% to 49% and subsequently to 74% under the automatic approval route, subject to resident Indian board representation. In accordance with IRDAI prudential mandates, all insurers must maintain a minimum Solvency Ratio of 1.5 (150% of the Required Solvency Margin) to guarantee policyholder claims liquidity. Social security schemes include Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY) and Pradhan Mantri Suraksha Bima Yojana (PMSBY), while IRDAI advances the ‘Insurance for All by 2047’ roadmap through the Bima Trinity initiative.
High-yield conceptual summaries for competitive exams and rapid revision.
The Insurance Regulatory and Development Authority of India (IRDAI) was established under the IRDA Act, 1999 on recommendations of the R.N. Malhotra Committee.
IRDAI was initially constituted in New Delhi before relocating its permanent statutory headquarters to Hyderabad, Telangana in 2001.
Life Insurance Corporation of India (LIC) was established on September 1, 1956 under the LIC Act, nationalizing 245 Indian and foreign life insurers.
The General Insurance Business (Nationalisation) Act, 1972 (GIBNA) nationalized non-life insurance business in India with effect from January 1, 1973.
The four public sector general insurance companies formed under GIC were New India Assurance, National Insurance, Oriental Insurance, and United India Insurance.
General Insurance Corporation of India (GIC Re) was converted into the sole national Indian reinsurer in November 2000 under IRDAI guidelines.
The Insurance (Amendment) Act, 2021 enhanced the Foreign Direct Investment (FDI) cap in Indian insurance companies from 49% to 74% under the automatic route.
Under IRDAI prudential regulations, all insurance companies operating in India must maintain a minimum Solvency Ratio of 150% (1.5x).
Insurance penetration in India is measured as the ratio of insurance premium to Gross Domestic Product (GDP) in percentage terms.
Insurance density is calculated as the ratio of total premium collected to the total population, expressed in US dollars or Indian rupees.
Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY) offers renewable one-year life insurance coverage of ₹2 lakh for individuals aged 18 to 50 years.
Pradhan Mantri Suraksha Bima Yojana (PMSBY) provides accident and disability coverage of up to ₹2 lakh for individuals aged 18 to 70 years.
Bima Sugam is an integrated electronic marketplace designed by IRDAI as an open digital public infrastructure for insurance buying and claims settlement.
Bima Vistar is an all-in-one bundled micro-insurance product offering life, health, personal accident, and property cover for rural and semi-urban citizens.
Bima Vaahak is a women-centric dedicated distribution channel designed by IRDAI to enhance reach and insurance penetration in every gram panchayat.
What is the maximum insurance coverage per depositor provided by the Deposit Insurance and Credit Guarantee Corporation (DICGC) for bank deposits?
Verified Explanation
DICGC provides insurance cover up to ₹5 lakh per depositor (including principal and interest across all accounts in the same capacity and right) per insured bank, raised from ₹1 lakh in February 2020.
2ID: GK-BANK-00305
easyCommercial Banks, Payment Banks & SFBs
Under the Deposit Insurance and Credit Guarantee Corporation (Amendment) Act, 2021, what is the maximum bank deposit insurance coverage provided per depositor per bank?
Verified Explanation
The deposit insurance limit provided by DICGC (a wholly owned subsidiary of RBI) is ₹5 Lakh per depositor across all accounts in a bank, payable within 90 days if a bank faces moratorium or liquidation.
3ID: GK-BANK-00422
hardCommercial Banks, Payment Banks & SFBs
What is the enhanced statutory bank deposit insurance limit provided per depositor per bank (covering principal and interest) by the DICGC since 2020?
Verified Explanation
The Deposit Insurance and Credit Guarantee Corporation (DICGC), a wholly-owned subsidiary of RBI, raised the deposit insurance coverage ceiling from Rs 1 lakh to Rs 5 lakh per depositor per insured bank with effect from 4 February 2020.
4ID: GK-BANK-00169
hardHistory of Indian Banking & Nationalisation
Which regulatory body designated Life Insurance Corporation of India (LIC), General Insurance Corporation of India (GIC Re), and The New India Assurance as Domestic Systemically Important Insurers (D-SIIs)?
Verified Explanation
IRDAI identifies and designates Domestic Systemically Important Insurers (D-SIIs) — entities whose distress or failure would cause significant dislocation in the domestic financial system.
5ID: GK-BANK-00203
easyCommercial Banks, Payment Banks & SFBs
Under the DICGC (Amendment) Act, 2021, within what statutory time limit must the Deposit Insurance and Credit Guarantee Corporation disburse insured deposits (up to ₹5 Lakh) to depositors when a bank is placed under moratorium?
Verified Explanation
The DICGC (Amendment) Act, 2021 mandates that depositors must receive access to their insured deposit amount (up to ₹5 Lakh per depositor) within 90 days of the RBI placing a distressed bank under moratorium/directions.
6ID: GK-BANK-00433
easyCommercial Banks, Payment Banks & SFBs
What is the maximum insurance coverage provided by the Deposit Insurance and Credit Guarantee Corporation (DICGC) per depositor per insured bank?
Verified Explanation
Under the DICGC (Amendment) Act 2021, bank depositors are insured up to a maximum of ₹5 lakh (inclusive of principal and interest) across all accounts held in the same bank and capacity.
7ID: GK-BANK-00551
easyCommercial Banks, Payment Banks & SFBs
Under the Deposit Insurance and Credit Guarantee Corporation (Amendment) Act, 2021, within what maximum statutory timeframe must depositors of stressed banks under RBI moratorium be paid their insured deposit amount up to Rs 5 lakh?
Verified Explanation
The DICGC (Amendment) Act, 2021 mandates that depositors of troubled banks placed under directions or moratorium by the RBI must receive their insured deposit claim amount (up to Rs 5 lakh) within a time-bound period of 90 days.
8ID: GK-AGRI-00762
hardRural Development, Credit & Institutions
In the KCC limit assessment formula, what specific percentage of the crop cultivation cost is allocated towards repairs, maintenance of farm assets, and crop insurance?
Verified Explanation
Under the NABARD KCC guidelines, 20% of the crop cultivation limit is earmarked for repairs and maintenance expenses of farm assets along with crop insurance, ensuring comprehensive financial liquidity across farming operations.
9ID: GK-AGRI-00864
mediumRural Development, Credit & Institutions
Which digitized claim settlement module was integrated into the National Crop Insurance Portal (NCIP) in March 2023 to directly disburse PMFBY insurance claims to farmers' bank accounts?
Verified Explanation
The DigiClaim module was rolled out on the National Crop Insurance Portal (NCIP) on 23 March 2023. It automates claim processing and disburses crop insurance claim payouts electronically directly to the bank accounts of insured farmers via the Public Financial Management System (PFMS).
10ID: GK-ENV-00869
mediumEnvironmental Treaties & Laws
Enacted in the immediate aftermath of the 1984 Bhopal Gas Tragedy, the Public Liability Insurance Act, 1991 mandates that owners handling hazardous substances must take out insurance policies to provide immediate financial relief on which legal liability basis?
Verified Explanation
The Public Liability Insurance Act, 1991 was enacted to provide immediate relief to persons affected by accidents occurring while handling hazardous substances. Under Section 3 of the Act, the claimant is not required to plead or establish that the death, injury, or damage was due to any wrongful act, neglect, or default of any person; liability is strictly determined on a 'no-fault liability' basis. The Act also created the Environmental Relief Fund (ERF) to disburse claims.