Insurance Sector in India 2026: The Short Answer
India's insurance sector is regulated by the Insurance Regulatory and Development Authority of India (IRDAI), set up under the IRDA Act, 1999 and headquartered in Hyderabad. Its chairperson is Ajay Seth, who joined on 1 September 2025 (appointed for three years on 24 July 2025). The biggest recent change is the Sabka Bima Sabki Raksha (Amendment of Insurance Laws) Bill, 2025, passed by Parliament on 17 December 2025, which allows up to 100% FDI in Indian insurance companies (up from 74%).
Key takeaway for bank exams: Banking awareness sections in IBPS PO, SBI PO, RRB PO mains and insurance exams (LIC AAO, NIACL AO) regularly ask the IRDAI chairman and HQ, the FDI limit, LIC and GIC Re facts, HQs of the four public sector general insurers, the year of nationalisation and the committee that opened the sector (Malhotra Committee). All facts below are from IRDAI, PIB and Ministry of Finance releases as of October 2026.
Insurance questions sit alongside banking schemes, so revise our financial inclusion schemes in India and banking terms A to Z notes as well.
IRDAI Full Form, Chairman and Headquarters (2026)
| Fact | Detail |
|---|---|
| Full form | Insurance Regulatory and Development Authority of India |
| Set up under | IRDA Act, 1999 (on the recommendation of the Malhotra Committee) |
| Headquarters | Hyderabad, Telangana |
| Chairperson | Ajay Seth (former Finance Secretary; joined 1 September 2025) |
| Predecessor | Debasish Panda (term ended March 2025) |
| Ministry | Department of Financial Services, Ministry of Finance |
| Main laws it works under | Insurance Act, 1938; IRDA Act, 1999 |
IRDAI's role: register insurers and intermediaries, approve products, protect policyholders, set solvency and investment rules, and regulate commissions and distribution. In September 2026 it released a consultation paper on distribution reforms, including linking commissions to policy persistency.
Sabka Bima Sabki Raksha Act 2025 (100% FDI in Insurance)
| Point | Detail |
|---|---|
| Name | Sabka Bima Sabki Raksha (Amendment of Insurance Laws) Bill, 2025 |
| Passed by Parliament | 17 December 2025 (introduced in Lok Sabha on 16 December 2025) |
| Acts amended | Insurance Act, 1938; LIC Act, 1956; IRDA Act, 1999 |
| FDI limit | Raised from 74% to 100% for Indian insurance companies |
| Foreign reinsurer branches | Net owned fund requirement cut from ₹5,000 crore to ₹1,000 crore |
| New fund | Policyholders' Education and Protection Fund |
| Other changes | More powers for IRDAI, including setting caps on commissions and remuneration; one-time registration for intermediaries |
FDI history: 26% (1999 IRDA Act) → 49% (2015) → 74% (2021) → 100% (2025 amendment).
History of Insurance in India (Timeline for Exams)
| Year | Event |
|---|---|
| 1818 | Oriental Life Insurance Company, Calcutta: first life insurer in India |
| 1850 | Triton Insurance Company, Calcutta: first general insurer |
| 1912 | Indian Life Assurance Companies Act |
| 1938 | Insurance Act, 1938 (still the main law) |
| 1956 | Life insurance nationalised; LIC formed on 1 September 1956 under the LIC Act, 1956 |
| 1972 | General Insurance Business (Nationalisation) Act; GIC formed with four subsidiaries (business nationalised from 1 January 1973) |
| 1993–94 | Malhotra Committee (chaired by R. N. Malhotra) recommended opening the sector to private players and an independent regulator |
| 1999 | IRDA Act passed; private and foreign (26%) participation allowed |
| 2000 | IRDA constituted as a statutory body |
| 2022 | LIC listed on the stock exchanges after its IPO |
| 2025 | Amendment allowing 100% FDI passed |
Public Sector Insurance Companies and Their Headquarters
| Company | Type | Headquarters | Founded / formed |
|---|---|---|---|
| Life Insurance Corporation of India (LIC) | Life | Mumbai | 1956 |
| General Insurance Corporation of India (GIC Re) | National reinsurer | Mumbai | 1972 |
| The New India Assurance Co. Ltd. | General | Mumbai | 1919 |
| United India Insurance Co. Ltd. | General | Chennai | 1938 |
| The Oriental Insurance Co. Ltd. | General | New Delhi | 1947 |
| National Insurance Co. Ltd. | General | Kolkata | 1906 |
| Agriculture Insurance Company of India (AIC) | Crop insurance | New Delhi | 2002 |
| ECGC Ltd. (Export Credit Guarantee Corporation) | Export credit insurance | Mumbai | 1957 |
Memory trick: take the four in the order New India, United India, Oriental, National and think "Mumbai, Chennai, Delhi, Kolkata": the same order as the four metros on a west-south-north-east trip.
Types of Insurance in India
| Type | Covers | Examples |
|---|---|---|
| Life insurance | Death or survival of the insured | Term plan, endowment, ULIP, whole life, money-back |
| General (non-life) insurance | Property, liability, travel, motor | Motor, fire, marine, home, travel |
| Health insurance | Hospital and medical costs | Individual, family floater, critical illness |
| Reinsurance | Insurance for insurance companies | GIC Re and foreign reinsurer branches |
| Microinsurance | Low-premium cover for low-income groups | Group and microinsurance policies |
Key terms: premium (amount paid by the insured), sum assured (amount promised on a claim), nominee (person who receives the claim), claim settlement ratio (claims paid ÷ claims received), free-look period (time to return a new policy), bancassurance (banks selling insurance as corporate agents), and Insurance Ombudsman (free grievance forum under the Insurance Ombudsman Rules, 2017).
Government Insurance Schemes in India (Bank Exam List)
| Scheme | Launched | Cover |
|---|---|---|
| Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY) | 2015 | ₹2 lakh life cover for ₹436 a year (age 18–50) |
| Pradhan Mantri Suraksha Bima Yojana (PMSBY) | 2015 | ₹2 lakh accident cover for ₹20 a year (age 18–70) |
| Atal Pension Yojana (APY) | 2015 | Guaranteed pension of ₹1,000–5,000 a month from age 60 (pension, not insurance, but asked with these) |
| Pradhan Mantri Fasal Bima Yojana (PMFBY) | 2016 | Crop insurance for farmers |
| Ayushman Bharat PM-JAY | 2018 | Health cover up to ₹5 lakh per family per year |
PMJJBY and PMSBY are offered through banks and post offices, which is why they appear in bank exams. For the latest enrolment figures, see our financial inclusion schemes note.
Insurance Bodies, Councils and Training Institutes
| Body | Role | Location |
|---|---|---|
| Life Insurance Council | Industry body of life insurers | Mumbai |
| General Insurance Council | Industry body of general and health insurers | Mumbai |
| Insurance Institute of India (est. 1955) | Professional exams and training for insurance staff | Mumbai |
| National Insurance Academy | Training and research for the insurance industry | Pune |
| Council for Insurance Ombudsmen | Runs the Insurance Ombudsman offices across India | Mumbai |
Recent Insurance News for Bank Exams (2025–26)
- GST relief: individual life and health insurance policies were exempted from GST with effect from 22 September 2025 (earlier taxed at 18%).
- 100% FDI law: passed by Parliament on 17 December 2025; by October 2026, IRDAI's chairperson said two insurers had already raised foreign shareholding to 100%.
- Distribution reforms: IRDAI's September 2026 consultation paper proposes commission caps and linking agents' pay to how long policies stay in force (persistency).
- Bima Sakhi Yojana: LIC scheme launched by the Prime Minister on 9 December 2024 in Panipat, Haryana, to train women aged 18–70 (Class 10 pass) as insurance agents with a stipend.
- Insurance for All by 2047: IRDAI's stated goal of covering every citizen with life, health and property insurance by India's 100th year of independence; Bima Sugam is its planned online marketplace for buying and servicing policies.
Insurance Sector Facts: Common Exam Traps
- IRDAI HQ is Hyderabad, not Mumbai or New Delhi. LIC and GIC Re are in Mumbai.
- LIC was formed in 1956; general insurance was nationalised in 1972 (effective 1973).
- Malhotra Committee (insurance reforms) is different from the Narasimham Committee (banking reforms).
- FDI in insurance is now up to 100% after the 2025 amendment; older books still say 74%.
- GIC Re is the national reinsurer, not a direct general insurer.
Insurance Sector in India Quiz (Practice Questions with Answers)
- Where is the headquarters of IRDAI? Answer: Hyderabad.
- Who is the chairperson of IRDAI (October 2026)? Answer: Ajay Seth.
- Up to what level is FDI allowed in Indian insurance companies after the 2025 amendment? Answer: 100%.
- Which committee recommended opening the insurance sector to private companies? Answer: Malhotra Committee (1993–94).
- When was LIC established? Answer: 1 September 1956.
- Where is the headquarters of United India Insurance? Answer: Chennai.
- Which company is India's national reinsurer? Answer: GIC Re (General Insurance Corporation of India), Mumbai.
- What is the annual premium of PMSBY? Answer: ₹20.
- Under which Act was IRDAI set up? Answer: IRDA Act, 1999.
- Which public sector general insurer is headquartered in Kolkata? Answer: National Insurance Co. Ltd.
For timed practice, take the SBI PO Mains Banking Awareness Mock Test 01 and the IBPS PO Mains Banking Awareness Mock Test 01.
Insurance Sector in India FAQs
Who regulates the insurance sector in India?
The Insurance Regulatory and Development Authority of India (IRDAI), a statutory body set up under the IRDA Act, 1999, with its headquarters in Hyderabad.
Who is the current chairman of IRDAI?
Ajay Seth, a former Finance Secretary, appointed for three years on 24 July 2025. He joined IRDAI on 1 September 2025.
What is the FDI limit in insurance in India?
Up to 100% after the Sabka Bima Sabki Raksha (Amendment of Insurance Laws) Bill, 2025, passed by Parliament on 17 December 2025. The earlier limit was 74%.
When was insurance nationalised in India?
Life insurance was nationalised in 1956, when LIC was formed. General insurance was nationalised under the General Insurance Business (Nationalisation) Act, 1972, with effect from 1 January 1973.
What are the four public sector general insurance companies?
The New India Assurance (Mumbai), United India Insurance (Chennai), The Oriental Insurance (New Delhi) and National Insurance (Kolkata).
What is bancassurance?
It is the sale of insurance policies through banks, which act as corporate agents of insurance companies and earn a commission.
Practice Next
- Mock tests: SBI PO Mains Banking Awareness Mock Test 01 and IBPS PO Mains Banking Awareness Mock Test 01, plus IBPS Clerk Mains General Awareness Mock Test 01, Banking Acts Banking Awareness Quiz 01.
- Related notes: financial inclusion schemes in India, banks headquarters and taglines 2026, banking terms A to Z and monetary policy tools of RBI.
- Exam details: SBI Clerk 2026 notification.
- Browse all study notes.