At the initial stage, the business of the Insurance in India was at the hands of private parties. After a certain period the entire business of insurance was nationalized which resulted in the monopoly of the insurance sector by a few public sector giants. Now the Government of India has again opened up this sector for private sector participation. The Insurance sector plays a very significant role in the economy. There are specific laws in India that regulate the operation of the public sector corporations carrying on insurance business. The general regulations on Insurance are contained in the Insurance Act, 1938 and the Insurance Rules, 1939. The Insurance Act, 1938 was enacted to consolidate and amend the law relating to the business of insurance in India. It provides for the registration of the insurers, qualification and other requirements for such registration. It is also provided that no insurer shall be registered unless he has a paid up capital of rupees one hundred crores, in case of a person carrying on the business of life insurance or general insurance or a paid up equity capital of rupees two hundred crores in case of a person carrying on exclusively the business as a re-insurer. Certain requirements relating to the structure of the capital of an insurer has also been provided under the act.
