LIC IPO: Here’s what you need to know about the public insurer’s history

The Government of India has filed the draft red herring prospectus (DRHP) for the Life Insurance Corporation of India (LIC) with SEBI this Sunday. As per this DRHP, the government-owned insurance company plans to have up to 31.62 crore equity shares of the face value of Rs 10 on offer through the offer for sale (OFS). There will be no fresh issue of shares and LIC’s embedded value stands at Rs 5, 39,686 crore as of September 2021.
 
How LIC was established?
 
Demand for nationalisation of the life insurance industry in India was made repeatedly but it gathered steam in 1944 when a bill to amend the Life Insurance Act, 1938 was tabled in the Legislative Assembly. It, however, took 12 years for life insurance to get nationalised in India as the life insurance sector in the country could only be nationalised by the year 1956.
 
Nationalisation took place in two stages—management of the companies was taken over via an ordinance and ownership too was taken over at a later stage by means of a bill. The Parliament passed the Life Insurance Corporation Act in June 1956. Subsequently, the Life Insurance Corporation of India (LIC) was created in September 1956.

The objective of LIC was to spread “life insurance much more widely and in particular to the rural areas with a view to reach all insurable persons in the country, providing them adequate financial cover at a reasonable cost,” according to the LIC website.
 
Major milestones in LIC's journey post establishment
 
June 1956: Life Insurance Corporation Act passed

Sept 1956: Establishment of LIC

1956: Fiji, Mauritius branches established

1960: UK branch established

1962: Pilot scheme of premium collection through post offices inaugurated

1963: Change over from calendar year to financial year adopted

1963:  First computers introduced in Mumbai and Kolkata offices

1964: Own Your Home scheme launched

1964: General insurance business begins

1965: Policy Holder’s Council set up in each division

1967: IBM 1401/1410 computer installed at Mumbai

1969-70: Rs 1,000 crore crossed in biz

1971-78: LIC Reorganisation Policy implemented by Professor Ishwar Dayal

1971: Concept of Agents’ Club introduced

1972: First Career Agents’ Branches set up

1972: LIC of India (Agents) Regulations formulated

1980: Direct Recruitment of officers begins

1980: National Insurance Academy (NIA) founded

1981: Jana Raksha Policy launched

1985-86: Rs 7,000 crore crossed in sum assured on new policies

1989: LIC (International) BSC (C) comes into existence

1989: LIC Mutual Fund launched

1989: Bahrain subsidiary established

July 1995: Online services for policyholders, agents via computer

Nov 1997: MAN and WAN networks established

2000: Nepal subsidiary established

2003: Sri Lanka branch established

2004: Premium payment via ECS and kiosks started

2007: LIC Pension Fund Limited launched

2008: Enters an agreement to implement Enterprise Document Management System (EDMS)

2008: LIC Cards Services launched

2008: LIC HFL Financial Services incorporated

2009: LIC Risk Management Department set up

2009: ‘LIC Card’ credit card launched

2010: Online paperless underwriting, SMS enquiry service for proposal status

2011: Integrated Complaint Management Service launched

2012: LIC Jeevan Akshay VI becomes first policy to be available for sale online

2012: Singapore subsidiary established

2013: Syndicate Bank inks MoU as corporate agent of LIC to sell LIC products

2014: Collection of micro-insurance premium via app launched

2015: Social security schemes like Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY), Pradhan Mantri Suraksha Bima Yojana (PMSBY) and Atal Pension Yojana (APY) launched

2015: Bangladesh subsidiary established

2016: LIC Black Diamond plan launched

2017: Enterprise Risk Management concept launched

2017: Digitisation of policy records for 29 cr customers completed

2019: Acquired 51 per cent stake in IDBI Bank

Feb 2022: LIC files DRHP for IPO
 
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