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Lic Ii
Lic Ii
Praveen
Introduction to the act
Act passed by parliament on june 18, 1956
Came into effect from july1,1956
Lic of india is a body corporate having
prepectual succession
common seal
Having the powers
to acquire, hold and dispose of property
can sue and be sued by its own name
Objectives of LIC of India
It collects the savings of the people through life policies and invests
the fund in a variety of investments.
It invests the funds in profitable investments so as to get good return.
Hence the policy holders get benefits in the form of lower rates of
premium and increased bonus. In short, LIC is answerable to the
policy holders.
It subscribes to the shares of companies and corporations. It is a
major shareholder in a large number of blue chip companies.
It provides direct loans to industries at a lower rate of interest. It is
giving loans to industrial enterprises to the extent of 12% of its total
commitment.
It provides refinancing activities through SFCs in different states and
other industrial loangiving institutions.
It has provided indirect support to industry through subscriptions to
shares and bonds of financial institutions such as IDBI, IFCI, ICICI,
SFCs etc. at the time when they required initial capital. It also directly
subscribed to the shares of Agricultural Refinance Corporation and
SBI.
It gives loans to those projects which are important for national
economic welfare. The socially oriented projects such as
electrification, sewage and water channelising are given priority by
the LIC.
It nominates directors on the boards of companies in which it makes
its investments.
It gives housing loans at reasonable rates of interest.
It acts as a link between the saving and the investing process. It
generates the savings of the small savers, middle income group and
the rich through several schemes.
Formerly LIC has played a major role in the Indian capital market. To
stabilise the capital market it has underwritten capital issues. But
recently it has moved to other avenues of financing. Now it has
become very selective in its underwriting pattern.
Importance Of Insurance