Life Insurance Corporation of India (LIC) was established after The Government of India passed the Life Insurance Corporation Act in 1956 in The Indian Parliament. The LIC Act 1956 elucidates the functions, management structure, auditing and accounting mechanisms of Life Insurance Corporation of India.
Going through the whole act is beyond the scope of this article. This article will be discussing the top 10 most important aspects of The LIC Act 1956.
Chapter 3 of The LIC Act states the functions of LIC. Let us go through the top 5 functions of LIC as mentioned in The LIC Act.
The powers of LIC are derived from the LIC Act 1956, passed in The Indian Parliament. Let us look at some of the most important powers of LIC.
All LIC policies are guaranteed by The Central Government of India. Not only the sum assured, but any accumulated bonus is also assured by the Government.
LIC related disputes can be handled in tribunals. These tribunals have the power equivalent of a civil court. One of the members of the tribunal must include a practicing or past High Court Judge. These tribunals will act as courts, including accepting evidence, making judgements, summoning people, and issuing commissions.
LIC must furnish important reports like audit reports, general reports, and growth reports to The Parliament of India from time to time.
The books of LIC are audited from time to time, and auditors are mandated to furnish the auditing reports to The Government of India.
The Central Government has the power to make or alter rules that ensure the smooth functioning of LIC. New rules can be laid down, and older rules can be altered by notification in the official gazette.
Over reaching regulatory powers can be exercised by LIC when it comes to recruitment, selection of agents, investments, formation of committees, and more.
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Frequently asked questions
The LIC Act was passed in 1956 by the Parliament of India.
LIC must disburse its annual report to the Central Government.
Previously, The Government of India used to appoint the auditors, but now, post its IPO, the company shareholders have the power to appoint auditors.