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{{Use dmy dates|date=May 2020}}
{{Use Indian English|date=November 2018}}
{{Infobox legislation
| short_title = Insurance Act, 1938
| legislature =
| image = Emblem of India.svg
| imagesize = 100
| long_title = An Act to consolidate and amend the law relating to the business of insurance
| citation = [http://financialservices.gov.in/Insurance/Acts/TheInsuranceAct_1938.pdf Act No. 4 of 1938]
| territorial_extent = {{flag|India}}
| enacted_by = [[Imperial Legislative Council]] <br />(Now the powers of the act rest with [[Parliament of India]])
| date_enacted =
| date_assented =
| date_signed =
| date_commenced =
| bill =
| bill_citation =
| bill_date =
| introduced_by =
| 1st_reading =
| 2nd_reading =
| 3rd_reading =
| white_paper =
| committee_report =
| amendments = 1940, 1941, 1946, 1950, 1955, 1968, 2002, 2015, 2021
| repeals =
| related =
| summary =
| keywords =
| status = amended
}}

The '''Insurance Act, 1938''' is a law originally passed in 1938 in [[British India]] to regulate the [[insurance]] sector. It provides the broad legal framework within which the industry operates.<ref name="Khan2013">{{cite book|author=M Y Khan|title=Indian Financial System|url=https://books.google.com/books?id=qyTZAgAAQBAJ&pg=SA16-PA1|access-date=22 August 2015|year=2013|publisher=Tata McGraw-Hill Education|isbn=978-1-259-09798-0|page=16}}</ref>

==History==
Prior to the law, only the Marine Insurance Act, 1906 of [[England]] existed in British India but it only applied to marine [[insurance]]. For other insurance, the British [[common law]] was applied. This law passed in 1938 borrowed heavily from the British law and covered all sorts of insurance. In 1963, a new Marine Insurance Act for independent India was passed. This also borrowed heavily from the English Marine Insurance Act, 1906.<ref name="Pathak">{{cite book|author=Akhileshwar Pathak|title=Legal Aspects of Business, 6e|url=https://books.google.com/books?id=brycBQAAQBAJ&pg=PT557|access-date=22 August 2015|publisher=McGraw-Hill Education|isbn=978-93-392-0541-6|page=557}}</ref> The Insurance Act had resulted in the formation of Controller of Insurance, a regulatory. But following the nationalisation of major insurance companies in India, under Life Insurance of India Corporation Act, 1956 and General Insurance Business (Nationalisation) Act, 1972, its importance diminished. However, as India began allowing private companies again in the insurance sector, [[Insurance Regulatory and Development Authority of India]] was formed in 1999.<ref name="Gulati2009">{{cite book|author=Neelam C. Gulati|title=Principles of Insurance Management: A Special Focus on Developments in Indian Insurance Sector Pre And Post Liberalisation|url=https://books.google.com/books?id=V5-IB2t2_34C&pg=PA322|access-date=22 August 2015|date=1 January 2009|publisher=Excel Books India|isbn=978-81-7446-556-6|page=322}}</ref>

==Summary==
The Insurance Act has 120 sections and 8 schedules. Under it, only an Indian company, as defined and registered under [[Companies Act, 1956]], is allowed to operate in India. Its foreign entity-owned equity should not exceed 49% as of 2015. It must have a licence from [[Insurance Regulatory and Development Authority of India]].<ref name="Tyagi2007">{{cite book|author=C.L. Tyagi & Madhu Tyagi|title=Insurance Law and Practice|url=https://books.google.com/books?id=UCtxXm6E7wQC&pg=PA20|year=2007|publisher=Atlantic Publishers & Dist|isbn=978-81-269-0786-1|page=20}}</ref><ref name=Cap49>{{cite news|title=RBI notifies hike in FDI cap in insurance sector to 49%|url=http://articles.economictimes.indiatimes.com/2015-04-08/news/60942771_1_fdi-cap-insurance-sector-dipp|access-date=22 August 2015|work=[[The Economic Times]]|date=8 April 2015}}</ref>

In March 2021, The Insurance (Amendment) Bill, 2021 was passed by the [[Parliament of India]] which increased the maximum permissible [[Foreign Direct Investment]] in the insurance sector to 74%, from the previous limit of 49%.<ref>{{Cite web|url=https://zeenews.india.com/economy/fm-nirmala-sitharaman-to-move-insurance-amendment-bill-2021-in-rajya-sabha-for-passing-today-2348607.html|title=FM Nirmala Sitharaman to move Insurance (Amendment) Bill 2021 in Rajya Sabha for passing today|date=18 March 2021|website=Zee News}}</ref>

==See also==
* [[Insurance in India]]
* [[Insurance Regulatory and Development Authority of India]]

==References==
{{Reflist}}{{Financial services in India}}{{Indian legislations}}

[[Category:Insurance in India]]
[[Category:1938 in law]]
[[Category:Acts of the Parliament of India 1938]]
[[Category:Insurance legislation]]
[[Category:Financial history of India]]

Insurance Act, 1938 - Revision history

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