A committee was set up in _____ under the chairmanship of R.N. Malhotra, former Governor of the Reserve Bank of India, to make recommendations for reforms in the insurance sector.
Show answer & explanation
Correct answer: B
Explanation
The correct answer is Option 2: 1993.
Explanation:
- In 1993, to formulate a framework for reforms in the Indian insurance sector, the Government of India constituted a committee chaired by the former Governor of the Reserve Bank of India, R.N. Malhotra.
- Malhotra Committee (1993): This committee submitted its report in 1994.
- Key Recommendations: * Opening up the insurance sector to private companies.
- Allowing foreign promoters to form Joint Ventures with Indian companies.
- Establishing an independent regulatory body.
- Outcome: Based on the recommendations of this committee, the Insurance Regulatory and Development Authority (IRDA)—now known as IRDAI—was constituted in 1999.
Important Facts Related to the Insurance Sector (Quick Revision):
- Establishment of LIC: September 1, 1956 (Nationalization of Life Insurance).
- Establishment of GIC: 1972 (Nationalization of General Insurance).
- Headquarters of IRDAI: Hyderabad.
- FDI Limit in the Insurance Sector: Currently, the limit for Foreign Direct Investment (FDI) in the insurance sector is 74%.
Important Questions for Upcoming Examinations:
Question: Which sector is the Malhotra Committee associated with?
Answer: Reforms in the insurance sector.
Question: When did the insurance regulatory body in India (IRDAI) receive statutory status?
Answer: In April 2000 (under the IRDA Act, 1999).
Question: Who is the current Chairperson of IRDAI?
Answer: Debasish Panda.