In the early 1950s, New India had hit its stride and business growth was at its peak. By 1955 it had General insurance premium of R5 crore. In 1954 its Life premium was R5.6 crore.
If that points to quantity, New India was diligent in ensuring the quality of its business as well. Persistency of Life insurance policies, that is, unbroken renewal without lapsation, is much talked of today. Way back in 1952, New India was already monitoring this. Lapsation norms were laid down and a veritable network of bank tie-ups was created across the country to make premium payment easy for the customer.
As on March 31, 1954, the Life Department’s valuation surplus was R1.57 crore. It had declared policy bonuses ranging from R14 to 16 per annum to its policyholders. It was at this highpoint that, on January 19, 1956, the Government passed the Life Insurance (Emergency Provisions) Ordinance, 1956 enabling it to take over all Life insurance business
in India.
New India had built up its Life insurance business to become the second largest Life insurer in India only to lose it all to nationalisation. Its revenue came down by more than half. Of its total funds of R30 crore, only R7.5 crore was to be retained, the rest being the Life Fund.
The properties and people related to the Life insurance business also went to Life Insurance Corporation of India (LIC), formed by an Act of Parliament to be the sole Life insurance company in the country, a status it would retain for four-and-a-half decades until the private sector was allowed into the industry in the year 2000.