Anil Project Amit

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HDFC Standard Life

Insurance


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Today there are many insurance products available in the market. Each company

has its set of products that it offers to the customers. This makes it difficult to keep track

of all the products all the time. A better way to understand them is by way of

classification. All insurance products can be classified in 4 basic categories.

This classification is based on the needs of the customers. Accordingly each of

these categories has an end need to be satisfied and all the products coming under that

category aim to fulfill that need e.g. Products coming under Investment category aim to

provide long term real growth over the period. Thus understanding these categories will

not only help us to understand various products but also help us to position our products

strongly in a competitive market. Let us take a look at the distinctive features of each

category.

Protection type of products:A typical protection type of productaims at

protecting income-earning capacity of the customers on happening of uncertain

events mentioned above during the term of product. These are the pure risk

products having no savings element. Naturally, these products dont have any

maturity benefits. High-risk cover at low costs is the unique feature of this type

that makes this category most attractive for the prospects who want high

insurance cover without spending much for it. Usually offered for a definite term,

mainly the Term Assurances come under this type. Various riders offered by

different companies also a part of protection category. The claim is paid only if

the stipulated event happens otherwise there are no maturity values at the end of

the term. Youll also find variations when some companies offer to refund all the

premiums paid but these products still come under this category.

Protection Investment

Pension Savin s


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Investment type of products:In investment type of products, thefocus is

on maximizing returns for the customer over a period time. In a way, it is opposite

to Protection type where the focus is maximizing the risk cover. Here the risk

cover is very low. The objective is to put maximum in investments. The

underlying principle is to commit money for a certain period of time and get the

benefits of real long-term growth. The products are usually single premium

policies where the entire premium is collected in advance. Surrenders are

discouraged and there is a commitment for certain minimum no of years. In death

during the term, value of the investments is returned.

Pension products:This is another very popular type of product.Along with

the risk of an untimely death or disability, we also have a risk of living too long

outliving our source of income. In other words, one needs to ensure that he gets a

decent income even after his retirement and continues to get it as long as he lives!

This is where we have pension products addressing the need for a comfortable

retirement. One can opt for an immediate pension or for pension at a future date

(also called as deferred pension). There is a range of options that one can have

when selecting a pension plan. There is a great amount of flexibility when it

comes to selecting a pension product. The important point to be noted is that

Pensions is a part of ones present income that he reserves for future consumption.

Every year that income is accumulated and invested. The lump sum accumulation

then is used for purchasing pension on the vesting date.

Savings type products:People like to save. Our saving rate hasbeen well

above 20% of our GDP for last few years. They save for events like childrens

marriage, education etc. Savings types of products aim to strike a good balance

between risk cover as well as returns. It acts as a protection on savings. Sum


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Table Showcasing Financial Results:

Parameters

Apr-Mar

2005-06

(Rs. Cr.)

Apr-Mar

2006-07

(Rs. Cr.) % Growth

Total received premium 668.40 1532.21 129.23

i. New Business 486.15 1028.94 111.65

ii. Renewal 182.25 503.27 176.14

Effective Premium Income

(Total) 436.08 887.30 103.47

Group Business Premium

(EPI) 49.40 135.15

173.58


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Chapter- 2

Products of HDFC Standard Life Insurance

At HDFC Standard Life, we offer a bouquet of insurance solutions to meet every need.

We cater to both, individuals as well as to companies looking to provide benefits to their

employees. This section gives you details of all our products. We have incorporated

various downloadable forms and product details so that you can make an informed choice

about buying a policy.

Forindividuals, we have a range of protection, investment, pension and savings plans that

assist and nurture dreams apart from providing protection. You can choose from a range

of products to suit your life-stage and needs.

Fororganizations, we have a host of customized solutions that range from Group Term

Insurance, Gratuity, Leave Encashment and Superannuation Products. These affordable

plans apart from providing long-term value to the employees help in enhancing goodwill

of the company.]

INDIVIDUALS

We at HDFC Standard Life realize that not everyone has the same kind of needs. Keeping

this in mind, we have a varied range of Products that you can choose from to suit all your

needs. These will help secure your future as well as the future of your family.

Protection Plans

You can protect your family against the loss of your income or the burden of a loan in the

event of your unfortunate demise, disability or sickness. These plans offer valuable peace

of mind at a small price.

Our Protection range includes ourTerm Assurance Plan & Loan Cover Term Assurance

Plan.
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Investment Plans

OurSingle Premium Whole of Life plan is well suited to meet your long-term investment

needs. We provide you with attractive long-term returns through regular bonuses.

Pension Plans

Our Pension Plans help you secure your financial independence even after retirement.

Our Pension range includes ourPersonal Pension Plan, Unit Linked Pension, Unit Linked

Pension Plus

Savings Plans

Our Savings Plans offer you flexible options to build savings for your future needs such

as buying a dream home or fulfilling your childrens immediate and future needs.

Our Savings range includes Endowment Assurance Plan, Unit Linked Endowment, Unit

Linked Endowment Plus, Money Back Plan, Childrens Plan, Unit Linked Youngstar,

Unit Linked Youngster Plus .

Individual products can be listed as follows:-

1-Protection Plans

=Term Assurance Plan

=Loan Cover Term Assurance Plan

2-Investment Plans

=Single Premium Whole of Life plan

=Personal Pension Plan

=Unit Linked Pension

=Unit Linked Pension Plus

3-Savings Plans

=Endowment Assurance Plan

=Unit Linked Endowment

=Unit Linked Endowment Plus
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=Money Back Plan

=Childrens Plan

=Unit Linked Youngster

=Unit Linked Youngster Plus.
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Details of these products are as under-

1-Protection Plans

Term Assurance Plan :-

"You have always ensured that your loved ones keep living a respectable life with their

heads held high. But life can be uncertain. As a prudent family man, you need to secure

your family's future and protect your pride and your family's self-respect. You need to

have a plan to take care of your family if something unfortunate were to happen to you.

With our Protection Plans, you can protect your family from uncertainties in life such as

your unfortunate death or critical illness. And ensure that your family lives a life of self-

respect and dignity even in your absence.

Protection Plans give you :

An ideal way to secure the financial future of your loved ones

High cover at a very nominal cost plus an option of adding optional benefits to

cover for other eventualities

A choice of two plans depending on your requirements

HDFC Term Assurance Plan : A pure risk cover plan, which gives you protection

against the uncertainties of life

HDFC Loan Cover Term Assurance Plan : An ideal way to cover your home loan

or any other loan liabilities

Choice of premium payment options-regular premium or a single one-time

premium

Choice of taking the plan on a single life basis or a joint life (first claim) basis.
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"You have always ensured that your loved ones keep living a respectable life with their

heads held high. But life can be uncertain. As a prudent family man, you need to secure

your family's future and protect your pride and your family's self-respect. You need to

have a plan to take care of your family if something unfortunate were to happen to you.

With our Protection Plans, you can protect your family from uncertainties in life such asyour unfortunate death or critical illness. And ensure that your family lives a life of self-

respect and dignity even in your absence

.

Our Protection Plans give you:

An ideal way to secure the financial future of your loved onesHigh cover at a very nominal cost plus an option of adding optional benefits to cover

for other eventualitiesA choice of two plans depending on your requirements HDFC Term Assurance Plan : A pure risk cover plan, which gives you

protection against the uncertainties of life

HDFC Loan Cover Term Assurance Plan : An ideal way to cover your home loan or any

other loan liabilities

Choice of premium payment options-regular premium or a single one-time premiumChoice of taking the plan on a single life basis or a joint life (first claim) basis

Highlights

Unique protection plan that helps you to safeguard your family by securing your

loan liability

Different types of loans can be covered under this


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The well- informed rightly said and proves how important investments are in todays date

and age. The question that we all fear is What about the risks attached?

GOOD NEWS for all the people who are anxious the same way! HDFC Standard Life

Insurance brings to you a safe investment plan that would take care of your savings and

nurture your earnings.

Highlights

HDFC Single Premium Whole Of Life Insurance Plan is a tailor-made

planwell suited to meet your long-term investment needs. This participating plan offers

you the following benefits:Whole of life plan aimed at providing long-term real growth of your money

Single premium investment planIn case of your unfortunate demise during the policy term, this participating (With

Profits) insurance plan will pay your family the Sum Assured and compound

Reversionary Bonuses, which are usually added annually. An additional Terminal

Bonus may be paid depending on the performance of the underlying investmentsDuring Guaranteed Surrender Periods you get the Sum Assured and all bonuses

vested as at the date of surrender

Personal pension plan

Today, you are busy climbing the ladder of success and realizing your dreams. Today,

time is with you. Just take a moment and think. Will you be able to continue at the same

pace? Will your income be the same forever? Will you be able to live life on your own

terms even after you retire?

We understand your need to build a secure future for yourself. Hence, the HDFC

Personal Pension Plan is an insurance policy that is designed to provide a post -

retirement income for life with the freedom to choose your retirement date.


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You can choose your premium, the Sum Assured and your retirement date. At the end of

the policy term, you will receive the Sum Assured plus any attaching bonus, which will

provide your post - retirement income.

The HDFC Personal Pension Plan is an insurance policy, which can benefit you in the

following ways:Provides a post retirement income in your golden years

Gives you the flexibility to plan your retirement date

Gives you tax benefits on your premiums

The plan receives simple Reversionary Bonuses, which are usually added annually. At

the end of the term, an additional Terminal Bonus may be paid depending on the

performance of the underlying investment.

Dont compromise on your self-respect, ever. Go ahead, hold your head high and enjoy

life with the HDFC Personal Pension Plan.

3 EASY STEPS TO YOUR OWN PLAN

Step 1 Choose your retirement ageStep 2 Estimate the post retirement income you require.

Step 3 Work out the premium payable with your Financial Consultant.

Unit Linked Pension


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place? Will your income be the same forever? Will you be able to live life on your own


The HDFC Unit Linked Pension is an insurance policy that is designed to provide a

retirement income for life with the freedom to maximize your investment returns. Stride

into your golden years of retirement with dignity and pride.

The HDFC Unit Linked Pension gives you:

An outstanding investment opportunity by providing a choice of thoroughly

researched and selected investmentsProvides a post retirement income for life.Gives you the flexibility to plan your retirement date.Gives you the freedom to invest premiums as per your preference.

You can choose your premium and the investment fund or funds. We will then invest

your premium, net of premium allocation charges in your chosen funds in the proportion

you specify. At the end of the policy term, you will receive the accumulated value of your

funds, which will be used to provide your pension income.

In the event of your unfortunate demise during the policy term, your spouse will receive a

cash lump sum to help him or her manage the retirement years.

Use HDFC Standard Lifes excellent investment options to maximize your savings &

secure your golden years. Dont compromise on self-respect, ever. Go ahead, hold your

head high and enjoy life with the HDFC Unit-Linked Pension.

All Unit Linked Life insurance plans are different from traditional insurance plans and

are subject to different risk factors.

HDFC Standard Life is the name of our Insurance Company and HDFC Unit Linked

Pension is the name of this plan. The name of our company and the name of our plan do

not, in any way, indicate the quality of the plan, its future prospects or returns



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Step 1 Choose your retirement age.Step 2 Choose the premium you wish to invest, based on your retirement needs.Step 3 Choose the investment fund or funds you desire.

Unit Linked Pension Plus

Lead a life of respect and dignity. Even after retirement.



pace? Will your income be the same forever? Will you be able to live life on your own


The HDFC Unit Linked Pension Plus is an insurance policy that is designed to provide a

retirement income for life with the freedom to maximize your investment returns. Stride

into your golden years of retirement with dignity and pride.

The HDFC Unit Linked Pension Plus gives you:


researched and selected investments
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RegularLoyalty Units to boost your fund value every yearProvides a post retirement income for life.Gives you the flexibility to plan your retirement date.Gives you the freedom to invest premiums as per your preference.




funds, which will be used to provide your pension income.

In the event of your unfortunate demise during the policy term, your spouse will receive a

cash lump sum to help him or her manage the retirement years.


secure your golden years. Dont compromise on self-respect, ever. Go ahead, hold your

head high and enjoy life with the HDFC Unit-Linked Pension Plus.




Pension Plus is the name of this plan. The name of our company and the name of our plan

do not, in any way, indicate the quality of the plan, its future prospects or returns.


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Endowment Assurance Plan

Secure Your Familys Financial Independence.

You have given your family the very best. And there is no reason why they should not get

the very best in the future too. As a judicious family man, your priority is to secure the

well-being of those who depend on you. Not just for today, but also in the long term.

More importantly, you have to guard your loved ones against any eventuality. How will

they sustain their way of life, so lovingly built by you, in your absence?

With ourHDFC Endowment Assurance Plan, you can ensure that your family remains

financially independent, even if you are not around. You can ensure that they live a life of

respect and dignity. Always.
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The HDFCSL Endowment Assurance Plan gives you:

An ideal way to secure your long-term financial goalsValuable protection to your family by way of lump sum payment in case of your

unfortunate death within policy termProvides lump sum payment (basic Sum Assured plus any bonus additions) on

survival up to maturity date

Very flexible benefit options and payment options

In case of your unfortunate demise during the policy term, this participating (With

Profits) insurance plan will pay your family the Sum Assured (together with the attached

bonuses) you had chosen.


the end of the term, an additional Terminal Bonus may be paid depending on the

performance of the underlying investment.


Step 1 Choose the amount of targeted savings and policy term using our Financial

Planning Tool.

Step 2 Choose from any one of the 4 additional benefit options as per your

requirement.Step 3 Work out the premium payable and Sum Assured with our Financial

Consultant.

Unit Linked Endowment

Invest in financial security and self-respect for you and your family.

You have given your family the very best. And there is no reason why they should not getthe very best in the future too. With HDFC Unit Linked Endowment, you can ensure that

your family remains financially independent, even if you are not around. You can ensure

that they live a life of respect and dignity. Always.

The HDFC Unit Linked Endowment Plan gives you:

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researched and selected investmentsValuable protection to your family in case you are not aroundFlexible benefit combinations and payment optionsFlexible additional benefit options such as critical illness coverAccess to your accumulated fund before maturity




funds.

In case of your unfortunate demise during the policy term, we will pay the greater of your

Sum Assured (less any withdrawals you have made in the two years before your claim)

and your total fund value to your family.


secure your and your familys future. We will provide financial security for your family

in your absence.


Step 1 Choose the premium you wish to invest.Step 2 Choose the amount of protection (Sum Assured) you desire.Step 3 Choose the additional plan benefits you desire.Step 4 Choose the investment fund or funds you desire.


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Unit Linked Endowment Plus

Invest in financial security and self-respect for you and your family.

You have given your family the very best. And there is no reason why they should not get

the very best in the future too. With HDFC Unit Linked Endowment Plus, you can ensure

that your family remains financially independent, even if you are not around. You can

ensure that they live a life of respect and dignity. Always.

The HDFC Unit Linked Endowment Plus gives you:


researched and selected investmentsRegularLoyalty Units to boost your fund value every year

Valuable protection to your family in case you are not aroundFlexible benefit combinations and payment options

Flexible additional benefit options such as critical illness cover

Access to your accumulated fund before maturity
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funds.

In case of your unfortunate demise during the policy term, we will pay the greater of yourSum Assured (less any withdrawals you have made in the two years before your claim)

and your total fund value to your family.


secure your and your familys future. We will provide financial security for your family

in your absence.




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Money Back Plan

Secure your financial independence. Live life on your own terms.

You have always believed in living life on your own terms. So why let the

changing realities of everyday life overwhelm you and make your aspirations take a back

seat? You can plan now to ensure that you have the necessary funds to meet your future

financial needs.

The HDFC Money Back Plan is a With Profit Plan that gives you:

LONG-TERM GOALS SHORT TERM GOALS

Provide adequate cover for Life, Critical

Illness or disability.

Buying a car

Saving for big-ticket assets like your

house.

Saving for your marriage

Saving for your childrens education Vacation abroad

Having a regular system for savings

A proportion of the basic Sum Assured as

cash lump sums at regular 5-year intervals

within the policy term (see the table given

below) an ideal way to secure your long-

term as well as short-term financial goals

A lump sum payment on survival up to

maturity date

Valuable protection to your family by way of
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lump sum payment in case of your

unfortunate death within the policy term.

This is over and above any earlier payouts

Key Benefits

Total

Policy

Term

Survival BenefitDeath

Benefit

5 Yrs. 10 Yrs. 15 Yrs. 20 Yrs. 25 Yrs. 30 Yrs.

Within

Policy

Term

10 40%

60% +

Attaching

Bonuses

- - - - 100%

Sum

Assured

+

attaching

bonuses

(Over

and

above

the

earlier

payouts).

15 30% 30%

40% +

Attaching

Bonuses

- - -

20 25% 25% 25%

25% +

Attaching

Bonuses

- -

25 20% 20% 20% 20%

20% +

Attaching

Bonuses

-

30 15% 15% 15% 15% 15%

25% +

Attaching

Bonuses


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EASY STEPS TO YOUR OWN PLAN

Step 1 Choose the amount of targeted savings and policy term using our

Financial Planning Tool.Step 2 Choose from any one of the 4 additional optional benefits as per your

requirement.Step 3 Work out the premium payable and Sum Assured with our Financial Consultant.


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Childrens Plan

Give your child the perfect start in life.

As a parent, your priority is your childs future and being able to meet your childs

dreams and aspirations. Today, providing a good education, establishing a professional

career or even a modest wedding is expensive. Costs are increasing fast. Just imagine

how much youll need when your child takes these important steps in life!

Plan today to ensure a bright future for your child. Start building savings today with our

HDFC Childrens Plan. So that your child is able to lead a life of respect and dignity with

a secured financial future.

The HDFC Children's Plan gives you:

Invaluable financial support to your childHelps you customize an ideal plan for your childProvides you multiple options for multiple benefits

The HDFC Childrens Plan is designed to secure your childs future by giving your child

(the beneficiary) a guaranteed lump sum, on maturity or in case of your unfortunate

demise, early in the policy term. The company to give you good long-term returns invests

the premiums, paid by you.


the end of the term an additional Terminal Bonus may be paid depending on the

performance of the underlying investment (See Bonuses for more details).

EASY STEPS TO YOUR OWN PLAN

Step 1 Choose the amount of targeted savings and policy term using our Financial

Planning Tool.
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Step 2 Choose any one of the 3 plan options as per your child's requirement.Step 3 Work out the premium payable and Sum Assured with our Financial

Consultant.

Unit Linked Youngster

Invest in your childs dreams, and secure your self-respect.

As a parent, your priority is your childrens future and being able to meet their dreams

and aspirations. Today, providing a good education, establishing a professional career or

even a modest wedding is expensive. Costs are increasing fast. Just imagine how much

you will need when your children take these important steps in life.

Plan today to ensure a bright future for your children. Start building savings today with

our HDFC Unit Linked Young Star so that your child is able to lead a life of respect and

dignity with a secured financial future.

The HDFC Unit Linked Young Star gives you:


researched and selected investments

Valuable protection to your child in case you are not aroundFlexible benefit combinations and payment optionsFlexible additional benefit options such as critical illness coverAccess to your accumulated fund before maturity

This means we will continue to make your savings on your behalf, in your absence. The

fund will be available for your familys use until the original Maturity Date. Use HDFC

Standard Lifes excellent investment options to maximize your savings & maximize your

childs achievements.

We will provide financial security for your child
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Young Star is the name of this plan. The name of our company and the name of our plan

do not, in any way, indicate the quality of the plan, its future prospects or returns.



Unit Linked Youngster Plus .

Invest in your childs dreams, and secure your self-respect.

As a parent, your priority is your childrens future and being able to meet their dreams

and aspirations. Today, providing a good education, establishing a professional career or

even a modest wedding is expensive. Costs are increasing fast. Just imagine how much

you will need when your children take these important steps in life. Plan today to ensure

a bright future for your children. Start building savings today with our HDFC Unit

Linked Young Star Plus so that your child is able to lead a life of respect and dignity with

a secured financial future.

The HDFC Unit Linked Young Star Plus gives you:


researched and selected investmentsRegularLoyalty Units to boost your fund value every yearValuable protection to your child in case you are not aroundFlexible benefit combinations and payment optionsFlexible additional benefit options such as critical illness coverAccess to your accumulated fund before maturity

This means we will continue to make your savings on your behalf, in your absence. The

fund will be available for your familys use until the original Maturity Date. Use HDFC
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Standard Lifes excellent investment options to maximize your savings & maximize your

childs achievements.

We will provide financial security for your child.




Young Star Plus is the name of this plan. The name of our company and the name of our

plan do not, in any way, indicate the quality of the plan, its future prospects or returns.



Group Products

One-stop shop for employee-benefit solutions

HDFC Standard Life has the most comprehensive list of products for progressive

employers who wish to provide the best and most innovative employee benefit solutions

to their employees. We offer different products for different needs of employers rangingfrom term insurance plans for pure protection to voluntary plans such as superannuation

and leave encashment.

We now offer the following group products to our esteemed corporate clients:

Group Term InsuranceGroup Variable Term Insurance


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Group Unit-Linked Plan

An investment solution that provides funding vehicle to manage corpuses with

Gratuity, Defined Benefit or Defined Contribution Superannuation or Leave

Encashment schemes of your companyAlso suitable for other employee benefit schemes such as salary saving schemes and wealth

management schemes

List of Group / Organizations product

Group Term Insurance

Group Variable Term Insurance

Gratuity

Superannuation orLeave Encashment

Group Term Insurance

Whatever the business Its the people who make it a success. Everybody requires some

type of life insurance, especially when others depend on them financially.

The Group Term Insurance (GTI) plan meets this need and serves as an ideal way for

companies to reinforce their bond with their employees. The sort of needs, you, as an

employer need to cater to could be in form of:

Employee benefits

Cover for housing or vehicle loans given by you to your employeesA GTI cover for future service gratuity liability to be taken along with the HDFC Group

Unit Linked PlanThe HDFC Group Term Insurance is a cost-effective plan that addresses these needs. In

addition you have the choice to opt for a GTI with an experience discount feature

("Profit Share"), where a discount is given on future premiums in case of favorable

claim experience (subject to group size).

The HDFC group term insurance plan will have the following structure:

One year renewable term insurance planOne master policy issued covering all members of the groupSum assured is payable on death (either due to natural causes or accidents)The plan covers death due to any cause; accidental or natural, and hence is more

comprehensive than Group Personal Accident Insurance. Several multinational

corporations, large Indian companies, foreign banks and software companies have
http://www.hdfcinsurance.com/products/grp_gtistdprop.asphttp://www.hdfcinsurance.com/products/grp_gvti.asphttp://www.hdfcinsurance.com/products/grp_gratuity.asphttp://www.hdfcinsurance.com/products/grp_superannuation.asphttp://www.hdfcinsurance.com/products/grp_leaveencash.asphttp://www.hdfcinsurance.com/products/grp_gtistdprop.asphttp://www.hdfcinsurance.com/products/grp_gtistdprop.asphttp://www.hdfcinsurance.com/products/grp_gvti.asphttp://www.hdfcinsurance.com/products/grp_gratuity.asphttp://www.hdfcinsurance.com/products/grp_superannuation.asphttp://www.hdfcinsurance.com/products/grp_leaveencash.asphttp://www.hdfcinsurance.com/products/grp_gtistdprop.asp


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already chosen the HDFC Group Term Insurance, an innovative product from HDFC

Standard Life Insurance, to protect their employees.

Optional Rider BenefitsAccidental Death BenefitTotal Permanent Disability

Total Permanent and Partial Disability BenefitCritical Illness BenefitTerminal Illness Benefit

Group Variable Term Insurance

The Group Variable Term Insurance is a tailor made insurance policy for third party

institutions. HDFC Standard Life Insurance Company will offer life insurance to

customers of one or more of the third partys specific products in order that in the event

of their death, there will be a lump sum available.The Group Variable Term Insurance:

On death, will pay a lump sum known as a sum assured. The sum assured varies

over time in order that the customer receives the cover that they needIs a group policyHas no lengthy underwriting procedureIs simple to administer

Claim Settlement process

Claim Settlements

The settlement of a claim arises due to Death of the Policyholder or due to Maturity of

the Policy.

Death Claim

In respect of a death claim an intimation regarding death of a policyholder from a

relative / nominee / or assignee is to be received.

The facts required to be submitted are:

1. Date of death,

2. Reason and Place of Death,

3. Full details of policies held by the Life assured should also be submitted.
http://www.hdfcinsurance.com/products/grp_gvti.asphttp://www.hdfcinsurance.com/products/grp_gvti.asp


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Death claims are categorized as Non-Early Death claims and Early Claims. The

procedure for processing these claims is different.

Non-early Death Claim:

Non-early Death Claims refer to death of the Life assured occurring after 3 years from

the date of commencement of policy or Date of last revival / reinstatement

If the policy is in force until death by regular payment of premiums, full sum assured is

payable along with bonus (if it is a with profit policy).

The following are the requirements for the settlement of the death claim:

Policy Document

Death Certificate from the appropriate authority

Legal evidence of Title, if the claimant is not an assignee / nominee

Abridged claim Form (3783/A)

Discharge Form in 3801, duly signed

Assignment / Reassignment deed, if any

Age proof, if age is not already admitted

Once these documents are received and if they are found in order, claim is settled and

payment is made to the person entitled to.

Early Claims:

Early Claims refer to the death of Life assured occurring within 3 years from

commencement of policy.

The following forms are to be submitted duly completed:

Claim Form B: Statement from the medical attendants who last treated the

deceased Life assured.

Claim form B1: certificate of treatment issued by the hospital authorities where

the deceased was treated last.


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Claim form E - certificate by the employer if the deceased was an employee.

Claim form C - certificate of burial/cremation signed by a person who attended

the funeral of the deceased.

Where death takes place due to accident, the death has to be reported to the police

and a FIR (First Information Report), police inquest report, and postmortem

report (if conducted only) are to be submitted.

Wherever death takes place within 2 years from Date of commencement an

enquiry is conducted to determine the genuineness of claim.

On the basis of these, the decisions to settle accidental benefits are taken.

Maturity:

If the life insured survives to the full term, then basic sum assured is payable. This

payment by the insurer to the insured on the date of maturity is called maturity payment.

In majority of the plans, full sum assured becomes payable along with Bonus as a

maturity payment, unless survivals benefits are paid earlier as in a money back policy.

At least 2 months before maturity date, information is sent to the life assured with a blank

discharge form for signature & completion by him. It is to be returned to the office along

with:

Original Policy document

Age proof if age not already submitted

Assignment /reassignment, if any.

Postdated cheques are submitted to the Life Insured on receipt of the above-mentioned

requirements.

Certain Relaxations in Settlements of the claims:


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Legally no claim is acceptable in respect of a lapsed policy or death of the Life assured

occurring within 3 years from the date of commencement of the policy. However, some

concessions are available and payment of claims are made -

If the Life assured had paid at least 3 years' premiums and thereafter if premiums

have not been paid, the nominees get proportionate paid up value. In the event of the death of the Life assured within 3 years and the policy is under

the lapsed position, nothing is payable.

Other concessions are:

If minimum 2 years premiums are paid and if death of Life assured occurs :

1. Within 3 months from the Date of first unpaid premium

Full sum assured along with bonus is payable subject to recovery of the premium

already fallen due and the premium that falls during the policy anniversary.

2. Between 3 to 6 months from fully unpaid premium

Only 50% of basic sum assured is payable. No bonus is paid and no arrears of

premium are received.

3. 6 months to 1 year from fully unpaid premium

Only notional paid up value is given

Loans On Policies

Policyholders are eligible to take loans on their policies subject to certain rules.

The policyholder has to apply for a loan in a prescribed form and submit the

Policy Bond along with the form duly completed.

The loan amount is calculated depending on the Surrender Value (SV) that the

policy would have acquired, and approximately 85% of the Surrender Value is

given as loan.


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Rate of interested charged on loans taken on insurance policies varies from

company to company and from time to time.

A policyholder can repay the loan amount either in part or in full, any time during

the term of the Policy. For LIC, the minimum repayment should be Rs. 50 and

thereafter in multiples of Rs. 10.

If the loan amount is not repaid during the term of the Policy or early claim, the

amount of loan plus interest, if any, will be deducted from the claim money

payable and the balance amount will be paid to the claimant. In case of LIC , if

the interest is not paid regularly every half year, then the interest is calculated on

compound interest basis.

If the premiums are not paid regularly, that is, if the policy is not kept in force,

there is a possibility that the loan amount along with accrued interest exceeds the

surrender value. At that stage, foreclosure action is taken on the policy.

Generally, plans for Children or special plans like Jeevan Griha and Deferred Annuity/

Pension Plans as well as Money Back Plans etc. are not eligible for loans.

Nomination:Nomination is the process of identifying a person to receive the policy

money in the event of the death of the Policyholder.

Nomination can be done at the inception of the Policy by providing details of

nominee in the proposal form. However, if the nomination is not given at the

beginning, the policyholder can give it later.

This nomination has to be effected by giving notice in a prescribed form to the

insurer and getting it endorsed on Policy Bond.

The Policyholder can do change of Nomination any time during the term of the

Policy and any number of times. For this, the policyholder has to give a notice ina prescribed form to the insurer and get it endorsed at the back of the Policy.

Further, the Policyholder can remove Nomination any time without giving prior

notice to the Nominee.

Nomination can be done only by a policyholder, who is a major, and on a policy

on his own life.


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Under Nomination, the Nominee gets only the right to receive the policy money

in the event of the death of the Policyholder.

Nomination does not pass on the property in the Policy.

If Nominee dies when the Policyholder is still surviving then the nomination

would be ineffective.

Nomination has no effect if the Policyholder is surviving.

If Nominee dies after the death of the policyholder but before receiving policy

money, then also Nomination becomes ineffective and only the Legal Heirs of the

Policyholder can claim money.

In the case of children policies, nomination is not done until the child becomes a

major. Section39 of Insurance Act 1938 governs nomination.

CHAPTER-3

INSURANCE IN INDIA

INTRODUCTION TO INSURANCE INDUSTRY

Insurance is as old as civilization. It has been developing from the family form of

insurance to mutual associations, stock exchange securities and again to state owned

organizations. Yogakshema has been the oldest term of insurance used in the Rig-

Veda for some kind of insurance.

The concept of formal insurance originated in the 12 th century in the form of

protection against financial loss to the seafarers involved in foreign trade. Growing

economic uncertainties caused by not only multiplicity of social, cultural, ethnic and

political factors but also natural calamities necessitated invention and development of

avenues capable of providing economic security to the bereaved family 8in the event of


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loss of bread earner. Thus began the concept of Life Insurance. With the development of

social security and the welfare status of the societies, the business of life insurance

assumed multidimensional. The disintegration in most of the societies, of the extended

family system, and ancient social institution, which provided a natural umbrella of

economic protection and emotional solace upon the death of the bread earner led to a

greater acceptability of the doctrine of life insurance and the growth of life insurance

industry around the globe. From a meager beginning of providing pecuniary protection

on the death earner, it has moved to become major vehicle in the financial planning for

both security and investment purpose. The industry hardly resembles 16 th or 17th century.

It would have been impossible to conceive then the development that has propelled

extensive changes in the product field, customer attitudes and market environment.

BENEFITS OF LIFE INSURANCE:

Superior To Any Other Savings Plan

Unlike any other savings plan, a life insurance policy provides full protection risk

of death. In the event of death of a policyholders, near and dear ones. In comparisons, any

other savings plan would amount to the total savings accumulated till date. If any other

incidence occurs prematurely, such savings can be much lesser than the sum assured.

Evidently, the potential financial loss to the family of the policyholder is cease able.

Encourages And Forces Thrift

A saving deposit can easily be withdrawn. The payment of life insurance

premium, however, is considered sacrosanct and is viewed with the same seriousness

as the payment of interest on a mortgage. Thus, a life insurance policy in effect brings

about compulsory savings.


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Easy Settlement And Protection Against Creditors

A life insurance policy is the only financial instrument the proceeds of which can

be protected against the claims of a creditor of the assured by effecting a valid

assignment of the policy.

Administering the Legacy for Beneficiaries

Speculative or unwise expense can quickly cause the proceeds to be squandered.

Several policies have foreseen this possibility and provide for payments over a

period of years or in a combination of installation and lump sum amount.

A Ready Marketability and Suitability for Quick Borrowings

A life insurance policy can, after a certain time period (generally 3 years), be surrendered

for a cash value. The policy is also acceptable as a security for a commercial loan, for

example a student loan, it is particularly advisable for housing loans when an acceptable

policy may also cause the lending institution to give loan at lower interest rates.

Disability Benefits

Death is not the only hazard that is insured, many policies also provide disability

benefits. Typically, these provide for waiver of future premiums and payment of monthly

installment spread over certain time period.

Accident Death Benefits

Many policies can also provide for an extra sum to be paid (typically equal to the

sum assured) if death occurs because of accident.

Tax Relief

Under the Indian tax act, the following tax relies are available

1. 30% of the premium paid can be deductible from your total income-tax

liability.


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2. 100% of the premium paid is deductible from your total taxable income.

When these benefits are factored in, it is found that most policies offer return that are

comparable/or even better than older savings modes such as PPF, NSC etc. Moreover,

the cost of insurance is very negligible.

AN OVERVIEW OF THE INDUSTRY:

Life Insurance Market in India

Many may not be aware that the life insurance industry of India is as old as it is in any

other part of the world. The first Indian life insurance company was the Oriental Life

Insurance Company, which was started in India in 1818 at Kolkata. A number of players

(Over 250 in life and about 100 in non-life) mainly with regional focus flourished all

across the country. However, the Government of India, concerned by the unethical

Standards adopted by some players against the consumers, nationalized the industry in

Two phases in 1956 (life) and in 1972 (non-life). The insurance business of the country

was then brought under two public sector companies, Life Insurance Corporation of India

(LIC) and General Insurance Corporation of India (GIC).

In line with the economic reforms that were ushered in India in early nineties, the

Government set up a Committee on Reforms (popularly called the Malhotra Committee)

In April 1993 to suggest reforms in the insurance sector. The Committee recommended

Throwing open the sector to private players to usher in competition and bring more

Choice to the consumer. The objective was to improve the penetration of insurance as a

Percentage of GDP, which remains low in India even compared to some developing

Countries in Asia.

Reforms were initiated with the passage of Insurance Regulatory and Development

Authority (IRDA) Bill in 1999. IRDA was set up as an independent regulatory authority,

which has put in place regulations in line with global norms. So far in the private sector,

POTENTIAL OF INSURANCE MARKET IN INDIA


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By any yardstick, India, with about 200 million middle class households, presents a huge

untapped potential for players in the insurance industry. Saturation of markets in many

developed economies has made the Indian market even more attractive for global

insurance majors.

With the per capita income in India expected to grow at over 6% for the next 10 years

and with improvement in awareness levels, the demand for insurance is expected to grow

at an attractive rate in India. An independent consulting company, The Monitor Group

has estimated that the life insurance market will grow from Rs.218 billion in 1998 to

Rs.1003 billion by 2008 (a compounded annual growth of 16.5%).

WINDS OF CHANGE

Reforms have marked the entry of many of the global insurance majors into the Indian

Market in the form of joint ventures with Indian companies. Some of the key names are

AIG, New York Life, Allianz, Prudential, Standard Life, Sun Life Canada and Old

Mutual. The entry of new players has rejuvenated the erstwhile monopoly player LIC,

which has responded to the competition in an admirable fashion by launching new

products and Improving service standards.

The following are the key winds of change brought about by

privatization.

Market Expansion:


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There has been an overall expansion in the market. This has been Possible due to

improved awareness levels thanks to the large number of advertising campaigns launched

by all the players. The scope for expansion is still unlimited as virtually all the players are

concentrating on large cities and towns - except by LIC to an extent there was no

significant attempt to tap the rural markets.

New Product Offerings:

There has been a plethora of new and innovative products offered by the new players,

mainly from the stable of their international partners. Customers have tremendous choice

from a large variety of products from pure term (risk) insurance to unit-linked investment

products. Customers are offered unbundled products with a variety of benefits as riders

from which they can choose. More customers are buying products and services based on

their true needs and not just traditional money-back policies, which is not considered very

appropriate for long-term protection and savings. However, there are still some key new

products yet to be introduced - e.g. health products.

Customer Service:

Not unexpectedly, this was one area that witnessed the most significant change with theentry of new players. There is an attempt to bring in international best practices in service

and operational efficiency through use of latest technologies. Advice and need based

selling is emerging through much better trained sales force and advisors. There is

improvement in response and turnaround times in specific areas such as delivery of first

policy receipt, policy document, premium notice, final maturity payment, settlement of

claims etc. However, there is a long way to go and various customer surveys indicate that

the standards are still below customer expectation levels.

Channels of Distribution:

Until two years back, the only mode of distribution of life insurance products was

through Agents. While agents continue to be the predominant distribution channel, today

a number of innovative alternative channels are being offered to consumers. Some of


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them are banc assurance, brokers, the Internet and direct marketing. Though it is too early

to predict, the wide spread of bank branch network in India could lead to banc assurance

emerging as a significant distribution mechanism.

A brief history of the Insurance sector

The business of life insurance in India in its existing form started in India in the year:

1818: with the establishment of the Oriental Life Insurance Company in Calcutta.

Some of the important milestones in the life insurance business in India are:

1912: The Indian Life Assurance Companies Act enacted as the first statute to regulate

the life insurance business.

1928: The Indian Insurance Companies Act enacted to enable the government to collect

statistical information about both life and non-life insurance businesses.1938: Earlier legislation consolidated and amended to by the Insurance Act with the

objective of protecting the interests of the insuring public.

1956: 245 Indian and foreign insurers and provident societies taken over by the central

government and nationalized. LIC formed by an Act of Parliament, viz. LIC Act,

1956, with a capital contribution of Rs. 5 crore from the Government of India.

The General insurance business in India, on the other hand, can trace its roots to the

Triton Insurance Company Ltd., the first general insurance company established in the

year

1850 in Calcutta by the British.

Some of the important milestones in the general insurance business in India are:

1907: The Indian Mercantile Insurance Ltd. set up, the first company to transact all

classes of general insurance business.

1957: General Insurance Council, a wing of the Insurance Association of India, frames a

code of conduct for ensuring fair conduct and sound business practices.

1968: The Insurance Act amended to regulate investments and set minimum solvency

margins and the Tariff Advisory Committee set up.

1972: The General Insurance Business (Nationalization) Act, 1972 nationalized the

general insurance business in India with effect from 1st January 1973.


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107 insurers amalgamated and grouped into four companies viz. the National

Insurance Company Ltd., the New India Assurance Company Ltd., the

Oriental Insurance Company Ltd. and the United India Insurance Company

Ltd. GIC incorporated as a company.

Indian insurance industry

Life Insurers: Top 10

S.No. Registration

Number

Date of

Reg.

Name of the Company

1 101 23.10.2000 HDFC Standard Life Insurance Company Ltd.

2 104 15.11.2000 Max New York Life Insurance Co. Ltd.

3 105 24.11.2000 ICICI Prudential Life Insurance Company Ltd.

4 107 10.01.2001 Kotak Mahindra Old Mutual Life Insurance Limited

5 109 31.01.2001 Birla Sun Life Insurance Company Ltd.

6 110 12.02.2001 Tata AIG Life Insurance Company Ltd.
http://www.hdfcinsurance.com/http://www.maxnewyorklife.com/http://www.iciciprulife.com/http://www.omkotakmahindra.com/http://www.birlasunlife.com/http://www.tata-aig.com/http://www.hdfcinsurance.com/http://www.maxnewyorklife.com/http://www.iciciprulife.com/http://www.omkotakmahindra.com/http://www.birlasunlife.com/http://www.tata-aig.com/


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7 111 30.03.2001 SBI Life Insurance Company Limited .

8 114 02.08.2001 ING Vysya Life Insurance Company Private Limited

9 116 03.08.2001 Bajaj Allianz Life Insurance Company Limited

10 117 06.08.2001 Metlife India Insurance Company Pvt. Ltd.

General Insurers : Top 6

S.No. Registration

Number

Date of

Registration

Name of the Company

1 102 23.10.2000 Royal Sundaram Alliance Insurance Company

Limited

2 103 23.10.2000 Reliance General Insurance Company Limited.

3 106 04.12.2000 IFFCO Tokio General Insurance Co. Ltd

4 108 22.01.2001 TATA AIG General Insurance Company Ltd.

5 113 02.05.2001 Bajaj Allianz General Insurance Company

Limited

6 115 03.08.2001 ICICI Lombard General Insurance Company

Limited.
http://www.sbilife.co.in/http://www.ingvysyalife.com/http://www.allianzbajaj.co.in/http://www.metlife.co.in/http://www.royalsundaramalliance.com/http://www.royalsundaramalliance.com/http://www.reliancegeneral.co.in/http://www.itgi.co.in/http://www.tata-aig.com/http://www.bajajallianz.co.in/http://www.bajajallianz.co.in/http://www.icicilombard.com/http://www.icicilombard.com/http://www.sbilife.co.in/http://www.ingvysyalife.com/http://www.allianzbajaj.co.in/http://www.metlife.co.in/http://www.royalsundaramalliance.com/http://www.royalsundaramalliance.com/http://www.reliancegeneral.co.in/http://www.itgi.co.in/http://www.tata-aig.com/http://www.bajajallianz.co.in/http://www.bajajallianz.co.in/http://www.icicilombard.com/http://www.icicilombard.com/


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INSURANCE BUSINEES:

Insurance business is divided into four classes:

1) Life Insurance

2) Fire Insurance

3) Marine Insurance and

4) Miscellaneous Insurance.

Life Insurers transact life insurance business; General Insurers transact the rest.

No composites are permitted as per law.

LEGISLATION (as on 1.4.2000):

Insurance is a federal subject in India. The primary legislation that deals with insurance

business in India is:

Insurance Act, 1938, and Insurance Regulatory & Development Authority Act, 1999.

INSURANCE PRODUCTS (as on 1.4.2000) (for latest information get in touch

with the current insurers website information of insurers is provided at the web page for

insurers ):

Life Insurance:

Popular Products: Endowment Assurance (Participating) and Money Back

(Participating). More than 80% of the life insurance business is from these products.


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General Insurance:

Fire and Miscellaneous insurance businesses are predominant. Motor Vehicle insurance

is compulsory.

Tariff Advisory Committee (TAC) lays down tariff rates for some of the general

insurance products (please visit website ofGIC for details)

2001

New products have been launched by life insurers. These include linked-products. For

details, please visit the websites of life insurers.

INFORMATION

About the insurance industry, the following documents may be helpful:

Malhotra Committee Report (The Report of the Committee on Reforms in the Insurance

Sector);

IRDA's First Annual Report - 2001

ENTRY OF FOREIGN PLAYERS

As a few of these players are also in different areas of financial services, the revenue

figures do not relate only to insurance related income. However, most of the global

insurance majors wish to participate in the opening up of the industry in India. Players

like ING Group, Prudential of the U.K., Standard Life, Sun Life of Canada and Zurich

Financial Services have already made an entry into the asset management business in

India. Further, a few such as AIG, Allianz and Zurich Financial Services have started
http://www.gicoi.com/http://www.gicoi.com/


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offering risk management services to Indian corporate. The entrants into the insurance

business in India can be divided into the following categories:

(i) Major international insurance groups, (ii) large private groups such as the Tatas, Birlas

and Reliance, who can enter the insurance industry on their own strength in terms of

funds, but who require technical/ managerial support from foreign participants; the

number of Indian groups belonging to this category is limited as insurance demands

substantial investment in ventures with long gestation periods. Such groups may involve

foreign insurance companies as they feel that this would be the best way to proceed, (iii)

Indian groups/companies which are not financially very strong but would still like to

enter this new field opening up. They can, however, enter the business only in joint

ventures with foreign insurance majors. The foreign majors would provide technical,

managerial and equity support. However, the amount of equity that would be required

over the years is substantial and given the fact that insurance projects have long gestation,

such groups may have difficulty in meeting fund requirements on their own at a later

date; (IV) banks and financial institutions such as State Bank of India and ICICI.

GUIDELINES FOR ENTRY OF INSURANCE

Commercial banks in India have a huge distribution network that cannot be matched by

other financial service organizations. Hence, commercial banks have been eyeing banc

assurance as a logical diversification. The Reserve Bank of India (RBI) has come out

with detailed guidelines on the entry norms of commercial banks into insurance.

For banks wanting to enter the insurance field, there are three options. Strong banks,

subject to eligibility norms, will be permitted to set up joint ventures for undertaking

insurance business with risk participation. The maximum equity contribution such a bank

would hold in the joint venture would normally be 50 per cent of the paid-up capital of

the insurance company. However, a higher level of equity contribution may be permitted,

subject to divestment of equity within the prescribed period.

Banks, which are not eligible as joint venture participants can make investments up to ten

per cent of the net worth of the bank or Rs. 50 crores, whichever is lower, in the

insurance company for providing infrastructure and services support. Such participation


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shall be treated as an investment and should be without any contingent liability for the

bank.

Finally, any scheduled commercial bank would be permitted to undertake insurance

business as agent of insurance companies on fee basis, without any risk participation.

Subsidiaries of banks will also be allowed to undertake distribution of insurance products

on agency basis. However, it may be added here that marketing/ selling of insurance

products is different from banking products, hence the selling techniques will be

different.


51/106


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HDFC - Standard Life

HDFC Standard Life Insurance HDFC Standard Life

Insurance Company is a joint venture between India's

largest housing finance provider, HDFC and Europe's

largest mutual life assurance company - The Standard

Life Assurance Company (U. K).

HDFC Standard Life Insurance Company Limited is the First Private Sector Life

Insurance Company to be granted a license.

Foreign Partner: Standard Life, UK

Standard Life, UK, founded in 1825, has been at the forefront of the UK insurance

industry for 175 years by combining sound financial judgments with integrity and

reliability. It is the Largest Mutual Life company in Europe and has total assets of Rs. 5,

50,000 crore.

It is one of the very few insurance companies in the world to have received 'AAA' rating

from two of the leading international credit rating agencies, Moody's and Standard &

Poor's. Standard Life was recently voted 'Company of the Decade' in U.K. by the

Independent Brokers called IFAs.

ICICI Prudential Life Insurance

ICICI Prudential Life Insurance is a joint

venture between the ICICI Group and

Prudential plc, of the UK. ICICI started its

operations in 1955 with providing finance

for industrial development, and since then it has diversified into housing finance,

consumer finance, mutual funds to being a Virtual Universal Bank and its latest venture

Life Insurance.


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Foreign Partner:

Established in 1848, Prudential plc. of U.K. has grown to be the largest life insurance and

mutual fund company in U.K. Prudential plc. has had its presence in Asia for the past 75

years catering to over 1 million customers across 11 Asian countries.

Prudential is the largest life insurance company in the United Kingdom (Source: S&P's

UK Life Financial Digest, 1998).

ICICI and Prudential came together in 1993 to provide mutual fund products in India and

today are the largest private sector mutual fund company in India.

Their latest venture ICICI Prudential Life plans to take care of the insurance needs at

various stages of life.

OM Kotak Mahindra Life Insurance

Established in 1985 as Kotak Capital ManagementFinance promoted by Uday Kotak the company has

come a long way since its entry into corporate finance. It has dabbled in leasing, auto

finance, hire purchase, investment banking, consumer finance, broking etc. The company

got its name Kotak Mahindra as industrialists Harish Mahindra and Anand Mahindra

picked a stake in the company. Kotak Mahindra is today one of India's leading Financial

Institutions.

Old Mutual

Old Mutual plc is an international financial services group based in London with

expanding operations in life assurance, asset management, banking and general

insurance. Old Mutual is listed on the London Stock Exchange (where it is included on

the FTSE 100 Index) and also on the South African, Namibian, Malawi and Zimbabwe

stock exchanges. It has 156 years of experience in the life insurance business.

OM Kotak Mahindra


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OM Kotak Mahindra is the coming together of Kotak Mahindra Finance Ltd., and Old

Mutual plc to enter the Indian insurance arena to offer a wide range of innovative life

insurance products.

Royal Sundaram Alliance Insurance Co. Ltd

Royal Sundaram marks the coming together of Sundaram Finance; one of Indias most

respected and trusted finance companies, and Royal and Sun Alliance, one of the largest

insurance groups in the world. Royal Sundaram aims to bring the customer innovative

products, developed and delivered on par with international standards. This vision is built

on the foundation of expertise and superior service laid by the parent companies, well

known as they are of creating benchmarks in customer loyalty and satisfaction.

Sundaram Finance

Founded in 1954, Sundaram Finance is one of Indias leading finance companies. Quality

in lending, transparency in transactions, caring for the customer and commitment to be

the best, have made Sundaram Finance one of the most respected finance companies in

India. From being a leader in automobile financing, Sundaram Finance has expanded its

range of financial services and products to encompass deposits, leasing, mutual funds and

housing finance.

Tata AIG General Insurance Company

The Tata AIG joint venture is a tie up between the established Tata Group

and American International Group Inc. The Tata Group is one of the largest

and most respected industrial houses in the country, while AIG is a leading

US based insurance and financial services company with a presence in over

130 countries and jurisdictions around the world.


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Max New York Life

Max India:

Max India Limited is a multi-business corporation thathas business interests in telecom services, bulk

pharmaceuticals, electronic components and specialty

products. it is also the service-oriented businesses of

healthcare, life insurance and information technology.

New York Life:

New York Life has grown to be a Fortune 100 company and an expert in life insurance. It

was the first insurance company to offer cash dividends to policy owners. In 1894, New

York Life pioneered the then unheard-of concept of insuring women at the same rate as

men. Thereafter, it continued to introduce a series of firsts - a disability benefit clause in

1920, unemployment insurance in 1992, and complete customer care on the Web in 1998.

Today New York Life has over US billion in assets under management and over 30,000

agents and employees worldwide. The October 2000 Fortune Survey named New York

Life amongst the top three most admired life and health insurance companies worldwide.

With over 3 million policyholders, New York Life is a leading provider of insurance in a

host of countries worldwide.


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Metropolitan Life

MetLife India proudly carries a 135-year-old legacy

of helping build financial freedom for everyone.

Metropolitan Life Insurance Company ("MetLife"), a

subsidiary of MetLife, Inc. (NYSE: MET), is a

leading provider of insurance and other financial services to individual and institutional

customers. The MetLife Companies serve approximately 12 million individuals in the

U.S. and companies and institutions with 33 million employees and members, including

88 of the Fortune 100 companies. MetLife also has, through its subsidiaries and affiliates,

international insurance operations in 12 countries.

The Joint Venture

MetLife India Insurance Company Private Limited ("MetLife India") is the Indian

affiliate of Metropolitan Life Insurance Company ("MetLife"), the number one life

insurer in the U.S, based on approximately US$ 2.4 trillion in life insurance in-force as of

December 31, 2002. MetLife India was incorporated in April 2001 as a joint venture between MetLife International Holdings, Inc., The Jammu and Kashmir Bank, M.

Pallonji and Co. Private Limited and other private investors.

MetLife India benefits from its affiliated company's 135-year old expertise and track

record of establishing successful operations in emerging markets, in addition to the

unique strengths of its Indian promoters. MetLife India offers a range of innovative

products and aims to build financial freedom for everyone. MetLife India is

headquartered in Bangalore and has offices in 9 cities and an additional 1,000-outreach

points through its distribution channel partners..


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About ING Vysya Life

ING Vysya Life Insurance Company Private

Limited entered the private life insurance industry

in India in September 2001, and in a short span of 18 months has established itself as a

distinctive life insurance brand with an innovative, attractive and customer friendly

product portfolio and a professional advisor force. It also distributes products in close

cooperation with its sister company ING Vysya Bank through Bancassurance. Currently,

it has over 3000 advisors working from 22 locations across the country and over 300

employees.

ING Vysya Life Insurance Company is headquartered at Bangalore and has established a

strong presence in the cities of Delhi, Mumbai, Kolkata, Hyderabad and Chennai. In

addition ING Vysya Life operates in Vizag, Vijaywada, Mangalore, Mysore, Pune,

Nagpur, Chandigarh, Ludhiana and Jaipur.


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Chapter 4

Insurance Regulatory & Development Authority (IRDA)

GOVERNMENT REGULATION

INSURANCE REGULATORY DEVELOPMENT ACT

(IRDA):

On the recommendation of the Malhotra Committee Indian

Parliament passed Insurance Regulatory Development Act.

(IRDA) in the year 1999. Government of India has set up oninterim Insurance Regulatory Authority (IRA) for proper monitoring and control of the

insurance industry. The IRA is headed by a chairman who also controller of insurance

and Chairman of IBC.

IRDA, for the time being prohibits 100% foreign equity in insurance. It requires the

Indian promoters to invest either wholly in an insurance venture or team up with a

foreign insurer with a cap of 26% of equity for a foreign partner. The Indian promoter is

permitted to divest only after 10 years to the Indian public, through a public offering of

shares, at which tune the equity structure will provide for equal participation between the

Indian and foreign partner with a share of 26% each in the share capital. IRA is a sole

authority responsible for awarding of licenses. There is no restriction on the number of

licenses and no composite license for life & non-life business.

Composition of Authority under IRDA Act, 1999

As per the section 4 of IRDA Act' 1999, Insurance Regulatory and Development

Authority (IRDA, which was constituted by an act of parliament) specify the composition

of Authority .The Authority is a ten-member authority consists of:

a chairman

5 whole-time members

4 part-time members


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IRDA proposals for new license are:

New players should commence business within 15-18 months.

Trafficking of licenses not to be permitted and shares are not Transferable without

approval.

REPORT 2000:

(General Insurance - Reinsurance) Regulations, 2000

In exercise of the powers conferred by Sections 114A of the Insurance Act, 1938(4 of

1938), the Authority in consultation with the Insurance Advisory Committee hereby

makes the following regulations, namely:

PRELIMINARY

1. Short title and commencement

These regulations may be called the Insurance Regulatory and Development Authority

(Reinsurance) Regulations, 2000 and are issued in pursuance of Section 114 of the Act.

They shall come into force from the date of its publication in the Official Gazette.

These regulations apply to all general insurers transacting direct insurance business.

The General Insurance Company

The business of general insurance is the monopoly of General Insurance Corporation of

India (GIC), owned by the Government of India. This entity is a single organization with

four subsidiaries. GIC was incorporated as a holding company in 1992 under the General

Insurance Act, 1972. The insurance business is subject to regulations under the Insurance

Act. 1938, and General Insurance Act, 1972. Being a fully owned subsidiary of GOI, the

paid-up capital of the GIC is fully subscribed by the govt. and GIC, in turn owns fully,

the paid-up capital of its four subsidiaries.


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Before nationalization in November, 1972, a number of Indian and many foreign

companies did general insurance business in India and this business was linked with their

branches abroad. In addition, LIC, some mutual companies and cooperative societies also

offered 68 Indian (including LIC) this product In fact, on the eve of nationalisation, and

45 non-Indian entities carried out insurance business in India. Nationalization saw the

business of all

National Insurance Co. Ltd.

New India Assurance Co. Ltd.

Oriental Fire and General Insurance Co. Ltd.

United India Insurance Co. Ltd.

These organizations absorbed by the General Insurance Company (GIC) with its four

subsidiaries viz. These subsidiaries carry out the entire general insurance business in the

country and cede 20% of it to GIC through the obligatory reinsurance premium on a

quota share basis. GIC's direct business is only in the form of aviation insurance.

The general insurance business is mainly of three types:

Marine,

Fire and miscellaneous

Miscellaneous.

As of now, fire insurance contributes the largest share in the business, although its share

has been going down. Miscellaneous business has been the growth area with health

insurance assuming increasing importance in terms of potential. Marine insurance is

relatively less important in India.

Acknowledging the trend of growth in miscellaneous business, GIC has recently come

out with a host of new policies/plans/schemes. Personal Accident Policy for Visitors in

Bank Premises, Mediclaim, Householders' Comprehensive Insurance Policy, Professional

Indemnity Insurance, insurance against liability and contingency for members of stock

exchanges and joint stock companies, Rejection Insurance on marine products, Nuclear


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Insurance Pool for insurance of nuclear power plants and other nuclear related risks, hut

insurance, and Personal Accident Insurance Social Security Scheme are examples of such

policies. GIC has also become active in mutual funds and housing as GIC Mutual Fund,

GIC Grih Vitta Ltd. Floating of Loss Prevention Association of India Ltd., and the

National Insurance Academy are some of the other long term customer friendly activities.

Duties, Powers and Functions of IRDA

Section 14 of IRDA Act, 1999 lays down the duties, powers and functions of IRDA.

Subject to the provisions of this Act and any other law for the time being in force, the

Authority shall have the duty to regulate, promote and ensure orderly growth of the

insurance business and re-insurance business.

(2) Without prejudice to the generality of the provisions contained in sub-section1, the

powers and functions of the Authority shall include, -

Issue to the applicant a certificate of registration, renew, modify, withdraw,

suspend or cancel such registration;

Protection of the interests of the policy holders in matters concerning

Assigning of policy, nomination by policy holders, insurable interest,

Settlement of insurance claim, surrender value of policy and other

Terms and conditions of contracts of insurance;

Specifying requisite qualifications, code of conduct and practical training for

intermediary or insurance intermediaries and agents;

Specifying the code of conduct for surveyors and loss assessors;

Promoting efficiency in the conduct of insurance business;

Promoting and regulating professional organizations connected with the insurance

and re-insurance business;

Levying fees and other charges for carrying out the purposes of this Act;

Calling for information from, undertaking inspection of, conducting

Enquiries and investigations including audit of the insurers,


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IRDA NOTIFICATION

INSURANCE REGULATORY AND DEVELOPMENT AUTHORITY

(LICENSING OF INSURANCE AGENTS) (AMENDMENT) REGULATIONS,

2002

F.No. IRDA/Reg./ 10/2002.-- In exercise of the powers conferred by section 42 and

section 114A of the Insurance Act, 1938 (4 of 1938), the Authority, in consultation with

the Insurance Advisory Committee, hereby makes the following regulations to amend the

Insurance Regulatory and Development Authority (Licensing of Insurance Agents)

Regulations, 2000, namely:-

1 (1) These regulations may be called the Insurance Regulatory and Development

Authority (Licensing of Insurance Agents) (Amendment) Regulations, 2002.

They shall come into force on the date of their publication in the Official Gazette.

In the Insurance Regulatory and Development Authority (Licensing of Insurance Agents)Regulations, 2000, after sub-regulation 3(2), the following sub-regulations 3(3) and 3(4)

shall be added:-

(3)The designated person shall grant or renew the licence within a period of 3

months from the date of application.

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