Year 2009-10

GanpatUniversity.
Project on Tata AIG Life Insurance

EXECUTIVE SUMMARY
The service industry is one of the fastest growing sectors in India today. The upcoming sectors which are really showing the graph towards upwards are Telecom, Banking, and Insurance. These sectors really have a lot of responsibility towards the economy. Amongst the above-mentioned areas insurance is one sector, which took a l ot of time in positioning itself. The insurance business of non -life companies was not much in problems but the major problem was with life insurance. Life Insurance Corporation of India had monopoly for more than 45 years, but the picture then was completely different. Previously people felt that Insurance is only for classes not formasses but now the picture is vice-versa. The same instinct that prompts modern businessmen today to secure themselves against loss and disaster existed in primitive men also. They too sought to avert the evil consequences of fire and and loss oflife and were willing to make some sort of sacrifice in order to achieve security.Though the concept of insurance is largely a development of the recent past, particularly after th e industrial era past few centuries yet its beginnings date back almost 6000 years. Life Insurance in its modern form came to India from England in the year 1818. Oriental Life Insurance Company started by Europeans in Calcutta was the first life insurance company on Indian Soil. All the insurance companies established during that period were brought up with the purpose of looking after the needs of European community and these companies were not insuring Indian natives. However, later with the efforts of eminent people like BabuMuttylal Seal, the foreign life insurance companies started insuring Indian lives. The formation of IRDA, entrance of private life insurance companies into India with one foreign partner, compulsory training of Insurance agent s etc. developments started to take place. And this was the time when these companiesstarted searching for proper channel partners whocan help the organization in expanding its network and business in India.

TABLE OF CONTENTS
SR. NO.     1 Preface Acknowledgement Executive summary Table of contents What is insurance? 1.1 Introduction A) Definition of insurance B) Classification of insurance C) Benefits / Need of insurance D) Principles of insurance 1.2 Brief history of insurance sector 1.3 Some of the milestones 1.4 Insurance sector reforms 1.5 About IRDA 1.6 Major players in life insurance & general insurance 1.7 Contribution of insurance sector in the growth of economy 2 Introduction of the insurance company visited 2.1 Company profile / History & development of the company 2.2 Mission & vision 2.3 Managing bodies 2.4 Organisation structure 2.5 Awards & achievements 3 Services 3.1 Products at the glance 3.2 Customer satisfaction 3.3 Claim settlement procedure in life / general insurance 4 Human Resource 4.1 Definition of agent 4.2 Procedure followed by an applicant to be an insurance agent 4.3 Functions / Responsibilities of agent 4.4 Remuneration system for an agent 5 Marketing 5.1 Marketing / Sales Strategies 5.2 Distribution channel 5.3 Market share of the company 6 7 Conclusion Bibiliography 64 65 59 59 63 47 50 50 50 53 PARTICULARS PAGE 4 5 6 7 8 8 8 9 11 13 15 16 17 21 27 30 30 35 35 36 37 39 39

1. WHAT IS INSURANCE?
Introduction

1.1

Insurance in its basic form is defined as A contract between two parties whereby one party called insurer undertakes in exchange for a fixed sum called premiums, to pay the other party called insured a fixed amount of money on the happening of a certain event." Insurance is basically a protection against a financial loss which can arise on the happening of an unexpected event. Insurance companies collect premiums to provide for this protection. By paying a very small sum of money a person can safeguard himself and his family financially from an unfortunate event. For Example if a person buys a Life Insurance Policy by paying a premium to the Insurance company , the family members of insured person receive a fixed compensation in case of any unfortunate e vent like death. There are different kinds of Insurance Products available such as Life Insurance , Vehicle Insurance, Home Insurance, Travel Insurance, Health or Mediclaim Insurance etc.

What is Insurance?

1.1(c)

Benefit of Insurance

The Problem of Risk in Economic and Commercial Activities can be dealt with in four ways. 1. Risk Avoidance 2. Risk Retention 3. Risk Transfer 4. Risk Minimisation

y y

Insurance is one of the most Import method of Risk Transfer. Insurance spreads the Risk among the Community and the likely Big Impact on one is reduced to Smaller Manageable Impacts on all, thus Insurance acts as a shock absorber.

A risk of trade is Insurable but a Trade Risk is not Insurable. In a Risk of Trade there can only be a loss whereas in a Trade Risk, there can be loss or gain Risks of Trade are called pure risks.

y y y

Only Economic or Financial Losses can be compensated by Insurance. The Business of Insurance is the Pooling of risk and resources. It is a technique which provides for collection of small amounts of premium from many Individuals and Firms out of which losses suffered by the few are paid. Insurers act as trustees of the Common Pool.

Insurance acts as a social security Social Shock Absorber. Solarium Fund for Hit & Run Victims of Road Accidents. PASS (Personal Accident & Social Security) scheme launched by the Govt. of India.

y y y y

Crop Insurance Schemes and other Rural Insurance covers for the Rural Masses.

What is Insurance? Insurance contributes to national wealth It contributes to a vigorous Economy and National Productivity. LIC & GIC funds formed out of the savings of People are channelled into Investments for Economic Growth. HUDCO, IDBI, IFCI, use funds siphoned from Insurance Money for lending to Entrepreneurs. Insurance protects the capital in industry It helps release the same for further Expansion.Insurance is the hand made to Commerce and Trade.

What is Insurance?

1.1(D)

Principles of Insurance

Insurance is a 'risk transfer mechanism' - it transfers the financial risks of everyday life from you to an insurance company. But only in terms of the financial consequences of risk. Without insurance, if you car was damaged, it would cost you a lot of money to fix it or to buy another one. It could cost you even more to pay for compensation to someone else involved in an accident. Insurance protects your financial interests. It cannot lighten the emotional, humanitarian and sentimental consequences of an accident. But properly used, it will protect your financial investment in your car and your legal obligations should you have an accident.

Insurable Interest Before you can insure anything, you must have a legally recognized financial interest in what you are insuring. For motor insurance, you can't take out an insurance policy on the car driven by the latest film star in the hope that it will crash and you can claim. That is nothing more than gambling. But you can insure the car you own, or drive. You would suffer financially if it is damaged or stolen and benefit from its continued existence.

Indemnity This word is used to describe the type of payment you would receive. A motor policy and a household policy are both a contract of indemnity. It means, subject to the terms of the contract, you are entitled to be put back in the same financial position after a loss as you were in before the loss. A refusal to indemnify is a refusal to pay the claim.

What is Insurance?

Contribution If there is more than one policy in force that you could claim on, you can't get payment from them both that would exceed the value of your loss.So each policy would contribute a portion of the loss. You would receive the full value of the loss but no more and the two policies would only bear part of it each.

Subrogation This is the right that your insurer has to recover from someone else where you are entitled to do so. For example, if another driver causes damage to your car, and your insurers pay for it, subrogation gives them the legal right to 'stand in your shoes' and reclaim their outlay from the responsible driver.

Proximate Cause When you seek to claim from your insurers for a property or financial loss you must show that the loss was caused as a result of a peril covered by the policy. There must be a direct relationship of cause and effect; the cause must be proximate in efficiency but not necessarily in point of time. There might for example, be a chain of causes in which each cause is the natural result of the preceding cause. It is the immediate and not the remote cause which must be considered. The full and classic definition of this principle is given in case law called 'Pawsey V Scottish Union and National Insurance Co (1908)'

What is Insurance?

1.2

History of Insurance in India

In India, insurance has a deep -rooted history. It finds mention in the writings of Manu ( Manusmrithi ), Yagnavalkya ( Dharmasastra) and Kautilya (Arthasastra). The writings talk in terms of pooling of resources that could be re-distributed in times of calamities such as fire, floods, epidemics and famine. This was probably a pre-cursor to modern day insurance. Ancient Indian history has preserved the earliest traces of insurance in the form of marine trade loans and carriers contracts. Insurance in India has evolved over time heavily drawing from other countries, England in particular. 1818 saw the advent of life insurance business in India with the establishment of the Oriental Life Insurance Company in Calcutta. This Company however failed in 1834. In 1829, the Madras Equitable had begun transacting life insurance business in the Madras Pres idency. This era, however, was dominated by foreign insurance offices which did good business in India, namely Albert Life Assurance, Royal Insurance, Liverpool and London Globe Insurance and the Indian offices were up for hard competition from the foreign companies. In 1914, the Government of India started publishing returns of Insurance Companies in India. The Indian Life Assurance Companies Act, 1912 was the first statutory measure to regulate life business. In 1928, the Indian Insurance Companies Act was enacted to enable the Government to collect statistical information about both life and non -life business transacted in India by Indian and foreign insurers including provident insurance societies. In 1938, with a view to protecting the interest of the Insurance public, the earlier legislation was consolidated and amended by the Insurance Act, 1938 with comprehensive provisions for effective control over the activities of insurers.

What is Insurance? The Insurance Amendment Act of 1950 abolished Principal Agencies. However, there were a large number of insurance companies and the level of competition was high. There were also allegations of unfair trade practices. The Government of India, therefore, decided to nationalize insurance business. An Ordinance was issued on 19 th January, 1956 nationalising the Life Insurance sector and Life Insurance Corporation came into existence in the same year. The LIC absorbed 154 Indian, 16 non -Indian insurers as also 75 provident societies245 Indian and foreig n insurers in all. The LIC had monopoly till the late 90s when the Insurance sector was reopened to the private sector. In 1972 with the passing of the General Insurance Business (Nationalisation) Act, general insurance business was nationalized with effect from 1st January, 1973. 107 insurers were amalgamated and grouped into four companies, namely National Insurance Company Ltd., the New India Assurance Company Ltd., the Oriental Insurance Company Ltd and the United India Insurance Company Ltd. The Gener al Insurance Corporation of India was incorporated as a company in 1971. Following the recommendations of the Malhotra Committee report, in 1999, the IRDA was constituted as an autonomous body to regulate and develop the insurance industry. The key objectives of the IRDA include promotion of competition so as to enhance customer satisfaction through increased consumer choice and lower premiums, while ensuring the financial security of the insurance market. The IRDA opened up the market in August 2000 with the invitation for application for registrations. Foreign companies were allowed ownership of up to 26%. The Authority has the power to frame regulations under Section 114A of the Insurance Act, 1938 and has from 2000 onwards framed various regulations companies for carrying on policyholders interests. ra nging from registration of business to protection of insurance

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What is Insurance?

11

1.3

Some of the Important Milestones in the Life Insurance

1850 1850

Non life insurance debuts with triton insurance company. Bombay mutual life assurance society is the first Indian owned life insurerance. The Indian Life Assurance Companies Act enacted as the first statute to regulate the life insurance business. The Indian Insurance Companies Act enacted to enable the

1912

1928

government to collect statistical information about both life and non life insurance businesses. Earlier legislation consolidated and amended to by the Insurance

1938

Act with the objective of protecting the interests of the insuring public. 245 Indian and foreign insurers and provident societies taken over

1956

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.

1907

The Indian Mercantile Insurance Ltd. set up, the first company to transact all classes of general insurance business. General Insurance Council, a wing of the Insurance Association of

1957

India, frames a code of conduct for ensuring fair conduct and sound business practices. The Insurance Act amended to regulate investments and set

1968

minimum solvency margins and the Tariff Advisory Committee set up. The General Insurance Business (Nationalization) Act, 1972

1972

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

What is Insurance?

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1.4

Insurance Sector Reforms

In 1993, Malhotra Committee, headed by former Finance Secretary and RBI Governor R. N. Malhotra, was formed to evaluate the Indian insurance industry and recommend its future direction. The Malhotra committee was set up with the objective of complementing the reforms initiated in the financial sector. The reforms were aimed at creating a more efficient and competitive financial system suitable for the requirements of the economy keeping in mind the structural changes currently underway and recognizing that insurance is an important part of the overall financial system where it was necessary to address the need for similar reforms In 1994, the committee submitted the report and some of the key recommendations included.

1997

Insurance regulator IRDA set up . IRDA starts giving licenses to private insurers: Kotak Life

2000

Insurance ICICI prudential and HDFC Standard Life insurance first private insurers to sell a policy.

2001

Royal Sundaram Alliance first non life insurer to sell a policy 2002 Banks allowed to sell insurance plans.

What is Insurance?

13

1.5

The Insurance Regulatory and Development Authority (IRDA)

Introduction The Insurance Act, 1938 had provided for setting up of the Controller of Insurance to act as a strong and powerful supervisory and regulatory authority for insurance. Post nationalization, the role of Controller of Insurance diminished considerably in significance since the Government owned the insurance companies. But the scenario changed with the private and foreign companies foraying in to the insurance sector. This necessitated the need for a strong, independent and autonomous Insurance Regulatory Authority was felt. As the enacting of legislation would have taken time, the then Government constituted through a Government resolution an Interim Insurance Regulatory Authority pending the enactment of a comprehensive legislation. The Insurance Regulatory and Development Authority Act, 1999 is an act to provide for the establishment of an Authority to protect the interests of holders of insurance policies, to regulate, promote and ensure orderly growth of the insurance industry and for matters connected therewith or incidental thereto and further to amend the Insurance Act, 1938, the Life Insurance Corporation Act, 1956 a nd the General insurance Business (Nationalization) Act, 1972 to end the monopoly of the Life Insurance Corporation of India (for life insurance business) and General Insurance Corporation and its subsidiaries (fo r general insurance business).

What is Insurance? The act extends to the whole of India and will come into force on such date as the Central Government may, by notification in the Official Gazette specify. Different dates may be appointed for different provisions of this Act. The Act has defined certain terms; some of the most important ones are as follows appointed day means the date on which the Authority is established under the act. Authority means the established under this Act. Interim Insurance Regulatory Authority means the Insurance Regulatory Authority set up by the Central Government through Resolution No. 17(2)/ 94-lns-V dated the 23rd January, 1996. Words and expressions used and not defined in this Act but defined in the Insurance Act, 1938 or the Life Insurance Corporation Act, 1956 or the General Insurance Business (Nationalization) Act, 1972 shall have the meanings respectively assigned to them in those Acts. A new definition of "Indian Insurance Company" has been inserted. "Indian insurance company" means any insurer being a company (a) which is formed and registered under the Companies Act, 1956 (b) in which the aggregate holdings of equity shares by a foreign company, either by itself or through its subsidiary companies or its nominees, do not exceed twenty-six per cent. Paid up capital in such Indian insurance company (c) whose sole purpose is to carry on life insurance business, general insurance business or re -insurance business. Powers and Functions of IRDA It issues the applicants in insurance arena, a certificate of registration as well as renewal, modification, withdrawal, suspension or cancellation of such registrations. It protects the interests of the policy holders in any insurance company in the matters related to the assignment of policy, nomination by policy holders, insurable interest, and resolution of insurance claim, submission value of policy and other terms and proposals in the contract.

14

What is Insurance? It also specifies obligatory credentials, code of conduct and practical instructions for mediator as well as the insurance company. Apart from this, it also defines the code of conduct for the surveyors and loss assessors involved with the insurance business. One of the major functions of IRDA includes endorsing competence in the insurance business. Apart from this, upholding and regulating professional organizations in insurance and re -insurance business is also a major duty of IRDA. IRDA is also entitled to for asking information, undertaking inspection and investigating the audit of the insurers, mediators, insurance intermediaries organizations insurance sector. It is also of concerned the with the and related to other the

15

regulation

rates,

profits,

provisions and conditions that may be offered by insurers in respect of general insurance business if it is not controlled or regulated by the Tariff Advisory Committee.It is also entitled to supervise the functioning of the Tariff Advisory Committee. IRDA specifies the terms and pattern in which books of accounts are to be maintained and statement of accounts shall be provided by insurers and other insurance mediators. It also regulates investment of funds by insurance companies as well as the maintenance of margin of solvency. It is also empowered to be involved in the arbitration of disagreements between insurers intermediaries. and intermediaries or insurance

What is Insurance? It is meant to specify the proportion of premium income of the insurer to finance policies. IRDA also specifies the share of life insurance business and general insurance business to be accepted by the insurer in the rural or social sector.

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Impact of IRDA On Indian Insurance Sector The creation of IRDA has brought revolutionary changes in the Insurance sector. In last 10 years of its establishment the insurance sector has seen tremendous growth. When IRDA came into being; only players in the insurance industry were Life Insurance Corporation of India (LIC) and General Insurance Corporation of India (GIC) , however in last decade 23 new players have emerged in the filed of insurance. The IRDA also successfully deals with any discrepancy in the insurance sector.

What is Insurance?

17

1.6

Major Copetitors of Tata AIG Life Insurance

y Life Insurance Corporation of India (LIC)

Life Insurance Corporation of India (LIC) was established on 1 September 1956 to spread the message of life insurance in the country and mobilise peoples savings for nation-building activities. LIC with its central office in Mumbai and seven zonal offices at Mumbai, Calcutta, Delhi, Chennai, Hyderabad, Kanpur and Bhopal, operates through 100 divisional offices in important cities and 2,048 branch offices. LIC has 5.59 lakh active agents spread over the country. The Corporation also transacts business abroad and has offices in Fiji, Mauritius and United Kingdom. LIC is associated with joint ventures abroad in the field of insurance, namely, Ken -India Assurance Company Limited, Nairobi; United Oriental Assurance Co mpany Limited, Kuala Lumpur; and Life Insurance Corporation (International), E.C. Bahrain. It has also entered into an agreement with the Sun Life (UK) for marketing unit linked life insurance and pension policies in U.K. In 1995-96, LIC had a total income from premium and investments of $ 5 Billion while GIC recorded a net premium of $ 1.3 Billion. During the last 15 years, LIC's income grew at a healthy average of 10 per cent as against the industry's 6.7 per cent growth in the rest of Asia (3.4 per cent in Europe, 1.4 per cent in the US). LIC has even provided insurance cover to five million people living below the poverty line, with 50 per cent subsidy in the premium rates. LIC's claims settlement ratio at 95 per cent and GIC's at 74 per cent are

What is Insurance? higher than that of global average of 40 per cent. Compounded annual growth rate for Life insurance business has been 19.22 percent per annum.

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y General Insurance Corporation of India (GIC)

The general insurance industry in India was nationalized and a government company known as General Insurance Corporation of India (GIC) was formed by the Central Government in November 1972. With effect from 1 January Indian 1973 the erstwhile 107 and foreign

insurers which were operating in the country prior to nationalization, were grouped companies, into four (i) operating National namely,

Insurance Company Limited; (ii) New India Assurance Company Limited; (iii) Oriental Insurance Company Limited; and (iv) United India Insurance Company Limited. (However, with effect from Dec'2000, these subsidiaries have been de-linked from the parent company and made as independent insurance companies). All the above four subsidiaries of GIC operate all over the country competing with one another and underwriting various classes of general insurance business except for aviation insurance of national airlines and crop insurance which is handled by the GIC. Besides the domestic market, the industry is presently operating in 17 countries directly through branches or agencies and in 14 countries through subsidiary and associate companies.

What is Insurance?

19

y Life Insurance Companies

1. Max New York Life Insurance Co. Ltd. Max New York Life Insurance Company Limited is a joint venture that brings together two large forces - Max India Limited, a multibusiness corporate, together with New York Life International, a global expert in life insurance. With their various Products and Riders, there are more than 400 product combinations to choose from. They have a national presence with a network of 57 offices in 37 cities across India. 2. ICICI Prudential Life Insurance Company Ltd. ICICI Prudential Life Insurance Company financial prudential is a joint venture and leading between ICICI Bank, a premier powerhouse plc, a

international financial services group headquartered in the United Kingdom. ICICI Prudential was amongst the first private sector insurance companies to begin operations in December 2000 after receiving approval from Insurance Regulatory Development Authority (IRDA). The company has a network of about 56,000 advisors; as well as 7 banc assurance and 150 corporate agent tie -ups. 3. Om Kotak Mahindra Life Insurance Co. Ltd. Kotak Mahindra Old Mutual Life

Insurance Ltd. is a joint venture between Kotak Mahindra Bank Ltd. (KMBL), and Old Mutual plc.

What is Insurance? 4. Birla Sun Life Insurance Company Ltd. Birla Sun Life Insurance Company is a joint venture between Aditya Birla Group and Sun Life financial Services of Canada. 5. 6. 7. 8. 9. SBI Life Insurance Company Ltd. ING Vysya Life Insurance Company Pvt. Ltd. Allianz Bajaj Life Insurance Company Ltd. Metlife India Insurance Company Pvt. Ltd. AMP SANMAR Assurance Company Ltd.

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10. Dabur CGU Life Insurance Company Pvt. Ltd.

What is Insurance?

21

y General insurance companies

1. Royal Sundaram Alliance Insurance Company Ltd. The joint venture bringing together Royal & Sun Alliance Insurance and Sundaram Finance Limited started its operations from March 2001. The company is Head Quartered at Chennai, and has two Regional Offices, one at Mumbai and another one at New Delhi. 2. Bajaj Allianz General Insurance Company Ltd. Bajaj Allianz General

Insurance Company Limited is a joint venture between Bajaj Auto Limited and Allianz AG of Germany. Both enjoy a reputation of expertise, stability and strength. Bajaj Allianz General Insurance received the Insurance Regulatory and Development Authority (IRDA) certificate of Registration (R3) on May 2nd, 2001 to conduct General Insurance business (including Health Insurance business) in India. The Company has an authorized and paid up capital of Rs 110 crores. Bajaj Auto holds 74% and the remaining 26% is held by Allianz, AG, Germany. 3. ICICI Lombard General Insurance Company Limited ICICI Lombard General

Insurance Company Limited is a joint venture between ICICI Bank Limited and the US-based $ 26 billion Fairfax Financial Holdings Limited. ICICI Bank is India's second largest bank, while Fairfax Financial

What is Insurance? Holdings is a diversified financial corporate engaged in general insurance, reinsurance, insurance claims management and investment management. Lombard Canada Ltd, a group company of Fairfax Financial Holdings Limited, is one of Canada's oldest property and casu alty insurers. ICICI Lombard General Insurance Company received regulatory approvals to commence general insurance business in August 2001. 4. Holamandalam General Insurance Company Ltd. Cholamandalam MS General Insurance Company Limited (Chola MS) is a joint venture of the Murugappa Group & Mitsui Sumitomo. Chola-MS commenced operations in October 2002 and has issued more than 1.4 lakh policies in its first calendar year of operations. The company has a pan-Indian presence with offices in Chennai, Hyderabad, Bangalore, Kochi, Coimbatore, Mumbai, Pune, Indore, Ahmedabad, Delhi, Chandigarh, Kolkata and Vizag.

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5. Reliance General Insurance Company Ltd. 6. IFFCO Tokio General Insurance Co. Ltd. 7. Export Credit Guarantee Co. Ltd. 8. HDFC-Chubb General Insurance Co. Ltd.

What is Insurance?

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1.7

Contribution to Indian Economy

Insurance is the only sector which garners long term savings Insurers are increasingly introducing innovative products to meet the specific needs of the prospective policyholders. An evolving insurance sector is of vital importance for economic growth. While encouraging savings habit it also provides a safety net to both enterprises and Individuals. Insurance Companies receive, without much default, a steady cash stream of premium or contributions to pension plans. Various actuary studies and models enable them to predict, relatively accuratel y, their expected cash outflows. Liabilities of Insurance companies being long -term or contingent in nature, liquidity is excellent and their investments are also long -term in nature. Since they offer more than the return on savings in the shape of life-cover to the investors, the rate of return guaranteed in their insurance policies is relatively low. Consequently, the need to seek high rates of returns on their investments is also low. The risk-return trade off is heavily tilted in favour of risk. As a combined result of all this, investments of insurance companies have been largely in bonds floated by GOI, PSUs, state governments, local bodies, corporate bodies and mortgages of long term nature. Generates Long term funds for infrastructure and strong positive correlation between development of capital markets and insurance/pension sector. For GDP to grow at 8 to 10%, qualitative improvement in infrastructure is essential. Estimates of funds required for development of infrastructure vary widely. An investment of 6,19,600crore is anticipat ed in

What is Insurance? the next 5 years. Tenure of funding required for infrastructure normally ranges from 10 to 20 years. The insurance industry also provides crucial financial intermediary services, transferring funds from the insured to capital investment, critical for continued economic expansion and growth, simultaneously generating long -term funds for infrastructure development. In fact infrastructure investments are ideal for asset-liability matching for life insurance companies given their l ong term liability profile. According to preliminary estimates published by the Reserve Bank of India, contribution of insurance funds to financial savings was 14.2 per cent in 2005-06, viz., 2.4 per cent of the GDP at current market prices. Development of the insurance sector is thus necessary to support continued economic transformation. Social security and pension reforms too benefit from a mature insurance industry. The insurance sector in India, which was opened up to private participation in the year 1999, has completed over seven years in a liberalized environment. With an average annual growth of 37 per cent in the first year premium in the life segment and 15.72 per cent growth in the nonlife segment, together with the largest number of life insuran ce policies in force, the potential of the Indian insurance industry is still large. Life insurance penetration in India was less than 1 per cent till 1990-91. During the 1990s, it was between 1 and 2 per cent and from 2001 it was over 2 per cent. In 2005 it had increased to 2.53 per cent.

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y Spread of financial services in rural areas and amongst socially less

privileged IRDA Regulations provide certain minimum business to be done 1. In rural areas 2. In the socially weaker sections Life Insurance offices are spread over nearly 1400 centres. Presence of representative in every tehsil deeper penetration in rural areas.

What is Insurance?

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Insurance agents numbering over 6.24 lakhs in rural areas. Policies sold in rural areas (2004 -05) - No. of policies - 55 lakhs, Sum assured 46,000 crores. Social security - No. of lives covered 2003-04 17.4 lakhs 2004-05 42.1 lakhs

y Employment generation
Life insurance industry provides increased employment opportunities. Employees in insurance sector as on 31st March, 2005 is around 2 lakhs. Many agents depend on insurance for their livelihood. No. of agents on 31st March 2004 15.59 lakhs. Brokers, corporate agents, training establishments provide extra employment opportunities. Many of these openings are in rural sectors.

Trust this would be helpful.

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2. INTRODUCTION OF THE INSURANCE COMPANY VISITED

2.1

Company Profile

Tata AIG offers exciting opportunities to learn, contribute and build careers. As a leading name in the fast-paced insurance industry, we are constantly growing and are always in search of bright talent across all levels. The Company's philosophy is strongly oriented to developing talent through larger and more enriching assignments. We recognize potential and consistent performance and our dynamic corporate culture can be summed up as "Work hard, play hard". This unique culture: gives you room to achieve, to grow and to seek new opportunities. believes opportunities will come from client needs. All we need to do is be alert as people first and professionals later. seeks to be the most innovative, the most tenacious in opening new markets and the most creative in developing new products and offering state -of-the-art services to clients, brokers and agents around the world. takes on ecommerce and technology as high priority, with intensified resources devoted to "the new economy" and internet -based technology. The kind of people who work here share the fol lowing strong characteristics.

y Integrity
Are consistently honest, follows through on commitments, stand up for their convictions, act responsibly, take accountability for their actions.

y Direction setting
Communicate a clear vision, implement strategies and plans, manage strategic objectives, control expenses, hold others accountable for results, achieve objectives with limited resources.

Introduction of the Insurance Company visited

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y Customer focus
Gather information from customers to understand their needs, anticipate customers' challenges, take action to meet customers' needs, establish goals with the customer in mind.

y Operating style
Pursue initiatives with energy and urgency, change course when appropriate, are entrepreneurial, make timely decisions , are resilient, work effectively under pressure, demonstrate a drive to win, attend to details.

y Working across boundaries

Build relationships with people in different parts of Tata AIG, communicate effectively with people at all levels, collaborates with internal and external resources to get the job done.

y Change leadership
Develop creative solutions to address business problems, encourage innovation and original thinking, support risk -taking, monitor progress toward goals, make persuasive presentations, express optimism about the future, balance multiple priorities, learns from mistakes and encourage others to do so.

y Business acumen
Solve problems by addressing root causes, identify critical information, work toward bottom-line goals, understand current issues facing Tata AIG, consider the business overall when making decisions.

Industry Revenues Employees

Insurance Under $20 Million Under 99

Introduction of the Insurance Company visited

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y History & Development of the Company

Tata-AIG Life Insurance Company is a joint venture between the Tata Group (74% equity stake) and American International Group Inc. (AIG) (26% equity stake). The company offers a broad range of life insurance products to individuals and groups. The products offered to individuals are variations of term life with or without a savings element, e.g., endowment policies and money back policies. Tata-AIG Life has been in operation since April 2001 (incorporated on A ug 23, 2000). While the company itself is relatively new, the Tata group is widely known in Indian households. The Tata Group is one of the oldest and largest industrial conglomerates in India. Established in 1868, it has interests in engineering, consumer products, chemicals, financial services, hotels, information technology and telecommunications. With over 80 companies, and with revenues close to 1.8% of the countrys GDP, the Tata brand is very well respected across the socioeconomic classes. Most importantly, it manufactures a large variety of goods that are highly visible to low-income households, like consumer goods, trucks and automobiles that bear the Tata logo. Having been around for over a century, the name Tata introduces immediate credibility in its microinsurance operations. Agents selling micro insurance products are able to assure potential clients that such a large conglomerate would have little interest in stealing their miniscule (in relative terms) premiums. AIG is the one of the worlds largest insurers. Aside from its massive pool of in-house technical capacity, it has experience working on micro insurance in Uganda.7 Although Tata is the largest shareholder in Tata -AIG, AIG manages the company with strategic guidance from AIGs Hong Kong office.

Introduction of the Insurance Company visited

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2.1(B)

Address of Registered Office

Tata AIG Life insurance Company Ltd. 1st floor, Wide Angle, Near Khari Briedge, Ahmedabad-Mehsana Highway, Mehsana - 384 002 India.

Tata AIG Life insurance Company Ltd. 6th floor,Peninsula Towers, Peninsula Corporate Park, Ganpatrao Kadam Marg, Lower Parel, Mumbai - 400 013 India.

Introduction of the Insurance Company visited

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2.1(C)

Staff Details of the Company

Mr. Tejas Modi Mr. Upendra Patel Mr. Vikas Singh Mr. Jaymeet Parmar Mr. Kirti Chaudhary Mr. Sanjay Naiya Mr. Pragnesh Patel Mr. Mitesh Acharya Mr. Satsingh Chavda Mr. Malkesh Goshai Mr. Pratik Adeshara Mr. Milap Rawal Mr. Ankit Ram Mr. Pinky Patel Mr. Vikas Singh Mr. Prashant

Branch Manager Unit Manager Unit Manager Unit Manager Unit Manager Unit Manager Unit Manager Unit Manager Unit Manager Unit Manager Unit Manager Unit Manager Unit Manager Trainer Trainer Operation Manager

2.1(D)

Time Keeping System of the Branch Visited

10:00am 7:00pm on Monday to Saturday.

Introduction of the Insurance Company visited

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2.2

Mission & Vision

Mission To win the trust of individuals, trade, industry and commerce and protect citizens, corporates, cooperatives and international investors in India.

Vision To be the industry leader by building customer satisfaction through fairness, transparency and quick response.

2.3

Managing Bodies

Chief Executive Officer(CEO) / Managing Director (MD)

Mr. Suresh Mahalingam

Executive Manager

Mr. Vivek Sood

y y y y

HR Manager -

Mr. Manjari Singal

Senior Vice Precident Apointed Actuary Head Management Development Trainer - Mr.Vijay Sinha

Introduction of the Insurance Company visited

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2.4

Organisation Structure

Chairman MD / CEO Head of Sales

Actuar HR

Training Head Sales Head Zonal Head

OPS Head

Regional Head

Area Manager

Branch Manager

Unit Manager

Advisor

Introduction of the Insurance Company visited

33

2.5

Awards & Achievement

TataAIGLifewinsLOMAawardforoutstandin gprofessionaldevelopmentofemployees Mumbai, May 31, 2004 TataAIGLifeInsuranceCompanyLtd.(Tata AIGLife)hasbeenawardedoneofthe mostprestigiousinternationalawardsintheinsuran cesectortheLOMA(LifeOffice ManagementAssociation)awardforoutstandingprofessionallifeinsuranceeducation of its Companys employees. TataAIGLifewillbepresentedthe'ExcellenceinEducation'awardi nKualaLumpur,MalaysiaonJune9,2004atLOMA'sAsiaPacificConference.TataAIGLifebag ged theawardonseveralparameters,suchas:impressivenumberoftotalenrollments(315 enrollments),achievementofa94.18percentpassrateintheLOMAexaminationsand over615.91percentgrowthinenr ollments over previous year. Mr.JoelBasarich,ManagingDirector(InternationalDivision),LOMA,hascongra tulated TATAAIGLifetobereceivingthisprestigiousawardwhile recognizing the Company as aleaderinthefield of insurance . Mr.lanJ-Watts,ManagingDirector,TataAIGLifeInsuranceCompanysaid,"Itis indeedaproudmomentforourteamatTataAIGLi fetobereceivingtheLOMAaward for'ExcellenceinEducation'.Thisawardisatestimonyofouremphasisontheoverall professionaldevelopmentofouremployeesandtheimplementationofbestpractices thatTataAIGLifehasembarkeduponintroducinginthe insurance sector in India. "TataAIGLifefocusesonextensiveeducationofitsemployeesasalsoitsdistributi on forceasweseethisasanecessaryfoundation to fulfill the diverse financial and insurance needsofourcustomersandothermembersofsociety.Thisawardalsoputsallofusat TataAIGLifeonanewagenda -wewillhavetostrivefurthertocreatenewbenchmarks for ourselves, Mr. Watts added.

Introduction of the Insurance Company visited About Loma Foundedin1924,LOMAisaninternationalassociation throughwhichmorethan1 ,250 insuranceandfinancialservicescompaniesfromover70countriesengageinresearch andeducationalactivitiestoimprovecompanyoperations . Today,LOMAhasmorethan400membercompaniesheadquarteredin70Count ries outsidetheU.S.andCanada.Allareasofthe worldarerepresented:Africa,Asia,the Caribbean,Europe,LatinAmerica,North America, Oceania, and the Pacific Region . LOMAhasahostofofferingsforinsurancecompaniesorcompaniesinFinancial services:

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y y

LOMAseducationprogramsofferovera 100 courses to professionals . LOMAsuppliesmorethan100productsandservicesdevelopedspecificallyfor themanagementandoperationalneedsoftheinsuranceandfinancialservices industry.

LOMAalsooffersconferences, seminars, and workshops for corporates.

3. SERVICE

35

3.1

Product Details

There are two types of products : 1. Traditional. 2. Ulips.

1. Tata AIG Life Comprehensive Superannuation Scheme Policy

Meaning Our traditional Superannuation product acts as a valuable tool to enhance the companys image whilst providing for a dignified retired life for the employees.

Key Features 1) 2) 3) 4) 5) Plan design and advice on Trust Formation/Deed of Variation. Actuarial valuation for Defined Benefit Scheme as per internationally accepted practices once in a year. Scheme registration and ongoing legislative compliance. Investment management and reporting to trustees. Administration services and benefit payments.

Superannuation Schemes can be of two types: 1) Defined Benefit (DB) This defines the amount of benefit that an employee receives at retirement. Actuarial valuation is conducted to determine the funding rate. A pooled fund is maintained for all members of the scheme.

36

Upon retirement of a member, the amount required to secure the benefit is drawn from the pooled fund. The pooled fund should achieve the required funding level to enable the employer to meet the benefit obligations. 2) Defined Contribution (DC) This defines the annual contribution that the employer will deposit into the scheme for each employee. Contributions are usually fixed as a percentage of the employees salary. Individual employee accounts reflecting the contributions and the interest accumulations are maintained. Upon retirement, the individual account is released to provide funds to secure the benefits under the scheme.

Benefit Payments: Upon the retirement of the member from employment or on cessation of employment, benefits, subject to the provisions of the companys rules, can be utilised in the following manner: 1) Upon Retirement To provide for payment of the commuted value relating to the portion of the pension which the member may, in accordance with the Rules, elect to commute; and / or to purchase an annuity in accordance with the companys Rules. 2) Upon Death To provide for payment of annuity/pension on the life of the beneficiary, in accordance with the Trust rules as framed by the company. Services 3) Upon Withdrawal

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1. To transfer the value of vested benefits to another Superannuation Scheme, if permissible by Trust rules framed by the respective Trustees. 2. To retain the value of the vested benefits under the policy and provide for a pension from the normal retirement date to the member or to the beneficiary in the event of death of the member prior to his retirement date. 3. To provide for immediate payment of the pension benefit in accordance with Trust rules as framed by the company. Tax Benefits under Income Tax Act, 1961: For the employer 1. Annual contributions are treated as deductible business expenses u/s 36(1)(iv) 2. Maximum ordinary annual contribution an employer can make is 27% (Provident Fund + Superannuation) of employees annual salary - Rule 87 3. Entire income of the fund is tax free u/s 10(25)(iii)

Services

2. Tata AIG Life Retirement Assure Group Gratuity SchemePolicy

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y Meaning
As per the Payment of Gratuity Act 1972, an employer is obliged to pay gratuity to an employee after he/she has rendered a continuous service of at least 5 years. Gratuity is payable to such an employee on: 1) Normal retirement 2) Resignation/early retirement Death or disablement due to accident or disease (completion of 5 years of service is not necessary in such cases).

How will the Employer/Trustee contribute to the Gratuity Scheme ? Employer/Trustee of the Gratuity Scheme shall fund for gratuity liability by: 1) Remitting the recommended contribution for the past service and an annual contribution for the future service 2) Transferring existing assets if any to Tata AIG Life based on mutually agreed asset valuation

How does the Unit Linked Gratuity Plan Structure work? 1) The Fund will be managed on a unitized basis. 2) Any contribution received will be converted into units based on the applicable fund unit price. 3) The fund value of the Gratuity Fund at any given time is based on the unit price declared at the close of business on the date on which the units are allocated.

Services

y Tax Benefits for the Employer*

1) Employers contribution to approved gratuity fund is an deductible business expenditure U/s 36(1)(v) as under:

39

2) Initial Contribution is allowed as deductible business expense to the extent of 8.33% of the member's salary for each year of employee's past service. (Rule 104) 3) Ordinary annual contributions is allowed to the extent of 8.33% of the employees salary. Interest Income on the fund is non taxable in the hands of the Trustees u/s 10(25) (iv).

Tax Benefits for the Employee* Gratuity received is exempt from tax up to half a months salary for every completed year of service or Rs. 3.5 lakhs, whichever is less u/s 10(10).

* Tax benefits are available as per the provisions of Income-tax Act, 1961 and subject to amendments thereof from time to time. To know whether you are eligible for above mentioned tax benefits, please consult your own professional advisors and Tata AIG Life Insurance Company Limited is not responsible in case you do not get any tax benefits stated above. Please note that the prevailing and applicable tax laws shall be final and conclusive on the matter and Tata AIG Life Insurance Company Limited is not responsible for the same at any time.

In Built Death Benefit 1) As part of the scheme, an additional benefit of Life Insurance Cover is included. 2) In the unfortunate event of a serving employee's death, the coverage would provide for a lump sum payment equal to sum assured depending on the life cover opted by the Trustees with a minimum of Rs. 1,000/-.

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3. Tata AIG Life Assure Golden Years Plan

y Meaning
Tata AIG Life Assure Golden Years(Assure Golden Years) is an endowment policy that provides both safety and steady returns. In the unfortunate event of your death, your dependants will receive the sum assured; otherwise your savings will continue to grow. Should you live past the term of the policy, you will receive both the sum assured as well as a host of bonuses.

y Key Features
1) A guaranteed addition of 10% of the sum assured if the policy has been in force for 10 years or more, is payable on death or maturity. 2) A reversionary bonus is payable on death or maturity. 3) A Terminal bonus paid on maturity or death if the policy has been in force for a minimum 10 years.
4)

Reversionary and Terminal bonuses are non-guaranteed and are dependent on Company performance.

y Tax Benefits, Riders and Age Eligibility

1) Premiums paid under this plan are eligible for tax benefits under Section 80C of the Income Tax Act, 1961. Any sum received under this plan is exempt from tax under section 10(10D) of the Income Tax Act, 1961.* 2) Term, Accident, Disability and Critical Illness riders are avail able for added protection. 3) Policy duration runs from the time of purchase up to age 60. 4) Policy is available for persons between 18 to 50 years of age.

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4. Tata AIG Life MahaLife Gold Plan

y Meaning
This unique policy is an ideal planning vehicle to fund your retirement. It provides a steady income and insurance coverage for life. Premiums are payable only for the first 15 years, and can be used to cover the fu ture expenses of your children.

y Key Features
1) 2) 3) A guaranteed annual coupon of 5% of the sum assured every year for the rest of the insureds term from the 10th policy anniversary. Yearly cash dividends are available from the 6th policy anniversary onwards (depending on Company performance). The entire sum assured is paid tax-free as per current Income Tax Laws.

y Tax Benefits, Riders and Age Eligibility

1) 2) The guaranteed 5% coupon and non -guaranteed cash dividends are tax free as per current Income Tax Laws. Premiums paid under this plan are eligible for tax benefits under Section 80C of the Income Tax Act, 1961. Any sum received under this plan is exempt from tax under section 10(10D) of the Income Tax Act, 1961.* 3) Disability, Accident, Term and Critical Illness riders are available for added protection at a nominal extra cost. (For juveniles, only Payor Benefit Rider is available). 4) Policy available for persons between 0 years and 60 years of age .

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5. Tata AIG Life Nirvana Plus Plan

Meaning The Tata AIG Life Nirvana Plus (Nirvana Plus) policy is Indias first and only pension policy with a guaranteed addition of 10% of the sum assured every 5 years. You can choose from three levels of cover, which is your amount of Sum Assured: Rs. 1 lakh, 2 lakhs & 4 lakhs. You can also decide the age you want to retire: 55, 58 or 60 years of age.

Key Features 1) 10% of sum assured is added to your sum assured for every 5 years of paid premiums. 2) Rs. 1 lakh will be paid directly to you should you be diagnosed with a covered critical illness (after a 30 day survival period) for first 3 years of the policy. 3) Deaths that occur during the period of the policy will result in an immediate payment of the full sum assured to your beneficiary, plus guaranteed additions and bonuses (if any). 4) Deaths that occur due to accidental causes during the plan period will result in an immediate payment of double the sum assured, plus guaranteed additions and bonuses (if any). 5) Payment of up to one third of your Sum Assured as lump sum cash upon reaching your chosen retirement age. The remainder i s used to buy a monthly income plan that will generate a monthly cash income. 6) A reversionary bonus will be declared and credited from the 6th policy anniversary onwards. 7) A terminal bonus will be paid upon maturity or death if the policy has been in force for 10 years. 8) Bonus is not guaranteed and will depend on the performance of the company.

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3.3

Claims Process in Life Insurance

y Filing a Life Insurance Claim y Claim settlement is one of the most important services that an insurance
company can provide to its customers. Insurance companies have an obligation to settle claims promptly. You will need to fill a claim form and contact the financial advisor from whom you bought your policy. Submit all relevant documents such as original death certificate and policy bond to your insurer to support your claim. Most claims are settled by issuing a cheque within 7 days from the time they receive the documents. However, if your insurer is unable to deal with all or any part of your claim, you will be notified in writing.

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y Types of claims
1) Maturity Claim
On the date of maturity life insured is required to send maturity claim / discharge form and original policy bond well before maturity date to enable timely settlement. Most companies offer/issue post dated cheques and/ or make payment through ECS credit on the maturity date. Incase of delay in settlement kindly refer to grievance redressal.

2) Death Claim (including rider claim)

In case of death claim or rider claim the following procedure should be followed.

Follow these four simple steps to file a claim:

y Claim intimation/notification
The claimant must submit the written intimation as soon as possible to enable the insurance company to initiate the claim processing. The claim intimation should consist of basic information such as policy number, name of the insured, date of death, cause of death, place of death, name of the claimant. The claimant can also get a claim intimation/notification form from the nearest local branch office of the insurance company or their insurance advisor/agent. Alternatively, some insurance companies also pro vide the facility of downloading the form from their website.

y Documents required for claim processing

The claimant will be required to provide a claimant's statement, original policy document, death certificate, police FIR and post mortem exam report (for accidental death), certificate and records from the treating doctor/hospital (for death due to illness) and advance discharge form for

Services claim processing. Based on the sum at risk, cause of death and policy duration, insurance companies may also req uest some additional documents.

45

y Submission of required documents for claim processing

For faster claim processing, it is essential that the claimant submits complete documentation as early as possible. A life insurer will not be able to take a decision until all the requirements are complete. Once all relevant documents, records and forms have been submitted, the life insurer can take a decision about the claim.

y Settlement of claim
As per the regulation 8 of the IRDA (Policy holder's Interest) Regulati ons, 2002, the insurer is required to settle a claim within 30 days of receipt of all documents including clarification sought by the insurer. However, the insurance company can set a practice of settling the claim even earlier. If the claim requires further investigation, the insurer has to complete its procedures within six months from receiving the written intimation of claim.

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4. HUMAN RESOURCES
4.1

Definationof Agent

y A businessman who buys or sells for another

in exchange for a commission.

y A person who sells insurance policies. There

are two main types of insurance agents: A captive agent can sell only the insurance policies of the company that employs him or her. An independent agent sells the policies of many different companies and attempts to find the best policy for the insurance buyer. An independent agent may also be called an insurance broker.

4.2

Procedure followed by an Applicant to be an Insurance Agent

y Short title and commencement

These regulations may be called Insurance Regulatory and Development Authority (Licensing of Insurance Agents) Regulations, 2000. They shall come into force on the date of their publication in the Official Gazette.

y Definitions
In these regulations,unless the context otherwise requires, 1. Act means the Insurance Act, 1938 (4 of 1938);

Human Resources 2. Approved Institution means an Institution engaged in education and/or training particularly in the area of insurance sales, service and marketing, approved and notified by the Authority; 3. Authority means the Insurance Regulatory and Development Authority established under the provisions of Section 3 of the Insurance Regulatory and Development Authority Act, 1999 (41 of 1999); 4. Composite insurance agent means an insurance agent who holds a licence to act as an insurance agent for a life insurer and a general insurer; 5. Corporate Agent means a person other than an individual as specified in clause (i); 6. Designated person means an officer normally in charge of marketing operations, as specified by an insurer, and authorised by the Authority to issue or renew licences under these regulations; 7. Examination Body means an Institution, which conducts the Authority; 8. Licence means a certificate of licence to act as an insurance agent issued under these regulations; 9. Person means 1. An individual 2. A firm 3. A company formed under the Companies Act, 1956 (1 of 1956), and includes a banking company as defined in clause (4A) of section 2 of the Act; prerecruitment tests for insurance agents and which is duly recognised by

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y Issue or renewal of licence

A person desiring to obtain or renew a licence (hereinafter referred to as the applicant) to act as an insurance agent or a composite insurance agent shall proceed as follows:The applicant shall make a n application to a designated person

Human Resources 1. In form irda-agents-va, if the applicant is an individual 2. In form irda-agents-vc, if the applicant is a firm or a company If the designated person refuses to grant or renew a licence under this regulation, he shall give the reasons therefor to the applicant.

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y Qualifications of the applicant

The applicant shall possess the minimum qualification of a pass in 12th Standard or equivalent examination conducted by any recognised Board/Institution, where the applicant resides in a place with a population of five thousand or more as per the last census, and a pass in 10th Standard or equivalent examination from a recognised Board/ Ins titution if the applicant resides in any other place.

y Practical Training
1) The applicant shall have completed from an approved institution, at least, one hundred hours practical training in life or general insurance business, as the case may be, which may be spread over three to four weeks, where such applicant is seeking licence for the first time to act as insurance agent. Provided that the applicant shall have completed from an approved institution, at least, one hundred fifty hours practical training in life and general insurance business, which may be spread over six to eight weeks, where such applicant is seeking licence for the first time to act as a composite insurance agent. 2) Where the applicant, referred to under sub-regulation (1), is 1. An associate/fellow of the institute of chartered accountants of india, new delhi. 2. An associate/fellow of the institute of costs and works accountants of india,calcutta. 3. An associate/fellow of the institute of company secretaries of india, new delhi.

Human Resources 4. An associate/fellow of the actuarial society of india, mumbai. 5. A master of business administration of any institution / university recognised by any state government or the central government. 6. Possessing any professional qualification in marketing from any institution / university recognised by any state government or the central government. 3) An applicant, who has been granted a licence after the commencement of these regulations, before seeking renewal of licence to act as an insurance agent, shall have completed, at least twenty -five hours practical training in life or general insurance business, as the case may be, from an approved institution.

49

y Examination
The Applicant shall have passed the pre -recruitment examination in life or general insurance business, or both, as the case may be, conducted by the Insurance Institute of India, Mumbai, or any other examination body.

y Fees payable
1. The fees payable to the Authority for issue or renewal of licence to act as insurance agent or a composite insurance agent shall be rupees two hundred and fifty. 2. The additional fees payable to the Authority, under the circumstances mentioned in sub-section (3) of section 42 of the Act, shall be rupees one hundred.

y Cancellation of licence
The designated person may cancel a licence of an insurance agent, if the insurance agent suffers, at any time during the currency of the licence, from any of the disqualifications mentioned in sub -section (4) of section 42

Human Resources of the Act, and recover from him the licence and the identity card issued earlier.

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y Issue of duplicate licence

The Authority may issue a duplicate licence replace a licence lost, destroyed, or mutilated on payment a fee of rupees fifty.

y Non-application to existing insurance agents

Nothing contained in Regulations 4 to 6 of these Regulations shall apply to the existing agents before the commencement of these Regulations.

4.3

Functions / Responsibilities of Agent

y Every Insurance Agent shall,

1. Identify himself and the insurance company of whom he is an insurance agent. 2. Disclose his licence to the prospect on demand. 3. Disseminate the requisite information in respect of insurance products offered for sale by his insurer and take into account the needs of the prospect while recommending a specific insurance plan. 4. Disclose the scales of commission in respect of the insurance product offered for sale, if asked by the prospect. 5. Indicate the premium to be charged by the insurer for the insurance product offered for sale. 6. Explain to the prospect the nature of information required in the proposal form by the insurer, and also the importance of disclosure of material information in the pu rchase of an insurance contract. 7. Bring to the notice of the insurer any adverse habits or income inconsistency of the prospect, in the form of a report (called insurance agents confidential report) along with every proposal submitted to the insurer, and any material fact that may adversely affect the

Human Resources underwriting decision of the insurer a s regards acceptance of the proposal, by making all reasonable enquiries about the prospect. 8. Inform promptly the prospect about the acceptance or rejection of the proposal by the insurer.

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y No insurance agent shall,

1. Solicit or procure insurance business without holding a valid licence. 2. Induce the prospect to omit any material information in the proposal form. 3. Induce the prospect to submit wrong information in the proposal form or documents submitted to the insurer for acceptance of the proposal. 4. Behave in a discourteous manner with the prospect. 5. Interfere with any proposal introduced by any other insurance agent. 6. Offer different rates, advantages, terms and conditions other th an those offered by his insurer. 7. Demand or receive a share of proceeds from the beneficiary under an insurance contract.

Human Resources FORM IRDA-AGENTS-VA (See Regulation 3) Insurance Regulatory and Development Authority (Licensing of Insurance Agents) Regulations, 2000. APPLICATION FOR A LICENCE / RENEWAL OF LICENCE TO ACT AS AN INSURANCE AGENT TO THE INSURANCE REGULATORY AND DEVELOPMENT AUTHORITY, DEPARTMENT OF LICENSING, NEW DELHI. DEAR SIRS, I request that --(a) a licence to act as an insurance agent* / a composite insurance agent* may be granted to me. (b) *my licence bearing number ____________________ and expiry date_____________ may be renewed for a further period of three years.

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2. I hereby declare that particulars given below are true and that the licencefor which I apply will be used only by myself for soliciting or procuring insurance business for one life insurer* / one general insurer* / both*. (1) Name: (2) Father's/Husband's Name [ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ] [ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ]

(3) Full Address: House No. : [ ][ ][ ][ ][ ][ ][ ][ ][ ][ ] Street: [ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ Town: [ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ District: : [ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ State : : [ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ Pin Code: : [ ][ ][ ][ ][ ][ ] Telephone No. [ ][ ][ ][ ][ ][ ]---[ ][ ][ ][ ][ ][ ][ ][ ] (STD Code -- Number):

][ ][ ][ ][

][ ][ ][ ][

][ ][ ][ ][

][ ][ ][ ][

][ ][ ][ ][

][ ][ ][ ][

][ ][ ][ ][

] ] ] ]

(4) Date of Birth: Day- Month-Year [ ][ ]-[ ] [ ]-[ ][ ][ ][ ] (5) Title : State 1 if are Mr., 2 Mrs., 3 Miss: [ ]

(6) If you ever held a Licence, state No. and date of expiry, otherwise say "Nil". (a) Licence Number: (b) Date of Expiry: Day- Month-Year [ ][ ][ ][ ] [ ][ ][ ][ ] [ ] [ ] [ ][ ]-[ ] [ ]-[ ][ ][ ][ ]

Human Resources (7) If you apply for licence to work for a life insurer, state 1, for a general insurer, state 2, for both state 3 in the box. (8) If you are an applicant from a rural place, state 1, in the box. (9) Educational Qualifications. State 1, if you passed Class X ; 2: Class XII; 3: Graduate; 4: Post-graduate ; 5: if you hold a professional qualification such as ACA, FASI, AICWA.):

53

[ ] [ ]

[ ]

(10) Give particulars of pass in pre-recruitment test conducted by the Insurance Ins titute of India or any examination body: (a) Name of Examination Body: (b) Candidate's Number: (c) Centre of Examination: (d) Date of Passing: (Day- Month-Year) [ [ [ [ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ] ][ ][ ][ ][ ][ ][ ][ ][ ] ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ] ]-[ ][ ]-[ ][ ][ ][ ]

(11) Give particulars of Practical Training completed from an approved institution. (a) Training Hours completed: [ ][ ] (b) Name of Training Institute: [ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ] [ ][ ][ ][ ][ ][ ][ ] (c) Candidate's Number: [ ][ ][ ][ ][ ][ ][ ][ ][ ][ ] (d) Centre (Place) of Training: [ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ] (e) Starting Date of Training: [ ][ ]-[ ][ ]-[ ][ ][ ][ ] (Day- Month-Year) 3. I further declare that---(a) I have not been found to be of unsound mind by a court of competent jurisdiction; (b) I have not been found guilty of criminal misappropriation or criminal breach of trust or cheating or forgery or an abetment of or attempt to commit any such offence by a court of competent jurisdiction; (c) I have not been found guilty of or to have knowingly participated in or connived at any fraud, dishonestly or mis-representation against an insurer or an insured in the course of any judicial proceeding relating to any policy of insurance or the winding up of an insurance company or in the course of an investigation of the affairs of an insurer; and (d) #I have not violated the code of conduct specified under Regulation 8 of Insurance Regulatory and Development Authority (Licensing of Insurance Agents) Regulations, 2000).

4. I have made the payment of licence fee of rupees two hundred and fifty and for which I enclose the documentary evidence. 5. I enclose the following documents in support of the educational qualification, pre recruitment test, and the practical training. (a) ______________________ (b)_______________ __________ Place Date: Yours faithfully, Signature of applicant

Human Resources FORM IRDA-AGENTS-VB (SEE REGULATION 3) INSURANCE REGULATORY AND DEVELOPMENT AUTHORITY (LICENSING OF INSURANCE AGENTS) REGULATIONS, 2000. INSURANCE REGULATORY AND DEVELOPMENT AUTHORITY, NEW DELHI LICENCE NO. [ ][ ][ ][ ] [ ][ ][ ][ ] [ ] [ ]

54

LICENCE TO ACT AS AN INSURANCE AGENT UNDER PART II OF THE INSURANCE ACT, 1938 (IV OF 1938)

NAME OF INSURANCE AGENT*/ COMPOSITE INSURANCE AGENT*:__________________________________ ADRESSS:

Having paid the prescribed fee and having made the necessary declaration is hereby authorised to act an insurance agent for three years from__________________ for procuring or soliciting insurance business of one life insurer* / one general insurer*/both*. (*strike out portion not required) Place

Date Authority

for Insurance Regulatory and Development

Designated Person:

Signature of Licence holder:

This licence is not valid unless it bears a fascimile of the signature of the chairperson of The licence holder should put his signature as soon as licence is received .

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5. MARKETING
5.1

Tata AIG like key Business Strategy

y Sound underwriting process is important to

ensure long term sustenance.

y Life insurance is a long term business. y Regular persistent business is the key to
profitable business.

y Pricing rightly is another key for profitable

business.

y At Tata AIG life, we believe in persistent

regular business, year on year.

y Tata AIG life wants to be the best in the

business.

y This is only possible when our customers

rank us as the best.

y We are on the right track.

Marketing

56

Market of different private players of 2009

Icici prudential SBI life Bajaj Alliance

10%
13%

8% 8% 6%
4%

Reliance Life
Birla Sunlife
4%

HDFC standard
Max New York Life Kotak Mahindra

15%

22% 3% 2% 2% 3%

Others Tata AIG Metlife Aviva Life

ING Vyasa

y Distribution Channels in Bank & Insurance

Traditionally, insurance products have been promoted and sold principally through agency systems in most countries. With new developments in consumers behaviours, evolution of technology and deregulation, new distribution channels have been developed succ essfully and rapidly in recent years. bank& insurance make use of various distribution channels: 1. Career Agents 2. Special Advisers 3. Salaried Agents 4. Bank Employees / Platform Banking 5. Corporate Agencies and Brokerage 6. Firms Direct 7. Response 8. Internet 9. e-Brokerage 10. Outside Lead Generating Techniques

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57

y The main Characteristics of each of these Channels are

1. Career Agents Career Agents are full-time commissioned sales personnel holding an agency contract. They are generally considered to be independent contractors. Despite this limitation on control, career agents with suitable training, supervision and motivation can be highly productive and cost effective. . Moreover their level of customer service is usually very high due to the renewal commissions, policy persistency bonuses, or other customer service-related awards paid to them. 2. Special Advisers Special Advisers are highly trained employees usually belonging to the insurance partner, who distribute insurance products to the bank's corporate clients. Banks refer complex insurance requirements to these advisors. The Clients mostly include affluent population who require personalised and high quality service. Usually Special advisors are paid on a salary basis and they receive incentive compensation based on their sales.

3. Salaried Agents Having Salaried Agents has the advantages of them being fully under the control and supervision of bank & insurance. These agents share the mission and objectives of the bank & insurance. The only difference in terms of their remuneration is that they are paid on a salary basis and career agents receive incentive compensation based on their sales. 4. Platform Bankers Platform Bankers are bank employees who spot the leads in the banks and gently suggest the customer to walk over and speak with appropriate representative within the bank. The platform banker may be a teller or a personal loan assistant and the representative being referred to may be a tarined bank employee or a representative from the partner insurance company.

Marketing 5. Direct Response In this channel no salesperson visits the customer to induce a sale and no face-to-face contact between consumer and seller occurs. The consumer purchases products directly from the bank & insurance by responding to the company's advertisement, mailing or telephone offers. 6. Internet Internet banking is already securely established as an effective and profitable basis for conducting banking operations. The reasonable expectation is that personal banking services will increasingly be delivered by Internet banking. bank& insurance can also feel confident that Internet banking will also prove an efficient vehicle for cross selling of insurance savings and protection products. 7. E-Brokerage Banks can open or acquire an e-Brokerage arm and sell insurance products from multiple insurers. The changed legislative climate across the world should help migration of bank & insurance in this direction. The advantage of this medium is scale of operation, strong brands , easy distribution and excellent synergy with the internet capabilities.

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Marketing

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5.2

Distribution Channel of Tata AIG

The winds of liberations initiated vast changes in the functions of the industry today.increasing number of multinational partnersip with private insurer have paved the way for a radical shift in insurance selling through number of new distribution channels besides bringing about more awareness on the need for insurance and also stressing on the important role t echnology can play. In the developed markets,many insurer have a preffed mode of distribution.In india many players are heding their bets because the need for or the sale outweights consideration of focus and because non -agency distribution,which is presently operational for the last two years,forms a basis for studies. Tata aig hasa corporate agency channel,which handles its corporate agents and has tie-ups with 38 corporate houses.insurer want to lower distribution costs by finding more effcient channels.The new private players are developing multiple channel modles;many insurer use are plan to use several banks as distridutors.because most of bank have stronge religion bias,in this regards has agreement with HBSC through that its doing both life insuranc e and general insurance. Because most bank have stronr religious bias,Insurer can use banks with out creating large overlap. Many large are sourcing product several insurer acting as manufacturer. As important distribution challenge facing insuers is the rular and social sector legislative requirements stipulated in terms of markets opening. For Tata Aig its takes ruler insurance as an opportunity and not an obligation.for achaving objective in an rular area it has also tie with NGOs.in this project mainl y focus on distribution channel of life insurance of tata aig also.as the whole topic of distribution channel can be known for the both company of tata aig.gradully channel are incorporating day by day for the growth of business.

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6. CONCLUTION

India insurance sector is likely to register unprecedented growth of 200% and attain a size of Rs2000 billon ($51.2 billon) by 2009-10, in for inwhich a private sector insurance business will achive a growth rate of 140% as result of aggressive marketing technique beging adopt by them against 35 40% growth rate of state owned insurance companies. The rular market offer the tremendous growth opporturties for insurance companies and insurer shouled be viable and cost effective distribution channels;bulid co insumer awaress and confidence. At last here I have concluded that the Tata AIG Life Insurance is growing company in very short period Tata AIG Life Insurance has done very good business as the Tata AIG Life Insurance has a good brand name. The all departments of Tata AIG Life Insurance is very sound the working style of Tata AIG Life Insurance is systematic and effective for growth the career.

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7. BIBILIOGRAPHY

For

the reference different types of newspaper are used and

books,journaland

different type of websites are used.

Names of Websites

1. www.google.com on 25th Jan10. 2. www.tata-aig-life.comon 25th Jan10. 3. www.tata-aig-general.com on 25th Jan10. 4. www.scribd.com on 30th Jan10. 5. www.wekipedia.com on 30th Jan10.

Names of Book and Journals Tata Aig Life Insurance Company Ltd.

Names of News Papers The Times of India.

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