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TABLE OF
CONTENT
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Declaration
Students Certificate
Acknowledgement
Preface
Chapter-1
Introduction .(11-38) Industry profile..11 Contribution to the Indian economy. 32 Role of IRDA. 35
Chapter-2
Company profile..(41-53)
TATA AIA life insurance Ltd. 41 TATA Group49 AIA Group 52
Chapter-3
Services..(57-67)
TATA AIA product details.57 Claim Process in Life insurance.65
TABLE OF CONTENT
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Chapter-4
Human Resource..(69-74)
Definition of agent..69 Functions/ Responsibilities of agent. 73
Chapter 5
Conceptual Discussion..(77-85)
Theory and concept used in the project77 Function of insurance..79 Why we need insurance. 80
Chapter 6
Marketing..(87-90)
Key business strategy...87 Distribution channel of TATA AIA 90
Objective of the study 91
Chapter 7
Research Methodology..(93-94)
Research Design.93 Sources of Data Collection 94
Chapter 8
Data Analysis & Interpretation..(97-111)
Chapter 9
Findings, Recommendation & Conclusion.(113-117)
Scope of the study118
Limitation of the study.119
Bibliography....121
Annexure.(123-126)
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Chapter - 1
INTRODUCTION
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INDUSTRY PROFILE
Insurance in India
The insurance sector in India has come a full circle from being an open competitive market to
nationalization and back to a liberalized market again. Tracing the developments in the Indian
insurance sector reveals the 360 degree turn witnessed over a period of almost two centuries.
Life Insuranceis the fastest growing sector inIndia since 2000 as Government allowed Private
players and FDI up to 26% and recently Cabinet approved a proposal to increase it to 49%. Life
Insurance in India was nationalized by incorporating Life Insurance Corporation (LIC) in 1956.
All privatelife insurance companies at that time were taken over by LIC.
In 1993, theGovernment of India appointed RN Malhotra Committee to lay down a road map for
privatisation of the life insurance sector.
While the committee submitted its report in 1994, it took another six years before the enabling
legislation was passed in the year 2000, legislation amending theInsurance Actof 1938 and
legislating theInsurance Regulatory and Development Authority Actof 2000. The same year the
newly appointed insurance regulator - Insurance Regulatory and Development Authority
IRDAstarted issuing licenses to private life insurers.
INTRODUCTION
http://en.wikipedia.org/wiki/Indiahttp://en.wikipedia.org/wiki/Life_insurancehttp://en.wikipedia.org/wiki/Government_of_Indiahttp://en.wikipedia.org/wiki/Insurance_Regulatory_and_Development_Authorityhttp://en.wikipedia.org/wiki/Insurance_Regulatory_and_Development_Authorityhttp://en.wikipedia.org/wiki/Insurance_Regulatory_and_Development_Authorityhttp://www.irdaindia.org/http://www.irdaindia.org/http://en.wikipedia.org/wiki/Insurance_Regulatory_and_Development_Authorityhttp://en.wikipedia.org/wiki/Government_of_Indiahttp://en.wikipedia.org/wiki/Life_insurancehttp://en.wikipedia.org/wiki/India7/22/2019 Tata Aia Project Report
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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 given in the following table.
Years Important milestones in the Indian life insurance business
1912: The Indian Life Assurance Companies Act came into force for regulating the life
insurance business.
1928: The Indian Insurance Companies Act was enacted for enabling the government to
collect statistical information on both life and non-life insurance businesses.
1938: The earlier legislation consolidated the Insurance Act with the aim of safeguarding
the interests of the insuring public.
1956: 245 Indian and foreign insurers and provident societies were taken over by the
central government and they got nationalized. LIC was formed by an Act of
Parliament, viz. LIC Act, 1956. It started off with a capital of Rs. 5 crore and that
too from the Government of India.
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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 given in the following table
1996 setting up of (interim) Insurance Regulatory Authority (IRA) Recommendations of the
IRA. 1997 Mukherjee Committee Report submitted but not made public 1997 The Government
Year Important milestones in the Indian general insurance
business
1907: The Indian Mercantile Insurance Ltd. was set up which was the
first company of its type to transact all general insurance business.
1957: General Insurance Council, an arm of the Insurance Association
of India, framed a code of conduct for guaranteeing fair conduct
and sound business patterns.
1968: The Insurance Act improved for regulating investments and set
minimal solvency levels and the Tariff Advisory Committee was
set up.
1972: The General Insurance Business (Nationalization) Act, 1972
nationalized the general insurance business in India. It was with
effect from 1st January 1973.
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gives greater autonomy to LIC, GIC and its subsidiaries with regard to the restructuring of
boards and flexibility in investment norms aimed at channeling funds to the infrastructure sector.
1998 The cabinet decides to allow 40% foreign equity in private insurance companies-26% to
foreign companies and 14% to NRIs, OCB
s and FII
s
. 1999 The Standing Committee headed by Murali Deora decides that foreign equity in private
insurance should be limited to 26%. The IRA bill is renamed the Insurance Regulatory and
Development Authority (IRDA) Bill. 1999 Cabinet clears IRDA Bill. 2000 President gives
Assent to the IRDA Bill.
INDIAN INSURANCE MARKET (HISTORY):
Insurance has a long history in India. Life Insurance in its current form was introduced in 1818
when Oriental Life Insurance Company began its operations in India. General Insurance was
however a comparatively late entrant in 1850 when Triton Insurance company set up its base in
Kolkata. History of Insurance in India can be broadly bifurcated into three eras: a) Pre
Nationalization b) Nationalization and c) Post Nationalization. Life Insurance was the first to be
nationalized in 1956. Life Insurance Corporation of India was formed by consolidating the
operations of various insurance companies. General Insurance followed suit and was nationalized
in 1973. General Insurance Corporation of India was set up as the controlling body with New
India, United India, National and Oriental as its subsidiaries. The process of opening up the
insurance sector was initiated against the background of Economic Reform process which
commenced from 1991. For this purpose Malhotra Committee was formed during this year who
submitted their report in 1994 and Insurance Regulatory Development Act (IRDA) was passed in
999. Resultantly Indian Insurance was opened for private companies and Private Insurance
Company effectively started operations from 2001.
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HOW BIG IS THE INSURANCE MARKET?
The insurance sector was opened up for private participation four years ago. For years now, the
private players are active in the liberalized environment. The insurance market have witnessed
dynamic changes which includes presence of a fairly large number of insurers both life and non-
life segment. Most of the private insurance companies have formed joint venture partnering well
recognized foreign players across the globe. There are now 29 insurance companies operating in
the Indian market14 private life insurers, nine private non-life insurers and six public sector
companies. With many more joint ventures in the offing, the insurance industry in India today
stands at a crossroads as competition intensifies and companies prepare survival strategies in a
detariffed scenario. There is pressure from both within the country and outside on the
Government to increase the foreign direct investment (FDI) limit from the current 26% to 49%,
which would help JV partners to bring in funds for expansion. There are opportunities in the
pensions sector where regulations are being framed. Less than 10 % of Indians above the age of
60 receive pensions. The IRDA has issued the first license for a standalone health company in
the country as many more players wait to enter. The health insurance sector has tremendous
growth potential, and as it matures and new players enter, product innovation and enhancement
will increase. The deepening of the health database over time will also allow players to develop
and price products for larger segments of society. Insurance is a Rs.400 billion business in
India, and together with banking services adds about 7% to India's Gap.
INDIAN SCENERIO:-
Indian economy is the 12th largest in the world, with a GDP of $1.25 trillion and 3rd largest in
terms of purchasing power parity. With factors like a stable 8-9 per cent annual growth, rising
foreign exchange reserves, a booming capital market and a rapidly expanding FDI inflows, it is
on the hinge of an ever increasing growth curve. Indians have a tendency to invest in properties
and gold followed by bank deposits. They selectively invest in shares also but the percentage is
very small--4-5%. This in itself is an indicator that growth potential for the insurance sector is
immense. Its a business growing at the rate of 15-20%
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per annum and presently is of the order of $47.9 billion. India is a vast market for life insurance
that is directly proportional to the growth in premiums and an increase in life density. With the
entry of private sector players backed by foreign expertise, Indian insurance market has become
more vibrant. Competition in this market is increasing with companys continuous effort to lure
the customers with new product offerings.However, the market share of private insurancecompanies remains very low -- in the 10-15% range. Even to this day, Life Insurance
Corporation (LIC) of India dominates Indian insurance sector. The heavy hand of government
still dominates the market, with price controls, limits on ownership, and other restraints. The
upward growth trend started from 2000 was mainly due to economic policies adopted by the then
Indian government. This year saw initiation of an era of economic liberalization and
globalization in the Indian economy followed by several reforms and long-term policies that
created a perfect roadmap for the success of Indian financial markets
The general insurance industry grew by 16% in 2006-07 as private insurers continued their
robust performance, while public sector players like New India Assurance and Oriental
Insurance improved their show. Despite continuous fall in business of government-owned
National Insurance, the 12 non-life insurers collected Rs 20,378 crore in first year premium in
the last fiscal compared to Rs 17,531 crore collected in 2005-06, according to data compiled by
regulator IRDA. New India Assurance collected Rs 4,762 crore in premium and continued to
lead the non-life sector by cornering 23.36% of themarket. National Insurance was at thesecond
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spot by collecting Rs 3,524 crore in premium, a decline of 7%, but had a market pie of 17.29%.
Oriental Insurance mopped up Rs 3,518 crore in premium income after logging 16.6% growth in
business to corner a market share of 17.26%. Another PSU insurer United India grew by a
modest 6.8% to collect Rs 3,147 crore in premium and had 15.44% of the market. The eight
private players expanded their business by 52% to collect Rs 5,427 crore in premium income and
increased their combined market share to 26.6% from 20.2% a year ago. ICICI Lombard led the
private players by logging 80% growth in premium at Rs 1,592crore, followed by Bajaj Allianz,
which grew by 50% to collect Rs 1,287 crore in premium. ICICI Lombard had a market share of
7.81% and Bajaj Allianz had 6.31% of the market.
Some of the important milestones in the general insurance business in India are:
1907:
The Indian Mercantile Insurance Ltd. set up, the first compan y to trans act all classes
of general insurance business.
1957:
General Insurance Council, a wing of the Insurance Associ ation of India, frames a
Code of conduct for ensuring fair conduct and sound business practices.
1968:
The I ns u r ance Ac t amended t o r egu l a t e i nves t men t s and s e t m i n i mum
solvency margins and the Tariff Advisory Committee set up.
1972:
The General Insurance Business (Nationalization) Act, 1972 nationalized th e
gene r a l i n s u r ance bus i nes s i n I nd i a w i t h e f f ec t f r om 1s t J anua r y 1973 .
1 0 7 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.
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FUNCTION OF INSURANCE:
Provide protection: The primary function of insurance is to provide protection against future
risk, accidents and uncertainty. Insurance cannot check the happening of the risk, but can
certainly provide for the losses of risk. Insurance is actually a protection against economic loss,
by sharing the risk with others.
Collective bearing of risk: Insurance is an instrument to share the financial loss of few among
many others. Insurance is a mean by which few losses are shared among larger number of
people. All the insured contribute the premiums towards a fund and out of which the persons
exposed to a particular risk is paid.
Assessment of risk: Insurance determines the probable volume of risk by evaluating various
factors that give rise to risk. Risk is the basis for determining the premium rate also.
Provide certainty: Insurance is a device, which helps to change from uncertainty to certainty.
Insurance is device whereby the uncertain risks may be made more certain.
Small capital to cover larger risk: Insurance relieves the businessmen from security
investments, by paying small amount of premium against larger risks and uncertainty.
Contributes towards the development of industries: Insurance provides development
opportunity to those larger industries having more risks in their setting up. Even the financial
institutions may be prepared to give credit to sick industrial units which have insured their assets
including plant and machinery.
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Means of savings and investment: Insurance serves as savings and investment, insurance is a
compulsory way of savings and it restricts the unnecessary expenses by the insured's For the
purpose of availing income-tax exemptions also, people invest in insurance.
Source of earning foreign exchange: Insurance is an international business. The country can
earn foreign exchange by way of issue of marine insurance policies and various other ways.
Risk free trade: Insurance promotes exports insurance, which makes the foreign trade risk free
with the help of different types of policies under marine insurance cover.
ROLES OF THE LIFE INSURANCE:
Life insurance as an investment: -
Insurance products yield more than any other investment instruments and it also provides added
incentives or bonus offered by insurance companies.
Life insurance as risk cover: -
Insurance is all about risk cover and protection of life. Insurance provides a unique sense of security
that no other form of invest can provide.
Life insurance as tax planning: -
Insurance serves as an excellent tax saving mechanism
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IMPORTANCE OF THE LIFE INSURANCE:
Protection against untimely death: -
Life insurance provides protection to the dependents of the life insured and the family of the
assured in case of his untimely death. The dependents or family members get a fixed sum of
money in case of death of the assured.
Saving for old age: -
After retirement the earning capacity of a person reduces. Life insurance enables a person to
enjoy peace of mind and a sense of security in his/her old age.
Promotion of savings: -
Life insurance encourages people to save money compulsorily. When life policy is taken, the
assured is to pay premiums regularly to keep the policy in force and he cannot get back the
premiums, only surrender value can be returned to him. In case of surrender of policy, the
policyholder gets the surrendered value only after the expiry of duration of the policy.
Initiates investments: -
Life Insurance Corporation encourages and mobilizes the public savings and canalizes the same
in various investments for the economic development of the country. Life insurance is an
important tool for the mobilization and investment of small savings.
Credit worthiness: -
Life insurance policy can be used as a security to raise loans. It improves the credit worthiness of
business.
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Social Security: -
Life insurance is important for the society as a whole also. Life insurance enables a person to
provide for education and marriage of children and for construction of house. It helps a person to
make financial base for future.
INSURANCE CYCLE:
Policy Renewal/Change Options/Application:-
The Insurance Cycle begins each year with the insurance offer. Actuarial documents are
published annually by the Risk Management Agency (RMA). The actuarial documents list the
plan of insurance, crop, type, variety, and practice that may be insured in a state and county, and
show the amounts of insurance, available insurance options, levels of coverage, price elections,
applicable premium rates, and subsidy amounts. The Special Provisions of Insurance list
program calendar dates, and general and special statements which may further define, limit, or
modify coverage.
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Sales Closing/Cancellation/Termination Dates:-
Insurance applications must be completed and signed no later than the sales closing date
specified in the crop actuarial documents. Applications signed after the crop sales closing date
may be rejected by the insurance provider.
Insurance coverage is continuous and can be cancelled by either the insurance provider or the
policyholder for the following crop year by providing a written notice to the other party no later
than the cancellation date specified in the crop policy. For a policyholder insured the previous
crop year, any changes he or she wishes to make to the policy coverage must be made on or
before the crop sales closing date. The policy will automatically renew for the subsequent crop
year unless the policyholder cancels the policy in writing on or before the crop cancellation date.
Insurance coverage may be terminated by the insurance provider for the following crop year for
nonpayment of outstanding debt by providing a written notice to the policyholder no later than
the termination date specified in the crop policy. The insurance provider may terminate coverage
on a crop if no premium is earned for three consecutive years.
Acceptance:-
Upon receipt of a properly completed and timely submitted insurance application, the insurance
provider will accept and process the application, unless the applicant is determined to be
ineligible under the contract or Federal statute or regulation. The insurance provider will issue a
summary of coverage and the appropriate policy documents to the applicant. After the
application is accepted, the policyholder may not cancel the policy for the initial crop year.
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Insurance Attaches: -
For annual crops, insurance attaches annually when planting begins on the insurance unit. The
crop must be planted on or before the crop's published final planting date unless late or prevented
planting provisions apply. If prevented planting provisions apply, and the crop cannot be timely
planted due to the causes specified in the crop provisions, such acreage may be eligible for a
prevented planting payment.
Acreage Reports:-
The policyholder must annually report for each insured crop in the county the number of
insurable and uninsurable acres planted or prevented from being planted if prevented planting is
available for the crop, the date the acreage was planted, share in the crop, the acreage location,
farming practices used, and types or varieties planted to the insurance provider on or before the
applicable acreage reporting date specified in the crop actuarial documents.
Summary of Coverage:-
The insurance provider will process a properly completed and timely filed acreage report, and
issue to the policyholder a summary of coverage that specifies the insured crop, the insured acres
and amount of insurance or guarantee for each insurance unit. The policyholder may make
changes to the filed acreage report, if permitted by the insurance provider.
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Premium Billing:-
The annual premium is earned and payable at the time insurance coverage begins. The insurance
provider shall issue a premium billing based upon the information contained in the acreage report
no earlier than the premium billing date specified in the crop actuarial documents. The premium
billing will specify the amount of premium and any administrative fees that may be due. If the
premium or administrative fees are not paid by the date specified in the actuarial documents or
policy, the insurance provider may assess interest on the outstanding premium balance.
Notice of Damage or Loss: -
A written notice of damage or loss for each unit is to be filed by the policyholder within 72 hours
of the policyholder's initial discovery of damage or loss but not later than 15 days after the
calendar date for the end of the insurance period unless otherwise stated in the individual crop
policy. The policyholder should refer to the individual crop provisions for additional
requirements in the event of damage or loss. These notifications provide the opportunity for the
insurance provider to inspect the crop and determine the extent of damage or potential
production before the crop is harvested or otherwise disposed of.
Inspection:-
After the insurance provider receives the written notice of damage or loss, it will be processed
and, if necessary, a loss adjuster will be sent to inspect the damaged crop and gather pertinent
information concerning the damage. If the policyholder wishes to destroy or not harvest the
crop,the loss adjuster will gather the appropriate information, conduct an appraisal to establish
the crop's remaining value and complete any forms needed. If the crop has been harvested or will
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not be harvested by the end of the insurance period, and the policyholder wishes to file a claim
for indemnity, the loss adjuster will gather the appropriate information and assist the
policyholder in filing the claim for indemnity. It is the policyholder's responsibility to establish
the time, location, cause, and amount of any loss.
Indemnity Claim:-
After the claim for indemnity is processed by the insurance provider, an indemnity check and a
summary of indemnity payment will be issued showing any deductions to the amount of
indemnity for outstanding premium, interest, or administrative fees.
Contract Change Date:-
Changes to the insurance program may be made by RMA from one year to the next. The
insurance provider will notify the policyholder in writing of any changes to the policy, actuarial
documents, or the Special Provisions of Insurance prior to the calendar date for contract changes
specified in the crop policy. The policyholder will have the opportunity to review the changes
and, if he/she desires, continue the insurance coverage for the following crop year, change the
policy coverage, or cancel the insurance coverage. Any changes to the policy coverage that the
policyholder makes must be made no later than the crop sales closing date. If the policyholder
wishes to cancel the policy, a written notice must be submitted to the insurance provider on or
before the crop cancellation date.
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List of Life Insurers (as of November 2011)
Apart from TATA AIA, the public sector life insurer, there are 23 other private sector life
insurers, most of them joint ventures between Indian groups and global insurance giants.
Life Insurer in Public Sector
1. Life Insurance Corporation of IndiaLife Insurers in Private Sector
1. SBI Life Insurance2. PNB Metlife India Life Insurance3. ICICI Prudential Life Insurance4. Bajaj Allianz Life5. Max Life Insurance6. Sahara Life Insurance7. Tata AIA Life8. HDFC Life9. Birla Sun Life Insurance10.Kotak Life Insurance11.Life Insurance Corporation of India12.Aviva Life Insurance13.Reliance Life Insurance Company Limited - Formerly known as AMP Sanmar LIC14.ING Vysya Life Insurance15.Shriram Life Insurance
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16.Bharti AXA Life Insurance Co Ltd17.Future Generali Life Insurance Co Ltd18.IDBI Fedaral Life Insurance19.
AEGON Religare Life Insurance
20.DLF Pramerica Life Insurance21.CANARA HSBC Oriental Bank of Commerce22.Star Union Dia-ichi Life Insurance Co. Ltd23.Edelweiss Tokio Life Insurance Company Ltd
Types of Insurance
There are basically two types of Insurance. They can be classified into following two
categories,
INSURANCE
LIFEINSURANCE GENERAL INSURANCE
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LIFE INSURANCE :
Your family counts on you every day for financial support, food. Shelter, transportation,
education, and much more. Insurance provides you with that unique sense of security that no
other form of investment provides.
Life insurance is all about making sure your family has adequate financial resources to make
those plans and dreams come true. It provides financial protection to help your family or
business to manage after your death.
Whole life policiescover the insured for life. The insured does not receive money while he is
alive; the nominee receives the sum assured plus bonus upon death of the insured.
Endowment PoliciesCover the insured for a specific period. The insured receives money on
survival of the term and is not covered thereafter.
Money back policiesThe nominee receives money immediately on death of the insured. On
survival the insured receives money at regular
Intervals during the term. These policies cost more than endowment with profit policies.
Annuities / Childrens policies The nominee receives a guaranteed amount of money at a pre-
determined time and not immediately on death of the insured. On survival the insured receives
money at the same pre-determined time. These policies are best suited for planning childrens
future education and marriage costs.
Pension schemesThere are policies that provide benefits to the insured only upon retirement.
If the insured dies during the term of the policy, his nominee would receive the benefits either as
a lump sum or as a pension every month.
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GENERAL INSURANCE
Every asset has a value and the business of general insurance is related to the protection of
economic value of assets. Assets would have been created through the efforts of owner, which
can be in the form of building, vehicles, machinery and other tangible properties.
Concepts of insurance have been extended beyond the coverage of tangible asset. Now the risk
of losses due to sudden changes in currency exchange rates, political disturbance, negligence and
liability for the damages can also be covered.
But if a person judiciously invests in insurance for his property prior to any unexpected
contingency then he will be suitably compensated for his loss as soon as the extent of damage is
ascertained.
Property InsuranceThe home is most valued possession. The policy is designed to cover the
various risks under a single policy. It provides protection for property and interest of the insured
and family.
Health InsuranceIt provides cover, which takes care of medical expenses following
hospitalization from sudden illness or accident.
Personal Accident InsuranceThis insurance policy provides compensation for loss of life
or injury (partial or permanent) caused by an accident. This includes reimbursement of cost
of treatment and the use of hospital facilities for the treatment.
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Travel Insurancethe policy covers the insured against various eventualities while
traveling abroad. It covers the insured against personal accident, medical expenses and
repatriation, loss of checked baggage, passport etc.
Liability InsuranceThis policy indemnifies the Directors or Officers or other
professionals against loss arising from claims made against them by reason of any wrongful
Act in their Official capacity.
Motor InsuranceMotor Vehicles Act states that every motor vehicle plying on the road
has to be insured, with at least Liability only policy. There are two types of policy one
covering the act of liability, while other covers insurers all liability and damages caused to
ones vehicles.
Since a single policy cannot meet all the insurance objectives, one should have a
portfolio covering all the needs.
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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
accurately, 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 tradeoff is heavily tilted in favor 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
6,19,600 crore is anticipated in the next 5 years.
CONTRIBUTION TO THE INDIANECONOMY
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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 long 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 to 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 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 insurance policies in force, the potential of the Indian
insurance industry is still large.
Life insurance penetration in India was less than 1 per cent till1990-91. During the 1990s, it
was between 1 and 2 per cent and from2001 it was over 2 per cent. In 2005 it had increased to 2.53 per
cent.
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Spread of financial services in rural areas and amongst socially lessprivileged
IRDA Regulations provide certain minimum business to be done
1. In rural areas2. 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.
Insurance agents numbering over 6.24 lakhs in rural areas.Policies sold in rural areas (2004-05) - No. of policies -
55 lakhs, Sumassured 46,000 crores. Social security - No. of lives covered 2003-04 17.4lakhs 2004-05 42.1 lakhs
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 on31st March 2004 15.59 lakhs. Brokers, corporate agents, trainingestablishments provide extra
employment opportunities. Many of theseopenings are in rural sectors.
Foreign Direct Investment (FDI) Policy in Insurance Sector
As per the current (March 2006) FDI norms, foreign participation in an Indian insurance
company is restricted to 26.0% of its equity / ordinary share capital. The Insurance Regulator has
stipulated that foreign investment in Indian Insurance companies be limited to 26% of total
equity issued (FDI limit) with the balance being funded by Indian promoter entities. The limit to
foreign investment includes both direct and indirect investment and has been a cause of
significant lobbying by foreign insurance companies for a change in regulations to increase
the FDI limit to 49% of equity issued.
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The Indian government has supported an increase in the FDI limit, which requires a change in
the Insurance Act. The Union Budget for fiscal 2005 had recommended that the ceiling on
foreign holding be increased to 49.0%.
A change in the Insurance Act requires a passage of the bill in both houses of Parliament. The
Indian government has tabled the bill in the Upper House of Parliament in August 2010.
Initial Public Offer (IPO) rules for Indian Life Insurance Companies
A key piece of legislation impacting on the Life Insurance industries capital raising abilities is
the lock-in period of 10 years for investment to be limited to promoter group equity investments.
Under the Insurance Guidelines, Indian Life Insurance companies can opt for a public issue of
equity through an Initial Public Offer (IPO) after 10 years of operations.
In October 2010, the securities market regulator, Securities and Exchange Board of India (SEBI),
issued disclosure norms for Indian Life Insurance Companies seeking to make an initial public
offer for sale of equity shares to the public.
The Insurance Regulatory and Development Authority
Insurance Regulatory and Development Authority(IRDA) is anautonomous apex
statutory body which regulates and develops theinsurance industry in India. It was constituted
by aParliament of India act calledInsurance Regulatory and Development Authority Act, 1999
[1][2]and duly passed by theGovernment of India.[3]
The agency operates its headquarters atHyderabad,Andhra Pradesh where it shifted fromDelhi
in 2001. The Insurance regulatory and Development Authority (IRDA), batted for a hike in the
foreign direct investment (FDI) limit to 49 per cent in the sector from the present 26 per cent.
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I am in favour of hike in the FDI limit for the insurance sector. Unless we go for 49 per cent, we
will not have the kind of capital required to underpin the
growth of the industry. This sector requires a lot of
money, IRDA Chairman J. Hari Narayan(till feb,2013)
said on the sidelines of a summit here.
The Insurance Laws (Amendment) Bill has been pending
before Parliament for about four years as there has been
no consensus among political parties on the issue of
raising the FDI limit to 49 per cent.
Coming under pressure from its allies, the UPA II
government, in May this year, had postponed a decision
on raising the FDI limit in the sector to 49 per cent. The
FDI limit in this sector was raised to 49% in July 2013.
Earlier, Mr. Hari Narayan said the IRDA would develop ten standard products in consultation
with industry bodies which could be launched by insurance companies without seeking the
regulatory nod.
We will have to work closely with the Life Insurance Council and the General Insurance
Council to see if we can develop such products, he added.
The insurance regulator said the persistence level was very low in the industry and there was a
need to bring in complete understanding of the market and insurance companies.
The persistence level refers to client retention by insurance companies. He said `Use and
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File would not be in the general interest of the policy-holders since the persistence ratio was
high. Recently the Finance Minister of India announced the setting of insurance repository
system.
An Insurance Repository is a facility to help policy holders buy and keep insurance policies in
electronic form, rather than as a paper document.Insurance Repositories,like Share Depositories
or Mutual Fund Transfer Agencies, will hold electronic records of insurance policies issued to
individuals and such policies are called electronic policies or e Policies.
History
TheIRDA Act, 1999was passed as per the major recommendation of theMalhotra Committee
report (1994) which recommended establishment of an independent regulatory authority for
insurance sector in India. Later, It was incorporated as a statutory body in April, 2000. TheIRDA
Act, 1999also allows private players to enter the insurance sector in India besides a maximum
foreign equity of 26 per cent in a private insurance company having operations in India.
The FDI limit in insurance sector was raised to 49% in July 2013. It serves as 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.
IRDA role is to protect rights of policy holders & they provides registration certification to life
insurance companies & responsible for renewal, modification, cancellation & suspension of this
registered certificate.
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Organizational structure
IRDA is a ten member body consisting of:
A Chairman, Five whole-time members and Four part-time members.
All members are appointed by theGovernment of India.
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Chapter - 2
COMPANY PROFILE
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TATA AIA Life Insurance Ltd.Tata AIA Life Insurance Company Limited (Tata AIA Life) is a joint venture company, formed
by Tata Sons and AIA Group Limited (AIA). Tata AIA Life combines Tata's pre-eminent
leadership position in India and AIA's presence as the largest, independent listed pan-Asia life
insurance group in the world spanning 15 markets in Asia Pacific. Tata Sons holds a majority
stake (74%) in the company and AIA holds 26% through an AIA Group company. Tata AIA Life
Insurance Company Limited was licensed to operate in India on February 12, 2001 and started
operations on April 1, 2001.lines. The Company's products are available through various
channels of distribution likeagents,brokers,banks (through bank assurance tie ups) and direct
channels likeTelemarketing,Digital Marketing,worksite etc.
Integrity
Are consistently honest, follows through on commitments, stand up for their convictions, act responsibly,
take accountability for their actions.
Direction setting
Communicate a clear vision, implement strategies and plans, manage strategic objectives, control
expenses, hold others accountable for results, and achieve objectives with limited resources.
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.
COMPANY PROFILE
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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.
Working across boundaries
Build relationships with people in different parts of TATA AIA, communicate effectively with people at all
levels, collaborates with internal and external resources to get the job done.
TATA GROUP IN INSURANCE:
TATA AIA General Insurance Company Ltd, and TATA AIA Life Insurance Company Ltd.,
(collectively "TATA AIA") are joint venture companies between the Tata group India's most
trusted industrial house and American International Group, Inc. (AIA), the leading U. S. based
international insurance and financial services organization. The Late Sir Dorab Tata, was the
founder Chairman of New India Assurance Co. Ltd., a group company incorporated way back in
1919. Government of India took over the management of this company as a part of
nationalization of general insurance companies in 1972. Not deterred by the move, Tata group
have ventured into risk management services having tied up with AIA group, back in 1977, with
the incorporationbusiness conglomerates, with revenues in 2006-07 of $28.8 billion (Rs129,994
crore), the equivalent of about 3.2 per cent of the country's GDP, and a market capitalization of
$72.2 billion as on December 6, 2007. Tata companies together employ some 289,500 people.
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ABOUT TATA-AIA:
TATA AIA Insurance Solutions is one of the leading insurance companies that provide both life
insurance as well as general insurance. This pioneer company is a joint collaboration between the
American International Group, Inc. (AIA) and Tata Group. They own the company in the ratio of
26:74. It is a leading financial institution that has carved a niche for itself all over the world.
TATA AIA Insurance provides facilities to both corporate and individuals. Starting its operations
on April 1, 2001, it seeks to serve different categories of people. It acquired its license for
carrying out operations in India on February 12, 2001. TATA AIA Insurance Solutions is one of
the most prestigious organizations in the business world. It employs thousands of employees and
offers various opportunities to people to build a prospective career. As a leading name in the
financial world, it identifies thepotential and experience of the individual. This insurance
company identifies the clientsneeds and works accordingly. It stresses on innovative aspect and
opening of new markets. It believes in new economy and latest Internet technology. TATA AIA
Insurance offers a number of products for the General Insurance holders. General insurance
products include:
Individual insurance Small business insurance Corporate insurance
TATA AIA Insurance offers flexible life insurance to the individuals, business organization and
other association. For the corporate, there are various insurance products like group pensions,
employee benefits, work place solutions and credit life. For the individuals, TATA AIA
Insurance offers various products for adults, children and for retirement planning.
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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.
Business acumen
Solve problems by addressing root causes, identify critical information, work toward bottom-line goals,
understand current issues facing TATA AIA, consider the business overall when making decisions.
History
TATA AIA General Insurance Company Limited(TATA AIA General) is a business
Collaboration of theTata Group andAIA.TATA AIA General merges two major finance
organizations i.e. the Tata Group's prominent headship place in India and AIA's global presence
as the world's leading international insurance and financial servicesOrganization.This joint
venture has started its operations inIndia from 1stApril 2001. The company provides both
corporate and personal insurance services. The organization offers an array of general insurance
covers which are well thought-out under commercial and consumer demands. The commercial
sector coversEnergy,Marine,Property and several specializedFinancial covers, while the
consumer insurance service offers a variety of generalInsuranceproducts such as insurance for
Automobiles,personal accident, casualty, home, health and travel. The company has made the
availability for its services from end to end channels of distribution like agents, banks (through
banc assurance tie ups), brokers and direct channels like tele-marketing, e-commerce, website,
etc. The headquarters of the company is situated in Mumbai. The company has provided the
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employment to more than 2000 qualified professionals across the country in more than 160
locations.
TATA AIA General Insurance won the Claims Service Company of the Year and the Best Non-
Urban Coverage Award at the India Insurance Awards 2012 held in Mumbai on June 7, 2012.
For any customer, the moment of truth arrives when he or she claims against their policy. The
Insurers promise made to their policy holders to protect them for the risks they are insured
against is tested at the time of making a claim.
TATA AIA believes that Claims servicing is about empathy for a customer's loss. With this in
mind, the Company has focused on deploying the latest in technology and systems, which
utilized by a team of experienced claims professionals; ensure a smooth experience for
customers from time of claim notification to resolution.
Recognizing this commitment to effective and speedy claims settlement and the Companys
leadership in claims servicing, India Insurance Awards awarded TATA AIA with The Claims
Service Company of the Year Award 2012. The jury honoured the Company for maintaining the
highest levels of client service, satisfaction and focus in claims handling in the fiscal year
2011-12.
The award citation mentions, TATA AIA General has maintained high standards in claims
servicing through leadership in claims settlement and average turnaround times. It further adds,
The Companys customer commitment in this area is reflected through initiatives such as an in -
house multi-lingual call center for claims, an online claims registration and tracking system for
ease of contact, mobile claims for cars and green channel settlement for faster service.
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Commenting on the Award, Gaurav D. Garg, MD & CEO of TATA AIA General said, With
cutting-edge knowledge, sound judgment born of experience, and innovative technology, our
professionals are well prepared to ensure that claims servicing is a pleasant experience for our
policy holders. This award further exemplifiesTATA AIAs dedication to build a customer-
focused claims network that is committed to service excellence. He added.
TATA AIA was recognized not just for its exemplary claims service but also for its commitment
to excel in its social obligations. India Insurance Awards awarded TATA AIA with the Best
Non-Urban Coverage Award 2012.
The Best Non-Urban Coverage Award honours TATA AIA as a general insurer focused on and
exceeding its commitments to the non-urban Indian market; in the process pushing the frontiers
by creating newer markets for insurance offerings for both, the company and other players to
partake of. The award citation elaborates, TATA AIA demonstrated excellence in reach,
business volumes, focused product offerings and innovative business models and partnerships to
service non-urban India.
TATA AIA considers Rural Insurance an integral part of its business. With this objective in
mind the Company has strengthened its focus in the non-urban market and has more than
doubled its top line, expanding in newer geographies as well as consolidating its base in existing
areas in non-urban India.
The Company has expanded its mass insurance capabilities, covering lakhs of customers through
retail and government deals. The Company also plans to introduce a new product line - weather
insurance, while selling traditional motor, health and commercial insurance products in the rural
markets.
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The India Insurance Awards presented on June 7, 2012 in Mumbai honour performance, growth,
product and market innovation, customer service and technology. The awards were given out in
various categories ranging across growth, claims servicing, geographical coverage, product and
technology innovation and social contribution.
In the well-attended presentation ceremony, 24 awards were given out across the Life, General,
Health and Overall segments to 17 best performing insurers in the country. TATA AIA General
Insurance won the Claims Service Company of the Year Award 2012 and Best Non-Urban
Coverage Award 2012.
TATA AIA General Insurance Company
TATA AIA General Insurance Company provides insurance solutions to individuals and
corporates. It offers a complete range of general insurance products including insurance for
automobile, home, personal accident, travel, energy, marine, property and casualty as well as
several specialized financial lines. TATA AIA believes in offering innovative and relevant
insurance solutions in the retail and commercial space. Each product offering is backed by
expertise and an unparalleled claims service.
TATA AIAs products are available through various channels of distribution like agents, brokers,
banks (through banc assurance tie ups) and direct channels like Tele Marketing, Digital
Marketing, worksite management etc. TATA AIA has its operations in 59 cities.
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TATA AIA Life Insurance
Has a deep rooted commitment to improve the quality of life of its customers,
employees and stakeholders .We do this by ou r e f for ts whi ch s t r i ve to mak e
T ATA AIA Li fe Insurance a corporate with values.
Increase Customer Value. Integrated efforts
THE JOINT VENTURE:
TATA AIA Life Insurance Co. Ltd. is capitalized at Rs. 185 crores of which 74 per cent
has been brought in by Tata Sons and the American partner brings in the balance 26 per
cent. Mr. George Oommen has been named managing director of TATA AIA Life. Tata-
AIA plans to provide broad array of life insurance plans to cover to both individuals and
groups. The company headquartered in Mumbai, with branch operations in Delhi,
Chennai, Hyderabad, Bangalore Calcutta, Pune and Chandigarh.
Tata Enterprises with 82 companies, spread over seven sectors and with an annual turnover
exceeding US $ 8.8 billion, employs more than 262,000 people. Tata Group has shown over
years that it is a value driven company and has pioneering contributions in various fields
including insurance, aviation, iron and steel. In terms of capital market performance as many as
40 listed Tata companies account for nearly 5% of the total market capitalization of all listed
companies. The Group has had a long association with India's insurance sector having been the
largest insurance company in India prior to the nationalization of insurance.
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THE TATA GROUP
Tata is a rapidly growing business group based in India with significant
international operations. Revenues in 2007-08 are USD 62.5 billion (around Rs.
251 ,543 crores), of which 61% was from
business outside India. The Groups Net Profit for
2007-08 is USD5. 4 bi ll io n (a ro un d Rs .
21 ,578 c r o r es ) . The Gr oup empl o ys
a r ound 350 ,000 peop l e wor l dwi de . The
b us in ess op e r a t i ons o f t he T at a Gr oup
cu rr en tl y en co mp as s se ve n business sectors
- Communications and Information Technology,
Engineering, Materials, Services, Energy,
Consumer Products and Chemicals. The
Group's 28 publicly l is ted en te rp ris es ha ve
a combi ned mar ke t cap i t a l i za t i on o f
aro und $60 bi l l ion, amo ng the highest
among Indian business houses, and a shareholder
base of 2.9 million. The major compan ies in the
Group include Tata Steel, Tata Motors, Tata
Consul tancy Services (TCS), Tata Power, Tata
Chemicals, Tata Tea, Indian Hotels, Tata
Teleservices and Tata Communications.
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Tata Group remains a family-owned business, as the descendants of the founder (from theTata
family)own a majority stake in the company. The current chairman of the Tata group isCyrus
Pallonji Mistry,who took over fromRatan Tata in 2012.Tata Sons is the promoter of all key
Tata companies and holds the bulk of shareholding in these companies. The chairman of Tata
Sons has traditionally been the chairman of the Tata group. About 66% of theequity capital of
Tata Sons is held by philanthropic trusts endowed by members of theTata family.
Tata Groupis an Indianmultinationalconglomerate company headquartered inMumbai,
Maharashtra,India.[3]It encompasses seven business sectors: communications and information
technology, engineering, materials, services, energy, consumer products and chemicals. Tata
Group was founded in 1868 byJamsetji Tata as a trading company.
It has operations in more than 80 countries across six
continents. Tata Group has over 100 operating companies
each of them operates independently. Out of them 32 are
publicly listed. The major Tata companies areTata Steel,
Tata Motors,Tata Consultancy Services (TCS),Tata Power,
Tata Chemicals,Tata Global Beverages,
Tata Teleservices,Titan Industries,Tata Communications andTaj Hotels.The combinedmarket
capitalization of all the 32 listed Tata companies was INR 6 Trillion ($96.87 billion) as of Sep
2013.[6]Tata receives more than 58% of its revenue from outside India.
Tata Group remains a family-owned business, as the descendants of the founder (from theTata
family)own a majority stake in the company. The current chairman of the Tata group isCyrus
Pallonji Mistry,who took over fromRatan Tata in 2012.Tata Sons is the promoter of all key
Tata companies and holds the bulk of shareholding in these companies. The chairman of Tata
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Sons has traditionally been the chairman of the Tata group. About 66% of theequity capital of
Tata Sons is held by philanthropic trusts endowed by members of theTata family.
The Tata Group and its companies & enterprises is perceived to be India's best-known global
brand within and outside the country as per anASSOCHAM survey. The 2009, annual survey by
the Reputation Institute ranked Tata Group as the 11th most reputable company in the world.
The survey included 600 global companies. The Tata Group has helped establish and finance
numerous quality research, educational and cultural institutes in India. The group was awarded
theCarnegie Medal of Philanthropy in 2007 in recognition of its long history of philanthropic
activities.
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AIA GROUP
AIA Group Limited and its subsidiaries (collectively "AIA" or "the Group") comprise the largest
independent publicly listed pan-Asian life insurance group in the world. It has wholly-owned
main operating subsidiaries or branches in 14 markets in Asia PacificHong Kong, Thailand,
Singapore, Malaysia, China, Korea, the Philippines, Australia, Indonesia, Taiwan, Vietnam, New
Zealand, Macau and Brunei and a 26 per cent joint venture shareholding in India. The business
that is now AIA was first established in Shanghai over 90
years ago. It is a market leader in the Asia Pacific region
(ex-Japan) based on life insurance premiums and holds
leading positions across the majority of its markets. It had
total assets of US$114,461 million as of 30 November
2011. AIA meets the savings and protection needs of
individuals by offering a range of products and services
including retirement planning, life insurance and accident
and health insurance. The Group also provides employee benefits, credit life and pension
services to corporate clients. Through an extensive network of agents and employees across Asia
Pacific, AIA serves the holders of more than 24 million individual policies and over 10 million
participating members of group insurance schemes. AIA Group Limited is listed on the Main
Board of The Stock Exchange of Hong Kong Limited under the stock code "1299" with
American Depositary Receipts (Level 1) traded on the over-the-counter market (ticker symbol:
"AAGIY").
The AIA Group exists to provide our customers with financial protection, security, and a
comfortable future.
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As a company, we understand that life is unpredictable. It has its highs as well as its challenges -
and everyone is on a different journey. Thats why our starting point has always been
understanding people. By being genuinely engaged with peoples real lives, we gain deeper
insights that enable us to offer a range of insurance and wealth management products that fit the
needs of the individual.
Over the last 90 years, weve built our business upon serving the ever-changing needs of people
and companies in Asia. Our personal, relationship-based approach has made us part of the fabric
of life here. And we will continue to protect generations of people, for many years to come,
whatever life brings them.
So whether you need support in achieving your ambitions, supporting a family, enjoying
retirement, or anything else: we understand where youre coming from, because weve been
there ourselves.
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ORGANISATION STRUCTURE
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Chapter 3
Services
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There are two types of products:
1. Traditional.
2. Ulips.
TATA AIA Life Comprehensive Superannuation Scheme Policy
Meaning
Our traditional Superannuation product acts as valuable tool to enhance the companysimage whilst
providing for a dignified retired life for the employees.
Key Features
1) Plan design and advice on Trust Formation/Deed of Variation.
2) Actuarial valuation for Defined Benefit Scheme as per internationally accepted practices once in a
year.
3) Scheme registration and ongoing legislative compliance.
4) Investment management and reporting to trustees.
5) 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.
TATA AIA PRODUCT DETAILS
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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 wills 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 utilized inthe 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.
3) Upon Withdrawal
1. To transfer the value of vested benefits to another Superannuation Scheme, if permissible by Trust
rules framed by the respective Trustees.
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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/s 36(1)(iv)2. Maximum ordinary annual contribution an employer can make is27% (Provident Fund +
Superannuation) of employees annual salary - Rule 87
3. 3. Entire income of the fund is tax free u/s 10(25)(iii)TATA AIA Life Retirement Assure Group Gratuity Scheme Policy
Meaning
As per the Payment of Gratuity Act 1972, an employer is obliged to pay gratuity to an employee
after he/she has rendered 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).
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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 AIA 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.
Tax Benefits for the Employer*
1) Employers contribution to approved gratuity fund is an deductible business expenditure U/s36(1)(v) as under:
2) Initial Contribution is allowed as deductible business expense to the extent of 8.33% of the
member's salary for each year of employees past service. (Rule 104)
3) Ordinary annual contributions are allowed to the extent of 8.33% of the employees salary.
Interest Income on the fund is nontaxable 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 monthssalary for every completed year of service or Rs.
3.5 lakhs, whichever is less u/s 10(10).
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* 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 AIA Life Insurance Company Limited is not responsible
in case you do not get any tax benefits stated above. Please note that the prevailing andapplicable tax laws
shall be final and conclusive on the matter and TATA AIA 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/-.
TATA AIA Life Assure Golden Years Plan
MeaningTATA AIA 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 dependents 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.
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.
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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.
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 available 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.
TATA AIA Life Maha Life Gold Plan
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 15years, and can be used
to cover the future expenses of your children.
Key Features
1) A guaranteed annual coupon of 5% of the sum assured every year for the rest of the insureds
term from the 10th policy anniversary.
2) Yearly cash dividends are available from the 6th policy anniversary onwards (depending on
Company performance).
3) The entire sum assured is paid tax-free as per current Income Tax Laws.
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Tax Benefits, Riders and Age Eligibility
1) The guaranteed 5% coupon and non-guaranteed cash dividends are tax free as per current
Income Tax Laws.
2) 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 Payer Benefit Rider is available).
4) Policy available for persons between 0 years and 60 years of age.
TATA AIA Life Nirvana plus Plan
Meaning
The TATA AIA Life Nirvana Plus (Nirvana Plus) policy is Indians 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).
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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 is 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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Filing a Life Insurance Claim
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. Submittal 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.
CLAIMS PROCESS IN LIFE INSURANCE
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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 tenable timely settlement. Most companies offer/issue
postdated cheques and/ or make payment through ECS credit on the maturity date. In case 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:
Claim intimation/notification
The claimant must submit the written intimation as soon as possible tenable 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
provide the facility of downloading the form from their website.
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 claim processing. Based on the
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sum at risk, cause of death and policy duration, insurance companies may also request some additional
documents.
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.
Settlement of claim
As per the regulation 8 of the IRDA (Policy holder's Interest) Regulations, 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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Chapter 4
Human Resource
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A businessman who buys or sells for another in exchange for a commission.
A person who sells insurance policies. There are two main types of insurance agents: Adaptive 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.
Procedure followed by an applicant to be an insurance agentShort 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.
Definitions
In these regulations, unless the context otherwise requires, -
1. Act means the Insurance Act, 1938 (4 of 1938);4. 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 license 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 authorized by the Authority to issue or renew licenses under these regulations;
DEFINITION OF AGENT
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7.Examination Body means an Institution, which conducts pre-recruitment tests for insurance agents and
which is duly recognized by the Authority;
8.License means a certificate of license 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
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