Tata Aia Project Report

7/22/2019 Tata Aia Project Report

1/123

TABLE OF

CONTENT


2/123

7 | P a g e

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


3/123

8 | P a g e

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)


4/123

9 | P a g e


5/123

10 | P a g e

Chapter - 1

INTRODUCTION


6/123

11 | P a g e

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/India


7/123

12 | P a g e


8/123

13 | P a g e

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.


9/123

14 | P a g e

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.


10/123

15 | P a g e

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.


11/123

16 | P a g e

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%


12/123

17 | P a g e

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


13/123

18 | P a g e

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.


14/123

19 | P a g e

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.


15/123

20 | P a g e

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


16/123

21 | P a g e

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.


17/123

22 | P a g e

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.


18/123

23 | P a g e

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.


19/123

24 | P a g e

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.


20/123

25 | P a g e

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


21/123

26 | P a g e

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.


22/123

27 | P a g e

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


23/123

28 | P a g e

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


24/123

29 | P a g e

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.


25/123

30 | P a g e

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.


26/123

31 | P a g e

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.


27/123

32 | P a g e

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


28/123

33 | P a g e

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.


29/123

34 | P a g e

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.


30/123

35 | P a g e

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.
http://en.wikipedia.org/wiki/Autonomoushttp://en.wikipedia.org/wiki/Insurancehttp://en.wikipedia.org/wiki/Parliament_of_Indiahttp://en.wikipedia.org/wiki/Insurance_Regulatory_and_Development_Authority#cite_note-act-1http://en.wikipedia.org/wiki/Insurance_Regulatory_and_Development_Authority#cite_note-2http://en.wikipedia.org/wiki/Insurance_Regulatory_and_Development_Authority#cite_note-2http://en.wikipedia.org/wiki/Insurance_Regulatory_and_Development_Authority#cite_note-2http://en.wikipedia.org/wiki/Government_of_Indiahttp://en.wikipedia.org/wiki/Insurance_Regulatory_and_Development_Authority#cite_note-3http://en.wikipedia.org/wiki/Insurance_Regulatory_and_Development_Authority#cite_note-3http://en.wikipedia.org/wiki/Insurance_Regulatory_and_Development_Authority#cite_note-3http://en.wikipedia.org/wiki/Hyderabad,_Indiahttp://en.wikipedia.org/wiki/Andhra_Pradeshhttp://en.wikipedia.org/wiki/Delhihttp://en.wikipedia.org/wiki/Delhihttp://en.wikipedia.org/wiki/Andhra_Pradeshhttp://en.wikipedia.org/wiki/Hyderabad,_Indiahttp://en.wikipedia.org/wiki/Insurance_Regulatory_and_Development_Authority#cite_note-3http://en.wikipedia.org/wiki/Government_of_Indiahttp://en.wikipedia.org/wiki/Insurance_Regulatory_and_Development_Authority#cite_note-2http://en.wikipedia.org/wiki/Insurance_Regulatory_and_Development_Authority#cite_note-act-1http://en.wikipedia.org/wiki/Parliament_of_Indiahttp://en.wikipedia.org/wiki/Insurancehttp://en.wikipedia.org/wiki/Autonomous


31/123

36 | P a g e

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


32/123

37 | P a g e

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.
http://en.wikipedia.org/w/index.php?title=Insurance_Repositories&action=edit&redlink=1http://en.wikipedia.org/w/index.php?title=Insurance_Repositories&action=edit&redlink=1


33/123

38 | P a g e

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.
http://en.wikipedia.org/wiki/Government_of_Indiahttp://en.wikipedia.org/wiki/Government_of_India


34/123

39 | P a g e


35/123

40 | P a g e

Chapter - 2

COMPANY PROFILE


36/123

41 | P a g e

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
http://en.wikipedia.org/wiki/Insurance_agenthttp://en.wikipedia.org/wiki/Insurance_brokerhttp://en.wikipedia.org/wiki/Bankhttp://en.wikipedia.org/wiki/Telemarketinghttp://en.wikipedia.org/wiki/Digital_marketinghttp://en.wikipedia.org/wiki/Digital_marketinghttp://en.wikipedia.org/wiki/Telemarketinghttp://en.wikipedia.org/wiki/Bankhttp://en.wikipedia.org/wiki/Insurance_brokerhttp://en.wikipedia.org/wiki/Insurance_agent


37/123

42 | P a g e

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.


38/123

43 | P a g e

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.


39/123

44 | P a g e

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
http://en.wikipedia.org/wiki/Collaborationhttp://en.wikipedia.org/wiki/Tata_Grouphttp://en.wikipedia.org/wiki/AIGhttp://en.wikipedia.org/wiki/Tata_AIGhttp://en.wikipedia.org/wiki/Organizationhttp://en.wikipedia.org/wiki/Indiahttp://en.wikipedia.org/wiki/Energyhttp://en.wikipedia.org/wiki/Marinehttp://en.wikipedia.org/wiki/Propertyhttp://en.wikipedia.org/wiki/Financialhttp://en.wikipedia.org/wiki/Insurancehttp://en.wikipedia.org/wiki/Automobileshttp://en.wikipedia.org/wiki/Automobileshttp://en.wikipedia.org/wiki/Insurancehttp://en.wikipedia.org/wiki/Financialhttp://en.wikipedia.org/wiki/Propertyhttp://en.wikipedia.org/wiki/Marinehttp://en.wikipedia.org/wiki/Energyhttp://en.wikipedia.org/wiki/Indiahttp://en.wikipedia.org/wiki/Organizationhttp://en.wikipedia.org/wiki/Tata_AIGhttp://en.wikipedia.org/wiki/AIGhttp://en.wikipedia.org/wiki/Tata_Grouphttp://en.wikipedia.org/wiki/Collaboration


40/123

45 | P a g e

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.


41/123

46 | P a g e

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.


42/123

47 | P a g e

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.


43/123

48 | P a g e

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.
http://www.kotaklifeinsurance.com/http://www.kotaklifeinsurance.com/


44/123

49 | P a g e

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.


45/123

50 | P a g e

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
http://en.wikipedia.org/wiki/Tata_familyhttp://en.wikipedia.org/wiki/Tata_familyhttp://en.wikipedia.org/wiki/Cyrus_Pallonji_Mistryhttp://en.wikipedia.org/wiki/Cyrus_Pallonji_Mistryhttp://en.wikipedia.org/wiki/Ratan_Tatahttp://en.wikipedia.org/wiki/Tata_Sonshttp://en.wikipedia.org/wiki/Equity_capitalhttp://en.wikipedia.org/wiki/Tata_familyhttp://en.wikipedia.org/wiki/Multinational_corporationhttp://en.wikipedia.org/wiki/Conglomerate_%28company%29http://en.wikipedia.org/wiki/Mumbai,_Maharashtrahttp://en.wikipedia.org/wiki/Mumbai,_Maharashtrahttp://en.wikipedia.org/wiki/Tata_Group#cite_note-3http://en.wikipedia.org/wiki/Tata_Group#cite_note-3http://en.wikipedia.org/wiki/Tata_Group#cite_note-3http://en.wikipedia.org/wiki/Jamsetji_Tatahttp://en.wikipedia.org/wiki/Tata_Steelhttp://en.wikipedia.org/wiki/Tata_Motorshttp://en.wikipedia.org/wiki/Tata_Consultancy_Serviceshttp://en.wikipedia.org/wiki/Tata_Powerhttp://en.wikipedia.org/wiki/Tata_Chemicalshttp://en.wikipedia.org/wiki/Tata_Global_Beverageshttp://en.wikipedia.org/wiki/Tata_Teleserviceshttp://en.wikipedia.org/wiki/Titan_Industrieshttp://en.wikipedia.org/wiki/Tata_Communicationshttp://en.wikipedia.org/wiki/Taj_Hotelshttp://en.wikipedia.org/wiki/Market_capitalisationhttp://en.wikipedia.org/wiki/Market_capitalisationhttp://en.wikipedia.org/wiki/Tata_Group#cite_note-Tata_group_market_value_nears_Rs_6_trillion-6http://en.wikipedia.org/wiki/Tata_Group#cite_note-Tata_group_market_value_nears_Rs_6_trillion-6http://en.wikipedia.org/wiki/Tata_Group#cite_note-Tata_group_market_value_nears_Rs_6_trillion-6http://en.wikipedia.org/wiki/Tata_familyhttp://en.wikipedia.org/wiki/Tata_familyhttp://en.wikipedia.org/wiki/Cyrus_Pallonji_Mistryhttp://en.wikipedia.org/wiki/Cyrus_Pallonji_Mistryhttp://en.wikipedia.org/wiki/Ratan_Tatahttp://en.wikipedia.org/wiki/Tata_Sonshttp://en.wikipedia.org/wiki/Tata_Sonshttp://en.wikipedia.org/wiki/Ratan_Tatahttp://en.wikipedia.org/wiki/Cyrus_Pallonji_Mistryhttp://en.wikipedia.org/wiki/Cyrus_Pallonji_Mistryhttp://en.wikipedia.org/wiki/Tata_familyhttp://en.wikipedia.org/wiki/Tata_familyhttp://en.wikipedia.org/wiki/Tata_Group#cite_note-Tata_group_market_value_nears_Rs_6_trillion-6http://en.wikipedia.org/wiki/Market_capitalisationhttp://en.wikipedia.org/wiki/Market_capitalisationhttp://en.wikipedia.org/wiki/Taj_Hotelshttp://en.wikipedia.org/wiki/Tata_Communicationshttp://en.wikipedia.org/wiki/Titan_Industrieshttp://en.wikipedia.org/wiki/Tata_Teleserviceshttp://en.wikipedia.org/wiki/Tata_Global_Beverageshttp://en.wikipedia.org/wiki/Tata_Chemicalshttp://en.wikipedia.org/wiki/Tata_Powerhttp://en.wikipedia.org/wiki/Tata_Consultancy_Serviceshttp://en.wikipedia.org/wiki/Tata_Motorshttp://en.wikipedia.org/wiki/Tata_Steelhttp://en.wikipedia.org/wiki/Jamsetji_Tatahttp://en.wikipedia.org/wiki/Tata_Group#cite_note-3http://en.wikipedia.org/wiki/Mumbai,_Maharashtrahttp://en.wikipedia.org/wiki/Mumbai,_Maharashtrahttp://en.wikipedia.org/wiki/Conglomerate_%28company%29http://en.wikipedia.org/wiki/Multinational_corporationhttp://en.wikipedia.org/wiki/Tata_familyhttp://en.wikipedia.org/wiki/Equity_capitalhttp://en.wikipedia.org/wiki/Tata_Sonshttp://en.wikipedia.org/wiki/Ratan_Tatahttp://en.wikipedia.org/wiki/Cyrus_Pallonji_Mistryhttp://en.wikipedia.org/wiki/Cyrus_Pallonji_Mistryhttp://en.wikipedia.org/wiki/Tata_familyhttp://en.wikipedia.org/wiki/Tata_family


46/123

51 | P a g e

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.
http://en.wikipedia.org/wiki/Equity_capitalhttp://en.wikipedia.org/wiki/Tata_familyhttp://en.wikipedia.org/wiki/ASSOCHAMhttp://en.wikipedia.org/wiki/Carnegie_Endowment_for_International_Peacehttp://en.wikipedia.org/wiki/Carnegie_Endowment_for_International_Peacehttp://en.wikipedia.org/wiki/ASSOCHAMhttp://en.wikipedia.org/wiki/Tata_familyhttp://en.wikipedia.org/wiki/Equity_capital


47/123

52 | P a g e

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.


48/123

53 | P a g e

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.


49/123

54 | P a g e

ORGANISATION STRUCTURE


50/123

55 | P a g e


51/123

56 | P a g e

Chapter 3

Services


52/123

57 | P a g e

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


53/123

58 | P a g e

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.


54/123

59 | P a g e

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).


55/123

60 | P a g e

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).


56/123

61 | P a g e

* 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.


57/123

62 | P a g e

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.


58/123

63 | P a g e

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).


59/123

64 | P a g e

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.


60/123

65 | P a g e

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


61/123

66 | P a g e

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


62/123

67 | P a g e

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.


63/123

68 | P a g e

Chapter 4

Human Resource


64/123

69 | P a g e

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


65/123

70 | P a g e

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