Company Profile

COMPANY PROFILE The story of insurance is probably as old as the story of mankind. The same instinct that prompts modern businessmen today to secure themselves against loss and disaster existed in primitive men also. They too sought to avert the evil consequences of fire and flood and loss of life and were willing to make some sort of sacrifice in order to achieve security. Though the concept of insurance is largely a development of the recent past, particularly after the industrial era past few centuries yet its beginnings date back almost 6000 years. ife !nsurance in its modern form came to !ndia from "ngland in the year #$#$. %riental ife !nsurance &ompany started by "uropeans in &alcutta was the first life insurance company on !ndian 'oil. (ll the insurance companies established during that period were brought up with the purpose of looking after the needs of "uropean community and !ndian natives were not being insured by these companies. )owever, later with the efforts of eminent people like *abu +uttylal 'eal, the foreign life insurance companies started insuring !ndian lives. *ut !ndian lives were being treated as sub,standard lives and heavy extra premiums were being charged on them. *ombay +utual ife (ssurance 'ociety heralded the birth of first !ndian life insurance company in the year #$-0, and covered !ndian lives at normal rates. 'tarting as !ndian enterprise with highly patriotic motives, insurance companies came into existence to carry the message of insurance and social security through insurance to various sectors of society. *harat !nsurance &ompany .#$/60 was also one of such companies inspired by nationalism. The 'wadeshi movement of #/01,#/0- gave rise to more insurance companies. The 2nited !ndia in +adras, 3ational !ndian and 3ational !nsurance in &alcutta and the &o,operative (ssurance at ahore were established in #/06. !n #/0-, )industan &o,operative !nsurance &ompany took its birth in one of the rooms of

the 4orasanko, house of the great poet 5abindranath Tagore, in &alcutta. The !ndian +ercantile, 6eneral (ssurance and 'wadeshi ife .later *ombay ife0 were some of the companies established during the same period. 7rior to #/#8 !ndia had no legislation to regulate insurance business. !n the year #/#8, the ife !nsurance &ompanies (ct, and the 7rovident 9und (ct were passed. The ife !nsurance &ompanies (ct, #/#8 made it necessary that the premium rate tables and periodical valuations of companies should be certified by an actuary. *ut the (ct discriminated between foreign and !ndian companies on many accounts, putting the !ndian companies at a disadvantage. The first two decades of the twentieth century saw lot of growth in insurance business. 9rom :: companies with total business,in,force as 5s.88.:: crore, it rose to #-6 companies with total business,in,force as 5s.8/$ crore in #/;$. <uring the mushrooming of insurance companies many financially unsound concerns were also floated which failed miserably. The !nsurance (ct #/;$ was the first legislation governing not only life insurance but also non,life insurance to provide strict state control over insurance business. The demand for nationali=ation of life insurance industry was made repeatedly in the past but it gathered momentum in #/:: when a bill to amend the ife !nsurance (ct #/;$ was introduced in the egislative (ssembly. )owever, it was much later on the #/th of 4anuary, #/16, that life insurance in !ndia was nationali=ed. (bout #1: !ndian insurance companies, #6 non,!ndian companies and -1 provident were operating in !ndia at the time of nationali=ation. 3ationali=ation was accomplished in two stages> initially the management of the companies was taken over by means of an %rdinance, and later, the ownership too by means of a comprehensive bill. The 7arliament of !ndia passed the ife !nsurance &orporation (ct on the #/th of 4une #/16, and the ife !nsurance &orporation of !ndia was created on #st 'eptember,

#/16, with the ob?ective of spreading life insurance much more widely and in particular to the rural areas with a view to reach all insurable persons in the country, providing them adequate financial cover at a reasonable cost. !& had 1 =onal offices, ;; divisional offices and 8#8 branch offices, apart from its corporate office in the year #/16. 'ince life insurance contracts are long term contracts and during the currency of the policy it requires a variety of services need was felt in the later years to expand the operations and place a branch office at each district headquarter. 5e,organi=ation of !& took place and large numbers of new branch offices were opened. (s a result of re,organi=ation servicing functions were transferred to the branches, and branches were made accounting units. !t worked wonders with the performance of the corporation. !t may be seen that from about 800.00 crores of 3ew *usiness in #/1- the corporation crossed #000.00 crores only in the year #/6/,-0, and it took another #0 years for !& to cross 8000.00 crore mark of new business. *ut with re,organi=ation happening in the early eighties, by #/$1,$6 (ssured on new policies. Today !& functions with 80:$ fully computeri=ed branch offices, #00 divisional offices, - =onal offices and the corporate office. !&@s Aide (rea 3etwork covers #00 divisional offices and connects all the branches through a +etro (rea 3etwork. !& has tied up with some *anks and 'ervice providers to offer on,line premium collection facility in selected cities. !&@s "&' and (T+ premium payment facility is an addition to customer convenience. (part from on,line Biosks and !C5', !nfo &enters have been commissioned at +umbai, (hmedabad, *angalore, &hennai, )yderabad, Bolkata, 3ew <elhi, 7une and many other cities. Aith a vision of providing easy access to its policyholders, !& has launched its '(T" !T" '(+7(5B offices. The satellite offices are smaller, leaner and !& had already crossed -000.00 crore 'um

closer to the customer. The digitali=ed records of the satellite offices will facilitate anywhere servicing and many other conveniences in the future. !& continues to be the dominant life insurer even in the liberali=ed scenario of !ndian insurance and is moving fast on a new growth tra?ectory surpassing its own past records. !& has issued over one crore policies during the current year. !t has crossed the milestone of issuing #,0#,;8,/11 new policies by #1th %ct, 8001, posting a healthy growth rate of #6.6-D over the corresponding period of the previous year. 9rom then to now, !& has crossed many milestones and has set unprecedented performance records in various aspects of life insurance business. The same motives which inspired our forefathers to bring insurance into existence in this country inspire us at !& to take this message of protection to light the lamps of security in as many homes as possible and to help the people in providing security to their families. 'ome of the important milestones in the life insurance business in !ndia areE #$#$E %riental ife !nsurance &ompany, the first life insurance company on !ndian soil started functioning. #$-0E *ombay +utual ife (ssurance 'ociety, the first !ndian life insurance

company started its business. #/#8E The !ndian ife (ssurance &ompanies (ct enacted as the first statute to

regulate the life insurance business. #/8$E The !ndian !nsurance &ompanies (ct enacted to enable the government to collect statistical information about both life and non,life insurance businesses.

#/;$E "arlier legislation consolidated and amended to by the !nsurance (ct with the ob?ective of protecting the interests of the insuring public. #/16E 8:1 !ndian and foreign insurers and provident societies are taken over by the central government and nationali=ed. !ndia. The 6eneral insurance business in !ndia, on the other hand, can trace its roots to the Triton !nsurance &ompany td., the first general insurance company established in the year #$10 in &alcutta by the *ritish. 'ome of the important milestones in the general insurance business in !ndia areE #/0-E The !ndian +ercantile !nsurance td. set up, the first company to transact all classes of general insurance business. #/1-E 6eneral !nsurance &ouncil, a wing of the !nsurance (ssociation of !ndia, frames a code of conduct for ensuring fair conduct and sound business practices. #/6$E The !nsurance (ct amended to regulate investments and set minimum solvency margins and the Tariff (dvisory &ommittee set up. #/-8E The 6eneral !nsurance *usiness .3ationali=ation0 (ct, #/-8 nationali=ed the general insurance business in !ndia with effect from #st 4anuary #/-;. #0- insurers amalgamated and grouped into four companies@ vi=. the 3ational !nsurance &ompany !nsurance &ompany td., the 3ew !ndia (ssurance &ompany td., the %riental td. 6!& td. and the 2nited !ndia !nsurance &ompany !& formed by an (ct of 7arliament, vi=. !& (ct, #/16, with a capital contribution of 5s. 1 crore from the 6overnment of

incorporated as a company.

Introduction

INSURANCE COMPANIES IN INDIA !n !ndia, !nsurance is a national matter, in which life and general insurance is yet a booming sector with huge possibilities for different global companies, as life insurance premiums account to 8.1D and general insurance premiums account to 0.61D of !ndiaFs 6<7. The !ndian !nsurance sector has gone through several phases and changes, especially after #///, when the 6ovt. of !ndia opened up the insurance sector for private companies to solicit insurance by passing !nsurance 5egulatory and <evelopment (uthority .!5<(0 *ill, allowing 9<! up to 86D. 'ince then, the !nsurance sector in !ndia is considered as a flourishing market amongst global insurance companies. )owever, the largest life insurance company in !ndia is still owned by the government. The history of !nsurance in !ndia dates back to #$#$, when %riental ife !nsurance &ompany was established by "uropeans in Bolkata to cater to their requirements. 3evertheless, there was discrimination among the life of foreigners and !ndians, as higher premiums were charged from the latter. !n #$-0, !ndians took a sigh of relief when *ombay +utual ife (ssurance 'ociety, the first !ndian insurance company covered !ndian lives at normal rates. %nset of the 80th century brought a drastic change in the !nsurance sector. !n #/#8, the 6ovt. of !ndia passed two acts , the ife !nsurance &ompanies (ct, and the 7rovident 9und (ct , to regulate the insurance business. 3ational !nsurance &ompany td, founded in #/06, is the oldest existing insurance company in !ndia. "arlier, the !nsurance sector had only two state insurers , ife !nsurers i.e. ife !nsurance &orporation of !ndia . !&0, and 6eneral !nsurers i.e. 6eneral !nsurance &orporation of !ndia .6!&0. !n <ecember 8000, these

subsidiaries were de,linked from parent company and were declared independent insurance companiesE %riental !nsurance &ompany imited, 3ew !ndia (ssurance &ompany imited, 3ational !nsurance &ompany imited and 2nited !ndia !nsurance &ompany imited. Aith an annual growth rate of #1,80D and the largest number of life insurance policies in force, the potential of the !ndian insurance industry is huge. Total value of the !ndian insurance market .800:,010 is estimated at 5s. :10 billion .2'G#0 billion0. The life insurance industry in !ndia grew by an impressive ;6D, with premium income from new business at 5s. 81;.:; billion during the fiscal year 800:,8001, braving stiff competition from private insurers. This report, H!ndian !nsurance !ndustryE 3ew (venues for 6rowth 80#8H, finds that the market share of the state behemoth, !&, has clocked 8#.$-D growth in business at 5s.#/-.$6 billion by selling 8.: billion new policies in 800:,01. *ut this was still not enough to arrest the fall in its market share, as private players grew by #8/D to mop up 5s. 11.1billion in 800:,01 from 5s. 8:.8/ billion in 800;,0:. Though the total volume of !&Fs business increased in the fiscal year .800:,80010 compared to the previous one, its market share came down from $-.0: to -$.0-D. The #: private insurers increased their market share from about #;D to about 88D in a yearFs time. The figures for the first two months of the fiscal year 8001,06 also speak of the growing share of the private insurers. The share of !& for this period has further come down to -1 percent, while the private players have grabbed over 8: percent.

LIC SU SIDIARIES

2nlike provisions for private players in the insurance sector, the !& (ct provides for setting up subsidiaries through policy holders fund. !t is due to the !& act that !& of !ndia has a number of subsidiaries which help it in leveraging its potential to the maximum, providing an enhanced set of diversified services to its customers. These subsidiaries include !& !nternational, !& 3epal, !& anka, !& )ousing 9inance and !& +utual 9und.

LIC INERNA!IONAL This is a ?oint venture offshore company promoted by !& which commenced

operations in 4uly, #/$/ with the ob?ectives of offering 2'G denominated policies to cater to the insurance needs of 35!s and providing insurance services to holders of !& policies currently residing in the 6ulf. !& !nternational operates in all 6&& countries.

LIC NEPAL ( ?oint venture company formed in 800# with the Cishal 6roup of !ndustries, 3epal.

LIC LAN"A ( ?oint venture company formed in 800; with the *artleet 6roup of &ompanies, 'ri anka. LIC #OUSIN$ FINANCE L!D% The &ompany is recogni=ed by 3ational )ousing *ank and listed on the 3ational 'tock "xchange .3'"0 I *ombay 'tock "xchange imited .*'"0. !& )ousing 9inance td. is one of the largest )ousing 9inance &ompany in !ndia. !ncorporated on #/th 4une #/$/ under the &ompanies (ct, #/16, the company was promoted by !& of !ndia and went public in the year #//:. !ts main ob?ective is to provide long term finance for construction or purchase of houses or apartments. !t has a <ubai office. LIC MU!UL FUND L!D% ife !nsurance &orporation of !ndia set up !& +utual 9und on #/th 4une #/$/ and contributed 5s. 8 &rores towards the corpus of the 9und. !& +utual 9und was constituted as a Trust in accordance with the provisions of the !ndian Trust (ct, #$$8. There are some other subsidiaries of !& which are &% LIC Mutual Fund A''et Mana(ement Company Ltd% )% LIC #FL Care #ome' Ltd% *% LIC#FL A''et Mana(ement Company Pri+ate Limited% ,% LIC#FL !ru'tee Company Pri+ate Limited% -% LIC#FL Financial Ser+ice' Limited. etc%

/#A! IS LIFE INSURANCE0

ife insurance is a contract that pledges payment of an amount to the person assured .or his nominee0 on the happening of the event insured against. The contract is valid for payment of the insured amount duringE

The date of maturity, or 'pecified dates at periodic intervals, or 2nfortunate death, if it occurs earlier. (mong other things, the contract also provides for the payment of premium periodically to the &orporation by the policyholder. ife insurance is universally acknowledged to be an institution, which eliminates FriskF, substituting certainty for uncertainty and comes to the timely aid of the family in the unfortunate event of death of the breadwinner. *y and large, life insurance is civili=ation@s partial solution to the problems caused by death. ife insurance, in short, is concerned with two ha=ards that stand across the life,path of every personE #. 8. That of dying prematurely leaves a dependent family to fend for itself. That of living till old age without visible means of support.

Life In'urance 1'% Ot2er Sa+in(' Contract of In'urance3 ( contract of insurance is a contract of utmost good faith technically known as uberrima fides. The doctrine of disclosing all material facts is embodied in this important principle, which applies to all forms of insurance.

(t the time of taking a policy, policyholder should ensure that all questions in the proposal form are correctly answered. (ny misrepresentation, non,disclosure or fraud in any document leading to the acceptance of the risk would render the insurance contract null and void.

Protection3 'avings through life insurance guarantee full protection against risk of death of the saver. (lso, in case of demise, life insurance assures payment of the entire amount assured .with bonuses wherever applicable0 whereas in other savings schemes, only the amount saved .with interest0 is payable. Aid to !2rift3 ife insurance encourages FthriftF. !t allows long,term savings since payments can be made effortlessly because of the Feasy installmentF facility built into the scheme. .7remium payment for insurance is either monthly, quarterly, half yearly or yearly0. 9or exampleE The 'alary 'aving 'cheme popularly known as ''' provides a convenient method of paying premium each month by deduction from oneFs salary. !n this case the employer directly pays the deducted premium to !&. The 'alary 'aving 'cheme is ideal for any institution or establishment sub?ect to specified terms and conditions. Li4uidity3 !n case of insurance, it is easy to acquire loans on the sole security of any policy that has acquired loan value. *esides, a life insurance policy is also generally accepted as security, even for a commercial loan.

!a5 Relief3 ife !nsurance is the best way to en?oy tax deductions on income tax and wealth tax. This is available for amounts paid by way of premium for life insurance sub?ect to income tax rates in force. (ssesses can also avail of provisions in the law for tax relief. !n such cases the assured in effect pays a lower premium for insurance than otherwise. Money /2en You Need It3 ( policy that has a suitable insurance plan or a combination of different plans can be effectively used to meet certain monetary needs that may arise from time,to, time. &hildrenFs education, start,in,life or marriage provision or even periodical needs for cash over a stretch of time can be less stressful with the help of these policies. (lternatively, policy money can be made available at the time of oneFs retirement from service and used for any specific purpose, such as, purchase of a house or for other investments. (lso, loans are granted to policyholders for house building or for purchase of flats .sub?ect to certain conditions0. /2o Can uy A Policy0 (ny person who has attained ma?ority and is eligible to enter into a valid contract can insure himselfJherself and those in whom heJshe has insurable interest. 7olicies can also be taken, sub?ect to certain conditions, on the life of oneFs spouse or children. Ahile underwriting proposals, certain factors such as the policyholder@s state of health, the proponentFs income and other relevant factors are considered by the &orporation.

In'urance For /omen 7rior to nationali=ation .#/160, many private insurance companies would offer insurance to female lives with some extra premium or on restrictive conditions. )owever, after nationali=ation of life insurance, the terms under which life insurance is granted to female lives have been reviewed from time,to,time. (t present, women who work and earn an income are treated at par with men. !n other cases, a restrictive clause is imposed, only if the age of the female is up to ;0 years and if she does not have an income attracting !ncome Tax. Medical And Non6Medical Sc2eme' ife insurance is normally offered after a medical examination of the life to be assured. )owever, to facilitate greater spread of insurance and also to avoid inconvenience, !& has been extending insurance cover without any medical examination, sub?ect to certain conditions. /it2 Profit And /it2out Profit Plan' (n insurance policy can be FwithF or FwithoutF profit. !n the former, bonuses disclosed, if any, after periodical valuations are allotted to the policy and are payable along with the contracted amount. !n FwithoutF profit plan the contracted amount is paid without any addition. The premium rate charged for a FwithF profit policy is therefore higher than for a FwithoutF profit policy. "eyman In'urance Beyman insurance is taken by a business firm on the life of key employee.s0 to protect the firm against financial losses, which may occur due to the premature demise of the Beyman.

MISSION71ISSION

MISSION H"xplore and enhance the quality of life of people through financial security by providing products and services of aspired attributes with competitive returns, and by rendering resources for economic development.H

1ISSION H( trans,nationally competitive financial conglomerate of significance to societies and 7ride of !ndia.H

OARD OF DIREC!ORS +embers on the *oard of the &orporation &% C2airman3 'hri. T.'. Ci?ayan )% Mana(in( Director3 'hri. <.B. +ehrotra *% Mana(in( Director3 'hri. Thomas +athew T. ,% Mana(in( Director3 'hri. (.B. <asgupta -% Finance Secretary3 'hri. (shok &hawla .+inistry of 9inance, 6ovt. of !ndia0 8% Additional SecretaryE 'hri. 6.&. &haturvedi .<epartment of 9inancial 'ervices, +inistry of 9inance, 6ovt. of !ndia.0 9% C2airman cum Mana(in( Director3 'hri. Kogesh ohiya .6!& of !ndia0 :% C2airman ; Mana(in( Director3 'hri. T.&. Cenkat 'ubramanian ."xport !mport *ank of !ndia0 <% <r. 'ooranad 5a?ashekhran &=% 'hri. +onis 5. Bidwai

A/ARDS AND AC#I1EMEN!S

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POLICIES ESC#EMESF ife !nsurance &orporation of !ndia provides number of products to its costumers. !& differentiated their policies into five different types which areE #. !nsurance 7lans 8. 7ension 7lans ;. 2nit 7lans

:. 'pecial 7lans 1. 6roup 'cheme INSURANCE PLANS

(s individuals it is inherent to differ. "ach individual@s insurance needs and requirements are different from that of the others. can fit your requirement. 3ewspaper Gee+an Anura( )ording #1 "omal Gee+an $ !&s !nsurance 7lans are policies that talk to you individually and give you the most suitable options that

CDA Endo?ment Television 1e'tin( Marria(e Endo?ment Or #0 At )& Plan 5etailer shop Educational Annuity 88 CDA Endo?ment %ther 1e'tin( sources At &: Gee+an "i'2ore C2ild Career Plan C2ild Fortune Plu' Gee+an C22aya C2ild Future Plan 1

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I LIO$RAP#Y

OO"S Mi'ra M%N.E)==:F. HPrinciples and Practices of Insurance@. c2and and Co% $upta% C% %% HHuman Resource Management Sultan c2and ; Son' Rao.1 S P. Human Resource Management Text and Cases /E SI!ES httpEJJwww.lic.in httpEJJwww.wikipedia.com

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 www.systems.com

Anne5ure

IUES!IONNAIRE
<ear 'ir J +adam ! am a student of <elhi !nstitute of 5ural <evelopment. ! am doing my 1 th semester of **( .*I!0program. (s part of my curriculum ! have selected the sub?ect L 7roduct I 'ervices of !& M as my pro?ect work. Thus, ! am submitting my questionnaire to your kind opinion. This questionnaire is only for the study purpose. Thanking you Kours 9aithfully

7"5'%3( <(T( . %7T!%3( 0 3(+"E <"'!63(T!%3E N2( !9!&(T!%3E "O7"5!"3&"E

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