CHAPTER I

INTRODUCTION
1.1 Background
Masters of Business Administration (MBA) under School of Management, Tribhuvan University
is 2 years course which consists of total four semesters. In the third semester, the internship
program is carried out for the partial fulfillment of the MBA degree that require students to
undergo an extensive 10 week internship. The objective behind the internship program is to train
students for future endeavors and dynamic corporate culture.
Internship program is regarded as a fruitful opportunity for the students of MBA to be familiar
with the corporate work environment. It basically provides an environment to gather professional
skills by working with the professionals themselves. While the main objective of internship to
help students understand the real working environment, internship also helps students apply the
knowledge gathered in the classroom into the real business practices. All in all, internship
program is a practical experience which blends the theoretical knowledge acquired with the real
world experience.
In todays global business context, everyone needs sufficient data and learning about the
changing business environment. Each business these days needs to confront the vicious rivalry.
Seeking after the knowledge about business and administration hypotheses in today's setting
does not confine into the endorsing books and syllabus by schools and colleges. It is equally
important to have real time information with college education. So, to bridge the gap between
theoretical knowledge and practical aspect, internship has been taken as a pool and has become
supportive to students also. Internship is the concept where in course of learning, one can put
theoretical knowledge into use.
In order to fulfill these objectives, the intern got opportunity to work for Rastriya Beema
Company Limited (RBCL). Various functions and operations of Crop and Livestock Insurance
Department and Youth Self Employment Insurance Department were learned during 10 weeks

period. This report is entirely based upon the personal experiences, observations, analysis and
knowledge gained during the stay at the insurance company.

1.2 Objective of the study

Every activities or work performed during internship are directed towards accomplishing certain
objectives. Internship program is in itself a new learning pedagogy, which provides the floor for
the practical exposure of theoretical knowledge. This report to a higher extent is focused on
functions and operations of Crop and Livestock Insurance Department and Youth Self
Employment Insurance Departments. Some of the major objectives of the report are mentioned
below:

1.2.1 General objective

To explore the applicability of theoretical knowledge in practical workplace and develop

the managerial and - communication skills to by observing and understanding the
culture and ethics of the real working environment.

1.2.2 Specific objectives

The specific objectives of the study are as follows

To experience the real work environment.

To develop interpersonal and communication skills.

To know about RBCLs services

To know about the operating procedures of different departments.
To evaluate the YSE insurance policy of RBCL

1.3 Significance of the Study

Internship allows student to practically exploit theoretical knowledge in the field of their interest.
The concept of various types of insurance policies, premium rates calculations and underwriting
processes are essential in the area of Insurance. The report closely explains about these areas
based upon the practical experience gained through observing and working under Crop and
Livestock and YSE department.
2

To achieve the objectives of internship program, this report is accounted as a learning instrument
about how RBCL manages the non-life insurance. Moreover, the role of RBCL in managing the
insurance of Youth Self Employment Fund is studied thoroughly.

CHAPTER II
INDUSTRY AND COMPANY PROFILE
2.1 Introduction of Insurance:
Businesses are never free of risks. The risks can be of a person's life, physical properties,
burglary, theft etc. It is for this reason, the people had been trying for a very long time to find a
medium to minimize and distribute their risks. Finally, as a result, this gave birth to the insurance
business. The main event that worked as a pioneer to give rise to insurance was the great fire of
London that took place on 1616 A.D. Then, the insurance policies of fire came into existence.
Later on, other types of insurance were felt as a need and were developed as motor, marine,
aviation and so on.
Insurance is a contract between the insurer and the insured in which the insurer promises to
compensate the insured in occurrence of the risk agreed upon by the parties and given that a sum
is paid by the insured to the insurer as a premium. There are two main competent parties in
insurance. One is insurer and the other is the insured. The party who undertakes the risk of the
other is called insurer and the one who transfers his/her risk is the insured.
Insurance business is mainly divided into two types as Life and Non-life Insurance. Non-life
insurance is an insurance of physical properties as house, vehicles, trading merchandise etc.
against the risk of fire, earthquake, burglary etc. Nonetheless, some of the non-life insurance
policies are also associated with life and health such as mountaineering expedition, river rafting,
accident, group medical etc but these category of insurance are directly relating to physical
properties. Generally, these types of insurance cover the time period of one year. Similarly, the
other type of insurance as mentioned above is the Life insurance business. This insurance, as the
name suggests is associated to the risks of life of people i.e. death. In case of death of the
insured, the sum insured is paid to the nominees otherwise the amount insured is paid back along
with bonus at the expiration of the period to the insured. But, there are varieties of policies which
may be whole life insurance, endowment life insurance, term life insurance etc. In case of whole
4

life insurance, premium is paid by insured throughout his/her life and the amount is paid along
with bonus only at death. Endowment life insurance pays compensation at death and also sum
insured with bonus at the end of period.

2.2 History of Insurance

2.2.1 History of Insurance in the World
Insurance policies started becoming more sophisticated along with development of specialized
varieties especially in Europe. Many policies evolved and developed in London in the 17 th
century. However, the history of insurance dates back to ancient when barter trade was prevalent
among the human beings. Of course, the concept of life insurance was not developed then at that
time. The people practiced insurance on the basis of mutual aid. i.e. when someone suffered from
destruction the other people helped him/her to recover the loss. The insurance was also done for
cases like famine.
The concept of health and life insurance was developed by the Greeks and the Romans. Tracing
back to the medieval era, a separate concept of insurance was developed in Genoa in which
policies and loans were treated separated. The premiums were determined on the basis of the
levels of the risk. Since then, new forms of insurance policies started evolving like fire insurance,
Business Insurance, life insurance, accident insurance and National insurance.

2.2.2 History of Insurance in Nepal

Nepal being a developing third world country, the insurance doesnt have long history. Nepal
Mal Chalani Tatha Bima Company Ltd was the first insurance company of Nepal. It was
established in 2004 B.S. This insurance company became a milestone in the Nepalese insurance
history established with an authorized capital of 5 lakhs.
The company mainly concentrated on non-life insurance. Because of the fact that it was private
company with limited capital, the company didnt become successful to provide all types of
insurance services all over the country. On the other hand, the other large foreign insurance
companies were doing good business in Nepal. Companies like Unite India Insurance, Starling

Insurance, Ruby General Insurance etc. had branches in Nepal to carry out the insurance
business.
Soon, then HMG began to realize the role of insurance business in the expansion of economic
activities and the alarming outflow of money from the country. Then, under the Insurance Act
2025, the government tried to establish a large and well established insurance company and
gave birth to the Rastriya Beema Sansthan. This insurance company was totally financed by
government to provide all types of insurance perils essential for the economic development until
2070 B.S. In 2071 B.S, the organization divided into Rastriya Beema Sansthan providing life
insurance services and Rastriya Beema Company Limited for providing non-life insurance
facilities. RBCL still now has been contributing towards economic development by providing
different non-life insurance facilities to business organizations, entrepreneurs and large project
undertakers. But, the original RBS alone provided various types of insurance facilities for 2
decades.
Nepal has always been walking towards the way of privatization, economic liberalization and
globalization when even fostered after the restoration of democracy. This has even been
accelerated after dethrone of kingship. So, as the country was following economic liberalization,
the previous acts were amended and new Insurance Act 2049 was introduced. Even a new
Insurance Act may emerge as due to new constitution of 2072 B.S. Due to these, the insurance
business had been gradually increasing year by year which seems to continue throughout future.
Year by year, many insurance companies got established in Nepal. By today, there are 25
insurance companies has been operating in Nepal. Like there must be a constitutional body to
control and regulate any business activity, the Insurance Board of Nepal or Nepal Beema
Samiti established under the Insurance Act 1992 regulates and control each and every
insurance company in Nepal. Currently, Nepal is equipped with 28 insurance establishments out
of which 9 are life insurance companies and the rest 19 are non-life insurance companies.
(Annexure I: List of Life Insurance Companies)
(Annexure II: List of Non- Life Insurance Companies)

2.3 Overview of Organization

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RBCL originally a part of RBS was established as a private company on 16 th Dec, 1967. Later
on, in 15th Dec, 1968 it was converted into a Corporation Wide Act 1968 (Rastriya Beema
Sansthan Act, 1968). So, it was operating as a single organization Rastriya Beema Sansthan
which operated both life and non-life insurance business. Later on, an amendment was made to
the Insurance Act 1995 making operation of both life and non-life insurance by a same
organization illegal. Finally the government decided to separate the entity as Rastriya Beema
Sansthan for conducting life insurance and Rastriya Beema Company Limited for
conducting non-life insurance. After many years of operation as Rastriya Beema Sansthan, in
2072 B.S, the company established itself as a separate entity RBCL conducting non-life
insurance business.
Capital is the indicator of corporate strength of any organization. The company currently has a
capital of Rs. 9,95,13,800. The company after its new life from 2071 B.S had the capital
structure as follows:

Capital Structure
GON
30%

Employees Provident Fund

41%

NBL
Public

10%
19%

*Source: RBCLs Brochure

Fig 2.1: Capital Structure of RBCL
The above diagrammatic representation of capital structure of RBCL predicts the proportion of
share ownership by government, Employees Provident Fund, NBL and the general public. The
figure depicts the government holds majority of RBCLs shares and Nepal Bank Ltd. is the minor

holder of shares of RBCL. 30% of the shares of RBCL are publicly held and the rest of the 19%
is held by Employees Provident Fund.
Since the major of its shares are held by government and the government organizations it has
been working as a government venture.
The company is currently headed by former deputy governor of Rastriya Bank Limited, Mr.
Raimajhi. He is the newly appointed General Manager of RBCL.

2.4 Mission, Vision and Objectives of RBCL

The company although has not officially described its mission and vision statements, by
spending a long time with the organization a general view about the mission and vision of the
organization is known to be:

2.4.1 Mission
Facilitating the citizens and nations with each and every category of insurance looking towards
welfare not only profit.

2.4.2 Vision
Becoming a consistent, reliable and dependent in the name of insurance.

2.4.3 Objectives
The main objectives as published by RBCL are:

To mobilize internal resources and capital for national development

To check burden of expense of foreign currency.

*Source:www.rbcl.com.np

2.5 Branches of the organization

RBCl is never back in providing the best services to meet the requirement of its customers be
that the existing ones or potential customers. Knowing the need of the market and the
convenience of the customers it has opened several branches across the country. The head office
of RBCL is located at Durbar Marg, Kathmandu. It has 12 branches within the country in

conjunction with the head in Biratnagar, Bhairahawa, Birjung, Pokhara, Nepalgunj,

Narayangadh, Dhangadi, Itahari, Birtamod, Hetauda, Nuwakot.

2.6 Products and Services

RBCl, being a governmental organization has been trying its best to serve more and
more Nepalese customers and business organization. It has been introducing highly
varied insurance policies. In the pace of development, it has kept policies like
Agriculture and Youth Self-Employment insurance which no other insurance
companies provide. The products and services of RBCL are as follows:
2.6.1 Motor Insurance Policy
Bikes, private cars and goods and passengers carrying vehicles are insured under this policy.
RBCL has two types of policy under the motor insurance. The customers can either choose
comprehensive policies or 3rd party policy. Comprehensive policy has different rates for different
brand of vehicles. For, pulsar bikes the premium rate is 2%. It covers claims relating to fire,
earthquake, flood, damage due to wear and tear of the machinery and damage due to several
external reasons. In case of 3rd party insurance policy, the compensation is limited to Rs. 80 lakhs
for private vehicles, Rs.25 lakh for bikes and Rs. 50 lakhs for the commercial vehicles.
2.6.2 Fire Insurance Policy
Under this insurance policy, the main risk covered is fire. Also included under this scheme are the
risks arising from lightning, losses resulting from earthquake, hooliganism and strikes, malicious
acts, terrorism, explosion, floods, inundation, cyclones and windstorms, landslides, aero plane or
accidental drop of goods from aero plane, etc.

2.6.3 Marine Insurance Policy

This can be considered as the first type of insurance policy in the world. The transportation of
goods and materials by sea is very risky. It covers any damage or loss to goods through air, sea as
well as road. It covers the risk of both import and export of Nepal.
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2.6.4 Aviation Insurance Policy

In the field of aviation industry, sometimes by bad luck or by some mistakes many accidents
occur. In country like Nepal, NAC has maximum record of air crashes. Hence, the only way to
insure the planes by the aviation corporations is only through this policy. This policy contains
insurance of hull and liability, crew members and passengers. In this type of policy, the amount
rate of insurance is usually given by the international market. The amount is usually pre-decided
looking at the level of risk by RBCL.

2.6.5 Engineering Insurance Policy

In case of construction projects like buildings, bridges, roads, tunnels etc, the contractor will be
liable for any damage, drawbacks or weaknesses of the project. An insurance policy that helps a
contractor insure the construction these projects and pay the amount of damage or weakness is
called engineering insurance policy. Also, a policy called Contractors Plant and Machinery
Policy is also there in which the accident or damage of the plant and machinery is insured.
Unlike other policies, the amount of premium is not prefixed in this policy but is fixed with
negotiation with the insured.
2.6.6 Group Medical Insurance
This is a policy which covers the medical expenses of a group of employees of an organization.
Organizations under this policy can insure employees and staffs from risk of any medical illness.
The premiums are paid by the organization. This policy pays 85% of the total amount of
expenditure of the employees medical fees. But, this policy requires 27 days for activation after
issuance of the policy. This policy is not applicable incase of pregnancy of the female employees.
Organization can also insure the family members of the employees along with them.

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2.6.7 Miscellaneous Insurance Policy

The main policies have separate departments for the underwriting and claim & re-insurance. But,
some of the policies which are necessary to the public dont have separate departments for it. All
these policies are kept under a group called miscellaneous policy. There is one single department
for these policies. Under this department, 9 different policies are looked after as follows:

Personal Accident Policy:

It covers all the risk regarding accidents that can happen to an individual. If the insured
sustain any bodily injury caused by violence, accident, external and visible means of injury
then it is settled by RBCL. This policy however does not give claim to deaths and permanent
damages. There are two separate policies under it as group and individual accident policies.
Both these group and individual policies are comprehensive.

Mountaineering Personal Accident Insurance:

This policy covers all the accidents including death and permanent displacement, frost bite,
high altitude sickness and snow sickness during the mountaineering expeditions of the
insured. However the costs of any medical and surgical treatments are not covered by this
policy. This policy covers trekking insurance too.

River Rafting Personal Accident Policy:

River rafting as a part of adventure is very risk. This policy covers the risks involved in
rafting of the insured. But, along with risks in rafting, this policy covers the personal
accidents of the insured that can occur while carrying out activities related to rafting like
accidents on the way to rafting river.

Burglary and House Breaking Insurance:

This is a policy that applies during the violence and forceful stealing. General usual stealing
by thieves in an unknown manner is not covered by this insurance. The event must be like
attack on the watchmen, breaking into house, stealing forcefully with arms and ammunitions,
building underground tunnel into a house or an office etc. There are no limitations for sum to
11

be insured in this policy. But, at RBCL the house must have fire and earthquake insurance to
undertake this policy.

Fidelity Guarantee:
Frauds by the employees can be huge threat to an organization. So, to save organizations
from such risk this policy is there. This policy is divided into two types as Floater Fidelity
and Fidelity. Floater fidelity are mainly for organizations having huge money or cash in
places like safe, cash box etc. to which only limited staffs like GM, CEO etc. have access.
Fidelity is mainly for cash counters and potential frauds by Taylors, cashiers etc. Mainly
banks do it.

Cash-in-Transit:
While transporting money or cash from one organization to another or from branches etc.
there can be great threat of burglary, ambush or robberies on the way. So, this policy insures
an organization from such threats. But, maximum protection must be there during transport
like presence of bodyguards, safe cash box, standardized vehicles etc. Otherwise, claims
wont be settled.

Bankers Blanket Insurance:

This policy protects financial institutions like banks, finance companies in all aspects related
to cash. This is like a package covering the policies of Burglary and Housebreaking
Insurance, Fidelity Guarantee, Cash-in-transit etc. But, this policy doesnt cover the
uncertainties related to gold.

Workmens Compensation:
In production and manufacturing firms or even sales organizations the workers or laborers
may be at high risk of fatal accident, natural disasters and other uncertainties. If such
incidents occur, then the firms may suffer from huge liability towards them. In such cases
this policy insures and compensates the enterprises against such risk. Also, this policy pays
12

the wages of the workers if the workers cant attend their working days in the organizations.
But, the laborers must be temporarily employed or on a contract basis by the organization.

Public Liability Insurance:

If in organizations or enterprises, the customers, clients or visitors are hurt badly, injured or
victimized by some carelessness, accidents like fire, electric shock and natural calamities like
earthquake, flood etc. then this policy compensates them against such incidents. The limit of
compensation is Rs. 1 lakh for one person and Rs.5 lakh for more than 1 person in an
incident. But, an event of such accidents, the compensation is maximum of Rs.10 in a year.
But, usually the claim paid will be 50% of the sum insured.

Professional Indemnity Insurance Policy (For Doctors and Medical Practioners):

A medical professional or a medical doctor while carrying out treatments or operations, by
some mistakes or unintended incident, may not be able to save the life of the patients. So, in
these cases, the court might declare the doctors or the hospital or clinic guilty and pay
compensations to the victims family. This type of policy helps them in such situations.
Similarly, the compensation is paid to the hospital if the hospital is declared guilty and has
undertaken this policy.

Travel Medical Insurance Policy (TMI):

Sickness, illness, accidents are natural phenomenon. But, while traveling abroad, these
incidents can be very problematic. Usually, a person can get ill while travelling to new place
because of the change in weather, drinking water, food etc. To become away from these types
of worries while traveling, TMI can be a right solution. At RBCL, this policy covers
Rs.100000 of such medical expenses. But, in case of death, the insureds nominee will
receive $25 only. This policy activates as soon as the travelers journey begins.

2.7 Crop & livestock and Youth Self-Employment (YSE) Department

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The Crop and Livestock and Youth Self- Employment department looks after the insurance of
Crop and Livestock and YSE. Though the department is managed and regulated under single
supervisor, this includes two different departments; Crop and livestock department and YSE
insurance Department. The internee spent entire 10 weeks of internship in this department.

Crop and Livestock Insurance: This insurance provides insurance coverage for various
agricultural activities like livestock, Poultry, Fish, Paddy, Vegetables farming against the
risk of Fire, Flood, Storms, Diseases and Insects Etc. The premium for Crop is 5 percent
while the premium for Fish insurance is 2 percentage of total cost of the business.

Youth Self Employment Insurance: Government of Nepal established Youth SelfEmployment Program on 2069 BS with the view to alleviate poverty. Under this
Program, Government provide loan of Rs 2,00,000 or less to Nepalese citizens for
starting any profession at lower interest rate through different co-operatives and banks.
Thousands of citizens have been able to find a way to earn due to this program.
The insurance of the businesses that general people start with the loan provided by GON
is done by Crop and Livestock and YSE department of RBCL. RBCL insures all the
businesses be it retail business, or agricultural farms. RBCL receives 4 percentage of the
premium collected among which 1 percent goes to the insurer organization and rest 3
percentage is allocated for claim settlement.

So, Crop & Livestock and YSE insurance is created to produce self-employed youths and
motivate farmers. This can change total scenario of Nepal. Pillars of nation can engage in
productive activities. Entrepreneurship and industrialization can be development in Nepal.

14

CHAPTER III
ANALYSIS OF WORKS AND ACTIVITIES PERFORMED
3.1 Background
Over the period of internship, Internee worked at Crop and Livestock and YSE Department.
Apart from that, internee didnt get the privilege to work in other departments like motor
department, Accounts department, Underwriting Departments etc. However, the staffs and
interns of every departments provided internee updated information about various departments of
RBCL. Moreover, RBCL provided a wonderful learning experience to learn, feel and expose
oneself to an insurance organization.
The internee worked at the Crop and Livestock and YSE department for entire 60 days. While
working in this department, internee got opportunity to learn lessons about the burning issues of
agricultural development. This was really useful and desirable lesson to learn to one of the pillars
of the nation which also provided an opportunity to serve and give hands towards nations
upliftment for the internee.

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3.1.1 Activities Performed in Crop and Livestock and YSE department

WEEKS
1-3

ACTIVITIES
Entering Application Forms Online
Documentation of Claims

Handling Claim Procedures

Preparing Journal Entries
Handling phone calls
Handling Customer Queries

4-6
Fig

3.1:

7-10

Issuing Policies
Preparing quarterly reports of Crop and Livestock department
Preparing reports to be sent to Insurance Board (Beema Samiti)

Week wise activities performed schedule

Entering Application Forms Online

The first job the internee got assigned was to enter the forms online. All the details of the
people proposing for insurance were to be entered online in YSEF software. The job was
to carefully enter all the relevant information in the software. However, one needed to be
aware of the sum insured and insurance policy. The amount could not exceed Rs 2,
00,000 and the maximum period for insurance is 5 years.

Documentation of Claims
As the property is damaged or livestock dies, it must be kept in mind that the incident has
to be published officially within 3 days of the incident. After the insured fulfills this
procedure, he/she collects all the proving documents for the claim. As the claim file is
submitted to the department, internee had to check if the documents are complete or
incomplete. Normally, a claim file needs to have following documents to be proceeded
further for settlement.
16

Identification of disease the pets died of by a qualified veterinary doctor

Recommendation letter prepared from CDO Office.
Memo of the local peoples agreement.
Recommendation made by District Livestock Office.
Minute of meeting held by the Financial Institution making the subject matter

must be the main agenda of the meeting.

Photographs showing the evidence of the incident.
Xerox Copy of Citizenship Certificate of the claimant.
Personal hand written letter of the Claimant.

Once the internee get the claims documents, it is required to be placed in proper place so
that searching it would be easy for supervisor. Sometimes, the claim file missed certain
documents. In that case, the internee had to place the file in different section under
heading Incomplete Claims. The internee also required to inform the claimant regarding
their missing documents.

Handling Claim Procedures

Handling claims and satisfying customers is the major job of the insurance company.
Under this department, the claims are basically settled by the technician, supervisor and
the CEOs of various insurance companies. Once the agricultural technician (internees
Supervisor) verifies the claim and even inspects about the damage going to the field, the
technician prepares a minute regarding theclaim and present to a meeting by the
department head in which RBCLs CEO, YSEF representative and other 3 insurance
companys CEO are present.After they approve the claim, claim is authorized and the file
is sent to the Accounts Department along with recommendation letter for the payment
of the claim. During the claims settlement process, internees job was to prepare the
documents required by the decision makers.

Preparing Journal Entries

The job of preparing journal entries is the responsibility of the Accounts Department.
But, at Crop & YSE Department, the department itself has to prepare the journal entries.
Before ACCT 2000 was introduced, an official format was prescribed for preparing
journal entries at RBCL. So, internee prepare journal entries for every transactions like
premium collected, claims paid, expenses for meetings, TADA expenses etc. All the
formats used to be in Nepali and the entries were also made in Nepali. The Debit (Dr.)
and Credit (Cr.) heads were prescribed by the department because students cannot have
17

full knowledge of Journal Entries to be made in Nepali. After, preparing it, the paper had
to be signed by the department head.

Handling phone calls

Internee had to attend the incoming calls of customer and deal with their enquiries and
requests. Similarly, calls were transferred to the respective departments according to the
demand of customers. Internee was responsible to call the respective customers to
inform about their missing documents. Normally the phone calls would be made by
claimants who were curious about their claims. The internees job was to search for the
respective claims and explain the claimant about the status of claims, whether it is
complete or incomplete and how long would it take to settle the claims.

Issuing Policies
As the work of entering policies online in the software came an end, the internee had to
issue policies. Without issued online policies, the claim cannot be settled. So, issuing
policy is considered as the most important work in insurance business. It is for this
reason,internee had to be careful to calculate premium. Any mistakes in the issued
policies in terms of premiums and years of insurance would have direct impact on the
claim settlement process. All the policies are issued form the YSEF software.

Handling photocopy machine

Photocopying is a day-to-day work for everyone. Every department had to photocopy
certain documents for running the operation. Some the internee too had to operate Xerox
Machine to get the jobs done. The step-by-step procedures for operating the machines
were as follows:

Handling Customer Queries

Providing information to the customer is one of the vital functions, Internee performed at
Crop and Livestock and YSE department. Customers want continuous information to
keep them updated. They seek information about documents necessary to do insurance,
claims and many more. Internee continuously kept updated so that they could handle all
18

the queries of the customers accordingly. However, the internee directed the customer
towards supervisor if they were in need of detailed and technical information.

Preparing quarterly reports of Crop and Livestock department

Crop and Livestock department under RBCL had to insure the crops and livestock of
different place like Kathmandu, kailali, Doti, Bajhang and Dhangadi. All the policies,
claims of these 5 districts are send to RBCL. At RBCL, the employees had to maintain
records about the premium collection.
In the quarterly reports, the policy number, name of insured, District, along with certified
market value, gross sum insured and premiums, retention sum insured and premium as
well as Quota share sum insurance and premium had to be calculated under three
headings as Crop, Livestock and Poultry. The gross premium for Cattle, Crop and Poultry
is 5 percent of Sum insured.

Preparing reports to be sent to Insurance Board (Beema Samiti)

Beema Samiti (Insurance Board) is an autonomous body, established to develop
systemize regularize and regulate the insurance business of Nepal under Insurance Act,
1992. All the activities to maintain and regulate the insurance business is done by
insurance board.
The government of Nepal have given subsidy to the people who insure their agricultural
farms by paying 75 percentage of the net premiums. For example, if a person insures his
her Crop farm of Rs 100000, out of 5 percent premium i.e. 5000, 75 percentage is paid
by the government while the rest 25 percent has to be paid by the insured. This subsidy
has helped people to get their agricultural farms insured. In order to request for the 75
percentage of premiums, RBCL has to send reports regarding the Policies, Type of crop,
Amount etc.
The report to Beema Smiti includesfollowing information

All the policies issued within 3 months period from Kahmandu and Dhangadi

Branches.
The total sum insured amount and sum insured of individual policy.
19

Xerox copies of each policies.

Calculation of 75 Percentage of Premium of each policy that Insurance Board has
to pay RBCL.

CHAPTER IV
OBSERVATIONS, EXPERIENCES AND PROFESSIONAL
SKILLS LEARNED
4.1 Observations
Internship program in itself reflects understanding and knowledge through observation of all the
activities performed under assigned department. During 10 weeks internship at RBCL, Internee
closely observed the insurance companys key services, the staffs and their behaviors, ways to
deal with clients, insurance functions, customers and their nature etc. The key observations at
various departments are as follows:
a. Claim settlement process of Crop and Livestock and YSE Department
Though Internee was not allowed to get involved in the meeting for settlement of claims,
internee got chance to observe the process.
The claim settlement process includes following steps.

Firstly, the technician verifies the claim and even inspects about the damage going to

the field.
After verifying claim, the technician prepares a minute regarding the claim.
The minute is presented to a meeting by the departmental head in which RBCLs

CEO, YSEF representative and other 3 insurance companys CEO are present.
Only valid claims having required documents are presented in the meeting.
After they approve the claim, claim is authorized and the file is sent to the Accounts

Department along with recommendation letter for the payment of the claim.
In case of YSE department, the Checks are firstly provided to Youth and Self
Employment office from where these are distributed to respective Claimants.
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Claims are not paid when

Livestock die diseases like Bird flu for which government give compensation.
In case of any epidemics, only 1% or 2% of total livestock of a farmer dies.
Under policies like Birds insurance, deaths less than or equals to 10% cannot be

claimed.
If reared and taken care according to the policies, theres only 5% probability that

they will die.

The claims are rarely fully paid because the income generated from the business
is calculated before paying the claims. For eg, when a cow dies, the amount of
milk extracted from the cow till its life is calculated and deducted from the claim
amount.
However, the policy might be devastating to insurer in case of the following
situations:

Natural calamities like flood, earthquake etc. affects the insured properties.
War and insecurity like that of during Maoist Insurgency occurs.
Epidemics like dysentery, Ebola, H1N1 virus arises killing thousands of insured
as the sum insured must be paid back in case of death of the insured.

b. Other observations
Besides departmental activities, intern also got opportunity to observe organizational
behavior and culture. Employees in RBCL preferred doing their tasks manually rather

than using modern technologies.

Whenever there arises any problem in any particular department regarding any
topic/case, the staffs of that department take group discussion approach to solve the
problem. However, the discussions is informal rather than proper meeting.If the problem
remains unsolved, it is then discussed with the staffs of head office or other big branches
via phone calls.
Staffs authorizes each and every document/transactions: signature, transaction details
etc.
21

Before settling claims, the technicians of each department personally inspect the

damages by going in the field.

The employees of RBCL constantly conduct meetings with Insurance Board members
to make or amend policies to provide better services to their customers.

4.2 Experience

The daily work as an intern depends on the nature of the organization, agency, or company. The
period of 10 weeks of internship was a great learning experience. The internship was full of good
experiences. At first Internee was quite skeptical about how he/she would adjust in a new
working environment. But the environment there was very warm and cordial. The employees
were very helpful and everyone was enthusiastic about teaching us things they knew. Thus, this
removed the fear of working in a real life situation.
Followings are the experiences that internee gained as an intern

Working in the Governments organization was the foremost experience for intern.
Learning about insurance policies, governments efforts in uplifting self-employment had
added up to the theoretical knowledge base.

Handling customers is far difficult than it sounds. So, the ways of dealing with customers

and listening to their queries has changed.

The customers, mainly in YSE claim are seen to have more fraudulent activities. So, it

has made intern more aware and concentrated facing and judging fraudulent activities.
Any problem in computing, networking etc. if could be solved by anyone become more
appreciable at an organization. Therefore, knowledge of IT is almost mandatory. We
need to go on with IT in this fast changing world. So, attitude has change towards
learning and getting experience with IT.

22

Furthermore, learning something in the classroom setting is a different experience, and sitting in
the chair waiting to handle the clients as one of those professionals is again a completely unique
experience that internee got to learn.

4.3 Professional Skills Learned

In course of dealing with customers and providing them services, Internee learned some
professional skills too. Some of the professional skills Internee managed to learn are as follows:
a) Managerial skills
Observing employees around, intern got to learn managerial skills required. Also, intern was
given responsibility to supervise new interns which enhanced these skills even more. Learned
managerial skills were:

Decision making at crucial times

Communicating information to the required departments

Supervising organizational activities to new interns

Inspecting documents for further processing

Writing letters to Insurance Boards for meetings

b) Operational skills
While working at Crop and Livestock and YSE department, day to day activities were closely
observed and hence following operational skills were learned:

filing the records

Handling queries and informing decisions
Distributing certificates
Keeping track of stationeries and files
Preparing quarterly reports

c) Other skills

The internee learnt the importance of team work. All the activities of the insurance
company are interrelated. So, the staffs need to work as a team and complete their
23

tasks effectively to successfully complete the large task. Proper communication,

coordination and cooperation are the most.

Proper interaction with the customers is most while dealing with the clients and
providing them services. The more Internee interacted with the customers, the more

managed to improve her communicational skill and gain her confidence.

Internee also improved her/his computer and technical skill by working as an intern in
RBCL. Internee is now able to scan signature/photo of customer, print bank statement,

check the account detail etc.

At internship, the internee got chance to learn many computer programs and software.
Also, it enhanced computer hardware and networking skills. So, little bit of IT skills

has been empowered after the internship.

At internship, internee learnt the claim handling procedures which is an essence of
insurance company.

4.4

Issues identified

4.4.1 Issues regarding effectiveness of Youth Self-Employment Insurance Policy

of RBCL
At the very beginning when the government introduced the provision of Agricultural and YSE
insurance policy, the private insurance companies realized it as lucrative and cannot yield profit.
The fact in everyones mind was that How can a private commercial insurance earn profit by
charging only 5% premium and later only fulfilling 100% of the amount of claim?. Being, a part
of government for insurance as well as public welfare, RBCL rightly was assigned to provide the
service. Here, the question arises whether RBCL has been able to perform its all functions to
provide effective and credible services to the customers. There are various operational issues
internee identified in this section of RBCL.

Lack of co-ordination:

Youth Self Employment (Sworajgar) Office is responsible to provide the loans to the
customers. However, the insurance is done automatically by the insurance company.
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There lacks co-ordination between Sworajgar office and RBCL. There is no proper rules
regarding the documentation. Even the claims that needs to be sent to RBCL by the YSE
office are not sent. Clearly, there is lack of co-ordination.

Lack of communication between customer and the staffs

Problems arise when there is lack of communication between customers and an

organization. In RBCLs case, the customers under YSE didnt had knowledge of
insurance regulations, claim rejection conditions and cases that might lead to fraud. Even
the YSE volunteers and financial instructions were either seen unaware or careless. So,
these nearly lead to suspicion of fraud and rejection of insurance policy and claims.
Thus, proper degree of communication is essential between an organization and the
public.

Problems regarding issuance of policies

The policies under YSE insurance departments has not been published for last two years.
The internee faced a lot of problems dealing with customers who had claimed 2 years
earlier but had not been settled. Without written policies, the claims cannot be settled but
due to systems failure, the policies could not be published.

Misplacement of Claims and Policies

One of the major issues in YSE insurance department of RBCL is misplacement of claims
and policies. All the policies and claims of last 5 years have not been placed carefully.
There is no proper record whether the policies are in Sworajgar Office or in RBCL office.
Customers regularly complain regarding the loss of their claim files.

25

4.4.2 Ways of Improving Efficacy of YSE Insurance Policy

a. Appoint permanent employee in YSE unit as soon as possible as there is understaffing in this
sector and the claims regarding Crop and Livestock and YSE is handled by a single technician.
b. Train other employees of co-operatives to become flexible to perform the job of entering the
details of customers effectively.
c. Proper maintenance should be made timely along with systematic storage of claim and policy
so that claims can be easily found out and necessary actions can be taken on time.
d. The meetings between the Sworajgar Offices staffs and the staffs of YSE insurance
department of RBCL should be conducted regularly.

4.4.2 Other issues identified

Lack of work Dedication

The main problem was that the employees attend their duties late and were found most of
their time spending in gossip and leisure. None of the staffs were found to be punctuate when
it comes to arriving at the affice. Thus, customers could not get fast and reliable service. The
organization was critized by customers as government organizations take too much time in
works.

Lack of work Ethics

Some unfair ways doing works by the executives has been noticed. The attraction towards
commission and benefits for performing official works such as acquiring equipment and
machineries, contracting works etc. have exploited the organization. Staffs were found to be
misusing the travel allowances given to them while visiting fields.

Under use of IT available

26

There was lack of IT skills and knowledge in staffs for performing their jobs. Though the
office is equipped with latest models of Computers, Internet and networking facilities, the
staffs had no knowledge for performing job in computerized manner. For e.g a simple skills
of typing either in Nepali or English was lacking in some employees.
Understaffing
Understaffing is the big problem in RBCL. For performing table works, the organization hire
as many interns as possible rather than hiring staffs. This has led to increasing stress for
supervisors as well as for interns. Supervisors constantly complain about having to teach
many interns as interns leave the position in short period of time. RBCL usually hire 20
interns for assisting the employees.

4.5 Methodology
Methodology is the way intern followed in order to solve research issues. In order to accomplish
the objective of this report, information is collected through systematic approach and scientific
tools. Primary and secondary sources of data were referred to reach in conclusion for the report.
Primary sources of data

Observation of activities performed

Formal and informal discussion
Interview with employees and concerned personnel of RBCL
instruction of supervisors,
Interaction with customers

Secondary sources of data

Reports of RBCL
Manual books
Websites
Published documents
Journal articles

27

4.6Analysis of Process, Procedures and Challenges

4.6.1

Analysis of Process and Procedures

Focusing on agriculture and income generating skills, YSEF is contributing towards promoting
agriculture development in this agricultural country. Similarly, this program has also helped
Nepalese to sustain their lives and alleviate poverty. With this program, thousands of Nepali
Youths have been able to find a way to earn two meals a day. Even after the Strike, this program
seems as a power to make Nepalese self-sufficient.

While the programs like YSEF is important. It is equally important for government to give
emphasis in proper management of this program. As mentioned earlier, there are various issues
regarding this sector. However, with the introduction of YSE software, the process of providing
fund, issuing policies and paying for insurance has been systematized.

The job of providing fund and managing the insurance policies used to be done manually.
Because of that, lots of problems used to arise. However, since the introduction of the software,
there has been few achievements.

Accurate computing of cumbersome and time-consuming jobs

calculating premiums of each and every customer

Automatic printing of policies once they are verified
Avoidance of duplication of entries due to existence of single-point data entry
Automatic and prompt carrying out of standing instructions on due date and

generation of reports.
Fast and up-to-date information transfer between various co-operatives,
Sworajgar office and RBCL.

28

like

YSE software could definitely be a supporting tool for managing youth Self Employment
program. However, there lacks proper co-ordination. There is no clear authorization as to who is
more responsible to lead the program and make it successful.

4.6.2. Challenges
Introducing technological change into an organization presents a different set of challenges to
management. YSE software software has definitely made the work simpler and effective but
proper implementation is yet to seen. Most of the senior employees are not aware of new
technologies so they tried to resist the change. So, it was challenging for management to make
them understand about the importance of the new system.
Also, system itself poses challenges. Sometimes accidently system failed which halt the overall
banking practices.

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CHAPTER V
SUMMARY AND CONCLUSION
5.1 Summary
Internship has been incorporated as an integral part of MBA program, which provides student an
opportunity to familiarize with organizational culture and develop managerial skills exposing
oneself to the real life functions of the business organization. It assists the students to understand
the real working situation being a part of the organization.

This report summarizes the major activities that Internee carried out at the RBCL.The overall
journey of the internee made in RBCL has been mentioned in the report. Basically, the activities
done, problems identified and experience gained have been discussed in this report. From this
internship the internee understood the value of team work, interpersonal communication,
importance of personal and public relation etc. The internee got opportunity to know about the
insurance environment as well as the functioning of the insurance company. The internee also
acquired information through formals and informal discussions with the employees and
customers of the bank. The use of both primary and secondary data has been done by the internee
for information collection.

After the completion of post-graduate degree, when we pursue our career in any organization, our
learning from this internship program will definitely pay off. This short span of time certainly was
not an adequate time to learn each and every functions and activities, but it definitely enough time to
understand professional setting and gain professional skills by seeing other work. In fact, Internee
believe the motto of this internship program is to make us observe professional workplace and
corporate culture rather than to make us learn the activities/works of the organization.

30

5.2 Conclusion
During the whole period of internship and the preparation of this report, the internee got the
opportunity to learn a lot about the non-life insurance sector of the nation. Overall, the internship
had been challenging but wonderful learning experience. This had given the internee a wonderful
opportunity to meet and work under people whose words and company gave many lessons that
the internee can use in future life. The internee learned many things being a part of an
organization and carry out works that of which can really evolve ones self-respect, continue
ones burning desire and confidence within oneself to move onto the corporate world.
The internee as an intern was able to achieve good impression and leave a different image in the
organization. It has also emerged a confidence within oneself to further carry out research
activities in the future. Many lessons were learn for life which would be had not been possible
without the program of internship in the course.
Apart from this, through the internship program, the internee got change to evaluate the works
performed at the business organization. The internee spent wonderful 10 weeks understanding
the importance of insurance and how the organization has been providing the service of YSE
insurance though the profit margin is very less. Through the study of economic feasibility of
YSE insurance, the internee found out that the earnings to RBCL from YSE insurance do not
seem to fulfill its entire expenditures. Moreover, some unforeseen situations like the natural
calamities, epidemics, insecurity etc. shows high probability of losses indicating to negativity
results of the feasibility of private insurers to adopt YSE policies

5.3 Recommendation
5.3.1 Recommendation for RBCL
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During the internship period, internee learnt various new things and went through valuable
experiences. Apart from this, internee also encountered numerous problems. Those problems
were related to the organization, internship process and also the placement. Taking this fact into
consideration, the following section highlights some recommendation to the college, and the
organization in which the placement is made.

Trend analysis, forecasting etc. must be done after the YSE policy exceeds 5 years to decide

whether to keep YSE insurance services in RBCL.

RBCL along with YSE must proper trainings to the volunteers about the insurance rules and
regulations to be strictly followed. The YSE must train the financial institutions how the
forms must be filled up and in what cases the policy forms will not be valid. Frauds from the

customers and financial institutions if found must be made punishable..

Proper mechanisms for evaluation must be developed so that the company performs all their
duties on time and there is no delay for the customers and unethical practices are removed
from the company or else going for privatization can be right step for RBCL.

4.3.2 Recommendation to College

The internship program is highly advantageous for the students as it is a gateway for the students
to the practical work life exposure. Still, lot more can be done by the university and college to
make this program explored out fully to groom the students to the fullest extent. Some
recommendations are as follows

Students must be fully guided and supervised by the college from the initial stage of
internship program. Guidance must be provided in regard to the organization selection,
objective of internship, expectations to be made, behavioral issues, etc.

The internship program can be made more useful by adding the time horizon so that the
internee could learn more things in detail

The internship could be included in 4th semester so that those who gets proposal from the
company to do the job, could do it.

32

REFERENCES
Agrawal, G. R. (2012). Business Environment in Nepal. Kathmandu: M.K. Publishers and
Distributors Pvt. Ltd.

Poudel, R. B., Baral, K. J., Gautam, R. R., & Rana, S. B. (2 011). Financial
Management. Kathmandu: Asmita.

www.rbcl.com.np (n.d.). Retrieved from http://rbcl.com.np/introduction-to-rbcl/

www.nrb.org.np. (n.d.). Retrieved from http://nrb.org.np/aboutus/department.php

33

Table of Contents
Declaration

. I
Endorsement

II
Certificate of Internship Completion

III

Acknowledgement
. . IV
Executive Summary

. V
Table of
Contents.......................................................................................................................
.................VI
List of Abbreviation
...................................................................................................
..VII
CHAPTER 1 : INTRODUCTION...................................................................................... 1
1.1 Background....................................................................................................... 1
1.2 Objective of the study....................................................................................... 2
1.2.1 General objective............................................................................................... 2
1.2.2 Specific objectives............................................................................................ 2
1.3 Significance of the Study................................................................................... 2
CHAPTER II: INDUSTRY AND COMPANY PROFILE.........................................................4
2.1 Introduction of Insurance:.................................................................................4
2.2 History of Insurance.......................................................................................... 5
2.2.1 History of Insurance in the World............................................................................5
2.2.2 History of Insurance in Nepal................................................................................5
2.3 Overview of Organization..................................................................................6
2.4 Mission, Vision and Objectives of RBCL.............................................................8
2.4.1 Mission............................................................................................................ 8
34

2.4.2 Vision.............................................................................................................. 8
2.4.3 Objectives........................................................................................................ 8
2.5 Branches of the organization............................................................................. 8
2.6 Products and Services....................................................................................... 9
2.7 Crop & livestock and Youth Self-Employment (YSE) Department.....................13
CHAPTER III: ANALYSIS OF WORKS AND ACTIVITIES PERFORMED............................15
3.1 Background..................................................................................................... 15
3.1.1 Activities Performed in Crop and Livestock and YSE department................15
CHAPTER IV: OBSERVATIONS, EXPERIENCES AND PROFESSIONAL SKILLS LEARNED 20
4.1 Observations................................................................................................... 20
4.2 Experience...................................................................................................... 22
4.3 Professional Skills Learned..............................................................................23
4.4

Issues identified........................................................................................... 24

4.4.1 Issues regarding effectiveness of Youth Self-Employment Insurance Policy of RBCL.........24

4.4.2 Ways of Improving Efficacy of YSE Insurance Policy...............................................26
4.4.2 Other issues identified................................................................................. 26
4.5 Methodology.................................................................................................... 27
4.6

Analysis of Process, Procedures and Challenges..........................................28

4.6.2. Challenges..................................................................................................... 29
CHAPTER V............................................................................................................... 30
SUMMARY AND CONCLUSION.................................................................................... 30
5.1 Summary......................................................................................................... 30
5.2 Conclusion....................................................................................................... 31
5.3 Recommendation............................................................................................ 31

35