SUBMITTED BY MR.

PRADEEP SEN PCL 1

(2010-2011)

Acknowledgements
The project is a golden opportunity for learning and self development. I consider myself very lucky and honored to have so many wonderful people lead me through in completion of this project. My grateful thanks to Dhruv Dubey, Area Manager ,LIC.who in spite of being extraordinarily busy with his duties, took time out to hear, guide and keep me on the correct path. I do not know where I would have been without her/him. A humble Thank you Sir.

Ms.

Manoj

Bhadale,

Manager

Training,

BHARI

AXA

LIFE

INSURANCE. Monitored my progress and arranged all facilities to make life easier. I choose this moment to acknowledge his contribution gratefully.

History of insurance in India

In India, insurance has a deep-rooted history. It finds mention in the writings of Manu ( Manusmrithi ), Yagnavalkya (Dharmasastra ) and Kautilya ( Arthasastra ). The writings talk in terms of pooling of resources that could be re-distributed in times of calamities such as fire, floods, epidemics and famine. This was probably a pre-cursor to modern day insurance. Ancient Indian history has preserved the earliest traces of insurance in the form of marine trade loans and carriers contracts. Insurance in India has evolved over time heavily drawing from other countries, England in particular. 1818 saw the advent of life insurance business in India with the establishment of the Oriental Life Insurance Company in Calcutta. This Company however failed in 1834. In 1829, the Madras Equitable had begun transacting life insurance business in the Madras Presidency. 1870 saw the enactment of the British Insurance Act and in the last three decades of the nineteenth century, the Bombay Mutual (1871), Oriental (1874) and Empire of India (1897) were started in the Bombay Residency. This era, however, was dominated by foreign insurance offices which did good business in India, namely Albert Life Assurance, Royal Insurance, Liverpool and London Globe Insurance and the Indian offices were up for hard competition from the foreign companies. In 1914, the Government of India started publishing returns of Insurance Companies in India. The Indian Life Assurance Companies Act, 1912 was the first statutory measure to regulate life business. In 1928, the Indian Insurance Companies Act was enacted to enable the Government to collect statistical information about both life and non-life business transacted in India by Indian and foreign insurers including provident insurance societies. In 1938, with a view to protecting the interest of the Insurance public, the earlier legislation was consolidated and amended by the Insurance Act, 1938 with comprehensive provisions for effective control over the activities of insurers. The Insurance Amendment Act of 1950 abolished Principal Agencies. However, there were a large number of insurance companies and the level of competition was high. There were also allegations of unfair trade practices. The Government of India, therefore, decided to nationalize insurance business. An Ordinance was issued on 19th January, 1956 nationalising the Life Insurance sector and Life Insurance Corporation came into existence in the same year. The LIC absorbed 154 Indian, 16 non-Indian insurers as also 75 provident societies245 Indian and foreign insurers in all. The LIC had monopoly till the late 90s when the Insurance sector was reopened to the private sector. The history of general insurance dates back to the Industrial Revolution in the west and the consequent growth of sea-faring trade and commerce in the 17th century. It came to India as a legacy of British occupation. General Insurance in India has its roots in the establishment of Triton Insurance Company Ltd., in the year 1850 in Calcutta by the British. In 1907, the Indian Mercantile Insurance Ltd, was set up. This was the first company to transact all classes of general insurance business. 1957 saw the formation of the General Insurance Council, a wing of the Insurance Associaton of India. The General Insurance Council framed a code of conduct for ensuring fair conduct and sound business practices.

The History of Insurance Worldwide:

The roots of insurance might be traced to Babylonia, where traders were encouraged to assume the risks of the caravan trade through loans that were repaid (with interest) only after the goods had arrived safelya practice resembling bottomry and given legal force in the Code of Hammurabi (c.2100 B.C.). The Phoenicians and the Greeks applied a similar system to their seaborne commerce. The Romans used burial clubs as a form of life insurance, providing funeral expenses for members and later payments to the survivors. With the growth of towns and trade in Europe, the medieval guilds undertook to protect their members from loss by fire and shipwreck, to ransom them from captivity by pirates, and to provide decent burial and support in sickness and poverty. By the middle of the 14th cent., as evidenced by the earliest known insurance contract (Genoa, 1347), marine insurance was practically universal among the maritime nations of Europe. In London, Lloyd's Coffee House (1688) was a place where merchants, ship-owners, and underwriters met to transact business. By the end of the 18th cent. Lloyd's had progressed into one of the first modern insurance companies. In 1693 the astronomer Edmond Halley constructed the first mortality table, based on the statistical laws of mortality and compound interest. The table, corrected (1756) by Joseph Dodson, made it possible to scale the premium rate to age; previously the rate had been the same for all ages. Insurance developed rapidly with the growth of British commerce in the 17th and 18th cent. Prior to the formation of corporations devoted solely to the business of writing insurance, policies were signed by a number of individuals, each of whom wrote his name and the amount of risk he was assuming underneath the insurance proposal, hence the term underwriter. The first stock companies to engage in insurance were chartered in England in 1720, and in 1735, the first insurance company in the American colonies was founded at Charleston, S.C. Fire insurance corporations were formed in New York City (1787) and in Philadelphia (1794). The Presbyterian Synod of Philadelphia sponsored (1759) the first life insurance corporation in America, for the benefit of Presbyterian ministers and their dependents. After 1840, with the decline of religious prejudice against the practice, life insurance entered a boom period. In the 1830s the practice of classifying risks was begun. The New York fire of 1835 called attention to the need for adequate reserves to meet unexpectedly large losses; Massachusetts was the first state to require companies by law (1837) to maintain such reserves. The great Chicago fire (1871) emphasized the costly nature of fires in structurally dense modern cities. Reinsurance, whereby losses are distributed among many companies, was devised to meet such situations and is now common in other lines of insurance. The Workmens Compensation Act of 1897 in Britain required employers to insure their employees against industrial accidents. Public liability Insurance, fostered by legislation, made its appearance in the 1880s; it attained major importance with the advent of the automobile.

Principles
Insurance involves pooling funds from many insured entities (known as exposures) to pay for the losses that some may incur. The insured entities are therefore protected from risk for a fee, with the fee being dependent upon the frequency and severity of the event occurring. In order to be insurable, the risk insured against must meet certain characteristics in order to be an insurable risk. Insurance is a commercial enterprise and a major part of the financial services industry, but individual entities can also self-insure through saving money for possible future losses.

Insurability Risk which can be insured by private companies typically share seven common characteristics: 1. Large number of similar exposure units: Since insurance operates through pooling resources, the majority of insurance policies are provided for individual members of large classes, allowing insurers to benefit from the law of large numbers in which predicted losses are similar to the actual losses. Exceptions include Lloyd's of London, which is famous for insuring the life or health of actors, sports figures and other famous individuals. However, all exposures will have particular differences, which may lead to different premium rates. 2. Definite loss: The loss takes place at a known time, in a known place, and from a known cause. The classic example is death of an insured person on a life insurance

policy. Fire, automobile accidents, and worker injuries may all easily meet this criterion. Other types of losses may only be definite in theory. Occupational disease, for instance, may involve prolonged exposure to injurious conditions where no specific time, place or cause is identifiable. Ideally, the time, place and cause of a loss should be clear enough that a reasonable person, with sufficient information, could objectively verify all three elements. 3. Accidental loss: The event that constitutes the trigger of a claim should be fortuitous, or at least outside the control of the beneficiary of the insurance. The loss should be pure, in the sense that it results from an event for which there is only the opportunity for cost. Events that contain speculative elements, such as ordinary business risks or even purchasing a lottery ticket, are generally not considered insurable. 4. Large loss: The size of the loss must be meaningful from the perspective of the insured. Insurance premiums need to cover both the expected cost of losses, plus the cost of issuing and administering the policy, adjusting losses, and supplying the capital needed to reasonably assure that the insurer will be able to pay claims. For small losses these latter costs may be several times the size of the expected cost of losses. There is hardly any point in paying such costs unless the protection offered has real value to a buyer. 5. Affordable premium: If the likelihood of an insured event is so high, or the cost of the event so large, that the resulting premium is large relative to the amount of protection offered, it is not likely that the insurance will be purchased, even if on offer. Further, as the accounting profession formally recognizes in financial accounting standards, the premium cannot be so large that there is not a reasonable chance of a significant loss to the insurer. If there is no such chance of loss, the transaction may have the form of insurance, but not the substance. 6. Calculable loss: There are two elements that must be at least estimable, if not formally calculable: the probability of loss, and the attendant cost. Probability of loss is generally an empirical exercise, while cost has more to do with the ability of a reasonable person in possession of a copy of the insurance policy and a proof of loss associated with a claim presented under that policy to make a reasonably definite and objective evaluation of the amount of the loss recoverable as a result of the claim. Legal When a company insures an individual entity, there are basic legal requirements. Several commonly cited legal principles of insurance include: 1. Indemnity the insurance company indemnifies, or compensates, the insured in the case of certain losses only up to the insured's interest. 2. Insurable interest the insured typically must directly suffer from the loss. Insurable

interest must exist whether property insurance or insurance on a person is involved. The concept requires that the insured have a "stake" in the loss or damage to the life or property insured. What that "stake" is will be determined by the kind of insurance involved and the nature of the property ownership or relationship between the persons. 3. Utmost good faith the insured and the insurer are bound by a good faith bond of honesty and fairness. Material facts must be disclosed. 4. Contribution insurers which have similar obligations to the insured contribute in the indemnification, according to some method. 5. Subrogation the insurance company acquires legal rights to pursue recoveries on behalf of the insured; for example, the insurer may sue those liable for insured's loss. 6. Causa proxima, or proximate cause the cause of loss (the peril) must be covered under the insuring agreement of the policy, and the dominant cause must not be excluded 7. Mitigation - In case of any loss or casualty, the asset owner must attempt to keep the loss to a minimum, as if the asset was not insured. Indemnification To "indemnify" means to make whole again, or to be reinstated to the position that one was in, to the extent possible, prior to the happening of a specified event or peril. Accordingly, life insurance is generally not considered to be indemnity insurance, but rather "contingent" insurance (i.e., a claim arises on the occurrence of a specified event). There are generally two types of insurance contracts that seek to indemnify an insured: 1. an "indemnity" policy, and 2. a "pay on behalf" or "on behalf of"[4] policy. The difference is significant on paper, but rarely material in practice. An "indemnity" policy will never pay claims until the insured has paid out of pocket to some third party; for example, a visitor to your home slips on a floor that you left wet and sues you for $10,000 and wins. Under an "indemnity" policy the homeowner would have to come up with the $10,000 to pay for the visitor's fall and then would be "indemnified" by the insurance carrier for the out of pocket costs (the $10,000). Under the same situation, a "pay on behalf" policy, the insurance carrier would pay the claim and the insured (the homeowner in the above example) would not be out of pocket for anything. Most modern liability insurance is written on the basis of "pay on behalf" language. An entity seeking to transfer risk (an individual, corporation, or association of any type, etc.) becomes the 'insured' party once risk is assumed by an 'insurer', the insuring party, by means

of a contract, called an insurance policy. Generally, an insurance contract includes, at a minimum, the following elements: identification of participating parties (the insurer, the insured, the beneficiaries), the premium, the period of coverage, the particular loss event covered, the amount of coverage (i.e., the amount to be paid to the insured or beneficiary in the event of a loss), and exclusions (events not covered). An insured is thus said to be "indemnified" against the loss covered in the policy. When insured parties experience a loss for a specified peril, the coverage entitles the policyholder to make a claim against the insurer for the covered amount of loss as specified by the policy. The fee paid by the insured to the insurer for assuming the risk is called the premium. Insurance premiums from many insureds are used to fund accounts reserved for later payment of claims in theory for a relatively few claimants and for overhead costs. So long as an insurer maintains adequate funds set aside for anticipated losses (called reserves), the remaining margin is an insurer's profit. Effects Insurance can have various effects on society through the way that it changes who bears the cost of losses and damage. On one hand it can increase fraud, on the other it can help societies and individuals prepare for catastrophes and mitigate the effects of catastrophes on both households and societies. Insurance can influence the probability of losses through moral hazard, insurance fraud, and preventive steps by the insurance company. Insurance scholars have typically used morale hazard to refer to the increased loss due to unintentional carelessness and moral hazard to refer to increased risk due to intentional carelessness or indifference. Insurers attempt to address carelessness through inspections, policy provisions requiring certain types of maintenance, and possible discounts for loss mitigation efforts. While in theory insurers could encourage investment in loss reduction, some commentators have argued that in practice insurers had historically not aggressively pursued loss control measures - particularly to prevent disaster losses such as hurricanes - because of concerns over rate reductions and legal battles. However, since about 1996 insurers began to take a more active role in loss mitigation, such as through building codes. Insurers' business model Underwriting and investing The business model is to collect more in premium and investment income than is paid out in losses, and to also offer a competitive price which consumers will accept. Profit can be reduced to a simple equation: Profit = earned premium + investment income - incurred loss underwriting expenses.

Insurers make money in two ways: 1. Through underwriting, the process by which insurers select the risks to insure and decide how much in premiums to charge for accepting those risks; 2. By investing the premiums they collect from insured parties. The most complicated aspect of the insurance business is the actuarial science of ratemaking (price-setting) of policies, which uses statistics and probability to approximate the rate of future claims based on a given risk. After producing rates, the insurer will use discretion to reject or accept risks through the underwriting process. At the most basic level, initial ratemaking involves looking at the frequency and severity of insured perils and the expected average payout resulting from these perils. Thereafter an insurance company will collect historical loss data, bring the loss data to present value, and compare these prior losses to the premium collected in order to assess rate adequacy. Loss ratios and expense loads are also used. Rating for different risk characteristics involves at the most basic level comparing the losses with "loss relativities" - a policy with twice as many losses would therefore be charged twice as much. More complex multivariate analyses are sometimes used when multiple characteristics are involved and a univariate analysis could produce confounded results. Other statistical methods may be used in assessing the probability of future losses. Upon termination of a given policy, the amount of premium collected and the investment gains thereon, minus the amount paid out in claims, is the insurer'sunderwriting profit on that policy. Underwriting performance is measured by something called the "combined ratio" which is the ratio of expenses/losses to premiums. A combined ratio of less than 100 percent indicates an underwriting profit, while anything over 100 indicates an underwriting loss. A company with a combined ratio over 100% may nevertheless remain profitable due to investment earnings. Insurance companies earn investment profits on "float". Float, or available reserve, is the amount of money on hand at any given moment that an insurer has collected in insurance premiums but has not paid out in claims. Insurers start investing insurance premiums as soon as they are collected and continue to earn interest or other income on them until claims are paid out. The Association of British Insurers (gathering 400 insurance companies and 94% of UK insurance services) has almost 20% of the investments in the London Stock Exchange. In the United States, the underwriting loss of property and casualty insurance companies was $142.3 billion in the five years ending 2003. But overall profit for the same period was $68.4 billion, as the result of float. Some insurance industry insiders, most notably Hank Greenberg, do not believe that it is forever possible to sustain a profit from float without an

underwriting profit as well, but this opinion is not universally held. Naturally, the float method is difficult to carry out in an economically depressed period. Bear markets do cause insurers to shift away from investments and to toughen up their underwriting standards, so a poor economy generally means high insurance premiums. This tendency to swing between profitable and unprofitable periods over time is commonly known as the underwriting, or insurance, cycle. Claims Claims and loss handling is the materialized utility of insurance; it is the actual "product" paid for. Claims may be filed by insureds directly with the insurer or through brokers or agents. The insurer may require that the claim be filed on its own proprietary forms, or may accept claims on a standard industry form, such as those produced by ACORD. Insurance company claims departments employ a large number of claims adjusters supported by a staff of records management and data entry clerks. Incoming claims are classified based on severity and are assigned to adjusters whose settlement authority varies with their knowledge and experience. The adjuster undertakes an investigation of each claim, usually in close cooperation with the insured, determines if coverage is available under the terms of the insurance contract, and if so, the reasonable monetary value of the claim, and authorizes payment. The policyholder may hire their own public adjuster to negotiate the settlement with the insurance company on their behalf. For policies that are complicated, where claims may be complex, the insured may take out a separate insurance policy add on, called loss recovery insurance, which covers the cost of a public adjuster in the case of a claim. Adjusting liability insurance claims is particularly difficult because there is a third party involved, the plaintiff, who is under no contractual obligation to cooperate with the insurer and may in fact regard the insurer as a deep pocket. The adjuster must obtain legal counsel for the insured (either inside "house" counsel or outside "panel" counsel), monitor litigation that may take years to complete, and appear in person or over the telephone with settlement authority at a mandatory settlement conference when requested by the judge. If a claims adjuster suspects under-insurance, the condition of average may come into play to limit the insurance company's exposure. In managing the claims handling function, insurers seek to balance the elements of customer satisfaction, administrative handling expenses, and claims overpayment leakages. As part of this balancing act, fraudulent insurance practices are a major business risk that must be managed and overcome. Disputes between insurers and insureds over the validity of claims or claims handling practices occasionally escalate into litigation (see insurance bad faith).

Marketing Insurers will often use insurance agents to initially market or underwrite their customers. Agents can be captive, meaning they write only for one company, or independent, meaning that they can issue policies from several companies. Commissions to agents represent a significant portion of an insurance cost and insurers that sell policies directly via mass marketing campaigns can offer lower prices. The existence and success of companies using insurance agents (with higher prices) is likely due to improved and personalized service

Across the world

Global insurance premiums grew by 2.7% in inflation-adjusted terms in 2010 to $4.3 trillion, climbing abovepre-crisis levels. The return to growth and record premiums generated during the year followed two years of decline in real terms. Life insurance premiums increased by 3.2% in 2010 and non-life premiums by 2.1%. While industrialised countries saw an increase in premiums of around 1.4%, insurance markets in emerging economies saw rapid expansion with 11% growth in premium income. The global insurance industry was sufficiently capitalised to withstand the financial crisis of 2008 and 2009 and most insurance companies restored their capital to pre-crisis levels by the end of 2010. With the continuation of the gradual recovery of the global economy, it is likely the insurance industry will continue to see growth in premium income both in industrialised countries and emerging markets in 2011. Advanced economies account for the bulk of global insurance. With premium income of $1,620bn, Europe was the most important region in 2010, followed by North America $1,409bn and Asia $1,161bn. Europe has however seen a decline in premium income during the year in contrast to the growth seen in North America and Asia. The top four countries generated more than a half of premiums. The US and Japan alone accounted for 40% of world insurance, much higher than their 7% share of the global population. Emerging economies accounted forover 85% of the worlds population but only around 15% of premiums. Their markets are however growing at a quicker pace.

TYPES OF INSURANCE
Insurance can be termed as a form of risk management which is mainly used to protect an individual against the risk of prospective financial loss, if any. Insurance can be used as a tool to shield an individual against potential risks like travel accidents, death, unemployment,

theft, property destruction by natural calamities, fire mishaps etc. Different types of insurance is used to cover different properties and assets such as vehicles, home, health care etc. Basically, an insurance policy can also be known as a protection net which secures you from any financial losses in future. All you have to do is pay the insurance agencies a specified amount every month, known as premium, so that they can take care of you by providing you financial back up in case of a sudden health emergency or a fatal incident. There are two ways for getting an insurance done.

One way is to visit an agent and consult him for the best option you can avail for your situation. And then, trust him/her for their suggestion on the type of insurance they feel is right for you. The other way is to research and choose on your own, the type of insurance which will be best suited for your situation. You should research the market as well as the net, to look for the best insurance companies, and furthermore, the most suitable type of insurance that they offer. Also explore the various types of policies which are available to you in the market, and then compare to decide which one to choose finally. TheLoanBazaar.com offer our clients with various types of insurance schemes and policies such as health insurance, travel insurance, life insurance etc, to name a few. The detail about all these types of insurance offered by us is as follows: Health Care Insurance With such high medical and health care costs these days, its hard to even think about visiting a doctor. But what about an unexpected mishap or an unforeseen disability or attack, where the potential medical bills could shoot up to a sky? Where would you get so much money from? These are exactly the situations where you feel you had a security, something which could come to your rescue and save you from such financial crisis. While some companies do provide its employees with health insurance, for others, this is a must. Especially for the aging couples, who have a comparatively more chances of needing emergency bill money. The health insurance does it all, so that they do not have to worry for the huge payments at the last minute. A health insurance can cover all from a routine immunization to a major illness.

Life Insurance

Loss of a family member is a catastrophe which glooms a familys life. But even more tragic is the death of a sole bread earner for the family, who then has to go through the pain of losing their loved one, as well as the financial loss putting their survival in jeopardy. This financial hardship due to a sudden death of a family member or a disability resulting to a loss of job or inability to work can be avoided to a great extent by taking up a life insurance policy. A Life insurance or disability insurance covers such losses and pays a family, compensation to restore the earnings lost by them due to a sudden death or disability. The monthly premiums for a life insurance are generally based upon the age, health, and occupation information of the applicant, in addition to the total benefits to be paid to him for his policy. Home Insurance Real estate property and hard assets are subject to accidental risks like theft, destruction due to natural disasters or fire accidents etc. with such huge investments gone into buying a real estate property like your home or office, the risk involved is a loss of large amount of money. Home and property insurance helps you in managing and protecting against these risks. The cost of a real estate property and its insurance is mostly based upon the worth of the already insured hard assets and also the location in which the assets are situated. Travel Insurance This is intended to cover any of the financial or any other losses which were incurred by the insured while traveling, be it nationally or internationally, such as mountain trekkers, cruise travelers etc. Auto Insurance Any vehicle on road, no matter how safe its driver is, is bound to meet with an accident or two, which may leave it with just a few scratches, or crash it up totally. Most countries today require you to have an auto insurance while on road in your vehicles. If you have an accidental car crash, a total repair could cost you a fortune. On the other hand, a little scratch on your Land Cruiser might also soar up your bills to a high. Whether or not you need an auto insurance mostly depends on the type of car you own. If you have an expensive car and a little repair could wipe you out financially, you should very well go in for a buying an all-inclusive and crash insurance which could protect you against any and every harm done to your vehicle.

**Classification of Insurance
Classify in 3 different Types:1. Life Insurance. cover Life 2. General Insurance.- Accidental , mediclaims etc comes under this . 3. Reinsurance For risk Company has to do this to safeguard there position.

Products i am taking two company LIC and BHARTI AXA life.

AND

Bharti AXA life

INDIVIDUAL PLANS Protect your loved ones against financial contingencies at nominal costs You love your family and feel responsible towards them in every way. But life can be uncertain and unforeseen contingencies can meet you anytime. At such times, life insurance comes to your rescue. As someone who wants only the best for their family, we understand your need to safeguard your family against any crisis. Our protection plans offer you high life cover at nominal costs so that you can fulfill your responsibility with ease and your family never has to face financial constraints.
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Bharti AXA Life Elite Secure- Pure Life Insurance cover at very competitive premiums. Option to cover your life till 75 years with a unique to age 75 years term Bharti AXA Life SecureConfident -A simple Life Insurance product .Option to enhance protection with the addition of Riders Bharti AXA Life Family Income Secure - Guaranteed Annual Income for your family in case of any eventuality 100% return of premium at maturity Bharti AXA Life Protect Plus -Financial Protection for your family. Guaranteed Cash Back on maturity Bharti AXA Life Premium Waiver Rider - 100% of all future premiums under the base policy are waived and paid by the Company on death of the life insured under the rider.

*Wealth Creation with Protection Ensure your family's security as you maximise your savings You can make your money work harder with our Wealth Creation with Protection plans. These plans come with the double advantage of: Complete peace of mind as your family is financially protected and Good investment option that ensures long-term financial goals are met

Whether it is a bigger home, a dream vacation or even a comfortable future, these life insurance plans are the best solutions along with the surety of financial protection. Our life insurance coverage plans include 'traditional' plans that give guaranteed money on maturity. While, we also offer market-linked plans that give you the benefit of good market performance to maximise your savings. Bharti AXA Life Child Plans - As a responsible parent you will never want to make any compromises when it comes to your child. Wouldnt it be nice if you have a trusted friend who takes care of all the finances for your child's growing dreams? Child plans, with a life insurance company like ours, have been created to help you provide the best for your child's key stages and help him secure a bright future. Bharti AXA Life Bright Stars EDGE - Double Protection Benefits for your loved ones - Sum assured Plus Fund value is paid in case something unfortunate were to happen to you Bharti AXA Life Future Champs -At crucial milestones of your childs life get assured money-back through Guaranteed Pay Back Benefits amounting to 109% of promised Sum Assured.Your childs future is secure incase of unfortunate death as future Guaranteed Payouts will be paid to the nominee Bharti AXA Life Power Kid Insurance Plan -Flexibility to choose life insurance benefit. Provision of Education Allowance .Career Development Allowance. Future premium payments in case of death of the life

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Bharti AXA Life Guaranteed PlansMaximise your gains from the market without the fear of loss of your money At Bharti AXA Life we care for you and your hard-earned money. Thats why we present the 'Guarantee Plans'- an innovative way of protecting your investment and maximising your gain from the market without losing any of your money. Our plans include an in-built guarantee feature that ensures the minimum value of your investments remain intact. You can therefore enjoy market ups but dont have to worry about market lows Bharti AXA Life Save Confident -Premium payment for 12 years, while you can enjoy benefits for 15 years .Regular money back with guaranteed annual payments
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Bharti AXA Life True Wealth- Double Guarantee: Highest daily NAV achieved during the Tracking Period of the True Wealth Fund is payable at maturity subject to a minimum NAV Guarantee of Rs 12!! Bharti AXA Life Aajeevan Anand -Get guaranteed regular payouts of 25% of Sum Assured every 5 years, starting from the end of 10thyear until you reach the age of 100 years Life Insurance cover until the age of 100 years Bharti AXA Life Monthly Income Plan -Guaranteed monthly income that helps fulfill your loved ones desires while protecting them in case of an unfortunate event

Health

Investments for your good health Given the fast pace of our lives, we always run the risk of acquiring lifestyle diseases - be it high blood pressure or various heart diseases. Add to this the rising medical costs because of which, we end up spending increasingly large amounts of money. Bharti AXA Life offers you Health Plans that ensure freedom from stress when it comes to your health expenses and let you enjoy your life without any worries.
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Bharti AXA Life EasyHealth y Extremely affordable premiums starting as low as Rs 3 per day y A range of Daily Hospital Cash Benefit options, with additional benefits in case of accidental hospitalisation in an ICU or otherwise Retirement Make the golden years of your life truly comfortable. Retirement plans are the best way to systematically plan for your golden years. Our flexible retirement plans ensure you live your dream retirement. By investing in these long-term plans by paying life insurance premium, you can earn a regular income even after you've stopped working. Without having to depend on anyone else or worry about rising costs, you can go ahead and lead a comfortable retirement.

Bharti AXA Life Wonder Years Retirement Plan y A plan that helps accumulate wealth for your retirement years. y Receive Guaranteed Retirement Amount PLUS vested Retirement Bonuses at vesting

Group Plans Life Insurance With Bharti AXA Life insurance products, provide financial security and protection to your loved ones. Simple, affordable plans to safeguard your family from life's uncertainties. Bharti AXA Life Shield - Life Shield, a single premium group term life insurance product, is a simple, affordable life insurance solution that financially secures the family of the group member by providing a life insurance cover. Bharti AXA Life Sanjeevani- Sanjeevani, a single premium group term life insurance product provides financial security and protection to your loved ones. It is a simple, affordable plan to safeguard your family from life's uncertainties. Credit Protection With Bharti AXA Life Credit Protection Plans you can ensure that your family enjoys a good lifestyle and at the same time is protected from the uncertainties of life. Bharti AXA Life Credit Secure Bharti AXA Life Mortgage Credit Shield Bharti AXA Life Credit Shield

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Bharti AXA Life Premier Protect Home Shield Health Bharti AXA Life health plan helps you financially secure yourself against 6 critical illnesses namely, cancer, heart attack, coronary artery by-pass surgery, kidney failure, stroke and loss of limbs. Bharti AXA Life Swasthya Sanjeevani

NAVS of funds from Bhart AXA life. Fund SFIN ULIF00919/05/2009BBUILDNPS1130 ULIF02104/10/2010BTUREWLTHG130 ULIF00708/12/2008EGROWTHOPR130 ULIF00321/08/2006DSTDYMOENY130 ULIF01107/12/2009LSAFEMONYP130 ULIF00121/08/2006BSAVENGROW130 ULIF01007/07/2009LSAFEMONEY130 ULIF00814/12/2008EGRWTHOPRP130 ULIF00426/12/2007BSNGROWPEN130 ULIF00221/08/2006EGROWMONEY130 ULIF00626/12/2007DSTDYMONYP130 ULIF01501/01/2010EGRMONYPLP130 ULIF01801/01/2010EGRWTHOPLP130 ULIF01909/02/2010EBUILDINDA130 ULIF01704/01/2010EBUILDINDP130 ULIF01214/12/2009EGROMONYPL130 Fund Build n Protect Fund Series One True Wealth Fund Growth Opportunities Fund Steady money Fund Safe Money Pension Fund Savengrow money Fund Safe Money Fund Growth Opportunities Pension Fund Save n Grow Money Pension Fund Grow money Fund Steady Money Pension Fund Grow Money Pension Plus Fund Growth Opportunities Pension Plus Fund Build India Fund Build India Pension Fund Grow Money Plus Fund Unit Price (Rs.) 10.3556 8.9683 16.7601 14.4475 11.4555 14.397 11.4526 15.8816 11.5323 13.961 12.8346 9.1974 9.3758 8.4721 7.8616 9.2775

ULIF01614/12/2009EGRWTHOPPL130 ULIF00526/12/2007EGROWMONYP130

Growth Opportunities Plus Fund Grow Money Pension Fund

9.0624 7.8133

LIC
Products are mainly divided in 5 categories :1. Insuarance Plans. 2. Pension Plans. 3. Unit plans. 4. Special Plans. 5. Withdrawn Plans. *Insurance Plans 1. Jeevan Arogya Introductions :Health has been a major concern on everybodys mind, including yours. In these days of skyrocketing medical expenses, when a family member is ill, it is a traumatic time for the rest of the family. As a caring person, you do not want to let any unfortunate incident to affect your plans for you and your family. So why let any medical emergencies shatter your peace of mind. LIC has launched LICs Jeevan Arogya, a unique non-linked Health Insurance plan which provides health insurance cover against certain specified health risks and provides you with timely support in case of medical emergencies and helps you and your family remain financially independent in difficult times. LICs Jeevan Arogya gives you: Valuable financial protection in case of hospitalisation, surgery etc Increasing Health cover every year Lump sum benefit irrespective of actual medical costs No claim benefit Flexible benefit limit to choose from

Flexible premium payment option

2. Endowment Plus IN THIS POLICY, THE INVESTMENT RISK IN INVESTMENT PORTFOLIO IS BORNE BY THE POLICYHOLDER This is a unit linked Endowment plan which offers investment cum insurance cover during the term of the policy. You can choose the level of insurance cover within the limits, which will depend on the mode and level of premium you agree to pay. You have a choice of investing your premiums in one of the four types of investment funds available. Premiums paid after deduction of allocation charge will purchase units of the Fund type chosen. The Unit Fund is subject to various charges and value of units may increase or decrease, depending on the Net Asset Value (NAV). Payment of Premiums: You may pay premiums regularly at yearly, half-yearly, quarterly or monthly (through ECS mode only) intervals over the term of the policy. Alternatively, a Single premium can be paid. A grace period of 30 days will be allowed for payment of yearly or half-yearly or quarterly premiums and 15 days for monthly (through ECS) premiums. Eligibility Conditions And Other Restrictions: (a) Minimum Age at entry (b) Maximum Age at entry (c) Minimum Maturity Age (d) Maximum Maturity Age (e) Policy Term (f) Minimum Premium 7 (age last birthday) 60 years (age nearer birthday) 18 years (completed) 70 years (age nearer birthday) 10 to 20 years

Regular premium (other than monthly (ECS) mode): Rs. [20,000] p.a. Regular premium (for monthly (ECS) mode): Rs. [1,750] p.m. Single premium: Rs. [30,000] (g) Maximum Premium -

Regular premium: Rs. [1,00,000] p.a. Single premium: No Limit (h) Sum Assured under the Basic Plan -

Minimum Sum Assured: Regular Premium policies: (Policy Term +1) times the annualized premium Single Premium: For age at entry of below 45 years: 1.25 times of the single premium For age at entry of 45 years and above: 1.10 times of the single premium Maximum Sum Assured: Regular Premium policies: 30 times of the annualized premium if age at entry is upto 45 years 25 times of the annualized premium if age at entry is 46 to 60 years Single Premium Policies: If Critical Illness Benefit Rider is opted for: 5 times the Single premium if age at maturity is upto 55 years. 3 times the Single premium if age at maturity is 56 to 60 years. If Critical Illness Benefit Rider is not opted for: 5 times the Single premium if age at maturity is upto 65 years. 3 times the Single premium if age at maturity is 66 to 70 years. Where the minimum Sum Assured is not in the multiples of Rs. 5,000, it will be rounded off to the next multiple of Rs. 5,000. Annualized Premiums shall be payable in multiple of Rs. 1,000 for other than ECS monthly. For monthly (ECS), the premium shall in multiples of Rs. 250/-. 3. Jeevan Anurag LICs Jeevan ANURAG is a with profits plan specifically designed to take care of the educational needs of children. The plan can be taken by a parent on his or her own life. Benefits under the plan are payable at prespecified durations irrespective of whether the Life Assured survives to the end of the policy term or dies during the term of the policy. In addition, this plan also provides for an immediate payment of Basic Sum Assured amount on death of the Life Assured during the term of the policy. Assured Benefit Payment of 20% of the Basic Sum Assured at the start of every year during last 3 policy years before maturity. At maturity, 40% of the Basic Sum Assured along with reversionary bonuses declared from time to time on full Sum Assured for the full term and the Terminal bonus, if

any shall be payable. For example, if term of the policy is 20 years, 20% of the Sum assured will be payable at the end of the 17th,18th, 19th year and 40% of the Sum Assured along with the reversionary bonuses and the terminal bonus, if any, at the end of the 20th year. Death Benefit Payment of an amount equal to Sum Assured under the basic plan immediately on the death of the life assured.

4. Komal Jeevan Product summary: This is a Children's Money Back Plan that provides financial protection against death during the term of plan with periodic payments on survival at specified durations. This plan can be purchased by any of the parent or grand parent for a child aged 0 to 10 years. Commencement of risk cover: The risk commences either after 2 years from the date of commencement of policy or from the policy anniversary immediately following the completion of 7 years of age of child, whichever is later. Premiums: Premiums are payable yearly, half-yearly, quarterly, monthly or through Salary deductions, as opted by you, up to the policy anniversary immediately after the life assured (child) attains 18 years of age or till the earlier death of the life assured. Alternatively, the premium may be paid in one lump sum (Single premium). Guaranteed Additions: The policy provides for theGuaranteed Additions at the rate of Rs.75 per thousand Sum Assured for each completed year. The Guaranteed Additions are payable at the end of the term of the policy or earlier death of the Life Assured. Loyalty Additions: This is a with-profit plan and participates in the profits of the Corporations life insurance business. It gets a share of the profits in the form of loyalty additions which are terminal bonuses payable along with death or maturity benefit. Loyalty addition may be payable depending on the experience of the Corporation

5. Marriage Endowment Or Educational Annuity Plan

Product summary: This is an Endowment Assurance plan that provides for benefits on or from the selected maturity date to meet the Marriage/Educational expenses of the named child. Premiums: Premiums are payable yearly, half-yearly, quarterly, monthly or through Salary deductions, as opted by you, throughout the term of the policy or earlier death.

Bonuses: This is a with-profit plan and participates in the profits of the Corporations life insurance business. It gets a share of the profits in the form of bonuses. Simple Reversionary Bonuses are declared per thousand Sum Assured annually at the end of each financial year. Once declared, they form part of the guaranteed benefits of the plan. Such bonuses are to be added till maturity even if the life assured dies before the maturity date. Final (Additional) Bonus may also be payable provided a policy is of a certain minimum term.

***Various Famous schemes are coming time to time from the LIC for different categories :1.The Endowment Assurance Policy Moderate Premiums High bonus High liquidity Savings oriented. This policy not only makes provisions for the family of the Life Assured in event of his early death but also assures a lump sum at a desired age. The lump sum can be reinvested to provide an annuity during the remainder of his life or in any other way considered suitable at that time. Premiums are usually payable for the selected term of years or until death if it occurs during the term period. Suitable For: Being an endowment assurance policy, this plan is apt for people of of all ages and social groups who wish to protect their families from a financial setback that may occur owing to their demise.

The amount assured if not paid by reason of his death earlier will payable at the end of the endowment term where it can be invested in an annuity provision for the rest of the policyholder's life or in any other way he may think most suitable at that time. Disability Benefit: In case policy holder becomes totally and permanently disabled due to an accident before reaching the age of 70 and the policy is in full force, he will not be required to pay further premiums, (the Disability Benefit is available in respect of the first Rs.20,000 sum assured on any one life) and the policy will continue to be in force.

Accident Benefit: By paying a small extra premium of Rs.1 per Rs.1000/- sum assured per year he or his family are entitled to the following benefits on death or permanent disability caused by accident. Even students above the age of 18 years can avail of this benefit. Premium Stoppage: If payment of premiums ceases after at least THREE years' premiums have been paid , a free paid-up policy for a reduced sum assured will be automatically secured provided the reduced sum assured, exclusive of any attached bonus, is not less than Rs. 250/-. The reduced sum assured will become payable on the event as stipulated in the policy. Bonus: Is there anything extra payable besides the sum assured at the time of claim settlement? Yes, but only if it is a with profits policy. Every year the Life Insurance Corporation distributes its surplus among policyholder to with profits polices in the form of bonuses. Substantial bonuses have been declared in the past after each valuation of policy liabilities.

2. Jeevan Shree-I Product summary: This is an Endowment Assurance plan offering the choice of many convenient premium paying terms. It provides financial protection against death throughout the term of plan with the payment of maturity amount on survival to the end of the policy term. Premiums: Premiums are payable yearly, half-yearly, quarterly or through Salary deductions, as opted by you, throughout the premium paying term or till earlier death. Alternatively premium may be paid in one lump sum (Single premium). Guaranteed Additions:

The policy provides for the Guaranteed Additions at the rate of Rs. 50/- per thousand Sum Assured for each completed year for first five years of the policy. The Guaranteed Additions are payable along with the Basic Sum Assured at the time of claim. Bonuses: The policy participates in the profits of the Corporations life insurance business from the 6th year onwards. It will get a share of the profits in the form of bonuses. Simple Reversionary Bonuses will be declared per thousand Basic Sum Assured annually at the end of each financial year. Once declared, they will form part of the guaranteed benefits of the plan.

3. Money Back with Profit Unlike ordinary endowment insurance plans where the survival benefits are payable only at the end of the endowment period, this scheme provides for periodic payments of partial survival benefits as follows during the term of the policy, of course so long as the policy holder is alive. In the case of a 20-year Money-Back Policy (Table 75), 20% of the sum assured becomes payable each after 5, 10, 15 years, and the balance of 40% plus the accrued bonus become payable at the 20th year. For a Money-Back Policy of 25 years (Table 93), 15% of the sum assured becomes payable each after 5, 10, 15 and 20 years, and the balance 40% plus the accrued bonus become payable at the 25th year. An important feature of this type of policies is that in the event of death at any time within the policy term, the death claim comprises full sum assured without deducting any of the survival benefit amounts, which have already been paid. Similarly, the bonus is also calculated on the full sum assured. 4. Jeevan Bharathi - I Introduction LICs Jeevan Bharati-I is a plan exclusively for women. It is a with profit plan having special features considering the needs of women. The plan also provides for Accident Benefit, Critical Illness Benefit and Congenital Disability Benefit as optional Riders 1. 1. SPECIAL FEATURES Encashment of Survival Benefit as and when needed:

The policyholder at her option may avail the survival benefit any time on or after its due date. If opted to avail later, increased survival benefit at the rate decided by the corporation from time to time will be payable.

2.

Flexibility to pay premiums in advance:

The mode of premium payment is only yearly under this plan. However, policyholder may pay the next yearly premium in advance in instalments (maximum upto 3 instalments) during the year. If premiums are paid in advance a premium rebate may be allowed as may be decided by the Corporation from time to time 3. Option to receive maturity proceeds in the form of an annuity: : The policyholder shall have the option to receive the maturity proceeds in the form of annuity. The rate of annuity will be based on the annuity rates prevalent at the time of stipulated Date of Maturity.

4. Auto Cover: After two years premiums have been paid, whenever premium payment is discontinued, the life cover for full sum assured will continue for 3 years from the due date of first unpaid premium. If death occurs during the Auto Cover period, then death benefit after deducting unpaid premiums, with interest is payable along with the vested bonus, if any. The auto cover shall not be available for rider benefits.

5. The Whole Life Policy This plan is mainly devised to create an estate for the heirs of the policyholder as the plan basically provides for payment of sum assured plus bonuses on the death of the policyholder. However, considering the increased longevity of the Indian population, the Corporation has amended the above provision, thereby providing for payment of sum assured plus bonuses in the form of maturity claim on completion of age 80 years or on expiry of term of 40 years from date of commencement of the policy whichever is later. The premiums under the policy are payable up to age 80 years of the policyholder or for a term of 35 years whichever is later. If the payment of premium ceases after 3 years, a paid-up policy for such reduced sum assured will be automatically secured provided the reduced sum assured exclusive of any attached bonus is not less than Rs.250/-. Such reduced paid-up policy is not entitled to participate in the bonus declared thereafter but the bonuses already declared on the policy will remain attach, provided the policy is converted in to a paid-up policy after the premiums are paid for 5 years. Suitable For: This policy is suitable for people of all ages who wish to protect their families from financial crises that may occur owing to the policyholders premature death.

6. Two Year Temporary Assurance Policy The Two Year Temporary Assurance policy is designed for the insuring public who requires risk cover for a maximum of two years. Under the Two Year Temporary Assurance policy a single premium is required to be paid at the outset of the policy to cover the entire period of term. The proposer is required to pay the medical examination fee. The proof of age must also accompany the proposal.The policy issued will be only under the 'Without Profits' plan.The policy is not entitled to any surrender value. No loan will be granted against the Two Year Temporary Assurance policy. Suitable For The Two Year Temporary Assurance policy caters to the individuals who specifically require insurance cover against risk for a short period of two years, for instance persons who are required to go on tours for instance for a year or so.

7. Jeevan Saathi Product summary : This is an Endowment Assurance Plan issued on the lives of husband and wife. The plan provides financial protection against death of both the lives. It pays the maturity amount on survival of one or both the lives to the end of the policy term. Premiums : Premiums are payable yearly, half-yearly, quarterly, monthly or through salary deductions as opted by you throughout the term of the policy or till the first death of the lives covered, whichever is earlier. Bonuses : This is a with-profit plan and participates in the profits of the Corporations life insurance business. It gets a share of the profits in the form of bonuses. Simple Reversionary Bonuses are declared per thousand Sum Assured annually at the end of each financial year. Once declared, they form part of the guaranteed benefits of the plan. Such bonuses are to be added till date of maturity or the second death of the lives covered, whichever is earlier. Final (Additional) Bonus may also be payable provided policy has run for certain minimum period.

Pension Plans:Pension Plus

IN THIS POLICY, THE INVESTMENT RISK IN INVESTMENT PORTFOLIO IS BORNE BY THE POLICYHOLDER LICs Pension Plus is a unit linked deferred pension plan, which provides you a minimum guarantee on the gross premiums paid. The plan is without any life cover.

You have a choice of investing your premiums in one of the two types of investment funds available. Premiums paid after deduction of allocation charge will purchase units of the Fund type chosen. The Unit Fund is subject to various charges and value of units may increase or decrease, depending on the Net Asset Value (NAV). 1. Payment of Premiums: You may pay premiums regularly at yearly, half-yearly or quarterly or monthly (through ECS mode only) intervals over the term of the policy. Alternatively, a Single premium can be paid. A grace period of 30 days will be allowed for payment of yearly or half-yearly or quarterly premiums and 15 days for monthly (through ECS) premiums. 2 . Eligibility Conditions And Other Restrictions: a) Minimum Entry Age - 18 years (last birthday) b) Maximum Entry Age - 75 years (nearest birthday) c) Minimum Vesting Age - 40 years (completed) d) Maximum Vesting Age - 85 years (nearest birthday) e) Minimum Deferment Term - 10 years f) Sum Assured - NIL g) Minimum Premium Regular premium (other than monthly (ECS) mode) : Rs. [15,000] p.a. Regular premium (for monthly (ECS) mode) : Rs. [1,500] p.m. Single premium: Rs. [30,000] h) Maximum Premium Regular premium : Rs. [1,00,000] p.a. Single premium: No Limit Annualized Premiums shall be payable in multiple of Rs. 1,000 for other than ECS monthly. For monthly (ECS), the premium shall be in multiples of Rs. 250/-.

3. Unit Plans:Pension Plus IN THIS POLICY, THE INVESTMENT RISK IN INVESTMENT PORTFOLIO IS BORNE BY THE POLICYHOLDER LICs Pension Plus is a unit linked deferred pension plan, which provides you a minimum guarantee on the gross premiums paid. The plan is without any life cover. You have a choice of investing your premiums in one of the two types of investment funds available. Premiums paid after deduction of allocation charge will purchase units of the Fund type chosen. The Unit Fund is subject to various charges and value of units may increase or decrease, depending on the Net Asset Value (NAV).

1. Payment of Premiums: You may pay premiums regularly at yearly, half-yearly or quarterly or monthly (through ECS mode only) intervals over the term of the policy. Alternatively, a Single premium can be paid. A grace period of 30 days will be allowed for payment of yearly or half-yearly or quarterly premiums and 15 days for monthly (through ECS) premiums. 2 . Eligibility Conditions And Other Restrictions: a) Minimum Entry Age - 18 years (last birthday) b) Maximum Entry Age - 75 years (nearest birthday) c) Minimum Vesting Age - 40 years (completed) d) Maximum Vesting Age - 85 years (nearest birthday) e) Minimum Deferment Term - 10 years f) Sum Assured - NIL g) Minimum Premium Regular premium (other than monthly (ECS) mode) : Rs. [15,000] p.a.

Regular premium (for monthly (ECS) mode) : Rs. [1,500] p.m. Single premium: Rs. [30,000] h) Maximum Premium Regular premium : Rs. [1,00,000] p.a. Single premium: No Limit Annualized Premiums shall be payable in multiple of Rs. 1,000 for other than ECS monthly. For monthly (ECS), the premium shall be in multiples of Rs. 250/-.

2 Endowment Plus IN THIS POLICY, THE INVESTMENT RISK IN INVESTMENT PORTFOLIO IS BORNE BY THE POLICYHOLDER This is a unit linked Endowment plan which offers investment cum insurance cover during the term of the policy. You can choose the level of insurance cover within the limits, which will depend on the mode and level of premium you agree to pay. You have a choice of investing your premiums in one of the four types of investment funds available. Premiums paid after deduction of allocation charge will purchase units of the Fund type chosen. The Unit Fund is subject to various charges and value of units may increase or decrease, depending on the Net Asset Value (NAV).

Comparision and Risks and Gains As the gain is that life is secured in the all the life insuarance . but in the investment fund like ULIP it is very risk in the investment fund because for the higher return company is stock market which is very risks because of the foreign instability and economic crises in US and Europe . Now commodities , Currencies are very volatile , so Assest Management company feels very risky in investment in this types of investment .

Recommendation Summary for a potential Customer . As per my recommendation Investor should investment in Government based Insuarance company plans because that is safe and very much transparent in their schemes . LIC is one of the prominent player in India and various new tactics for markrting there products like :-

Individual Agent: The individual agent has been the bedrock and the lynchpin in the marketing of insurance, especially life insurance. The professional agent has been the strongest link between the life insurer and the customer. The professional agent has the onerous role of explaining the concepts, terms and conditions, benefits and privileges of the insurance contract. He has to analyze the financial requirements and risks faced by the customers and market insurance plans suited to the needs and means of the customers. All insurance companies, and life insurance companies in particular, have recognized the paramount importance of this channel. The number of agents has grown at a spectacular rate. The total number of agents on they roll is 11,03,047 as on 31.03.2007 as against 10,52,283 as on 31.03.2006. Corporate Agents: The number of corporate agents has grown in recent years. Corporate agent is a concept introduced with a view to taking advantage of the presence of a large number of entities with a sizeable client base, contacts and goodwill already operating in the market. With multi locations and a network of people assisting them, these entities have a different structure and purpose. Hence their existing network could be utilized to market insurance. The corporate agent could thus be defined as a person - meaning a firm or company formed under the Companies Act, 1956 or a banking company or a Bank/RRB or a co-operative society registered under the Co-operative societies Act, 1912 or a panchayat or a NGO/MFI covered under the Coop Societies Act or a NBFC registered with RBI or any other institution. They assist greatly in the spread of insurance through the greater reach of the institutions. Brokers: Brokers are permitted to sell products of more than one insurer. Brokers have been very predominant in the non life arena. Large risks require quite sophisticated expertise. Brokers have played a very key role in this area both in selling products and in servicing of Insurance claims. Brokers have now also entered the Life Insurance market. Bancassurance: Bancassurance is developing as an important channel in India. This is due to the large reach and customer base of banks in both urban and rural areas in India. The persistency rate in Bancassurance, due to the continuous contact with the client is better than in other channels. The ease of payment of premium and the facility of maturity/claim payments through the bank account make it a customer friendly channel Referrals: This is a new concept very similar to getting a prospecting list and leads to effect sales with customers. It is evident that in addition to banks, there could be various other entities which could act as a referral provider due to the large database of members/clients, like credit cardholders association members, society members etc. In short, such institutions could share or market their database to provide leads to the intermediaries to sell insurance products. The referral provider is not a licensed intermediary, but can be regulated by the insurance Regulator, through approval of the terms of the agreement, between the insurer and the referral provider.

Direct Marketing: In the new technological environment, new innovative marketing systems have evolved. The use of inter-net, web based sales, e- marketing, telecalling, mobile SMS have made giant strides in reaching out to customers. This is an emerging channel which in future may grow in size and proportion of sales. This channel requires active regulation which should be on issues of transparency, disclosure, privacy, contract, TRAI guidelines etc. It would be necessary to give full complete information through soft copies of proposal forms, schedules, policies etc. New Business Brought in by All Channels of Distribution: (1/4/2oo7 to 31/3/2008) (Individual Assurances) Policies ( in lakh) Sum Assured ( in crore ) First Premium Income (in crore) Composite 375.90 2, 75, 457.65 43,812.86 Growth Rate -1.62 % -9.12 % 10.80%8 Pension & Group Business & Social Security Schemes Achievement From 1.4.2007 to 31.03.2008 Pension & Group Schemes Growth Rate Social Security Schemes Growth Rate No. of New Lives 153.71 lac 83% 113.67 lac 98% Premium Income (Rs. In Crore ) 10356.94 -9% 192.56 91% Business In Force as on 31.3.2008 Policies (in crore ) Sum Assured ( Rs. In crore) Individual Assurance 23.39 17, 28, 679 Group Insurance (lives) 5.10` 3, 06, 711 Span of Organization Today LIC functions with 2048 fully computerized branch offices, 100 divisional offices,7 zonal offices and the corporate office. LICs wide are network covers 100 divisional offices and connects all the branches through a Metro Area Network. LIC has tied up with some banks and service providers to offer on-line premium collection facility in selected cities. LICs ECS and ATM premium payment facility is an addition to customer convenience. Apart from on-line kiosks and IVRS, Info Centres have been commissioned at Mumbai, Ahmadabad, Bangalore, Chennai, Hyderabad, Kolkata, New Delhi, Pune and many other

cities. With a vision of providing easy access to its policy holders, LIC has launched SATELLITE SAMPARK OFFICES. The Satellite offices are smaller, leaner and closer to the customer. The digitalized records of the satellite offices will facilitate anywhere servicing and many other conveniences in the future. Scope of Insuarance Sector in India. Insurance in India has gone through two radical transformations. One holding company was formed with four subsidiaries. As a part of the general opening up of the economy after 1992, a Government appointed committee recommended that private companies should be allowed to operate. It took six years to implement the recommendation. Private sector was allowed into insurance business in 2000. However, foreign ownership was restricted. No more than 26% of any company can be foreign-owned. A totally regulation free regime ended in 1912 with the introduction of regulation of life insurance. A comprehensive regulatory scheme came into place in 1938. This was disabled through nationalization in what follows, we examine the insurance industry in India through different regulatory regimes. But, the Insurance Act of 1938 became relevant again in 2000 with deregulation. With a strong hint of sustained growth of the economy in the recent past, the Indian market is likely to grow substantially over the next few decades. The rest of the chapter is organized as follows. First, we study the evolution of insurance business before nationalization. This is important because the denationalized structure brought back to play important legal rules from 1938. Next we analyze the nationalized era separately for life and property casualty business as they were not nationalized simultaneously. Much of post-independence history of insurance in India was the history of nationalized insurance. In the following section, we examine the new legal structure introduced after the industry was denationalized in 2000. In the penultimate section, we examine the current state of play and projected future of the industry. ***Some Facts in Insuarance Sector Insurance Act, 1938 In 1938, with a view to protect the interest of insuring public, earlie legislation(1928) was consolidated and amended by the Insurance Act, 1938 with comprehensive provisions for detailed and effective control over the activities of insurer. For the first time in the history of insurance in India, the whole business was brought under a unified system of control and its structure strengthened by statutory regulations. Weaker elements were weeded out; indiscriminate promotion was checked and speculative insurance was eliminated. The best proof the soundness of the law was the effective check on large scale liquidations which had marred the name of insurance in the thirties. In due course, various amendments were made in the Indian Insurance Act 1938 in subsequent years to improve the regulatory mechanism. The Act of 1938, which in many respects codified and modernized the laws relating to insurance in the country, suggest the same noteworthy changes in regulation and organization of business. It was considerable step forward in the direction to envelop all forms of insurance. Malhotra Committee

In 1993, the first step towards insurance sector reforms was initiated with the formation of Malhotra Committee, headed by former Finance Secretary and RBI Governor R.N. Malhotra. The committee was formed to evaluate the Indian insurance industry and recommend its future direction with the objective of complementing the reforms initiated in the financial sector. Key Recommendations of Malhotra Committee Structure  Government stake in the insurance Companies to be brought down to 50%.  Government should take over the holdings of GIC and its subsidiaries so that these subsidiaries can act as independent corporations.  All the insurance companies should be given greater freedom to operate.Competition  Private Companies with a minimum paid up capital of Rs.1billion should be allowed to enter the industry.  No Company should deal in both Life and General Insurance through a single Entity.  Foreign companies may be allowed to enter the industry in collaboration with the domestic companies.  Postal Life Insurance should be allowed to operate in the rural market.  Only one State Level Life Insurance Company should be allowed to operate in each state. Regulatory Body  The Insurance Act should be changed.  An Insurance Regulatory body should be set up.  Controller of Insurance should be made independent. Investments  Mandatory Investments of LIC Life Fund in government securities to be reduced from 75% to 50%.  GIC and its subsidiaries are not to hold more than 5% in any company. Customer Service  LIC should pay interest on delays in payments beyond 30 days  Insurance companies must be encouraged to set up unit linked pension plans.  Computerisation of operations and updating of technology to be carried out in the insurance industry.  Malhotra Committee also proposed setting up an independent regulatory body The Insurance Regulatory and Development Authority (IRDA) to provide greater autonomy to insurance companies in order to improve their performance and enable them to act as independent companies with economic motives. Insurance sector in India was liberalized in March 2000 with the passage of the Insurance Regulatory and Development Authority (IRDA) Bill, lifting all entry restrictions for private players and allowing foreign players to enter the market with some limits on direct foreign ownership. There is a 26 percent equity cap for foreign partners in an insurance company. There is a proposal to increase this limit to 49 percent. The opening up of the insurance sector has led to rapid growth of the sector. Presently, there are 16 life insurance companies and 15 non-life insurance companies in the market. The potential for growth of insurance industry in India is immense as nearly 80 per cent of Indian population is without life insurance cover while health insurance and non-life insurance continues to be well below international standards.

Regulator Of Insurance Industry In India : IRDA The Insurance Regulatory and Development Act of 1999 were set out as follows. To provide for the establishment of an Authority to protect the interests of holders of insurance policies, to regulate, promote and ensure orderly growth of the insurance industry and for matters connected therewith or incidental thereto and further to amend the Insurance Act, 1938, the Life Insurance Corporation Act, 1956 and the General Insurance Business (Nationalization) Act, 1972. The Act effectively reinstituted the Insurance Act of 1938 with (marginal) modifications. Whatever was not explicitly mentioned in the 1999 Act referred back to the 1938 Act? (1) It specified the creation and functioning of an Insurance Advisory Committee that sets out rules and regulation. (2) It stipulates the role of the Appointed Actuary. He/she has to be a Fellow of the Actuarial Society of India. For life insurers the Appointed Actuary has to be an internal company employee, but he or she may be an external consultant if the company happens to be a non-life insurance company. The Appointed Actuary would be responsible for reporting to the Insurance Regulatory and Development Authority a detailed account of the company. (3) Under the Actuarial Report and Abstract, pricing of products have to be given in detail. It also requires details of the basic assumptions for valuation. There are prescribed forms that have to be filled out by the Appointed Actuary including specific formulas for calculating solvency ratios. (4) It stipulates the requirements for an agent. For example, insurance agents should have at least a high school diploma along with training of 100 hours from a recognized institution. (5) Under Assets, Liabilities, and Solvency Margin of Insurers, the Insurance Regulatory and Development Authority has set up strict guidelines on asset and liability management of the insurance companies along with solvency margin requirements. Initial margins are set high (compared with developed countries). The margins vary with the lines of business. Life insurers have to observe the solvency ratio, defined as the ratio of the amount of available solvency margin to the amount of required solvency margin: (a) the required solvency margin is based on mathematical reserves and sum at risk, and the assets of the policyholders fund; (b) the available solvency margin is the excess of the value of assets over the value of life insurance liabilities and other liabilities of policyholders and Shareholders funds. (6) It sets the reinsurance requirement for (general) insurance business. For all general insurance, a compulsory cession of 20% regardless of line of business to the General Insurance Corporation, the designated national reinsurer was stipulated. (7) Under the Registration of Indian Insurance Companies, it sets out details of registration of an insurance company along with renewal requirements. For renewal, it stipulates a fee of one-fifth of one percent of total gross premium written direct by an insurer in India during the financial year preceding the year. It seeks to give detailed background for each of the following key personnel: Chief Executive, Chief Marketing Officer, Appointed Actuary, Chief Investment Officer, Chief of Internal Audit and Chief Finance Officer. Details of sales

force, activities in rural business and projected values of each line of business are also required. (8) Under Insurance Advertisements and Disclosure, details of insurance advertisement in physical and electronic media has to be detailed with the Insurance Regulatory and Development Authority. The advertisements have to comply with the regulation prescribed in section 41 of the Insurance Act, 1938. The Act of 1938 says, No person shall allow or offer to allow, either directly or indirectly, as an inducement to any person to take out or renew or continue an insurance in respect of any kind of risk relating to lives or property in India, any rebate of the whole or part of the commission payable or any rebate of the premium shown on the policy, nor shall any person taking out or renewing or continuing a policy accept any rebate, except such rebate as may be allowed in accordance with the published prospectus or tables of the insurer. (9) All insurers are required to provide some coverage for the rural sector. It is called the Obligations of Insurers to Rural Social Sectors