CHAPTER 3 PROFILE OF THE INSURANCE INDUSTRY

3.1. HISTORY OF INSURANCE The business of insurance is started with marine business. Traders, who used to gather in the Lloyds coffee house in London, agreed to share the losses to their goods while being carried by ships. The losses used to occur because of pirates who robbed on the high seas or because of bad weather spoiling the goods or sinking the ships. The first insurance policy was issued in 1583 in England. In India insurance began in 1870 with life insurance being transacted by an English company, the European and Albert. The first Indian insurance company was the Bombay Mutual Assurance Society Ltd., formed in 1870. This was followed by the oriented life insurance company in 1874, Bharat in 1896 and the empire of India in 1897.

By the year 1956, when the life insurance business was nationalized and the life insurance corporation of India (LIC) was formed in 1st September 1956, there were 170 companies and 75 provident fund societies transacting life insurance companies in India. After the amendment to the relevant loss in 1999, the LIC didnt have the exclusion privilege of doing life insurance business in India.

HISTORY AND PRESENT STATUS OF INSURANCE MARKET IN INDIA

The insurance sector in India has come at full circle from being an open competitive market to nationalization and back to a liberalized market again. Tracing the development in the Indian insurance sector reviles the 360 degree turn witnessed over a period of almost two centuries.

Brief History of the Insurance Sector The business of life insurance in India in its existing form started in India in 1818 to the establishment of Oriental Life Insurance Company in Calcutta. Some of the important milestones in the life insurance business in India are:

1912: The Indian Life Assurance Companies Act enacted as the first statute to regulate the life insurance business. 1928: The insurance companies act enacted to enable the government to collect statistical information about both life and non-life insurance business. 1938: Earlier legislation consolidated and amended to buy the insurance act with the objective of protecting the interest of the insuring public. 1956: 245 Indian foreign insurers and provident societies are taken over by the central government and nationalized. LIC founded by an act of parliament, viz. LIC act 1956, with the capital contribution of Rs. 5 crores from the Government of India.

Insurance Sector Reforms In 1993, Malhotra committee, headed by former Finance Secretary and RBI Governor R. N. Malhotra, was formed to evaluate the Indian insurance industry and recommend its future direction. The Malhotra committee set up with the objective of complimenting the reform initiated in the financial sector. The reforms were aimed at creating a more efficient and competitive financial system suitable for the requirement of the economy keeping in mind the structural changes currently underway and recognizing that the insurance is an important part of the overall financial system where it was necessary to address the need for similar reforms. In 1994, the committee submitted the report and some of the key recommendation included:

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

the subsidiaries can act as Independent Corporation. All the insurance company given greater freedom to operate.

WHY LIFE INSURANCE

Life insurance aims at protecting the predictable and unpredictable events. Predictable Events House hold expense Education Childrens marriage Buying an asset Retirement Leaving a legacy

Unpredictable Events Death Sickness Disability Critical illness

BENEFITS
Life insurance cover is essential due to the following benefits. A lump sum payment to the nominees at the time of the death of the policy holder A regular payment to the nominees in the event of the death of the policy holder. Tax benefits as premium paid reduce the liability of tax. Relief economic hardships in the finally on the eventful death of the sole income holder. Inculcates the habit of saving.

NEED FOR INSURACNE

The need for life insurance comes from the need to safeguard our family. If we care for your familys needs, you will definitely consider insurance. Today insurance has become even more important due to the disintegration of the prevalent joint family system. A system in which a number of generation existed in harmonic, a system in which a sense of financial securities was always there as there were more earning members.

Time has changed and the nuclear family has emerged. Apart from the other pitfalls of a nuclear family, a high sense of insecurity is absorbed in it today besides, the family has shrunk. Needs are increasing with the time and fulfillment of these needs is a big question mark.

How will you be able to satisfy all those needs? Better life style, good education and long desired house. But again you just cannot fritter away all your earnings. You need to save a part of it for the future to a vise decision. This is where insurance helps you. Factors such as fewer numbers of earning members, stress, pollution, increased competition, higher ambitions, etc.

3.2. COMPANY PROFILE 3.2.1. ABOUT ING LIFE INSURANCE

ING Life Insurance recently achieved the significant milestone of completing 10 years of operations in India. The company is a joint venture between ING Insurance International B.V. and Exide Industries. Headquartered in Bangalore, ING Life India is currently present in over 200 cities and serves over 1 million policy holders in India.

The company distributes its products through two channels, the Tied Agency and the Alternate Channel. The Tied Agency channel comprises over 30,000 ING Life Advisors, spread across the country. The Alternate Channels business within ING Life India is a fast growing distribution channel, and includes the

Banc assurance partner (ING Vysya Bank), Referral Partners, Corporate Agents and Brokers.

3.2.2. ABOUT ING GROUP ING is a global financial institution of Dutch origin offering banking, insurance and asset management to over 85 million private, corporate and institutional clients in over 40 countries. With a diverse workforce of approximately 130,000 people, ING is dedicated to setting the standard in helping our clients manage their financial future.

3.2.3. ABOUT ING IN INDIA

ING operates through three businesses in India, ING Vysya Life Insurance, ING Vysya Bank and ING Investment Management. ING Vysya Bank is a premier private sector bank with over 76-year heritage and 1.5 million satisfied customers. ING Investment Management believes in providing investors with the knowledge and opportunity to manage their future easily.

3.2.4. MISSION, VALUES AND PERSONALITY At ING Life, our mission is To set the standard in helping our customers manage their financial future.

Our business is driven on our values of Optimism, Knowledgeable, Trustworthy and Transparent. Optimism: We bear an approach of Optimism towards our company, towards each other, in our products and in our care for our customers interests. Knowledgeable: We cultivate the knowledgeable value through our robust way of working, sharing and actively communicating. Trustworthy: We deliver trustworthiness by doing the right things in right way, by delivering an easier customer experience and by being a socially responsible corporate.

 Transparent: Our value of transparent drives our actions, reflects in our products and services. Our values are personified by our people through a set of Personality aspects. These personality aspects are: Positive, Professional, Accountable and Transparent. Positive: ING Life India employees live its value of optimism by bearing a positive and can-do attitude to their work. Professional: At ING Life India, we expect the highest standard of professional behavior by providing professional advice to customers, by treating customers equitably, abide by companys culture and act with compliance. Accountable: ING Life India expects employees to be accountable for their actions, words and decisions such that it builds their personal integrity and fosters ING Life Indias value of trustworthiness. Straightforward: ING Life India expects employees to be

straightforward in their conduct and work while dealing with customers and colleagues.

3.2.5. THE BRAND POSITIONING

The Brand Essence of ING Life is, Experience the joy of fulfilling your responsibility. This essence is captured in the unique brand positioning Mera Farz, developed in 2007. This positioning means, ING Life helps its customers fulfill their responsibilities as provider towards themselves and their families. As part of the ING Group, the worlds largest financial services company, ING Life provides its customers with the strength, reliability and the right balance between long-term savings, security and reasonable returns.

This powerful positioning has helped ING Life create a distinct identity for itself. The latest brand campaign in 2008 portrays how key life-stages in our lives, such as marriage, birth of a child, childrens education, retirement, bring

unexpected financial worries along with happiness. However, we can overcome these burdens with prudent financial planning and a helping hand from ING Life, thus fulfilling our responsibilities towards our family.

3.2.6. PRODUCT PORTFOLIO

ING Life follows a "customer centric approach" while designing its products. The Company's product portfolio offers products that cater to every financial requirement, at all life stages. ING Life has developed an exclusive tool - the LifeMakerTMa simple tool which helps our customers choose a plan most suitable to them, based on their needs, requirements and current life stage. This tool helps build a complete financial plan for life at every life stage, whether the requirement is Protection, Savings, Retirement or Investment.

3.2.7. MANAGEMENT
Board of Directors (as on Jan 01, 2012) Mr. Rajan Raheja: Chairman Mr. Satish Rahejaa: Director Mr. S. Douglas Caldwell Jr.: Director Mr. Frank Koster: Director Mr. Kshitij Jain: Managing Director and CEO Mr. N. N. Joshi: Director Mr. Rajesh Kapadia: Director Mr. A. K. Mukherjeee: Director

Executive Team (as on Jan 01, 2012) Mr. Kshitij Jain: Managing Director and CEO Mr. Rahul Agarwal: Chief Distribution Officer Mr. B. Ashwin: Chief Operating Officer Mr. Uco Vegter: Chief Financial Officer

3.2.8. PARTNERS
A glance at our equity partners: ING Insurance International B.V. 26% Exide Industries 50%

Other shareholders 24%

ING Group ING is a global financial institution of Dutch origin offering banking, investments, life insurance and retirement services. As of 30 September 2010, ING served more than 85 million private, corporate and institutional clients in more than 40 countries. With a diverse workforce of about 107,000 people, ING is dedicated to setting the standard in helping our clients manage their financial future.

Exide Industries Limited With eight manufacturing plants strategically located across the country, Exide is Indias largest producer of automotive and industrial batteries. Its range of products covers everything from the smallest batteries required in motorcycles to the giant batteries powering submarines.

It is the market leader in the organized sector in both the automotive and industrial segments. 'EXIDE' and 'SF (Standard Furukawa)', the flagship brands of the Company, are also the leading battery brands in the country.

3.2.9. LIFE INSURANCE PRODUCT CENTER

Our Life Insurance Plans Arm You For Tomorrow...

Individual Life Insurance Products ING Life Insurance aims to make customers look at life insurance afresh, not just as a tax saving device but as a means to live life to the fullest. It believes in

enhancing the very quality of life, in addition to safeguarding an individual's security. The Company follows a customer centric approach while designing its products. The ING Life product portfolio offers products that cater to every financial requirement, at all life stages.

Go ahead and pick your requirement to find life insurance plans that best match your needs. Protection Secure your familys financial future. Savings Save for your aspirations and life goals. Retirement Lead your retired life on your own terms.

Investment Invest now for a better future.

Children Plans Give your child the best.

Protection Plans Our Protection Plans help you ensure that your family continues to enjoy a comfortable lifestyle even in your absence. We make available a variety of plans to provide you with the flexibility of choosing one that fits your and your family's needs the best. We recognize protection as the basic insurance need and have therefore kept our products comprehensive yet economical for you.

So go ahead, get an ING Protection Plan and secure your family's financial future!

 ING Term Life Simplest and most economical form of term life insurance. Large sum assured at highly affordable premium rates. ING Term Life Plus Term insurance product with return of premium. Large sum assured at affordable premium rates.

Savings Plans Our Saving Plans help you achieve your life goals making them cherished moments for you and your family. They provide you with the flexibility to save for your future requirements while you continue to improve your current lifestyle. Our plans help discipline your savings approach and point your efforts towards defined goals so that whatever stage of life you are in, you are always in control and self-reliant.

So go ahead, get an ING Savings Plan to achieve your life goals! Reassuring Life Endowment Plan (Reversionary Bonus) Savings plan with a highly reliable safety net for your family in case something happens to you. Safal Jeevan Endowment Plan Comprehensive protection and savings plan with an in-built accident cover. Option to choose from a pre-packaged range of fixed terms and premiums. ING Creating Star Guaranteed Future ING Assured Returns (Withdrawn) The Guaranteed Interest Rate declared for the 3rd Policy year is 9%*, The Delayed Payment Interest rate is 6%*. (Including Account Administration Fees of 1.25%) ING Secured Income Insurance Plans ING Secured Income Insurance Plus

ING Secured Income Insurance RP

Investment Plans and Financial Planning Our Investment Plans are created keeping your needs in mind. We appreciate the flexibility required to suit your risk appetite and the commitments you may want to make. Our global expertise in managing wealth for individuals at all stages in their life ensures that we have products to suit your taste whatever your objective of investing may be.

So go ahead, get an ING Investment Plan to reach your goals faster! ING STAR Life ING STAR Life, a unique life insurance plan that helps you enjoy assured tax free returns on your hard earned savings. All you have to do is pay premium for 3 years and enjoy benefits in a 12 year period. ING Prospering Life SP ING Prospering Life SP is a Single Premium Unit Linked Insurance Plan which maximizes returns over the long term (10-years) by providing choice of 6 investment funds with just a single contribution. ING Market Shield ING Market Shield not only provides life cover but also balances risk and reward in a transparent manner and provides you an opportunity to enjoy growth while retaining protection. It is a Unit linked life insurance plan that ensures you never miss an opportunity to maximize your gains and at the same time limits your losses. ING Prospering Life An excellent Unit Linked Life Insurance plan for wealth creation while enjoying control over your assets at all times. ING Uttam Jeevan - Regular Premium A long term investment tool with market linked returns and increasing Life Cover to secure financial protection for the customer's family at every stage of life.

 ING Uttam Jeevan - Single Premium ING Uttam Jeevan SP is a simple, easy to understand plan which fulfills customers needs of investment and protection. It is a unique Single Premium unit linked plan which can help you strike your future worries in one shot. Pay once and enjoy the benefits for the term of the policy. Powering Life Investment plan with high reversionary bonus. Premium payments for a short period of time, life cover for a longer period and high maturity benefits. New Fulfilling Life Plan Investment plan with double benefit of periodic cash returns during policy term and maturity or death benefit.

Retirement Plans Our Retirement Plans ensure that you lead your life after retirement on your own terms, doing things you have always dreamt of. We also believe it is important to be in control of your retirement planning. Our innovative features help you choose your retirement age and also control the way your investments are managed keeping in mind your retirement needs.

So go ahead, get an ING Retirement Plan and retire on your own terms! ING New Best Years Retirement plan with capital guarantee and plenty of flexibility, to help build a sizeable financial asset for you or your family, in case youre not around. ING Immediate Annuity A plan that gives you a guaranteed income throughout your retired life and more.

Children Plans At ING Life we understand, you would love to see your child do better than you.

At ING Life we understand the love and the ambitions you have for your child. This is why ING Lifes Children Plans are not just for children. In a way, they are meant for every parent. ING Aashirvad Guaranteed protection for your child, even after your child becomes a parent. Creating Life Child Protection Plan Ideal savings plan for new parents. Payment to child in case of death of parent and at maturity. Future premiums waived in case of death of parent. Creating Life Money Back Plan Savings plan for new parents with money back. Double benefit of a life cover along with periodic cash returns during the term of the policy.

Individual Products Riders Riders are the optional contracts, which offer additional benefits for policyholders. They are always attached to a basic policy. They cannot be bought separately or independently of a basic policy. Each Rider will have its own premium rate and separate policy conditions. Accidental Death Rider Accidental Death, Disability and Dismemberment Rider ING Term Life Rider ING Critical illness Rider ING Critical illness Limited Pay Rider

3.2.10.

PREMIUM PAYMENT

Payments at ING Life ING Life Insurance Branches You can make the payments at ING Life Branches through: Cash Cheque or Demand Draft in favour of 'ING VYSYA LIFE INSURANCE' Credit Card You can use any bank's credit card (Master / Visa). Your Credit Card can be swiped at select ING LIFE Branches.

ING Vysya Bank Standing Instruction You can set up an auto debit instruction (standing instruction) on your ING Vysya bank accounts for regular debits of your premium amounts. To avail this facility you have to fill-up and sign the standing instruction mandate and submit the mandate to your nearest ING Life Insurance branch.

Standing instruction mandate can also be couriered to any of the ING Life Branch address or to the below mentioned address: Policy Servicing Dept., Gold Hill Square, 1st Floor, 690, Hosur Road, Begur Hobli, Bangalore- 560 068 Online premium payment through ING Vysya Bank web site If you are holding an account or Credit Card with ING Vysya Bank, you can make your ING Life premium payments by visiting the Net Banking - Utility Payment facility provided on the ING Vysya Bank website.

 Online premium payment through ING Life web site and Customer Portal If you are holding an account with ING Vysya Bank, you can pay your premiums online Net Banking using ING Life online payment facility or ING Life customer portal. ING Vysya Bank Branches counters through Cash and Local Cheque/DD You can walk-in to any of the ING Vysya Bank branches along with your renewal premium receipts or renewal premium notices and pay your premiums through Cash Cheque or Demand Draft in favour of 'ING VYSYA LIFE INSURANCE' Please note that outstation cheques will not be accepted for premium payments.

Other Banks and Vendors South Indian Bank Branches You can walk-in to any of the South Indian Bank Branches along with your renewal premium receipts or renewal premium notices and pay your premiums through Cash only.

Note: Maximum Cash acceptable limit is Rs. 50,000.00. Cash up to Rs.49, 999.00 will be accepted without any documents. Cash of Rs. 50,000.00 will be accepted only on producing a copy of your PAN Card or Form 60. Karnataka One Counters If you are in Mysore, Bellary, Shimoga, Mangalore, Tumkur, Belgaum, Gulbarga or Davangere you can just walk-in to any of the Karnataka One counters and pay your premiums through cash, local cheque / demand draft or

credit/debit cards. All cheques and demand drafts should be prepared in favour of ING VYSYA LIFE INSURANCE.

Note: Outstation cheques are not accepted and Maximum Cash acceptable limit per policy is Rs. 50,000.00. Cash up to Rs.49, 999.00 will be accepted without any documents. Cash of Rs. 50,000.00 will be accepted only on producing a copy of your PAN Card or Form 60.

No part payments will be accepted. Bangalore One Counters If you are in Bangalore, you can just walk-in to any of the Bangalore One counters and pay your premiums through cash, local cheque / demand draft or credit cards. All cheques and demand drafts should be prepared in favour of ING VYSYA LIFE INSURANCE.

Note: Outstation cheques are not accepted and Maximum Cash acceptable limit is Rs. 50,000.00. Cash up to Rs.49, 999.00 will be accepted without any documents. Cash of Rs. 50,000.00 will be accepted only on producing a copy of your PAN Card or Form 60. HD One Counters If you are in Hubli or Dharwad, you can just walk-in to any of the HUBLI DHARWAD One Counters and pay your premiums through cash or local cheque / demand draft. All cheques and demand drafts should be drawn in favour of 'ING VYSYA LIFE INSURANCE'. Hubli-Dharwad One Counters: Hubli-Dharwad One Near HDMC Zonal Office 9 Glass House, Hubli - 1 Ph No: 0836-2362880

Hubli-Dharwad One Near HDMC Zonal Office 4 Navanagar, Hubli - 4 Ph No: 0836-2224333

Hubli-Dharwad One Near HDMC Zonal Office 12 1st floor Kalabhavan, Dharwad Ph No: 0836-2444098

Note: Outstation cheques are not accepted and Maximum Cash acceptable limit is Rs. 50,000.00. Cash up to Rs.49, 999.00 will be accepted without any documents. Cash of Rs. 50,000.00 will be accepted only on producing a copy of your PAN Card or Form 60. AISECT Outlets You can walk-in to any of the AISECT outlets along with your renewal premium receipts or renewal premium notices and pay your premiums through Cash only. AISCET is a leading IT Training and Educational services network with an unrivalled spread of over 4000 franchisee centers across 27 states and 3 Union Territories in the country.

Note: Premium payments beyond Rs. 50,000/- per policy shall not be accepted in cash. For premium payment of exact Rs. 50,000/- submission of copy of your Pan Card (or) Form 60 is mandatory. Suvidhaa Retail Outlets You can walk-in to any of the Suvidhaa outlets along with your renewal premium receipts or renewal premium notices and pay your premiums through Cash only.

Note: Premium payments beyond Rs. 50,000/- per policy shall not be accepted in cash. For premium payment of exact Rs. 50,000/- submission of copy of your Pan Card (or) Form 60 is mandatory. Sify Outlets You can walk-in to any of the Sify Outlets along with your renewal premium receipts or renewal premium notices and pay your premiums through Cash only. Sify is one of Indias leading integrated Information Communications Technology companies with a network of over 1600 e-port outlets where they accept cash payments and produce instant receipts. Sify accept cash payments on the spot from customers and transact online to validate the policy details and issue immediate receipts. One Stop Shop Outlets You can walk-in to any of the One Stop Shop Outlets along with your renewal premium receipts or renewal premium notices and pay your premiums through Cash only.

One Stop Shop Group of Companies is a fast growing e-commerce business in India with a sizable presence across India .OSS accept cash payments on the spot from customers and transact online to validate the policy details and issue immediate receipts. SMS - Paymate Paymate is a SMS based payment platform that allows you to transact conveniently through a 'single SMS'. Paymate is the most easy, secure and convenient mode of payment.

If you have an account with IDBI Bank, you can pay your renewal premium through Paymate.

Registration Instructions: If you hold an account with IDBI bank, you may call your respective bank call center to register and start using Paymate for paying your premiums. The bank takes you through verification process of verifying your bank a/c details. On successful completion of verification, your bank provides you with a 4 digit unique identification pin. The mobile number and the 4 digit pin are registered by your bank against your Bank a/c number. You are now registered and ready to use Paymate to pay your premiums through SMS.

Payment Instructions: SMS "IVL" space your 8 digit policy number to 5667711. You will receive a SMS from Paymate on your Policy details like Name of the Life Assured and the premium amount due with a 3 digit pin number. After verifying your Policy details you have to reply by typing IVL space 3 digit pin (provided by Paymate) followed by 4 digit pin number (provided by your Bank during registration). On successful verification, Paymate confirms to you via SMS the status of the transaction along with a transaction id. Premium payments beyond Rs. 50,000/- per policy shall not be accepted in cash. For premium payment of exact Rs. 50,000/- submission of copy of your Pan Card (or) Form 60 is mandatory.

Standing Instruction (SI) Electronic Clearing System (ECS) You can pay your ING Life Insurance premiums through the ECS service available in selected cities. To avail this facility you have to fill-up and sign the ECS mandate and get the same verified and certified by the Bank where your Bank Account is maintained. You will have to submit the same with a Cancelled Cheque to your nearest ING Life Insurance Branch.

ECS mandate can also be couriered to any of the ING Life Branch address or to the below mentioned address: Policy Servicing Dept., Gold Hill Square, 1st Floor, 690, Hosur Road, Begur Hobli, Bangalore- 560 068 Standing Instruction (SI) through Citi Bank You can set up an auto debit instruction (standing instruction) on your CITI bank accounts for regular debits of your premium amounts. To avail this facility you have to fill-up and sign the standing instruction mandate and submit the mandate to your nearest ING Life Insurance branch.

Standing instruction mandate can also be couriered to any of the ING Life Branch address or to the below mentioned address: Policy Servicing Dept., Gold Hill Square, 1st Floor, 690, Hosur Road, Begur Hobli, Bangalore- 560 068

 Standing Instruction (SI) through State Bank of India You can set up an auto debit instruction (standing instruction) on your SBI accounts for regular debits of your premium amounts. To avail this facility you have to fill-up and sign the standing instruction mandate and submit the mandate to your nearest ING Life Insurance branch.

Standing instruction mandate can also be couriered to any of the ING Life Branch address or to the below mentioned address: Policy Servicing Dept., Gold Hill Square, 1st Floor, 690, Hosur Road, Begur Hobli, Bangalore- 560 068 Standing Instruction (SI) through ICICI Bank, AXIS Bank, Bank of Baroda, Union Bank of India, Corporation Bank, IDBI You can set up an auto debit instruction (standing instruction) on the above mentioned bank accounts for regular debits of your premium amounts. To avail this facility you have to fill-up and sign the standing instruction mandate and submit the mandate to your nearest ING Life Insurance branch.

Standing instruction mandate can also be couriered to any of the ING Life Branch address or to the below mentioned address: Policy Servicing Dept., Gold Hill Square, 1st Floor, 690, Hosur Road, Begur Hobli, Bangalore- 560 068

 Standing Instruction (SI) through Credit Card You can set up an auto debit instruction (standing instruction) on your credit card (Master, Visa) for regular debits of your premium amounts. To avail this facility you have to fill-up and sign the standing instruction mandate and submit the mandate to your nearest ING Life Insurance branch.

Standing instruction mandate can also be couriered to any of the ING Life Branch address or to the below mentioned address: Policy Servicing Dept., Gold Hill Square, 1st Floor, 690, Hosur Road, Begur Hobli, Bangalore- 560 068 Note: American Express Cards are not acceptable

Online Payment You can pay your premiums online in the following ways: ING Life Online Premium Payment You can pay your premiums online using our online payment facility and customer portal. Tech Process Solution Ltd. You can register with Tech process (Bill Junction) and make your ING Life premiums online. Electronic Bill payment and Presentment (EBBP) with banks If you are holding an account or Credit Card with CITI, HSBC or AXIS Bank, you can make your ING Life premium payments by visiting the Net Banking Utility Payment facility provided on the Banks website.

 BangaloreOne You can pay the premium online (through Credit Card) by registering on the BangaloreOne website. eCollect (NEFT / RTGS) You can make your premium payment through the NEFT facility by adding ING Life Insurance as beneficiary and using the code IVLI and your policy number.