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Project Report Feasibility of Insurance Plans ICICI Prudential A report submitted to Delhi Business School, New Delhi as a part fulfillment of MBA + Post Graduate Program (Industry Integrated) in Entrepreneurship & Business Submitted to: Director Academics Submitted by: Delhi Business School XXXXXXXX New Delhi XXXXXXXX XXXXXXXX 1 st Semester

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Project Report

Feasibility of Insurance Plans ICICI Prudential

A report submitted to Delhi Business School, New Delhi as a part fulfillment of MBA + Post Graduate Program (Industry Integrated) in Entrepreneurship & Business

Submitted to: Director Academics Delhi Business School New Delhi Submitted by: XXXXXXXX XXXXXXXX XXXXXXXX 1st Semester Punjab Technical University Internal Guide: Faculty: Delhi Business School New Delhi

Certificate

This is to certify that the summer training was done on submitted to Delhi Business School, New Delhi by XXXXX in partial fulfillment of the requirement for the award of degree of MBA + Post Graduate Program in Entrepreneurship & Business, is a bonafide work carried out by him/her under my supervision and guidance. This work has not been submitted anywhere else for any other degree/diploma. The original work was carried during the period of two months starting from 15th May 2008 to 15th July 2008 in the ICICI Prudential at its Dilshad Garden Branch.

Name of the Guide: Address:

ACKNOWLEDGEMENT

This gives me immense pleasure to thank my Training Head Mr. ANKIT NARULA and Mr. MUKUL BHARTIYA under whose guidance and enlightening path for finding navigation I was able to complete this report. I also take this opportunity to thank them for wholehearted support they gave me in understanding the importance of this project. At last I would like to thank all those direct and indirect support which made me to complete this project successfully.

Report Content1. Meaning of Insurance 2. History of Insurance 3. Purpose and Need of Insurance 4. Insurance Plans at a glance 5. Governing Body of Insurance Sector 6. Various Terms Involved in Insurance Sector 7. Documents used in Insurance 8. ICICI Prudential - The company 9. Promoters of ICICI Prudential 10.Vision & Values of ICICI Prudential 11.Insurance Product of ICICI Prudential 12.Edge of ICICI Prudential over others 13.Competitors of ICICI Prudential 14.Bibliography

InsuranceInsurance is a guarantee given by one person to other for supporting the other person in case of loss of certain material thing or on happening of certain events which may cause loss to the party getting insurance.

History of InsuranceInsurance has been known to exit in some form or other since 3000 BC. The Chinese traders, traveling treacherous river rapids would distribute their goods among several vessels, so that the loss from any one vessel being lost would be partial and shared, not total. In India, insurance began in 1818 with life insurance being transacted by English Co. The Oriental Life insurance company Ltd. The first Indian insurance company was the Bombay mutual Assurance society Ltd. formed in 1870 in Mumbai. This was followed by Bharat insurance co. in 1896 in Delhi, the empire of India in 1897 in Mumbai, the united India in Chennai, the national, the national Indian and Hindustan cooperative in Kolkata. Later were established the Cooperative Assurance in Lahore, The Bombay life, the Indian mercantile, the new India and the Jupiter in Mumbai and the lakshmi in New Delhi. These were all Indian companies started as a result of swadeshi movement in the early 1900s.By the year 1956, there were 170 companies and 75 provident fund societies transecting life insurance business in India

Purpose and need of insuranceAssets were insured, because they were likely to be destroyed before the expected lifetime through accidental occurrence. Such accidental occurrences are called perils. Fire, floods, lighting earthquakes etc are called perils .If such perils can cause damage to the asset, we say that the asset is exposed to the risk .Perils are the events. Risks are the consequential Losses. The risk only means that there is a possibility of damage.

Insurance Plans- At a glanceBroadly, insurance plans can be distinctly divided into ULIPs and traditional plans. A brief detail of both segments:

Unit Linked Insurance ProductULIPs have gained high acceptance due to attractive features they offer. These include: 1. Flexibility 1. Flexibility to choose Sum Assured. 2. Flexibility to choose premium amount. 3. Option to change level of Premium /Sum Assured even after the plan has started. 4. Flexibility to change asset allocation by switching between funds 2. Transparency 1. Charges in the plan & net amount invested are known to the customer 2. Convenience of tracking ones investment performance on a daily basis. 3. Liquidity

1. Option to withdraw money after few years (comfort required in case of exigency) 2. Low minimum tenure. 3. Partial / Systematic withdrawal allowed 4. Fund Options 1. A choice of funds (ranging from equity, debt, cash or a combination) 2. Option to choose your fund mix based on desired asset allocation

Traditional PlansThese are the oldest types of plans available. These plans cater to customers with a low risk appetite. Some of the common features of traditional plans are: 1. Steady Investment 1. Major chunk of investible funds are in debt instruments 2. Steady and almost assured returns over the long term 2. Features 1. Death benefit is Sum Assured + guaranteed & vested bonus 2. Helps in asset creation as they are for a long tenure 3. Premium to Sum Assured ratios are fixed for each plan and age. 4. Generally withdrawals are not allowed before maturity

Differences ULIPSTraditional plans

The premium in excess of risk cover All the premiums go into a common is invested as desired by the fund and are invested at the insurers discretion. policyholders.

The investment return may vary There are two categories of benefits according to the market movement guaranteed and none guaranteed. For and the investment risk is entirely guaranteed return, the investment risk borne by the policyholder. is born by the insurers. However,

non-guaranteed of the insurer.

benefits

such

as

bonuses depend on the performance

Withdrawals are allowed. Loss, if any Surrenders are allowed but at a loss. Depends on NAV loans are not Loans may be provided. allowed. There are no bonuses except loyalty For participating policies bonuses are bonus in some cases. paid. premium amount used for

The amount of the premium used for The

insurance coverage other charges and insurance coverage other charges and the purchase of units is unbundled investment are bundled up and not and transparent. Benefits are variable. Loss is likely. Gains likely depending on market movements known. Benefits are pre determined Loss is unlikely. Gains unlikely except through bonuses.

IRDA Guidelines regarding ULIP ProductsThe IRDA has issued various guidelines on various matters related to ULIP. Some of these are: Surrender benefit only after third policy anniversary First partial withdrawal only after third policy anniversary

SA can be reduced up to the extent of partial withdrawals during second year prior to death and after age 60. Lock in period for each top up amount ,for partial withdrawals except during last three years of contract Death benefits to be guaranteed Maturity benefits may be guaranteed, at levels reasonable in relation to current and long term interest rates scenario Policy to become paid up ,if there is default in premium after three years Opportunity to be given to revive lapsed policy Auto cover facility allowed for full SA for limited period No auto cover facility allowed if at least three years premium is not paid If policy is not revived ,surrender value to be paid at the end of the third policy anniversary or end of the revival period whichever is later No risk cover after policy term Ways of calculating various charges are stipulated

Governing Body of Insurance Sector:Insurance act, 1938The insurance Act 1938,which came into effect from 1st July 1938, and was amended in1950 and later in 1999,is the principal enactment relating to the business of insurance in India .The act contains provisions regarding

licensing of agents and their remunerations, prohibition of rebates ,and protection of policy holders interests. It also has provisions placing limits on the expenses of insurers, use of funds and patterns of investments, maintaining solvency levels, and constitution of insurance Association and insurance councils and the tariff Advisory committee for general insurance. Till the constitution of the IRDA by the IRDA act 1999, in the controller of insurance was responsible for the administration of the insurance act .since 1999, the IRDA has replaced the controller of insurance. The insurance act vests the IRDA with power to Register insurance companies and also cancel their registrations Monitor and certify the soundness of the terms of life insurance business Make regulations relating to the conduct of the business of insurance Inspect documents of insurers Appoint additional directors ,issue directions Take over the management of an insurer and appoint administrators Adjudicate on disputes between insurers and intermediaries or between intermediaries Decide on disputes relating to settlement of claims of amounts not exceeding Rs.2000 By the end of December 2006, the IRDA had issued more then 25 regulations and also issued several guidelines to insurers on a verity of matters.

Insurance regulatory and development authority

This act passed in December 1999, provided for the establishment of the IRDA to the interest of policyholders of insurance policies to regulate, promote and ensure orderly growth of the insurance industry and for matters connected therewith or incidental thereto. It also sought to amend the insurance act, 1938 the life insurance corporation act 1956 and the general insurance business act, 1972 The IRDA is a corporate body .it is advised by an advisory committee consisting of not more then 25 persons to represent the interest of commerce, industry, transport, agriculture, consumer forums, surveyors, agents intermediaries, organizations engaged in safety and loss prevention, research bodies and employees associations in the insurance sector. It replaces the controller of insurance to administer the provisions of the insurance act. That includes registrations, licensing and laying down regulations for the proper conduct of the business and the protection of the interests of policyholders.

OMBUDSMANThe governing body of the Insurance Council is authorized by law to appoint Ombudsmen for the insurance industry. The function of the Ombudsmen is to resolve complaints in respect of disputes between policyholders and insurers in cost effective, efficient and impartial manner. The complaints to the Ombudsmen may relate to partial or total repudiation of claims any dispute regarding premium paid or payable in terms of the policy any dispute on the legal construction of the policy relating to claims delay in settlement of claims non-issue of any insurance document to customers after receipt of premium.

The Ombudsman acts as counsel and mediator in matters within its terms of reference. It has no right to summon witnesses. It is not a judicial authority. It has to make its decision on the basis of documents submitted to it. The complainant and the insurer are allowed to make personal submissions. But lawyers are not permitted to argue the case. Complaints to the Ombudsman lie only when the insurer had rejected the complaint or no reply was received within one month of the complaint or the reply was not satisfactory. The Ombudsman is expected to make a recommendation within one month from the date of receipt of complaint. if the complainant accepts this recommendations, the insurer has to comply within 15 days and inform the ombudsman accordingly, if the complainant does not accept the ombudsmans recommendation, the ombudsman shall pass an award in writing, stating the amount awarded which shall not be in access of what is necessary to cover the loss which is suffered by the complainant as a direct consequences of the insured peril or for an amount not exceeding RS.2000000, which ever is lower. The award has to be passed within three months. The complainant has to intimate his acceptance of award within one month by a letter of acceptance to the insurer and the insurer has to comply within 15 days and inform the ombudsman. If the complainant does not intimate acceptance, the award can not be implemented.

Various Terms Involved in Insurance SectorCautionProspects have to be advised always that

(1) Investments are subject to market risks. (2) Past performance may not be guide to future performance. (3) Name given to the various funds options offered under ULIPs do not in any way indicate the quality of these funds or their future prospects or returns. (4) The NAV of the fund may go up and down and the insurer will not be responsible for the same. (5) All benefits are subject to tax laws and charges specified by the insurer. The prospects related to linked insurance plans carry a statutory warning which says that, unless clearly marked as guaranteed the benefits are not guaranteed and that the figures of assumed investment returns shown in the illustrations are not upper or lower limits of what may be got back ,as they depend on number of factors including future investment performance. The details mentioned earlier regarding the terms and conditions of these unit link policies are not applicable in all such policies. Insurers add or subtract some facilities in order to differentiate their plan in from those of other insurers. Agents must check with their insurers the details of the plans on offer.

ClaimsA claim is the demand that the insurer should redeem the promise made in the contract. The insurer has than to perform his part of the contract or settle the claim, after satisfying him that all the conditions and requirements for settlement of claim have been complied with. In particular, he should check

Whether insured event has taken place. required to be performed? These may be payment of bonus, payment of sum assured in installments waiver of future premiums etc.

What are the obligations assumed under the contact, which are

Whether the policyholder has performed his part. Who are the persons entitled to demand performance? Nomination assignment, income tax notice prohibitory orders, official assignees notice-are all relevant.

Maturity claimsUnder endowment type of policies, the SA is to be paid when term of the policy is over. The date on which the term is complete, is the date of maturity and the settlement of SA on that date is the maturity claim. The amount payable on maturity is the SA less and debts like loan and interest or outstanding premiums. To this bonuses would be added, if it is a with profit policy. Action on maturity claims is normally, initiated by the insurer. The insurer normally sends intimations to the insured in advance. Before paying the payment, the insurer has to satisfy that: There are no assignment The identity of the policy holder is proved The age stands admitted The premiums are all paid The original policy is handed in The discharge voucher is duly completed.

The insurer is expected to make payment on maturity date. Post dated cheques are duly sent to the insured in advance by the insurer, provided the discharge form is duly received with signature by the company. If the policy holder dies before the date of maturity, the post dated maturity will be cancelled by the insurer and a claim by death will be preceded. Some times the original policy is reported to be lost; caution is to be exercised to ensure that there is no attempt to defraud. It could have been pledged elsewhere for a loan. However, if the loss seems to be genuine, it is possible to settle the claim based on indemnity and an advertisement in the newspapers, as precaution. Under MWP act policies, the proceeds of the policy will be paid to the trustees. If there is no trustee, the official trustee will step in. but if the beneficiaries are major and competent to contract, payment can be made directly to them without the intervention of trustees. The policyholder is not required to sign the discharge form. In case of absolute assignment, the payment will be made to the assignee. If the assignment is conditional, reverting to the policyholder on the date of maturity the payment will be made to the policy holder on the date of maturity. It will be prudent however to check that the assignee has no outstanding claims. Some maturity claims may be payable after the date of maturity, but later not as lump sum; but in installments. While the decision to settle may be taken on maturity, the settlement process will continue for few years.

Survival benefit paymentsA survival benefit is paid on money beck policy before the date of maturity. The procedure will be similar as the payment of the maturity claims. Action will be initiated by the insurer and post dated cheques will be sent by him in advance to the policyholder. If the policy is reported to be lost, insurers are likely to settle based on indemnity, as may be done in the cases of maturity. The reason is that when maturity claims are paid no further obligations are left after that. However, the policy does not cease to exist after the survival benefits. A duplicate may be asked for, on which endorsement will be made regarding the settlement of the survival benefits. If the life assured dies after the date when survival benefit was due, but before it is settled, the death claim will be paid to the nominee. But whether the death claim can be paid to the nominee is not beyond doubt. Some insurers have taken the view that this is permissible. Another view is that the survival benefit, already having become due is a debt to the deceased policyholder and not a claim under the policy and therefore, payable to the heirs and not to the nominee. This would particularly be so, if the policyholder has already signed the discharge voucher. There is no doubt however, if the death occurred before the due date of survival, even if the discharge voucher had been signed. It is a death claim payable to the nominee and there is no survival benefit at all.

DEATH CLAIM

The procedures in settling a death claim are more complex then settling in maturity claims. This is mainly because, the facts relating to death have to be established and the identities of the claimants have to be studied. The death claim action begins with an intimation being received in the insurers office. The intimation may be sent by the nominee assignee employer or by the relative of the deceased policyholder. These intimations may have very littlie information; other then the policy number, the name of the life assured and date of death. The office need not wait till the intimation of the claim is received. Obituary columns, or newspaper reports in case of accidents or air crashes may give information and the claim action can be initiated. However, care has to be taken to insure that the identity of the deceased is established. A name is not enough to establish identity. The following will be necessary before a death claim can settled Policy document Deeds of assignment Proof of age Certificate of death Legal evidence of title if the policy is not assigned or nominated Form of discharge executed and witnessed. If the claim has occurred within three years from the commencement of policy or, from a revival, following additional requirements may be called for, in order to verify the possibility of suppression of material facts at the time of proposal /revival

Statement from the last medical attendant giving details of last illness and treatment Statement from the hospital, if the deceased had been admitted to a hospital Statement from the person who have attended last rites and had seen the dead body Statement from the employer, if the deceased was employed ,showing details of leave

If the life assured has unnatural death such as accident suicide or unknown causes, police inquest report, panchnama, chemical examiners report post mortem report .coroners report etc. would also be looked into. Depending on preliminary data, a special enquiry can be made. Claims arising within three years from commencement are looked at more carefully, because it would be expected that after the underwriters scrutiny, the life assured should have had a longer life span than three years. The point to check would be whether there had been any suppression of material facts. If the insurer is satisfied that there has been suppression, the claim will be repudiated. That means that no claim will be paid. When a policy is revived on the basis of evidence of good health, an underwriter makes a decision. An early death (within three 3 years) after that, raises the same issue and will be looked in to more carefully. This need not be done if the revival was done without reference to state of health.

CLAIM CONCESSIONThere situations when though the policy has lapsed and nothing is payable, yet the insurer pays the death claim. For example, assume that in a 30year old endowment policy the last premium is not paid and the policy is in state of lapse in the last year if the life assured dies a few weeks ago of the maturity date, it would be wrong to say that death claim is not payable . There is practically no risk in the last year. The LIC pays claim in full in the following circumstances after deducting the outstanding premiums with interest. In both cases, the policy could have been revived by just paying the arrears of premium and no proof of good health would have been necessary. After three years if the death claims arises within six months from the date of lapse After five years, if death claim arises within twelve months from the date of lapse In cases where premiums are being advanced from surrender value, the claim amount will be payable in full. The policy is, for all practical purposes, in full force.

Presumption of death

Proof of death is essential. A death certificate issued by the municipal office or similar local body is the acceptable proof of death. A certificate of burial or cremation can also be obtained. Statements from witnesses to the last rites will be supporting evidence. In case of accidents, air crashes or on natural calamities, the bodies may not be found. In such cases, insurers relay on statements from the carriers or other authorities with relevant information. In case of defence personnel, a certificate from the commanding officer of the unit is to be obtained. If a court enquiry is ordered, its findings should be obtained. Some times a person is reported missing without any information about his whereabouts. The Indian evidence act provides for presumption of death in such cases, if he has not been heard of for seven years. If the nominee or heirs claim that the life insured is missing and must be presumed to be dead, insurers insist on a decree of from a competent court. It is necessary that the premium should be paid until the court decrees presumption of death. The insurer may also act on its own without a decree of court, if reasonably strong circumstantial evidence exits to show that the life assured could not have survived a fatal accident or hazard. Insurers may as a matter of concession, waive premiums during the seven-year period.

PRECAUTIONSAs per the Indian lunacy act, if a person is mentally deranged, a court of law is required to appoint a person to act as a guardian to manage the properties of the lunatic. Where the assured or the person to sign the discharge form .If the person has insured from the mental disorder, a medical certificate to that effect, would be necessary. Any order from the court or other judicial

authority with reference to the policy money has to be respected. The insurer does not have to contest the orders. It is for the claimants to do so. Sometimes the court orders may not be appropriate. For example, the policy moneys under a MWP act policy cannot be attached against the debts of the life assured. If a court or judicial tribunal passes an order of attachment, the claimant must get that order vacated. The insurer may present the facts if called upon to do so. If the life assured has reported to have died before the maturity date, the claim has to be treated as a death claim and processed accordingly. However, if the assured has died after the date of maturity but before the receipt is discharged, the claim is to be treated as a maturity claim and be paid to the legal heirs. Death certificate and evidence of title would be necessary. Payment of claim to non-residents is governed by the foreign exchange control regulations. If the policy belongs to Hindu Undivided Family then the payment will be made to the karta of the HUF. If the intimation is received after three years of death, there is reason to suspect. Investigations are required as in the case of early claim because there is possibility of fraud. The plea of time barred can be taken if the reasons for the delay in making the claim are not fully satisfactory.

ACCIDENT AND DISABILITY BENEFITS

These benefits are conditional on conclusive evidence, that all the eligibility conditions are satisfied and that the exclusions do not apply. The conditions are that The accident must be caused due to external causes violent means not self inflicted The death must be a result of injuries caused by the accident The death must occur within 120 days or such other period as may be specified The exclusions may be International self injury, attempted suicide, insanity, immorality, intoxication Accident while engaged in civil aviation or aeronautics other then as a passenger Injuries resulting from riots, civil commotion etc. Claim settlement would require the following documents as evidences First information report

Panchnama of accident site police report Police report Post mortem report Chemical examiners report, in case of poisoning, Hospital reports if any

drugs, narcotics

Critical illness claims

The benefits would be payable on satisfactory evidence, in the nature of hospital and other medical reports, that the conditions of critically, waiting period and illness are met.

IRDA regulationsThe IRDA regulations stipulate that The insurer should ask for all the requirements in the case of a death claim at one time and not piece meal The decision to admit or to repudiate should be made within 30 days of receipt of papers

If an investment is necessary, it should be completed within six month Interest at 2%over the bank rate, will be payable for delays in setting the death claims

Interest at the saving bank rate will be paid if the insurer is ready to pay but the claimants are not ready to collect

Policy conditionsThe policy states the obligations and rights of the policyholder, as well as the terms and conditions of the policy. These could differ between insurers and between plans of the same insurer.

AGEThe policy conditions provide that, if the age of the life assured is found higher than the age stated in the proposal form, apart from any rights and remedies available to the insurer, premium at the higher rate will have to be

paid from the commencement, with interest. This is largely redundant nowadays, as the proof of age is provided with the proposal itself. Even then, there could be an odd case of the proof of age being found to be false. In such cases, the insurers rights and remedies would include also the right to declare the policy ab initio void, on the ground of suppression of material facts. Age is important not only for calculation of premium but also for underwriting of risk. The following are usually accepted as proofs of age Certified extract from the municipal records Certificate of baptism Certified extract from family Bible if it contains date of birth Certified extract from service register of employer Passport Identity card issued by defence department in case of defence personnel Marriage certificate issued by roman catholic church If none of these standard proofs of age are available, horoscopes, self declaration by way of affidavit, elders declaration or certificate by village panchayat may be accepted as proof of age. These are referred to as nonstandard proofs of age.

DAYS OF GRACEThe policy stipulates that the premium have to be paid in the insurers office on the date specified therein. These dates are called due dates premium may be paid by any of the normal modes of making payments, which include

cash, cheques, demand draft, postal order, money orders, bankers orders ,etc. nowadays electronic means of payment are also available for example debit cards and credit cards. The insurer has the option to decide whether the collection charges should be collected from the policyholder. Premiums are required to be paid on the due dates mentioned on the policy. Insurers however allowed a grace period for payment of premium. Payment within the grace period is considered the payment on time. The grace period would be one month for the entire year, but not less then 30 days. Some insurers allowed this grace period even for monthly mode. In the case of SSS, if the premium is deducted by the employer and there is a delay in remitting the same in insurers office, the delay is usually condoned. If the delays happen frequently, the SSS arrangement may be terminated. If the premium is not paid within the days of grace, it is considered a default and the policy is said to be lapsed. If the insured happens to die within the days of grace and the premium has not been paid, the claim would be admitted in full and the premium for the current year will be deducted from the claim amount. Strictly, the premium is deemed to have been paid only when the cash is received in the insurers office. That means the cheque must be cleared and proceeds credited into the insurers account. In practice, however the premium is deemed to be paid when the cheque or demand draft is received. The RPR is issued subject to clearance. Sometimes the insurer may consider that the premium has been paid, if there is proof that the policyholder had sent the money, even if it had not been received in the

office. This may be necessary in case of death claims, where the death has occurred before the premium reached the office. Such proof may be available in the case of orders. The benefit is given to the policyholder because the money towards payment of premium had left his hand and was in transit. In India where the area is vast and the numbers of offices of the insurer are not too many, arrangements are made with the banks for collection of premium. Such collecting branches send a cheque for the consolidated amount collected, along with the list of policies, to the specified office of the insurer at specified intervals. Date of collection by the collecting bank is considered the actual date of payment of premium.

LAPSE AND NON-FORFEITUREIn terms of the policy conditions, the obligation of the insurer to pay the SA as stated their in is subject to the premium being paid on the due dates. A payment within the days of grace period is deemed the payment made on the due date. If the premium is not received by the insurer within the grace period then it is assumed that there is a default from the side of the policyholder. The insurer is entitled to say that the policy has ended. Such termination is called lapse. No claims arise on the policy after a lapse, and all premiums are forfeited. In practice however, insurers do not forfeit all the premiums paid when the policy lapses. The insurance act does not allow such forfeiture. The reason is that every policy acquires a reserve because of (1) premiums in the early

years of policy being more then what are justified (2) the savings element in the premium. It would not be fair to forfeit this reserve. The policy conditions provide various safeguards to policyholders, when there is a premium default. These provisions are called non-forfeiture provisions. There are various options. One of them is to return the amount to the policyholder that represents the reserve. This amount is called the surrender value or the cash value. The insurance act requires that every policy shall have a guaranteed surrender value, if at least three years premium have been paid. This minimum has to be paid to the policyholder. This minimum has to be stated as part of the policy conditions. Insurers actually pay more then the guaranteed minimum. Surrender value or cash value is made available normally when the policy has remained in force for at least three years; this is so because in the first year, most of the premium goes out in expenses. There is little left for accumulation. The other non-forfeiture options are Making the policy paid up Keeping the policy in force through premiums advanced from the surrender value and Providing term insurance cover from the surrender value

KEEPING POLICY IN FORCEThe option of continuing the policy as in full force is made possible by nationally advancing the premium as a loan from the surrender value. This can continue as long as the total premiums, advanced is not more then the surrender value. At the stage when the surrender value is not sufficient to advance a full settlement of premium, the policy is finally determined and any surrender value is left over is paid to the policyholder. Some insurers, prior to nationalization of the insurance business in India used to offer the benefit of automatic advance of premium. Its main advantage is that the insurance cover is fully safeguarded and not reduced; also the policyholder can pay the premium whenever he is in the position to do so and the policy will continue to be in force. The interim failure to pay will have no effect. If the policy is with profits it will be entitled to bonus. However, after some years, if the arrears are not paid and the surrender value is exhausted, the sense of loss is much more, as little cash is available and the benefit of cover remains notional and not real. That is why many insurers prefer to offer paid up option. Some insurers in India offer the automatic advance of premium option, provided the policyholder specifically asks for it. Otherwise, the paid up conditions comes into operation. The LIC does not offer it even as an option.

EXTENDED TERM INSURACE

The third option is of extended term insurance cover. Under this option, the insurer converts the policy into a single premium term insurance for the full SA of the policy for such a period as the net surrender value will purchase, at the insured age at the time of lapse of the policy. This is similar to the second, except the premium advanced from the surrender value is not the premium due under the policy, but the premium necessary to provide a term insurance cover equal to the SA. It has the same advantage, of securing cover, as the second option of automatic advance of premium. The policy may last for a longer period because the premium advanced is lower. But the surrender value would not increase as in the second option, as the second element of the premium is not being advanced For the full Under the extended term the policy remains In full force SA for a limited period instead of reduced paid up amount of insurance remaining in force for the entire policy period as in the first option. Under the last to options at some time, the amount payable will become zero. In the third option even if the extended term continues till the original date of maturity, the amount payable at maturity will not be the SA. At such times, there is sense of having been cheated.

REVIVALWhen a policy lapses, it benefits neither the insurer nor the policyholder. The insured losses the insurance risks cover for the full amount. It signifies a reversal of the decision to arrange for the insurance cover and therefore, exposes the policyholder to possible adverse circumstances it is also a

reflection on the agents efforts as it suggests that the policyholder had not been fully convinced about the usefulness of the insurance plan. The insurer also loses. The level premium is also based on the assumption that barring death claims, the policies will run for the full term. The initial expenses incurred on proposals are high and the insurer can recover them, only if the policies remain in full force. Normally people enjoying bad health are more likely to keep the policy in force, while others with good health may not value the continuance of policy. In that case, there is adverse selection. This means that the insurers experience and liability is likely to be greater than what was assumed, while fixing the cost of insurance. Because lapsation affects both the parties adversely, and because lapsation is not always intended by insured to happen, insurers make it possible for lapsed policies to be brought beck into full force. This process is called revival. Insurers have different schemes of revival; with a view to help, policyholders revive lapsed policies on easy terms. For revival of policies, the following will normally be necessary. Arrears of outstanding premiums with interest Proof of continued good health A fee for reinstatement or revival, in the case of some insurers Some insurers do not allow revival, if the policy has remained in lapsed condition for more then five years. This is because of the possibility that the

arrears of premiums on such a policy would be too heavy and that it would be better to take out a fresh policy. The requirement of proof of good health varies according to the duration of lapse and according to the SA. Up to six months from the date of lapse, no proof is necessary. Only the arrears of premium will do. This period of six months is extended to 12 months in the case of policies, which have been in force for at least five years. If the policy is due to mature within a year, then also only arrears of premium called for. Where proof of good health is necessary, the nature of proof can be a simple declaration or an elaborate medical examination with special reports. The considerations are the same as in the case of fresh proposal for insurance. A revival is effectively a decision to underwrite a risk, the risk being equal to the original SA under the policy less the paid up value. The underwriter may agree to revive as per the original policy terms or on modified terms or even decline to revive. This decision is made after examining the risk factors at the time of arrival, which may have changed since the original policy was taken. Subject to underwriter deciding that the revival can be done, various alternatives are offered by the LIC to suit the convenience of the policyholder. Other insurers, in course of time may offer similar convenient schemes, because revivals are in the interest of all concerned. The special revival scheme is allowed if

The policy had not acquired any surrender value on the date of lapse The period expired after lapse is not less then six months and not more than three years The policy had not been revived under this scheme before On revival under this scheme, there will be a new policy with the same plan and term as the original policy but with the following changes. The date of commencement will be advanced by a period equal to the duration of lapse, but not more then two years. If the original policy commenced on 1.10.1999 and had lapsed on 1.1.2001, on revival on 1.7.2001the new date of commencement would be 1.4.2001, 1 year and six months forward. If the revival was to be done on 1.4.2003, the new date will be 1.10.2001 and not 1.1.2002. Premium will be recalculated for the age corresponding to the date of commencement after revival. The original policy will be endorsed for changes in the date of commencement, age, premium, date of last installment of premium, and maturity date. The difference between the old premium and the new premium with interest thereon will have to be paid. The policyholder will be required to pay the endorsement fee. The revival consideration, in monetary terms, is quite low under the special revival scheme, as arrears of premium will not be paid for the entire period of lapse.

Under the installment revival scheme, the policyholder will not be required to pay the full arrears but only six monthly premiums two quarterly premiums, one-half yearly premium or half of the yearly premium. The balance of the arrears will be spread over the remaining due dates in the policy year current on the date of revival, and two full policy years there after. This scheme is made available if the policy cannot be revived, under the special revival scheme, where the premium is outstanding for more than one year and no loan is outstanding. Another scheme is offered is the loan cum revival scheme where under the arrears required for revival are advanced out of the surrender value of the policy as a loan under the policy. The policy will be revived immediately and the loans have to be repaid like any other loan under insurance policies. If the loan available under the policy is more than the amount required for revival, the excess may be paid to the policyholder, on request. If the policy is the money back kind of policy in which a survival kind of payment is due, the said survival amount can be adjusted towards the outstanding dues for revival. This is the survival cum revival scheme.

ASSIGNMENTA life insurance policy is property. It represents rights. It is an actionable claim as described in the transfer of the property act. 1882. a life insurance policy forms part of the estate of the policyholder and can be sold, mortgaged, charged gifted. One of the methods of transfer is the assignment.

An assignment transfers the rights, title and the interest of the assigner to the assignee. Legal provisions for assignment of insurance policies are available in almost all the countries. Section 38 of the insurance act 1938 states that The assignment can be done by an endorsement on the policy or by the separate deed. When the assignment is made by an endorsement on the policy itself, no stamp duty is necessary. Separate deeds have to be stamped. It must be signed by the transferor or his dully authorized agent The signature must be attested by a witness The assignment is effective as soon as it is executed It must be sent to the insurer along with a notice The assignment is effective against the insurer only when the notice is delivered to the insurer Where there is more than one instrument, the priority of claims shall be determined by the order in which the notice are delivered to the insurer The person making the assignment should have the right or title to the property in question. The assigner must be major and competent to contract. An assignment involving a part of the policy moneys is considered bad in low. An assignment once made cannot be cancelled or even altered in form, by the assignor unless the assignee re-assigns the policy. Assignments are two kinds, absolute and conditional. In cases, all rights, title and interest of assignor in the policy pass to the assignee. The assignee becomes the titleholder and can deal with the policy in any manner he likes.

He does not have to take the consent of the assignor. In a condition assignment, however, the interest in the policy automatically reverts to the assignor on the occurrence of the specified solution. For example, a conditional assignment can provide for reversion when the assignee predeceases the policyholder survive till the date of maturity. When a policy is taken by the person on the life of another, the proposer is the policyholder. All rights, interest title in the policy vest in him. The life assured has no interest in the policy unless the proposer assigns the policy in his favor. In case of childrens deferred assurance plans, the life assured can assign the policy after the vesting date.

NOMINATIONNomination is the simple way to ensure easy payment of policy moneys in the case of death claim. As per section 39of the insurance act, 1938 the holder of the policy on his own life may nominate the person or persons to Whom the money secured by the policy is to be paid in the event of his death. This can be made at the time of proposal or at any time during the currency of the policy. A person having a policy on the life of another, cannot effect a nomination. A nomination can be changed by a policyholder by making another endorsement on the policy. If space is not available on the policy for the endorsement, nomination can be done on a separate piece of paper. When a policy is assigned, the existing nomination is automatically cancelled. The assignee not being the life assured cannot make a nomination.

When the policy is reassigned to the life assured, he will have to make a fresh nomination. A nomination gives the nominee only the right to receive the policy moneys in the event of death of the life assured. A nominee does not have any right to the whole of the claim. He only has the right to give a valid discharge but has to hold the moneys on behalf of those entitled to it. When a nominee is minor, an appointee should be appointed by the policyholder. The appointee must affix his signature to the endorsement either in the proposal form or on the text of the policy. The life assured has a right to revoke the appointment of the appointee and appoint a fresh appointee. The appointee losses his status when the nominee becomes a major. When the nominee is a minor and there is no appointee, the claim amount under the policy cannot be paid to the guardian. It can be paid to the legal heirs of the deceased life assured. When the nominees are more than one the policy money are payable to them jointly or to the survivor. No specific share for each nominee can be made. To do so would be contrary to the provisions of act, however, nomination in succession like payable to A failing him to B. While an assignment automatically cancels a nomination, an assignment made in the favor of the insurer, in consideration for a loan granted against the security of the policy, does not cancel the nomination.

If the nominee dies after the death of the life assured, but before the payment of the death claim, the policy moneys would be part of the estate of the life assured and would be paid to his representatives. The nomination continues to be operative on the maturity of the policy, in respect of policies where the maturity amount is payable in installments after the date of maturity, the remaining installments can be paid to the nominee. But the nominee has no right to commute future installments payable.

SURRENDERS AND LOANSSurrender is a voluntary termination of the contract, by the policyholder. A policyholder can surrender the life insurance policy before it becomes a claim. Surrenders are not allowed unless the policy has run for a minimum period, which may vary from three to seven years. The amount payable by the insurer to the policyholder or surrender is called is called the surrender value or the cash value. Surrender values are published and made known to policyholders by some insurers either as part of the prospects or by mention in the policy conditions. Some insurers prefer to announce a guaranteed surrender value as required by the law, which may be given a percentage of the premiums paid. The actual surrender value will be higher than the guaranteed surrender value. The surrender value is usually a percentage of premiums paid or the percentage of the paid up value. The percentage increases as the duration of the policy increases. The surrender value on a policy will be more after 15 years compared to the surrender value after 10 years. The percentage decreases as the term of the policy increases.

In most of life insurance policies, insurers provide the facility of loans. Loans are given up to 80% or 90%of the surrender value of the policy. Interest is charged on the loans. They maybe repaid, in full or in part during the currency of the policy or may remain as a debt on the policies monies until the claim arises. Policies, which do not acquire adequate surrender value, and policies where there is provision for return of a portion of the SA at periodical intervals, are not usually eligible for loan facility.

ForeclosureAs the name suggests, foreclosure means writing off or disclosure of current policy before the date of maturity. When a loan is granted under a policy, the life assured has a choice to pay the interest or allow it to accumulate to be adjusted from the policy moneys payable when the claims arises. This is possible if the premiums are paid regularly and the policy remains in force. In case of paid up policies, the surrender value will not grow as fast as the accumulated interest. The principal loan and accumulated interest could become more then the surrender value at some time. In that case foreclosure becomes necessary. When it is decided to take foreclosure action, a notice may be issued to policyholder calling for the payment of arrears of loan interest. If the interest is not paid, the policy is foreclosed, which means surrendered to loan. The foreclosure action is complete when taken into insurers office. The balance surrenders value, if any after adjusting the principal loan and outstanding

loan interest, is paid to the policyholder, after obtaining the discharge voucher. It is possible to reinstate a foreclosed policy, before the policyholder has returned the discharge voucher and collected the balance surrender value. The procedures will be similar to revival, with evidence of good health also. Instead of arrears of premium, the arrears of loan interest will have to be paid. On foreclosure, the nomination if any ceases to be operative. If life assured dies before payment of the balance surrender value, the amount is not payable to nominee, but only to get legal heirs of the deceased assured.

ALTERATIONSInsurers allow alterations in the policies that have been issued. Some of the alterations may be very simple, like change in address, change of mode in payment of premium, or change in nomination. Some changes may be to make a participating policy, none participating or vice versa or to break one policy into two or more policies of smaller SAs. These may affect the premiums due, but do not affect the risk of the insurer. Other request can be for significant changes, like in the plan or term or both, changes in SA etc. the governing principals followed in this matter is that alterations in these existing policies may be allowed if the risk does not increase.

INDISPUTABILITY OF THE POLICY

If the proposer at the time of proposal has made any untrue or incorrect statements either in the proposal form or in the personal statement or he has not disclosed any material information, the policy contract become invalid. It means that all the benefits under the policy ceases and all moneys paid there under are forfeited. However, this penalty is subject to section 45 of the act, 1938. Under this section, a policy, which has been in force for two years, cannot be disputed on the ground of incorrect statement in the proposal form and other documents, unless it is shown to be on a material matter and fraudulently made. This provision is made to interest of policyholders.

Documents used in InsuranceAn insurance policy is a contract. The stakes in the insurance companies are very large and those interested in the stakes, many. There could be disputes involving the insurer and the insured or the insurer and the beneficiaries of the policy or between the beneficiaries. The terms and conditions of the policy will provide the grounds to decide the issues in the dispute. These terms will relate to statements and actions at various times during the course of the policy. These will have to be proved through documents. Documentation therefore is important in the life insurance business. The insurance business is a long-term one, lasting 30 or 40 years. Transactions may be rare. If the premiums are paid without any default and no changes in the nominations etc., are made the policy file may not be opened until the claim arises after, may be thirty years. In the absence of proper documentation, it may not be possible to know the dues and the rights

or even the identities of the persons concerned. The various documents required in insurance business are as follows:

PROPOSAL FORMSThe first document in the insurance file is the proposal or the application for insurance. It is usual to obtain the proposal in a standardized, printed form. This is to be completed by the proposer in his own handwriting and signed in the presence of a witness. Contract to be deemed valid, requires signatures to authenticate through witnesses. The proposal form and the statements therein are important as these statements form the basis of the life insurance contract. If someone else has filled up the proposal form, the person filling up the proposal form has to declare that he wrote the answers as dictated by the proposer, that the questions were read out to him and that he had understood the answers. If the proposer has answered the questions in a different language there must be a declaration to the effect that the questions were explained to him in his own language and the answers were written by him only after understanding the questions fully. If the proposer is illiterate, the left thumb impression has to be attested by a third party, who has to give a declaration that the questions were explained to him and answers dictated by him were recorded truthfully and were read out to him and were understood by him. These procedures are important to make the proposer responsible for the answer in the proposal, which become the basis of the insurance contract. Otherwise, he may be able to claim later, that he did not know what was written in the proposal, as somebody else written the answer.

The proposal form contains a declaration at the end stating that all the statement there in are true in every respect and that if any untrue averment be contained there in, the insurer will be entitled to declare the contract as null and void and forfeit the moneys already paid. The policy document also refers to this declaration. This declaration makes the principal of utmost good faith operational. The agent must draw the attention of the proposer to this declaration and its importance and insure that there are no untrue statements in the proposal. The proposal form will contain information as to the name and address of the proposer, name of the person to be insured, if different details of the person to be insured like his occupation and date of birth details about the insurance required like plan, term and sum assured, riders to be added details about earlier proposal for insurance. The underwriter looks at these particulars. If the address is care of somebody, clarification may be asked for. There could he be a suspicion of moral hazard. The occupation of the life to be assured would determine the need for occupation extras. The manner in which the earlier proposals had been accepted does not bind the underwriter, but provide some guidance. If the earlier policies are not continuing, there could be doubts about the purpose of the present proposal. Further particulars required along with the proposal, would include (a) preferred mode of premium (b) whether the policy should be beck dated, to get the benefit of the lower age and lower premium (c) employment particulars to enable deductions and (d) nomination. If the policy is to be issued under the marriage women property act, then the relevant forms have to be filled up, stating the beneficiaries and the trustees. These details have

no bearing on the underwriting, but are necessary for preparing the policy and for making the necessary administrative arrangements for servicing.

PERSONAL STATEMENTThe personal statement is to be completed along with the proposal. This asks for particulars about the state of health of the person proposed to be insured, his family history, medical consultation, and illness, absence from work due to medical grounds, etc. If the proposal is to be considered as a non-medical case, particulars will be required about the employer. If the person is a female, additional questions will have to be answered. All these details are used for underwriting purposes. The declaration at the end of the proposal form applies to the statements in the personal statements as well. Incorrect statements can nullify the contract. If a medical examination is done, because of the standard rules of the insurer or because the underwriter asks for it, the medical report and any other special reports, become parts of the documentation. Under the regulations issued by IRDA in April 2002, a copy of the proposal is to be supplied to the policyholder within 30 days of the completion of the contract. Some insurers attach photocopies of the proposal to the policy itself. The medical reports submitted by the agent or other officials of the insurer are confidential and will not be made available to the proposer. Though the data in those documents are taken in to account by the underwriter, they do

not form the basis of the contract. The proposer is not responsible for and is not bound by the data in those documents.

First Premium ReceiptThe underwriters decision on the proposal may be to accept at OR otherwise. If it is accepted at OR, the policy can be commenced immediately, provided the full premium has been paid along with the proposal. The FPR will be issued. If the acceptance is not at OR, the proposer has to agree to the modified terms of the policy. In addition, pay the balance premium if any, before the FPR can be issued. The IRDA regulations require that the decision on the proposal form should be made by the insurer within 15 days. The FPR is the evidence that the insurance contract has begun. The policy document, which is the evidence of the contract, may be issued only after some time. If the claim arises before the policy is issued, but after the FPR is issued, the insurer is liable. Once the policy document is issued, that becomes the proof that the cover has begun and that the first premium has paid. The FPR becomes irrelevant. The FPR will state that the proposal for insurance has accepted and that the premium has been received. It will give the particulars of the policy, such as policy number, date of commencement of risk, date of maturity, date of payment of premium, premium amount, mode, name and address of the life assured. The date on which the next premium is due is also stated.

The date of issue of FPR is the date on which the premium is adjusted in the books of the insurer. Until then, the money remains deposits. This date is effectively the date on which the liability of the insurer begins. The FPR, and later the policy also may show another date as the date of commencement. This would be an earlier date, chosen for the benefit of the lower premium, corresponding to a lower age. An insurer agrees to such requests for backdating, to a date within the financial year. The premium due dates and the policy anniversary will be reckoned based on such back dated date. This date of commencement is only notional, because there is no risk cover till the date of the issue of the FPR. In the case of the policy, which is backdated, the FPR may acknowledge more then one installment premium. This depends on the extent of dating back and the mode of the premium. Strictly, the issue of the FPR signifies the conclusion of the contract and it is binding on both the parties. However the regulations issued by the IRDA, provide that the policyholder has the option to withdraw from the contract within 15 days of the issue of the policy. He will then be entitled to refund of the premium paid, less cost of risk for the short period and expenses towards medical examination and stamp duty. This period of 15 days is called the free lock in period or cooling off period.

RENEWAL PREMIUM RECEIPTWhen the policyholder pays the premiums due under the policy subsequent to the issue of the FPR, RPR are issued. These RPR are important to prove payments, as default can lead to termination of the contract. Disputes may arise as to whether a particular payment has made or not. If such disputes are

raised at the time of the claim, the respective RPR will provide conclusive evidence. The adjustments of such subsequent premiums do not constitute conclusive evidence. This is because insurers do adjust later payments leaving gaps for earlier defaults to be collected at the time of claim. Renewal receipts are not issued in respect of policies under SSS. The consolidated cheque received from the employer is adjusted as one transaction. Individual policyholders do not get receipts. Salary slips would show deduction of premium from salary. A certificate from the employer about the deductions having been made and sent to the insurer should also suffice. Policyholders tend to argue that the SSS arrangement is between the insurer and the employer and that he, the policyholder, is not responsible for any default. This argument is not valid. The employer is not the agent of the insurer. The insurer is providing a facility to its employees. The employer will not have any control if the salary is not paid any time because of strike or leave or termination of employment. The insurer may not be informed about it. The employee has to make sure that the deductions are made, and if not done for any reason, to arrange separately for payment. Electronic system is being developed for payment of premium. These include electronic clearing systems direct debit to the bank account or payments through the internet.

POLICY DOCUMENT

The policy document is the most important document. It is the evidence of the contract. It is prepared to reflect the terms of the contract. If the original policy is lost it wont affect the insurance contract. A duplicate policy will be issued on request. Pre-printed policy forms containing standard policy conditions and schedules are used. Clauses and liens may be separately typed and pasted on the policy document. The policy document is to be signed by the competent authority and stamped, according to the Indian stamp act new technology may enable insurers to avoid pre printed forms and print a policy every time, with appropriate schedules and terms, including terms and clauses. The preamble to the policy states that the proposal and the declaration signed by the party form the basis of the contract. The operative clause lays down the mutual obligation of the parties regarding payment of premiums and payment of SA on the happening of the insured event and on production of age proof and title of the claimant. The schedule gives all essential particulars of the policy like dates of commencement on maturity, SA, nominee, premiums special clauses, if any, riders, and exclusions or liens etc. The terms and conditions will refer to the days of grace for payment of premium, availability of loan, etc. Instructions issued by the IRDA require that the policy information statement should be issued with every policy, stating The facility available for mode and periodicity of payment of premium

Person or office to be contacted for any service or enquiry relating to the policy Importance of intimating change of address of policyholder and nominee Availability of mechanisms to address grievances Information on location of insurance ombudsman

ENDORSEMENTIn a pre-printed policy form, the standard policy conditions and privileges are printed. If any of them need modification, in keeping with the terms of acceptance, endorsements are attached to the policy. If a condition in the pre printed policy is not applicable, the same will be cancelled by rubberstamping the clause accordingly. If individual policies are printed by computers, such endorsements and cancellation may be avoided. During the currency of the policy, alterations may be affected, in age, plan or term, SA, mode of premium payment, etc. separate endorsement will be placed on and kept alone attached to the policy document, to indicate such changes. Nominations made subsequent to the issue of the policy are to be made on the back of the policy itself as endorsements. Assignment can also be made on the back of the policy document. If made on separate stamped deeds, then these deeds as well as the notices issued to the insurer become important document.

RENEWAL AND BONUS NOTICESReminders to policyholders regarding premiums due, are not important document they have no significance after the premium is paid. Receipt of the notice is also not essential for payment of premium. Similarly, bonus intimation notices are also not important. The bonus data is updated in the insurers file automatically. The policyholder will know about bonus declarations through news items and advertisements in media, much earlier. The IRDA has stipulated that once a year, the insurer should inform the policyholder about the status of policy.

PROSPECTSThe IRDA regulations as amended in October 2002, stipulate that the prospectus or brochure issued by the insurer, should explicitly state the scope of benefits, conditions, warranties, entitlement, exceptions, right for participation in bonus, etc. under each plan of insurance. If the right to participate in bonus is deferred for some time after commencement of the policy, the fact should be explicitly stated.

ICICI Prudential The CompanyICICI Prudential Life Insurance Company is a joint venture between ICICI Bank - one of India's foremost financial services companies-and Prudential plc - a leading international financial services group headquartered in the United Kingdom. Total capital infusion stands at Rs. 37.72 billion, with ICICI Bank holding a stake of 74% and Prudential plc holding 26%.

ICICI Prudential began their operations in December 2000 after receiving approval from Insurance Regulatory Development Authority (IRDA). Today, its nation-wide team comprises of over 954 branches in addition to 1,015 micro-offices, over 296,000 advisors; and 21 bancassurance partners. ICICI Prudential was the first life insurer in India to receive a National Insurer Financial Strength rating of AAA (Ind) from Fitch ratings. For three years in a row, ICICI Prudential has been voted as India's Most Trusted Private Life Insurer, by The Economic Times - AC Nielsen ORG Marg survey of 'Most Trusted Brands'. As the company grew its distribution, product range and customer base, it continued to tirelessly uphold the commitment to deliver world-class financial solutions to customers all over India.

Promoters of ICICI Prudential CompanyICICI Ltd Bank 74% stakeholder of ICICI PrudentialICICI Ltd was established in 1955 by the World Bank, the Government of India and the Indian Industry, to promote industrial development of India by providing project and corporate finance to Indian industry.

Since inception, ICICI has grown from a development bank to a financial conglomerate and has become one of the largest public financial institutions in India. ICICI has financed all major sectors of the economy, covering

6,848 companies and 16,851 projects. In the fiscal year 2000-2001, ICICI had disbursed a total of Rs 319.65 billion.

ICICI has now developed a whole range of activities to become a Universal Bank. Some of ICICI's spectrum of activities include: * Commercial Banking - ICICI Bank, India's first internet bank. * Information Technology - ICICI Infotech, transaction processing, software development * Investment Banking - ICICI Securities, one of the key players in the Indian Capital player focus Products * Distribution - ICICI Capital, Distribution and Servicing of Retail Liability Products ICICI is listed on the Indian Stock Exchanges and on the New York Stock Exchange (NYSE). On September 22, 1999, it became the first Indian company to be listed on the NYSE (symbol: IC and IC.D). This has been followed by the listing of ICICI Bank on NYSE (symbol: IBN) on March 28, 2000. on IT in and Markets India HealthCare * Mutual Fund - Prudential ICICI AMC, leading private sector mutual fund * Venture Capital - ICICI Venture, leading private equity investor with * Retail Services - ICICI PFS, Marketing and Distribution of Retail Asset

Prudential plc. 26% stake holder of ICICI Prudential

Prudential plc was founded in 1848. Since then it has grown to become one of the largest providers of a wide range of savings products for the individual including life insurance, pensions, annuities, unit trusts and personal banking. It has a presence in over 15 countries, and caters to the financial needs of over 10 million customers. It manages assets of over US$ 259 billion (Rupees 11, 39,600 crores approx.) as of December 31, 1999. Prudential plc. had its presence in Asia for the past 75 years catering to over 1 million customers across 11 Asian countries. Prudential is the largest life insurance company in the United Kingdom (Source: S&P's UK Life Financial Digest, 1998). Asia has always been an important region for Prudential and it has had a presence in Asia for over 75 years. In fact Prudential's first overseas operation was in India, way back in 1923 to establish Life and General Branch agencies. In the US, Prudential owns Jackson National Life, one of the leading life insurance companies. Prudential controls approximately 4% of all the listed shares on the second largest stock exchange in the world, the London Stock Exchange, making it one of the largest institutional investors in the UK. Prudential is focused on the internet generation and is one of the first financial service organizations to use the internet on a fully integrated basis. In October 1998, Prudential launched a "branchless" bank based on the internet. Unusually titled as "egg". The bank has in a short span of its existence become a leading banking service provider in the UK. Infect in the first six months of its existence it garnered over 5 billion (US$ 8 billion) in deposits from over 500,000 customers.

Development of superior products and services that offer value for money and security while producing superior financial returns enables Prudential to maximize the value of its shareholder's investment and to establish lasting relationships with customers and policy holders.

Vision & Values of ICICI Prudential CompanyVisionTo be the dominant Life, Health and Pensions player built on trust by worldclass people and service. This we hope to achieve by:

Understanding the needs of customers and offering them superior products and service Leveraging technology to service customers quickly, efficiently and conveniently Developing and implementing superior risk management and investment strategies to offer sustainable and stable returns to our policyholders Providing an enabling environment to foster growth and learning for our employees And above all, building transparency in all our dealings

The success of the company will be founded in its unflinching commitment to 5 core values -- Integrity, Customer First, Boundary less, Ownership and Passion. Each of the values describes what the company stands for, the qualities of our people and the way we work.

We do believe that we are on the threshold of an exciting new opportunity, where we can play a significant role in redefining and reshaping the sector. Given the quality of our parentage and the commitment of our team, there are no limits to our growth.

ValuesEvery member of the ICICI Prudential team is committed to 5 core values: Integrity, Customer First, Boundary less, Ownership, and Passion. These values shine forth in all we do, and have become the keystones of our success.

Insurance Products of the ICICI PrudentialBroadly talking the products of the company can be classified as: 1. Insurance Solution for Individual 2. Group Insurance Solutions

Insurance Solutions for IndividualsICICI Prudential Life Insurance offers a range of innovative, customercentric products that meet the needs of customers at every life stage. Its products can be enhanced with up to 4 riders, to create a customized solution for each policyholder.

Savings & Wealth Creation Solutions1.

Save'n'Protect is a traditional endowment savings plan that offers life protection along with adequate returns. CashBak is an anticipated endowment policy ideal for meeting milestone expenses like a child's marriage, expenses for a child's higher education or purchase of an asset. It is available for terms of 15 and 20 years. LifeTime Gold & LifeTime Plus are unit-linked plans that offer customers the flexibility and control to customize the policy to meet the changing needs at different life stages. Each offer 6 fund options Preserver, Protector, Balancer, Maximiser, Flexi Growth and Flexi Balanced. LifeLink Super is a single premium unit linked insurance plan which combines life insurance cover with the opportunity to stay invested in the stock market. Premier Life Gold is a limited premium paying plan specially structured for long-term wealth creation. InvestShield Life New is a unit linked plan that provides premium guarantee on the invested premiums and ensures that the customer receives only the benefits of fund appreciation without any of the risks of depreciation. InvestShield Cashbak is a unit linked plan that provides premium guarantee on the invested premiums along with flexible liquidity options. LifeStage RP is a unique and powerful wealth creation insurance solution, which combines the benefits of automatic asset allocation and quarterly rebalancing along with increased protection.

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Protection Solutions1.

LifeGuard is a protection plan, which offers life cover at low cost. It is available in 3 options - level term assurance, level term assurance with return of premium & single premium. HomeAssure is a mortgage reducing term assurance plan designed specifically to help customers cover their home loans in a simple and cost-effective manner.

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Education insurance plans1.

Education insurance under the Smart Kid brand provides guaranteed educational benefits to a child along with life insurance cover for the parent who purchases the policy. The policy is designed to provide money at important milestones in the child's life. Smart Kid plans are also available in unit-linked form - both single premium and regular premium.

Retirement Solutions1.

Forever Life is a traditional retirement product that offers guaranteed returns for the first 4 years and then declares bonuses annually. LifeTime Super Pension is a regular premium unit linked pension plan that helps one accumulate over the long term and offers 5 annuity options (life annuity, life annuity with return of purchase price, joint life last survivor annuity with return of purchase price, life annuity guaranteed for 5, 10 and 15 years & for life thereafter, joint life, last

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survivor annuity without return of purchase price) at the time of retirement.3.

LifeLink Super Pension is a single premium unit linked pension plan. Immediate Annuity is a single premium annuity product that guarantees income for life at the time of retirement. It offers the benefit of 5 payout options. PremierLife Pension is a unique and convenient retirement solution with a limited premium paying term of three or five years, to suit professionals and businessmen, especially those who require more flexibility and customization while planning their finances.

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Health Solutions1.

Health Assure Plus: Health Assure is a regular premium plan which provides long term cover against 6 critical illnesses by providing policyholder with financial assistance, irrespective of the actual medical expenses. Health Assure Plus offers the added advantage of an equivalent life insurance cover. Cancer Care: is a regular premium plan that pays cash benefit on the diagnosis as well as at different stages in the treatment of various cancer conditions. Cancer Care Plus: is a wellness plan that includes all the benefits of Cancer Care and also provides an additional benefit of free periodical cancer screenings. Diabetes Care: Diabetes Care is a unique critical illness product specially developed for individuals with Type 2 diabetes and prediabetes. It makes payments on diagnosis on any of 6 diabetes related

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critical illnesses, and also offers a coordinated care approach to managing the condition. Diabetes Care Plus also offers life cover.5.

Diabetes Care Plus: is a unique insurance policy that provides an additional benefit of life cover for Type 2 diabetics and pre-diabetics Hospital Care: is a fixed benefit plan covering various stages of treatment - hospitalization, ICU, procedures & recuperating allowance. It covers a range of medical conditions (900 surgeries) and has long term guaranteed coverage up to 20 years. Crisis Cover: is a 360-degree product that will provide long-term coverage against 35 critical illnesses, total and permanent disability, and death.

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Group Insurance SolutionsICICI Prudential Life also offers Group Insurance Solutions for companies seeking to enhance benefits to their employees. Group Gratuity Plan: ICICI Prudential Life's group gratuity plan helps employers fund their statutory gratuity obligation in a scientific manner. The plan can also be customized to structure schemes that can provide benefits beyond the statutory obligations. Group Superannuation Plan: ICICI Prudential Life offers both defined contribution (DC) and defined benefit (DB) superannuation schemes to optimize returns for the members of the trust and rationalize the cost. Members have the option of choosing from

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various annuity options or opting for a partial commutation of the annuity at the time of retirement. Group Immediate Annuities: In addition to the annuities offered to existing superannuation customers, we offer immediate annuities to superannuation funds not managed by us. Group Term Plan: ICICI Prudential Life's flexible group term solution helps provide affordable cover to members of a group. The cover could be uniform or based on designation/rank or a multiple of salary. The benefit under the policy is paid to the beneficiary nominated by the member on his/her death.

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Flexible Rider Options ICICI Prudential Life offers flexible riders, which can be added to the basic policy at a marginal cost, depending on the specific needs of the customer. Accident & disability benefit: If death occurs as the result of an accident during the term of the policy, the beneficiary receives an additional amount equal to the rider sum assured under the policy. If an accident results in total and permanent disability, 10% of rider sum assured will be paid each year, from the end of the 1st year after the disability date for the remainder of the base policy term or 10 years, whichever is lesser. If the death occurs while travelling in an

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authorized mass transport vehicle, the beneficiary will be entitled to twice the sum assured as additional benefit.2.

Critical Illness Benefit: protects the insured against financial loss in the event of 9 specified critical illnesses. Benefits are payable to the insured for medical expenses prior to death. Waiver of Premium: In case of total and permanent disability due to an accident, the future premiums continue to be paid by the company till the time of maturity. This rider is available with Smart Kid, LifeTime Plus, LifeTime Super and LifeTime Super Pension. Income benefit rider: In case of death of the life assured during the term of the policy, 10% of the sum assured is paid annually to the nominee on each policy anniversary till the maturity of the rider.

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Edge of ICICI PrudentialThe ICICI Prudential edge comes from our commitment to our customers, in all that we do - be it product development, distribution, the sales process or servicing. Here's a peek into what makes us leaders. 1. The products have been developed after a clear and thorough understanding of customers' needs. It is this research that helps us develop Education plans that offer the ideal way to truly guarantee your child's education, Retirement solutions that are a hedge against inflation and yet promise a fixed income after you retire, or Health insurance that arms you with the funds you might need to recover from a dreaded disease.

2. Having the right products is the first step, but it's equally important to ensure that our customers can access them easily and quickly. To this end, ICICI Prudential has an advisor base across the length and breadth of the country, and also partners with leading banks, corporate agents and brokers to distribute our products. 3. Robust risk management and underwriting practices form the core of ICICI Prudential business. With clear guidelines in place, we ensure equitable costing of risks, and thereby ensure a smooth and hassle-free claims process. 4. Entrusted with helping the customers meet their long-term goals, they adopt an investment philosophy that aims to achieve risk adjusted returns over the long-term. 5. Last but definitely not the least, ICICI Prudential 28,000 plus strong team is given the opportunity to learn and grow, every day in a multitude of ways. This belief keeps them engaged and enthusiastic, so that they can deliver on promises to cover people, at every step in life.

Competitors of ICICI Prudential ING Vysya Life Insurance Life Insurance Corporation of India Max New York Life Insurance Company Ltd HDFC Standard Life Insurance Company Limited OM Kotak Mahindra Life Insurance Company Ltd.

SBI Life Insurance Company Limited Tata AIG Life Insurance Company Birla Sun Life Insurance Company Limited MetLife India Insurance Company Pvt. Ltd.

Bibliography

Www.prudential.co.uk Www.iciciprulife.com Www.insure2bsecure.com/insure/information IC 33 Life Insurance author S. Balachandran

Brochure of ICICI Prudential