strategic human resource mgmt. ch 1 pulak das

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Page 1: strategic human resource mgmt. ch 1 pulak Das

prepared by: PAREEN RAVAL

ASSIGNMENT : 1 SHRM

Page 2: strategic human resource mgmt. ch 1 pulak Das

FORCES IN THE ENVIRONMENT

Industrial competition

Social forces

Regulatory forces

Technological forces

Page 3: strategic human resource mgmt. ch 1 pulak Das

REGULATORY FORCES

Page 4: strategic human resource mgmt. ch 1 pulak Das

Term Regulatory forces can be defined as

Forces that depend on various government

regulatory agencies that impact how an

organization operates on a daily basis. An example

is the Food and Drug Administration (FDA),

Federal Communications Commission (FCC),

Environmental Protection Agency (EPA), and

Consumer Product Safety Commission (CPSC) etc.

Page 5: strategic human resource mgmt. ch 1 pulak Das

Areas of concern Due to Change in Regulatory Forces

Economic liberalization;

Protection of consumer rights;

Environmental protection laws;

Govt. tax policy in annual budget: Value added

tax, excise exemption, tariff policy, FDI;

WTO regulation and patent law change;

A change in labor regulations

Page 6: strategic human resource mgmt. ch 1 pulak Das

REGULATORY FORCES IN INSURANCE SECTOR

Page 7: strategic human resource mgmt. ch 1 pulak Das

Normal insurance planULIP : Unit Linked Insurance Plans Difference between ULIP and Mutual Funds

SEBI has announced list of 14 major insurance

companies to stop selling the ULIPs. Such as SBI

Life, ICICI Prudential, TATA AIG, Aegon Religare

Life, Aviva Life, Bajaj Allianz, Bharti AXA, Birla

Sunlife, HDFC Standard Life, ING Vysya Life,

Kotak Mahindra old mutual life, Max New York

Life, Metlife India and Reliance Life

Page 8: strategic human resource mgmt. ch 1 pulak Das

IRDA wins over SEBI on ULIP policy verdictIRDA’s roleCharges on ULIP policy

Most of the ULIP policies charges more fees for the first three years. Basically insurance companies would charges the following fees on the ULIP

1. Initial administration charge

2. Regular administration charge

3. Policy administration fee

4. Investment management charge

Page 9: strategic human resource mgmt. ch 1 pulak Das

ULIP Reforms

There are number of changes done on nature of

the ULIP since October 2009. It makes ULIP

more attractive to the investors compare to the

previous one with high cost deductions.

Page 10: strategic human resource mgmt. ch 1 pulak Das

ULIP with less than 10 Years There is 3% cap on charges levied by the insurance

companies on ULIP. It means, the total fees collected on ULIP premiums can not exceed 3%. It is defined as difference between net yield and gross yield should not exceed 3%.

In the above 3%, the management fee can not be more than 1.5%.

Gross yield is the yield generated by the ULIP before all charges are deducted.

Net yield is the yield generated by the ULIP after all charges are deducted

ULIP with greater than 10 years Over all fees can not be more than 2.25%.Management fees can not be more than 1.25%.

Page 11: strategic human resource mgmt. ch 1 pulak Das

Unit-linked insurance products (ULIPs) filed after September 30, 2009 will have a lock-in of five years.

According to the IRDA, there will be new norms on tightening the commission and fees on ULIP products. It is trying hard to make the investment more attractive for the investors.

Page 12: strategic human resource mgmt. ch 1 pulak Das

The new norms will have the high life cover, in the existing

policies have the high focus on the investment rather than

the protection on life. IRDA want to bring more clarity on

the life cover and investment portion on the same product.

This make investors to clearly understand how much is

invested and how much is insured.

In order to put more money in the hands of investors, IRDA

recently said that insurers cannot charge a fee for

surrendering a unit-linked insurance policy after five years.

Page 13: strategic human resource mgmt. ch 1 pulak Das

At present, insures charge more fees on

surrendering the policy even after the completion

of the lock-in period.

Page 14: strategic human resource mgmt. ch 1 pulak Das

Say Thanks to SEBI!!!

ULIP investors must say thanks to SEBI for

putting pressure on IRDA to introduce new

norms on ULIP policies.

Page 15: strategic human resource mgmt. ch 1 pulak Das