PREFACE

I am very happy to place this project in the head of my esteemed readers.

Work on the project of analysis of Future Generali Life Insurance
agent’s recruitment and market survey is a very tough task but through
the helping of my colleagues, professors and the other people it’s
become simple.
I would like to introduce myself as
one of those aspirants, who are trying to make identity of their won in
the crowd of approaches and opportunity. The project provides practical
environment for us to explore. This report is the outcome of 45 days
working with lot of enthusiasm and hardworking.
Through this project, I got good experience and learned a
lot about HR and as well as finance, which shall be of immense help in
the future for me. I take this opportunity to present this report and
sincerely hope that it would be of great use to its readers.

Ravindra vyas
Ashish Mathur
Vinay Vyas
MBA 3rd semester
 ACKNOWLEDGEMENT

I express my sincere thanks to my project guide, Mr. Ashish Sharma,

Agency Manager of Future Generali India for guiding me right from the
inception till the successful completion of the project.
I sincerely acknowledge him for extending their valuable
guidance, support for literature, critical reviews of project and the report
and above all the moral support hehad provided to me with all stages of
this project.
I would also like to thank the supporting staff
of MBA Department, for their help and cooperation throughout our
project.

Ravindra vyas
Ashish Mathur
Vinay Vyas
[MBA 3rd Semester]

EXECUTIVE SUMMARY
In today’s competitive market, for life insurance sector, recruiting good
agents has often been considered the number one job & problem in
agency management. It is certainly a task that new companies in the
Indian life insurance market have put much stress on.
The reason is that life insurance remains a product, not many
are easily disposed to buy and not many want to sell either. The survival
of agency manager depends on his convincing enough qualified and
competent people to choose life insurance selling as a permanent career.
Recruitment involves selecting the
right candidate for the agent’s job and selling the agency idea to him.
Recruitment continuously is very much important for life insurance
companies; because FYP (First Year Premium) is directly depend on the
number of Agents/Advisors, Activity Ratio, Case Rate & Case Size.
Apart from recruiting more & more advisors it is necessary to recruit
quality advisors to maintain activity ratio, case rate and case size.
Further, it is very important to
know the target segment for recruitment, in this project work,
I have segmented the whole market mainly on the basis of demographic
(occupation, & age), and geographic (urban & sub-urban areas)
segmentation, to identify the potential
Segment for recruitment.

CONTENTS

1. Introduction of Industry

2. Introduction of Company
3. Objectives of the Research

4. Research Methodology

1 Title of the Study

2 Duration of the Project

3 Objective of Study

4 Type of Research

5 Sample Size and method of selecting sample

6 Scope of Study

7 Limitation of Study

INTRODUCTION OF INSURANCE

The business of insurance is related to the economic values of assets.

Every asset has a value. The asset would have been created through the
efforts of the owner. The asset is valuable to the owner, because he
expects to get some benefits from it. The benefits may be an income or
something else.
It is a benefit because
it meets some of his needs. In the case of a factory or a cow, the product
generated by is sold and income generated. In the case of a motor car, it
provides comfort and convenience in transportation. There is no direct
income. Every asset is expected to last for a certain period of time
during which it will perform. After that, the benefit may not be
available.
There is a life time for a
machine in a factory or a cow or a motor car. None of them will last
forever. The owner is aware of this and he can so manage his affairs that
by the end of that period or life time, a substitute is made available.
Thus, he makes sure that the value or income is not lost. However, the
asset may get lost earlier. An accident or some unfortunate event may
destroy it or make it nonfunctional.
In that case, the owner and those deriving benefits there from, would be
deprived of the benefit and the planned substitute would not have been
ready.
There is an adverse or unpleasant situation.
Insurance is a mechanism that helps to reduce the effect
of such adverse situations.

SOME DFFINITIONS OF INSURANCE

1. Insurance, in law and economics, is a form of risk management
primarily used to hedge against the risk of a contingent loss. Insurance is
defined as the equitable transfer of the risk of a potential loss, from one
entity to another, in exchange for a premium.

2. Plans in which individuals and organization who are concerned about

potential risks will pay premiums to an insurance company, who in
return, will reimburse them if there is loss. To generate a profit, the
insurer will invest the premiums it receives.

3. A contract that provides compensation for specific losses in exchange

for a periodic payment. An individual contract is known as an insurance
policy and the periodic payment is known as an insurance premium.

4. A contract in which one party agrees to pay for another party‘s

financial loss resulting from a specified incident (for example, a
collision, theft or storm damage).

BRIFE HISTORY OF INSURANCE

The business of insurance started with marine business, traders, who
used to gather in the Lloyd’s 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 ship/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 was the Albert. The first Indian
insurance company was the Bombay Mutual Assurance Society Ltd,
formed in 1970.
Later, the Hindustan cooperative was
formed in Calcutta, the united India in Madras, the Bombay life in
Bombay, the Jupiter in Bombay and the Lakshmi in New Delhi. These
were all Indian companies, started as a result of the Swadeshi movement
in the early 1900s.
By the year 1956, when the
life insurance business was nationalized and the Life Insurance
Corporation of India (LIC) was formed on 1st September 1956, there
were 170 companies and 75 provident fund societies transacting life
insurance business in India. After the amendment to the relevant laws in
1999, the LIC did not have the exclusive privilege of doing life
insurance business in India. By 31/3/2002, eleven new insurance had
been registered and had begun to transact life insurance business in
India.

PURPOSE & NEED OF INSURANCE

Only economic consequences can be insured. If the loss is not financial,
insurance may not be possible. Examples of non-economic losses are
love and affection of parents, leadership of managers, sentimental
attachments to family heirlooms, innovative and creative abilities, etc.
The mechanism of insurance is
very simple. People who are exposed to the same risks come together
and agree that, if any one of them suffers a loss, the others will share the
loss and make good to the person who lost. All people who send goods
by ship are exposed to these risks, which are related to water damage,
ship sinking, piracy etc. Those owning factors are not exposed to
these risks, but they are exposed to different kinds of risks like fire, hail
storms, earth quakes, lightning, burglary etc. Like this, different kinds of
risks. By this method, the heavy loss that any one of them may suffer
(all of them may such losses at the same time) is divided into bearable
small losses by all.
In others words, the risks is spread
among the community and the likely big impact on one is reduced to
smaller manageable impacts on all. There are certain principles, which
make it possible for insurance to remain a fair
arrangement.
The first is that it is difficult for any one individual to bear
the consequence of the risks that he is exposed to. It will become
bearable when the community shares the burden. The second is that the
peril should occur in an accidental manner. Nobody should be in a
position to make the risks happen.
In other
words, none in the group should set fire to his assets and ask others to
share the costs of damage.
This would be taking unfair
advantage of an arrangement put into place to protect people from the
risks they are exposed to the occurrence has to be random, accidental
and not the deliberate creation of insured person.
Assets are insured,
because they are likely to be destroyed, through accidental
occurrences. Such possible occurrences are called perils. Fire, floods,
breakdowns, lightning, earthquakes etc. are perils. If such perils cab case
damage it the asset, we say that the asset is exposed to that risks. Perils
are the events. Risks are the consequential losses or damages. The risk to
an owner of a building, because of the peril of an earthquake, may be a
few lakhs or a few crores of rupees, depending on the cost of the
building and the contents in it. The risk only means that there is a
possibility of loss or damage. The damage may or may not happen.
Insurance is done against the contingence that it may happen. There has
to be an uncertainty about the risk. Insurance is relevant only if there are
uncertainties.
If there are no uncertainties
about the occurrences of an event, it cannot be insured against, in the
case of a human being, death is certain, but the time of death is
uncertain. In the case of a person who is terminally ill, the time of earth
is not uncertain, though not exactly known. He cannot be insured.
Insurance does not protect the asset. It does not prevent its loss due to
the peril.
The peril cannot be
avoided through insurance. The peril can sometimes be avoided, through
better safety and damage control management. Insurance only tries to
reduce the impact of the risks on the owner of the assets and those who
depend on that asset. It only compensates the losses and that too not
fully.
Only economic consequences can be insured. If the loss is not financial,
insurance may not be possible. Examples of non-economic losses are
love and affection of parents, leadership of managers, sentimental
attachments to family heirlooms, innovative and creative abilities, etc.
If a Jumbo Jet with more than
350 passenger’s crashers, the loss would run into crores of rupees. No
airline would be able to bear such a loss. It is unlikely that many Jumbo
jets, come together into an insurance pool, whenever one of the Jumbo
Jets in the pool crashes, the loss to be borne by each airline would come
down to a few lakhs of rupees.
Thus, insurance is a business of “haring”.The manner in which
the loss is to be shared can be shared can be determined beforehand. It
may be proportional to the risk that each person is exposed to. This
would be indicative of the benefit he would receive if he the peril befell
him. The share could be collected from the members after the loss has
occurred or the likely shares may be collected in advance, at the time of
admission to the group. Insurance companies collect in advance and
create a find from which the losses are paid.
The collection to be made from each
person in advance is determined on assumption. While it may not be
possible to tell beforehand, which person will suffer, it may be possible
to tell, on the basis of past experiences, how many person, on an
average, may suffer losses.

INSURANCE AS A SECURITY TOOLS

The united Nations Declaration of human Rights 1948 provides that
“Everyone has a right to a standard of living adequate for the health and
well-being of himself and his family, including food, clothing, housing
and medical care and necessary social services and the right to security
the event of unemployment, sickness, disability, widowhood or other
lack of livelihood in circumstances beyond the control”.
When the breadwinner dies, to that extent, the
family’s income dies. The economic condition of the family is affected,
unless other arrangements come into being to restore the situation Life
insurance provides if this did not happen, another family would be
pushed into the lower strata creates a cost on society. The lower strata
create a cost on society. Poor
people cost the nation by way of subsidies and doles and so on. Poor
people also cost by way of larger growth in population, poor education
and vagaries in behavior of children.
Life insurance tends to reduce such costs. In this sense life insurance
business is complementary to the state’s efforts in social management.
Under a socialistic system the responsibility of full security is placed
upon the state to find resources for providing social security. In the
capitalistic society, provisions of security are largely left to the
individuals. The society provides instruments, which can be used in
security this aim. Insurance is one of them. In a capitalistic society too,
there is a tendency to provide some social security by the state under
some schemes, where members are required to contribute e.g. Social
Security Schemes in U.K. In India, social security finds a place in our
constitution. Article41 requires state, within the limits of its economic
capacity and development, to make effective provisions for security
right to work, to education and to provide public assistance in case of
unemployment, old age, sickness and disablement and in other cases of
undeserved want.
 TYPES OF INSURANCE

1. Auto Insurance
This is insurance, which protect the insured against losses involving the
use of Automobiles.

2. Business Insurance
Insurance that is intended to serve the insurance needs of a business
rather than the needs of an individual.

3. Health Insurance
A broad term applying to all types of insurance indemnifying or
reimbursing for losses caused by bodily injury or sickness or for
expenses of medical treatment necessitated by sickness or accidental
bodily injury. Health policies can offer many options and very in their
approaches to coverage. It might also include
prescriptions and doctor visits.

4. Life Insurance
It provides for payment of a sum of money upon the death of the insured
person.

5. Loss of Income Insurance

Insurance that covers workers who are unable to work for any reason.
They are usually paid 80% of the insured income. They may have to be
off work for 3 months before the policy comes in effect.

6. Property Insurance
Property insurance provides protection against risks to property, such as
fire, theft or weather damage.
7. Travel Insurance
Is an insurance cover taken by those who travel abroad, which covers
certain losses such as medical expenses, loss of personal belongings,
travel delay, personal liabilities?

8. Workers Compensation Insurance

A State-mandated from of insurance covering workers injured in job-
related accidents.

9. Insurance advice
Advice offered to you related to insurance.

Tax Benefits, Riders and Age Eligibility

1. Premiums paid under this plan are eligible for tax benefits under
Section 80C of the Income Tax Act, 1961. Any sum received under this
plan is exempt from tax under section 10(10D) of the Income Tax Act,
1961.
2. Attach Accident, Waiver of premium, Payer Benefit (for juvenile
policy) and Critical Illness riders to this policy at a nominal extra cost
for added protection.

The Insurance Regulatory and Development Authority (IRDA)

Reforms in the Insurance sector were initiated with the passage of the
IRDA Bill in Parliament in December 1999. The IRDA since its
incorporation as a statutory body in April 2000 has fastidiously stuck to
its schedule of framing regulations and registering the private sector
insurance companies.
 The other decisions taken
simultaneously to provide the supporting systems to the
insurance sector and in particular the life insurance companies were the
launch of the IRDA’s online service for issue and renewal of licenses to
agents. The approval of institutions for imparting training to agents has
also ensured that the insurance companies would have a trained
workforce of insurance agents in place to sell their products, which are
expected to be introduced by early next year. Since being set up as an
independent statutory body the IRDA has put in a framework of globally
compatible regulations. In the private sector 12 life insurance and 6
general insurance companies have been registered.

GENERAL INSURERS
Public Sector
1. National Insurance Company Limited
www.nationalinsuranceindia.com
2. New India Assurance Company Limited www.niacl.com
3. Oriental Insurance Company Limited
www.orientalinsurance.nic.in
4. United India Insurance Company Limited www.uiic.co.in

Private Sector
1. Bajaj Allianz General Insurance Co. Limited
www.bajajallianz.co.in
2. ICICI Lombard General Insurance Co. Ltd.
www.icicilombard.com
3. IFFCO-Tokyo General Insurance Co. Ltd. www.itgi.co.in
4. Reliance General Insurance Co. Limited www.ril.com
5. Royal Sundaram Alliance Insurance Co. Ltd. www.royalsun.com
6. TATA AIG General Insurance Co. Limited www.tata-aig.com
 7. Cholamandalam General Insurance Co. Ltd.
www.cholainsurance.com
8. Export Credit Guarantee Corporation www.ecgcindia.com
9. HDFC Chubb General Insurance Co. Ltd.

REINSURER
General Insurance Corporation of India www.gicindia.com
Introduction of Future Gen e rali India Life and Non Life
Insurance Company Limited

Company Profile
Future Generali is a joint venture between the India-based Future Group
and the Italybased Generali Group.
Future Generali is present in India in both the Life and Non-Life
businesses as Future Generali India Life Insurance Co. Ltd. and Future
Generali India Insurance Co. Ltd.

Future Group
Future Group, led by Mr. Kishore Biyani, is positioned to cater to the
entire Indian consumption space. The Future Group operates through six
verticals:
1. Future Retail (encompassing all lines of retail business)
2. Future Capital (financial products and services)
3. Future Brands (all brands owned or managed by group companies)
4. Future Space (management of retail real estate)
5. Future Logistics (management of supply chain and distribution)
6. Future Media (development and management of retail media spaces)
The group’s flagship enterprise, Pantaloon Retail, is India’s leading
retail company with presence in food, fashion and footwear, home
solutions and consumer electronics, books
and music, health, wellness and beauty, general merchandise,
communication products, Etailing and leisure and entertainment. The
company owns and manages multiple retail formats catering to a wide
cross-section of the Indian society and its width and depth of
merchandise helps it capture almost the entire consumption basket of the
Indian consumer.
Headquartered in Mumbai (Bombay), the company operates through 4
million square feet of retail space, has over 150 stores across 35 cities in
India and employs over 15,000 people. The company’s revenues for FY
05-06 were Rs. 2017 crore Founded in 1987, as a garment
manufacturing company, Pantaloon Retail forayed into modern retail in
1997 with the opening up of a chain of department stores, Pantaloons.
In 2001, it launched Big Bazaar, a
hypermarket chain, followed by Food Bazaar, a supermarket chain and
went on to launch Central, a first of its kind, seamless mall located in the
heart of major Indian cities. Some of it’s other formats include,
Collection I (home improvement products), E-Zone (consumer
electronics), Depot (books, music, gifts and
stationaries), all (fashion apparel for plus-size individuals), Shoe Factory
(footwear) and Blue Sky (fashion accessories). It has recently launched
its retailing venture, futurebazaar.com.
Some of
the group’s subsidiaries include Home Solutions Retail India Ltd, Future
Bazaar India Ltd and Converge Retail India Ltd, which leads the group’s
foray into home improvement, retailing and communication products,
respectively. Other group companies
include, Pantaloon Industries Ltd, Galaxy Entertainment and Indus
League Clothing. It has also entered joint venture agreements with a
number of companies including ETAM group,
Gini & Jony, Liberty Shoes, Staples and Planet Sports, a company that
owns the franchisee of international brands like Marks & Spencer,
Debenhams, Guess and The Body Shop in
India.
Future Capital Holdings, the group’s financial arm, focuses on asset
management through real estate investment funds (Horizon and Kshitij)
and consumer-related private equity fund, in division. It also plans to get
into insurance, consumer credit and offer other financial products and
services. Future Group’s vision is to, "deliver Everything, Everywhere,
Every time to Every Indian
Consumer in the most profitable manner." One of the core values at
Future Group is, ‘Indian’ and its corporate credo is – Rewrite rules,
Retain values.

Generali Group
Established in Trieste on December 26, 1831, Generali is an
international group present in more than 40 countries and 5th largest
company in the world with insurance companies and
companies mostly operating in the financial and real estate sectors. Its
ranked is 47th in Global fortune list of 500’s (2009). Over the years, the
Generali Group has reconstructed a significant presence in Central
Eastern Europe and has started to develop business in the principal
markets of the Far East, including China and India.
Generali Group is a key player in Continental Europe, with a
significant presence in
all the principal countries.
Generali is the third largest European insurance group by premium
written and the
47th largest company by revenues in the "Fortune Global 500" 2009
worldwide ranking.
Characterised since 1831 by a strong international drive.
Implementing a decentralised multi-brand and multi-local approach.
Focused on the retail market.
Using a multi-channel distribution strategy.

Vision and values of Generali Group

Group`s Vision
We are committed to being a leading international team that produces
consistent, excellent results for our stakeholders in the short and long
term.
We believe in the value of our people and we build our competitive
advantage through the commitment of every individual. We will
therefore seek to produce and to leverage constantly a pioneering spirit,
innovation and excellence.
We are committed to becoming the most attractive employer for the
best performing
people.
We will work constantly to enhance our group identity, proud of our
history and of the
richness of our diversities.

Pioneering spirit
Inclination towards innovation and continuous search for new and better
solutions, being
open to changes and being ambitious to continuously improve and
innovate.

Passion for clients

Emphasis on clients and their needs, searching for the optimal solution
to satisfy them
both by supplying high quality products and services as well as by
providing them with
transparent and thorough information.

Responsibility
Ethical choice of accepting the consequences of one’s own actions and
of being loyal to
the organization, taking the initiative and making decisions within one’s
own competence
and responsibility.

Respect
Strong belief that “doing business” implies respecting the rules; rules
linked to our duties towards shareholders as well as rules affecting the
relationship with all our stakeholders,
especially our employees and the community where we operate.

Flexibility
Ability to be open and to encourage others to stay open to change, to
maintain and improve work effectiveness in new situations, to adapt
one’s attitude and behaviour to work effectively with different people, to
readily adapt to changing priorities, new procedures and methods, better
ideas and strategies.

Integration
Ability to grow and work together by listening to each other and openly
and constructively comparing different ideas, which is fundamental to
improve both oneself and business results.
Professionalism
Continuous commitment of the individual and of the organization to
develop knowledge and to increase the value of experience, in order to
achieve a specific and distinctive know- how.

Transparency
A “must” in the exchange of opinions and information, based on clear
purposes and on behavioural coherence in order to create and strengthen
confidence amongst people and integrity in business performance.

Business activity and Mission of Generali Group:

The Group`s Activity
The Generali Group is one of the most significant participants in the
global insurance and financial products market. The Group is leader in
Italy and Assicurazioni Generali, founded in 1831 in Trieste, is the
Group's Parent and principal operating Company, characterised from the
outset by a strong international outlook and now present in 64 Countries,
Assicurazioni Generali has
consolidated its position among the world's leading insurance operators.
It has in fact a
strong position in western Europe, its main area of activity, with
significant market shares in Germany, France, Austria, Spain,
Switzerland as well as Israel. In recent years, the Group has made a
significant return to central-eastern European markets and has set up
offices in the principal markets of the Far East, among which China and
India.
In the last decade, the Group has
widened its product offerings from only insurance to include the entire
range of financial and real estate services and asset management.

The Group's Mission

The Mission of the Generali Group is to:
Become the leading insurance group in terms of profitability in the
major European countries in which the Group operates and play an
important role in high-potential markets.
Grow in the retail and SME (Small & Medium-sized Enterprises)
sectors by implementing a distribution strategy based primarily on
agents networks and focused on a multi-brand approach.

INTRODUCTION OF RECRUITMENT
Recruitment and Selection system in Insurance sector had become vital
for maximum output and effective business results.
This study will provide sufficient information about Recruitment and
Selection systems carried out in Future Generali India Life Insurance
Company Ltd.
Meaning:
“Recruitment and Selection system refers to sourcing and building
efficient Human Resource to the organization to attain its
objectives”.
This policy complies with, and supports, the Company’s Equal
Opportunities Policy by:
Ensuring that every stage of the recruitment and selection process is
carried out in a
systematic way, based on pre-agreed criteria, to eliminate the potential
for personal bias affecting the decision making process.
Ensuring that all decision points are fully documented to assist with
subsequent monitoring.
Making the whole procedure as open as possible, to ensure that all
candidates understand why decisions have been taken and, where they
wish, to obtain meaningful feedback.
Enabling demonstration of robust, transparent processes and thereby
providing a basis for defense in the event of challenge.
 Analyzing Your Workplace:
To assist you analyze your workplace to identify recruitment or selection
issues for women, we suggest you:
Revisit your workforce profile to find where your female employees
are.
Consult with your employees.
Examine your existing recruitment and selection policies and practices.

Developing Policy and Procedures

Put in place a policy requiring recruitment and selection processes to
select the best
person for the job.
Develop a quality, consistent process for recruitment that delivers
diverse recruits.
Have a recruitment strategy that links to your business plan, and to a
strategy toretain employees.

Reviewing Recruitment and Selection Opportunities

Monitor each stage of the recruitment process to identify any practice
that may disadvantage some candidates.
Investigate whether women have equal opportunity in the recruitment
and selection process by collecting information on the numbers of men
and women:
. applying for positions
. being short-listed
. being interviewed
. being appointed, and
. Survey staff about their perception of equity in recruitment procedures.
Consider collecting diversity information as part of the process. There
could be a
pool of diverse candidates you’re not reaching or unnecessarily
excluding.

Reviewing Job Descriptions:

Ensure all job profiles/descriptions reflect the real requirements of the
job, rather
than describing the person who filled that job previously.
Write job profiles in language that encourages both men and women to
apply – including women of and Differing backgrounds. For example,
avoid use of jargon and acronyms that tend to be exclusive.

Recruitment of Agents
I) Need, Scope & Objective of the Policy
As most part of the insurance business is through agents/corporate
agents who bring in non face to face business relationships with the
policyholders, therefore there is need for
the selection process of agents/corporate agents to be monitored
carefully.
Agents/ Advisors who are dealing directly with the public
(whether as members of staff or agents) are the first point of contact with
potential money launderers and their efforts are
therefore vital to the strategy in the fight against money laundering. The
Company monitoring the agents should monitor sales practices followed
by agents and ensure that if any unfair practice is being reported then
action is taken after due
investigation.
Services of defaulting agents who expose the Company to AML related
risks or are found guilty of misconduct on multiple occasions should be
terminated and the details reported to
IRDA for further action.
 Insurance Company when faced with a non-
compliant agent or corporate agent should take necessary action to
secure compliance, including when appropriate, terminating its business
relationship with such an agent/corporate agent.
The Stakeholders of the policy are :
a. Sales Manager, Agency Development Manager, Branch Manager,
Regional
Manager and the Zonal Business Head of the Company.
b. Prospective Agent/ Advisors.
c. Agency team.
d. Channel Operation team.
e. Learning & Development Team.
f. Legal team.
By way of this policy, we have made an attempt to consolidate the
regulatory provisions involved in the recruitment, training and licensing
process and designed the consequent management / complaint handing
process in case of any deviation from the policy.
This policy shall ensure that the smooth and robust Agency
Recruitment, Training and Licensing process. It highlights the role,
responsibility of all the stakeholders. This policy also puts in place the
Consequence Management of Complaints Process, in
case of any misconduct by any agent or non-compliant agent.

II) Regulatory requirements for Insurers

a. Prohibition of payment by way of commission or otherwise for
procuring business,
b. Prohibition of rebates,
c. Register of Insurance Agents, etc.

A) Limitation of expenditure on commission

(l) No person shall pay or contract to pay to an insurance agent, and no
insurance agent shall receive or contract to receive by way of
commission or remuneration in any form in respect of any policy of life
insurance issued in India by an insurer after the 31st day of December,
1950, and effected through an insurance agent, an amount exceeding-
(a) Where the policy grants an immediate annuity or a deferred annuity
in consideration of a single premium, or where only one premium is
payable on the policy, two per
cent of that premium,
(b) where the policy grants a deferred annuity in consideration or more
than one premium, seven and a half per cent of the first year's premium,
and two per cent of each renewal premium payable on the policy, and
(c) in any other case, thirty five per cent of the first year's premium,
seven and a half per cent of the second and third year's renewal
premium, and thereafter five percent of each renewal premium payable
on the policy:

Provided that in a case referred to in clause (c), an insurer, during the

first ten years of his business may pay to an insurance agent and an
insurance agent may receive from such an insurer, forty per cent of the
first year's premium payable on the policy:

Provided further that in case referred to in clause (c) where the rate of
commission payable on the first year’s premium is equal to or less than
twenty-one per cent thereof, and the rate on the fourth and fifth year’s
premiums does not exceed sis per cent there of, the Life Insurance
Corporation of India may pay to an insurance agent, and the insurance
agent may receive from it, commission on the sixth and subsequent
year’s renewal premiums payable on the policy at a rate not exceeding
six per cent of each renewal premium.
(2) No person shall pay or contract to pay to a special agent, and no
special agent, shall receive or contract to receive, by way of commission
or as remuneration in any form, in respect of any policy of life insurance
issued in India by an insurer after the 31st day of December, 1950, and
effected through a special agent, an amount exceeding -
a. In a case referred to in clause (a) of sub–section (1), one half per cent
of the premium,
b. In a case referred to in clause (b) of sub–section (1), two per cent of
the first year's premium payable on the policy and
c. In a case referred to in clause (c) of sub–section (1), fifteen per cent
of the first year's premium payable on the policy:

Provided that in a case referred to in clause (c), an insurer, during the

first ten years of his business, may pay to a special agent, and a special
agent may receive from such an insurer, seventeen and a half per cent of
the first year's premium payable on the policy:

Provided further that in a case referred to in clause (c), where the rate
of commission payable on the first year’s premium is equal to or less
than twenty-one per cent there of, and the rate on the fourth and fifty
year’s premiums does not exceed six per cent there of, the Life
Insurance Corporation of India may pay to an insurance agent, and the
insurance agent may receive from it, commission on the sixth and
subsequent year’s renewal premiums payable on the policy at a rate not
exceeding six per cent of each renewal premium.
(3) No person shall pay or contract to pay to a special agent, and no
special agent, shall receive or contract to receive, by way of commission
or remuneration in any form in respect of any policy of general
insurance issued in India by an insurer after the Commencement of
Insurance (Amendment Act, 1968, and effected through an insurance
agent, an amount not exceeding fifteen per cent of the premium payable
on
the policy where the policy relates to fire or marine insurance or
miscellaneous insurance.
(4) No person shall pay or contract to pay to a principal agent, and no
principal agent shall receive or contract to receive, by way of
commission or remuneration in any form, in respect of any policy of
general insurance issued in India by an insurer after the
commencement of the Insurance (Amendment) Act, l950, and effected
through a principal agent, an amount exceeding
a.) In the case referred to in clause (a) of sub–section (3), twenty per
cent of the premium payable on the policy, and
b.) In the case referred to in clause (b) of that sub–section, fifteen per
cent on the policy, Less any commission payable to any insurance agent
in respect of the said policy:

Provided that the Authority may, in such circumstances and to such

extent and for such period as may be specified, authorize the payment of
commission or remuneration exceeding the limits specified in this sub–
section to a principal agent of an insurer
incorporated or domiciled elsewhere than in India, if such agent carries
out and has continuously carried out in his own office duties on behalf of
the insurer which would otherwise have been performed by the insurer.
(5) Without prejudice to the provisions of section 102 in respect of a
contravention of anyof the provisions of the preceding sub–sections by
an insurer, any insurance agentwho contravenes the provisions of sub–
section (1) or sub-section (3) shall bepunishable with fine which may
extend to one hundred rupees.

B) Prohibition of rebates
(1) No person shall allow or offer to allow, either directly or indirectly,
as an inducement to any person to take or renew or continue an
insurance in respect of any kind of risk relating to lives or property in
India, any rebate of the whole or part of the commission
payable or any rebate of the premium shown on the policy, nor shall any
person taking out or renewing or continuing a policy accept any rebate,
except such rebate as may be allowed in accordance with the published
prospectuses or tables of the insurer:

Provided that acceptance by an insurance agent of commission in

connection with a policy of life insurance taken out by himself on his
own life shall not be deemed to be acceptance of a rebate of premium
within the meaning of this sub–section if at the time of such acceptance
the insurance agent satisfies the prescribed conditions establishing that
he is a bona fide insurance agent employed by the insurer.
(2) Any person making default in complying with the provisions of this
section shall bepunishable with fine which may extend to five hundred
rupees.

C) According to Section 43. Register of Insurance Agents

(l) Every insurer and every person who acting on behalf of an insurer
employs insurance agents shall maintain a register showing the name
and address of every insurance agent appointed by him and the date on
which his appointment began and the date, if any, on which his
appointment ceased. Agency commission (tied) has to be paid within
following limits:

Commission as % of premiums
Single premium policies
granting immediate / deferred annuity2%
Other Single premium policies 2%
More than 1 premium policies granting deferred annuity 7.5% of FY
premium2.0 % of renewals
Other policies 40% of FY premium (After 1st years from
commencement, 35%)
7.5% of renewals for 2nd & 3rd years 5% of renewals thereafter

III) Regulatory requirements for Agents

Recruitment, Training & Licensing
In relation to recruitment, training & Licensing of advisors, IRDA has
prescribed detailed guidelines which are as follows:
Every Agent under the Insurance Regulatory and Development
Authority (Licensing of Insurance Agents) Regulations, 2000 is
required to obtain a license before soliciting any insurance Business.
Any individual desiring to obtain the License shall fulfil the following
criteria:
a) Possess at least the minimum qualification of a pass in 12th Standard
or equivalent examination conducted by any recognised
Board/Institution.
b) Completed from an approved institution, at least, fifty hours’ practical
training in life or general insurance business, as the case may be, which
may be spread over one to two weeks, whereas in case of Composite
License, have completed from an approved institution, at least, seventy
five hours’ practical training in life and general insurance business,
which may be spread over two to three weeks.
c) Has passed pre-recruitment examination in life or general insurance
business, or both, as the case may be, conducted by the Insurance
Institute of India, Mumbai, or any other examination body.
d) Has the requisite knowledge to solicit and procure insurance business
and is capable of providing the necessary service to the policyholders;
He has to make an application for obtaining the license to designated
person (DP) of the insurer in prescribed form together with the fees of
Two hundred and fifty rupees. The license to act an agent shall be valid
for a period of three years from the date of its issue.
In case of renewal of license, the agent has
to undergo twenty five hours of additional training in life or general
business. In case of composite insurance agent, additional fifty hours of
training is required.

Prescribed C ode of Conduct

The sales team (all channels) is responsible to ensure that none of the
agents, advisors, sales executive deviate from the requirements
discussed hereunder.

D O’s & DONT’s :

Every Insurance Agents/ Advisors are required to strictly follow The
Code of Conduct as prescribed by the IRDA:
(a) Identify himself and the insurance company of whom he is an
insurance agent.
(b) Disclose his licence to the prospect on demand.
(c) Disseminate the requisite information in respect of insurance
products offered for sale by his insurer and take into account the needs
of the prospect while recommending a specific insurance plan.
(d) Disclose the scales of commission in respect of the insurance product
offered for sale, if asked by the prospect.
(e) Indicate the premium to be charged by the insurer for the insurance
product offered for sale.
(f) Explain to the prospect the nature of information required in the
proposal form by the insurer, and also the importance of disclosure of
material information in the purchase of an insurance contract.
(g) bring to the notice of the insurer any adverse habits or income
inconsistency of the prospect, in the form of a report (called “Insurance
Agent’s Confidential Report”) along with every proposal submitted to
the insurer, and any material fact that may
adversely affect the underwriting decision of the insurer as regards
acceptance of the proposal, by making all reasonable enquiries about the
prospect.
(h) Inform promptly the prospect about the acceptance or rejection of the
proposal by the insurer.
(i) Obtain the requisite documents at the time of filing the proposal form
with the insurer;
and other documents subsequently asked for by the insurer for
completion of the proposal.
(j) Render necessary assistance to the policyholders or claimants or
beneficiaries in complying with the requirements for settlement of
claims by the insurer.
(k) Advise every individual policyholder to effect nomination or
assignment or change of address or exercise of options, as the case may
be, and offer necessary assistance in this behalf, wherever necessary.

Insurance Agents shall NOT Practice the following:

(a)Solicit or procure insurance business without holding a valid licence.
(b)Induce the prospect to omit any material information in the proposal
form.
(c)Induce the prospect to submit wrong information in the proposal form
or documents submitted to the insurer for acceptance of the proposal.
(d) Behave in a discourteous manner with the prospect.
(e)Interfere with any proposal introduced by any other insurance agent.
(f)Offer different rates, advantages, terms and conditions other than
those offered by his insurer.
(g)Demand or receive a share of proceeds from the beneficiary under an
insurance contract.
(h)Force a policyholder to terminate the existing policy and to effect a
new proposal from him within three years from the date of such
termination.
(i)Have, in case of a corporate agent, a portfolio of insurance business
under which the premium is in excess of fifty percent of total premium
procured, in any year, from one person (who is not an individual) or one
organisation or one group of organisations.
(j)Apply for fresh licence to act as an insurance agent, if his licence was
earlier cancelled
by the designated person, and a period of five years has not elapsed from
the date of such cancellation.
(k)Become or remain a director of any insurance company.
Agent should be communicated that, if he commits or practices any of
the above don’t, he shall be liable to be terminated. Every Insurance
Agent should endeavor to conserve the insurance business already
procured and make every attempt to ensure premium remittance by the
policyholders is Within the stipulated time, by giving renewal premium
notices in writing and orally to
policyholders. Any deviation from the above prescribed code of conduct
will be considered non-adherence and appropriate action will be initiated
as per the Consequence Management Process
against the concerned agent and he shall be guilty of misconduct

VI) Recruitment Process of Agents/ Advisors:

Responsibility and Accountability:

1) Sales Manager (SM) :

Shall be directly responsible for undertaking the following recruitment
process within the regulatory guidelines and must ensure:
Documents are submitted as per process note released by Channel
Operations team from time to time and that the documents are not fake
or forged.
Agents complete the stipulated training from the Agent Training
Institute and prepare them for undertaking the examination conducted by
Insurance Institute of India
Photograph in the hall ticket and in the examination form are identical
(recent one).
Exam centre allotted to the candidate is nearest exam centre to the
branch office of the company where he is taking agency.
Agents registered with the company take the exam on the day pre-
fixed. Any deviation from the above mentioned process will be
considered non-adherence and
appropriate action will be initiated as per the Consequence Management
Process against the concerned agent and the Sales Manger and he shall
be guilty of misconduct. A Quarterly declaration to the effect that there
is complete adherence to this policy shall be given by each SM.

2) Agency Development Manager (ADM):

ADM will be directly responsible for supervising the above recruitment
process within the regulatory guidelines. Any deviation from the above
mentioned process will be considered non adherence and appropriate
action will be initiated as per the Consequence Management Process
against the concerned Manager and he shall be guilty of misconduct. A
Quarterly declaration to the effect that there is complete adherence to
this policy shall be given by each ADM.

3) Branch Manager (BM):

Shall be directly responsible for verifying the above recruitment process
within the regulatory guidelines at the branch level and must:
Oversee the activities concerning recruitments and will be overall
responsible for the
code of conduct of the sales teams working in the branch.
Act as a guide and ensure that every team member is made aware of
the recruitment policy, regulatory provisions and company guidelines
and processes in force
Ensure all documents that are being presented are in order and take full
responsibility regarding its authenticity.
Ensure proper/rightful use of company seal/stamp. Must ensure that
there are no extra/duplicate stamps in the branch in order to stop misuse.
Ensure candidates registered for exams do appear themselves. Any
attempt to use unfair means will have to be brought to the notice of
company officers immediately.
Ensure that the training institute is fully compliant as per the
guidelines laid down by the regulator as well as internal guidelines
circulated by Channels Operations from time to time Since the BMs are
administrative heads of branches it is expected that they drive a culture
of compliance in their respective branches and ensure that the provisions
laid out are implemented fully at all times.
Any deviation from the above mentioned process will be
considered non adherence and appropriate action will be initiated as per
the Consequence Management Process against the concerned Manager
and he shall be guilty of misconduct. A Quarterly declaration to the
effect that there is complete adherence to this policy shall be given by
each BM.

4) Regional Manager (RM)

Shall be directly responsible for verifying the above recruitment process
within the regulatory guidelines at the regional level and must:
Review the process in every branch from time to time
Have a mechanism whereby compliance is reviewed periodically
during branch reviews
Ensure there is a sign-off process at the end of review
Any deviation from the above mentioned process will be considered non
adherence and appropriate action will be initiated as per the
Consequence Management Process against
the concerned Manager and he shall be guilty of misconduct.
A Quarterly declaration to the effect that there is complete adherence to
this policy shall be given by each RM.

5) Zone Business Head (ZBH):

Shall be directly and overall responsible for ensuring 100% compliance
of the above recruitment process within the regulatory guidelines at the
zonal level and must:
Review the various processes in review meetings
Have a mechanism whereby compliance is reviewed periodically
during Zonal reviews
Ensure there is a sign-off process at the end of review
Any deviation from the above mentioned process will be considered non
adherence and appropriate action will be initiated as per the
Consequence Management Process against the concerned Manager and
he shall be guilty of misconduct. A declaration to the effect that there is
complete adherence to this policy shall be given by each ZBH.

VII) Responsibility of the Learning & Development (L&D) team:

1. Should provide training to all new agents/ advisors on background to
money laundering, mandatory KYC norms and AML related
Compliances.
2. Contents in the training modules pertaining to any
regulations/statue/law shall be preapproved by the compliance
department.
3. Ensure that all prospective agents/agents undergo training as per the
new syllabus and adhere to the new norms of training hours prescribed
in this policy ;
4. Ensure that the list of rules and regulations covering performance of
agents and corporate agents must be put in place.
5. Ensure that the agents and corporate Agents/ advisors should be
made aware of the insurance institution’s policy for dealing with non-
regular customers particularly where large transactions are involved, and
the need for extra vigilance in these cases.
6. Agents /advisors who receive completed proposals and cheques for
payment of the single premium contribution should be appropriately
trained in the processing and
verification procedures by the L&D team.
7. Should provide a higher level of instruction covering all aspects of
money laundering procedures to Administration/Operations supervisors
and managers with the responsibility for supervising or managing staff.
8. Should also provide ongoing training in the form of refresher training
at regular intervals to ensure that staff does not forget their
responsibilities by a twelve or six monthly review of training.
9. Should verify the status of Agent Training Institute from IRDA
website before sponsoring candidates for training to said Institute.
10. Should ensure that the candidate sponsored for training by the
Company passes the Agents pre-recruitment examination within six
months of completing his/her training failing which, he/she would be
required to undergo the training again.
11. Agents/Advisors should be made aware of the Company’s Human
Capital Policy. While product training, the rider understanding should be
very clear.
12. In case of ULIP Training, the importance of market risk factors
associated with the ULIP Products should be properly communicated to
the customers by the advisors/ agents.
13. Should oversee the proper conduct of the training at the training
institute through regular audit and inspection and ensure that no
candidate is sponsored to those institutes that are not maintaining the
required standards of and facilities for the training.

VIII) Other Important Points:

1) SOLICITATION
Following needs to be seen:
Evaluate customer’s life insurance need
Ability of customer to pay premiums over intended policy duration
Suitability of product for him
Explain the product in full

PRESENTATIONS
For presentations, please use the pre-approved material or the material
provided by the Company.

TELEMARKETING
Telemarketing is also advertising. The Company is registered with the
National Do Not Call Registry (NDNC Registry) Telecom Regulatory
Authority of India (TRAI). All telemarketing scripts require pre-
approval from Compliance. The NDNC Registry will be a data base
having the list of all telephone numbers of the subscribers who do not
want to receive unsolicited commercial communication UCC. Verify
calling telephone numbers list with the NDNC registry before making a
call to the customer. The Company as telemarketers who make calls to
the numbers registered in Do Not Call List, whereby shall be payable to
pay
Rs.500/ - to the service provider for every first (UCC) and Rs.1000/-
shall be payable for subsequent UCC. There is a provision for
disconnection of the Company telephone number
/ telecom resource if the UCC is sent even after levy of Rs.500/- &
Rs.1000/- tariff.

REBATING / DISCOUNTING
Rebating is prohibited. Any person making default shall be punishable
with fine which may extend to five hundred rupees.

MISREPRESENTING
1.1.a No person is authorized to issue, circulate or use directly or
indirectly, any written or oral statement or circular misrepresenting the
terms of any policy issued or to be issued by the company, or
misrepresenting the benefits or privileges promised under any policy or
estimating the future bonuses, accruals, guarantees payable under any
policy otherwise than mentioned in the terms of the policy.
1.1.b Misrepresenting also includes failure to properly explain the policy
provisions or to unintentionally or intentionally make mistakes in
completing the application for insurance.Misrepresenting any facts
inorder to sell insurance is fraudulent.
1.1.c In the case of any deviations from the above the company shall
take
strict disciplinary action as per the approved malpractice matrix.
1.1.d Misrepresent about tax benefits which could be claimed under any
insurance plan.

6) MISLEADING COMMENTS ABOUT COMPETITORS

Do not:
a) Make false or misleading statements about competitors.
b) Make any unfair or incomplete comparisons with other insurers, their
policies, benefits, agents, services, method of marketing or compare
unlike policies.
c) Make misleading, derogatory, false or maliciously critical statements
about the financial condition of any insurance company.

IX) Consequence Management of Complaints Process:

As and when such fraud cases occurs or any non-adherence or in case
of any incident that can harm the interest of the organization the
concerned Manager must as a first step inform and report (with all the
necessary details, documents, facts of the case) to the immediate
supervisor concerned Zonal Manager who in turn ensures that it is
shared with Legal Department and Head Agency at Head Office on the
same day. The case shall be reported, in case the matter needs
immediate attention/escalation, a mail may be sent to Agency Head or
Company Secretary and Legal Head.
Kindly note that any delay in bringing the matter to notice of the Legal
department will be construed as an attempt to hide facts.
The Company shall conduct an enquiry to be conducted by authorized
independent personnel (preferably by the Internal Audit team) to find
out the facts of the case with relevant supporting and share with the
Legal team within 3 days of its occurrence.
The Legal team shall in consultation with the Agency team give their
suggestions with
action points to close the cases within 3 days of the case being reported
to them.

COURSE OF ACTION IF:

A) The Agent/ Advisors are found guilty of misconduct or are

noncompliant:
Necessary action shall be taken to secure compliance.
The concerned Agent /Advisors shall be given a warning, in case of 1st
instance.
In case of 2nd repeated instance, the concerned Agent /Advisors shall
be issued a show cause notice and escalation to concerned SM shall be
done and further if necessary & deemed appropriate, terminating its
business relationship with such an agent.

B) The Sales Manager (SM) / Agency Development Manager

(ADM)/ Branch Manager (BM) is non–complaint to the process and
is found guilty of misconduct:
Necessary action shall be taken to secure compliance.
Further, the concerned SM/ADM shall be given a warning, in case of
1st instance.
In case of 2nd repeated instance, the concerned SM/ADM /BM shall
be issued a show because notice and escalation to concerned Supervisor
shall be done and further if necessary & deemed appropriate shall be
liable to be terminated from the services of the Company.
The concerned immediate supervisor will be given warning in case of
first incident.
However, in case of second incident the concerned immediate
supervisor shall be issued a show because notice and escalation to the
Head Agency & Legal Head shall be done and further if necessary &
deemed appropriate shall be liable to be terminated
from the services of the Company.
C) The Regional Manager (RM) / Zonal Business Head (ZBH) is
non
complaint to the process and is found guilty of misconduct:
Necessary action shall be taken to secure compliance.
Further, the concerned RM/ZBH shall be given a warning, in case of
1st instance.
However, in case of second incident the concerned RM/ ZBH shall be
issued a show cause notice and escalation to the Chief Sales & Business
Development Officer (CSBD) and CEO shall be done and further if
necessary & deemed appropriate shall be liable to be terminated from
the services of the Company.
Then, on monthly basis the excel report of all such cases shall be
prepared by the Agency team with the action taken (i.e. the closure of
the case) as per the specific suggestion of the Legal team and forwarded
to the Legal team.
Legal team should ensure that the required action has been taken and
all such cases are closed before reporting the same to the CSBD & CEO.
The Legal team shall on monthly basis report all such cases to the
CSBD & CEO.