Rahul Stpnew

Recruitment and Training Parameter Analysis of
LIC Through Millennium Service Provider
CHAPTER-1
ABOUT THE TRAINING ORGANIZATION
1 Madan Mohan Malaviya Technical University , Gorakhpur

Training Organization
Name of Organization: - Millennium Service Providers (MSP), India.
Millennium Service Providers
Training Center Location: - Gorakhpur, Uttar Pradesh.
The idea of this company is to help business use technology and human resource to have insight
of value of customer and their behavior with effective strategy. The challenge is to make it easy
for the client to do their business with the organization any way they want, at any point of time,
through any channel, in any language and in any currency to make client feel that they are dealing
with single unified organization that recognizes them at every single touch point. The company is
set up with the sole motto to provide custom marketing and promotion solutions to the interested
clients.
Millennium service providers, stand for ingenuity, innovation, ability and speed. Millennium
service providers is an indigenous brand promotion company working with applications,
networking and information technology, as well as professional training for various domains. The

organization is a solution provider company with a strong domain expertise in design and
engineering disciplines.
Corporate Vision
To make it easy for the client to do their business with the organization anyway they want.
Mission
An indigenous brand promotion company which is working upon applications, networking and
information technology, as well as professional training for various domains.
Specialties
Brand building
Event Conceptualization & Organizing
Public Relations
Promotions.

More Information About the Organization :-
1. Owner
Gaurav Srivastava and Ankur Tripathi
2. Industry
Education Management
3. Type
Privately Held
4. Founded
2009
5. Headquarters
33 Kasia Road Near Ram Janki Hospital,
Betiahata Gorakhpur,
Uttar Pradesh
273001
India
6. Company Size
11-50 employees
7. Website
http://www.mspinternational.org


Meaning of Insurance
Insurance is a social device where uncertain risks of individuals may be combined in a group and
thus made more certain - small periodic contributions by the individuals provide a found
out of which those who suffer losses may be reimbursed.
The business of insurance is related to the protection of the ECONOMIC VALUES OF ASSETS.
Every asset has a value. The asset would have been created through the efforts of the owner. 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. It is a benefit because it meets some of his needs.
CHAPTER-2
The benefit may be an income or in some other form. In the case of a factory or a cow, the
product generated by it is sold and income is generated. In the case of a motor car, it provides
INTRODUCTION TO INSURANCE
comfort and convenience in transportation. There is no direct income. Both are assets and provide
benefits.
Every asset is expected to last for a certain period of time during which it will provide the
benefits. After that, the benefit may not be available.
There is a life-time for a machine in 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.
Insurance is a mechanism that helps to reduce the effects of such adverse situations. In addition
to being a means to protect oneself, the insurance Industry is an efficient conduit for the saving of
people to be channeled towards economic growth. In India, the Insurance Industry 7 is more than

150 years old. Today, it is monopolized by two PSUs in their respective fields of life and General
Insurance.
However, with the successful passage IRDA Bill through both houses of parliament in December
1999 the sector has been opened up to private players. This will provided much. Needed
impetus to the Industry and will improve the quality of service and products and will also increase
employment opportunities. There are still some issues their need to be sorted out, particularly
with regard to the status of intermediaries as envisaged by the Insurance Regulatory Authority.
An insurance company works out how likely it is that an accident or event will happen and what it
would cost to put it right. Based on this, the insurance company sets what is known as a premium.
This is the amount it asks you to pay in order to protect yourself against the accident or event. The
cost of the premium is often spread so you pay it on a monthly basis. If whatever it is you have
insured yourself against happens, you then make a claim to your insurance beneficiary of the
asset, a certain sum if the loss occurs. Company and it pays out the agreed amount.
What Is Life Insurance?
Life insurance is a contract that pledges payment of an amount to the person assured (or his
nominee) on the happening of the event insured against. The contract is valid for payment of the
insured amount during the date of maturity or specified dates at periodic intervals, or Unfortunate
death, if it occurs earlier.
Life insurance provides your family with a sum of money should something happen to you. It thus
permanently protects your family from financial crises. Life insurance is a guarantee that your
family will receive financial support, even in your absence. Put simply, In addition to serving as a
protective cover, life insurance acts as a flexible money-saving scheme, which empowers you to
accumulate wealth-to buy a new car, get your children married and even retire comfortably.
Life insurance also triples up as an ideal tax-saving scheme
There are many options with coverage, depending on insured situation. And there are two main
categories of life insurance: term life, and whole life insurance.
Term life is the simplest and least expensive type of policy. Its pure insurance with no cash value
account. A term life policy has only one function: to pay a specific lump sum to whomever you
have designated, upon a specific event of insured death.
Whole life insurance provides permanent protection insured dependents while building a cash
value account. With this type of insurance, the insurance company manages the policies various
accounts.
HISTORY OF INSURANCE
A. Insurance has been known to exist 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, and not
total. The Babylonian traders would agree to pay additional sums to lenders, as the price for
writing off the loans, in case of the shipment being stolen. The inhabitants of Rhodes
adopted the principle of general average of general average, whereby, if goods are
shipped together, the owners would bear the losses in proportion, if loss occurs, due to
jettisoning during distress. {Captains of ships caught in storms, would throw away some of
the cargo to reduce the weight and restore balance. Such throwing away is called

jettisoning} The Greeks had started benevolent societies in the late 7th century AD, to take
care of the funeral and families of members who died. The great fire of London in 1666,in
which more than 13000 house were lost, gave a boost to insurance and the first fire
insurance company, called the fire office, was started in 1680.
B. The origins of insurance business as in vogue at present, is traced to the Lloyds Coffee
House in London. Traders, who used to gather in the Lloyds coffee house in London,
agreed to share the losses to their goods while being carried by ships. The losses used to
occur because of pirates who robbed on the high seas off because of bad weather spoiling
the goods or sinking the ship. In India, insurance began in 1818 with life insurance being
transacted by an English company, the Oriental Life Insurance Co. in 1870 in Mumbai.
This was followed by the 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.
C. Later, were established the cooperative Assurance in Lahore, the Bombay Life (originally
called the swadeshi life), the India 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 the
swadeshi movement in the early 1900s.
The History of Insurance in India
Some of the important milestones in the life insurance business in India are:
1870 - The Bombay Mutual Life Insurance Society that started its business in was the
first company to charge same premium for both Indian and non-Indian lives.

1912 - The Indian Life Assurance Companies Act enacted as the first statute to regulate
the life insurance business.
1928 - The Indian Insurance Companies Act enacted to enable the government to collect
statistical information about both life and non-life insurance businesses.
1938 - Earlier legislation consolidated and amended to by the Insurance Act with the
objective of protecting the interests of the insuring public.
1956 - 245 Indian and foreign insurers and provident societies taken over by the central
government and nationalized. LIC formed by an Act of Parliament, viz. LIC Act, 1956,
with a capital contribution of Rs. 5 crore from the Government of India.
By the year 1956, when life insurance business was nationalized and the life Insurance
Corporation of India (LIC) was formed on1st September 1956, there were 170 companies and 75
provident fund societies transacting life business in India. After the amendments to the relevant
laws in 1999, the L.I.C. did not have the exclusive privilege of doing life insurance business in
India. By 31.8.2007, sixteen new life insurers had been registered and were transacting life
insurance business in India.
Before 1956, insurance was private with minimal government intervention. In 1956, life insurance
was nationalized and a monopoly was created.
1972- General insurance was nationalized as well. But, unlike life insurance, a different
structure was created for the industry.
2003-India had the nineteenth largest insurance market in the world in.

Strong economic growth in the last decade combined with a population of over a billion makes it
one of the potentially largest markets in the future. Insurance in India has gone through two
radical transformations.
One holding company was formed with four subsidiaries. As a part of the general opening up of
the economy after 1992, a Government appointed committee recommended that private
companies should be allowed to operate. It took six years to implement the recommendation.
Private sector was allowed into insurance business in 2000. However, foreign ownership was
restricted. No more than 26% of any company can be foreign-owned.
A totally regulation free regime ended in 1912 with the introduction of regulation of life
insurance. A comprehensive regulatory scheme came into place in 1938. This was disabled
through nationalization in what follows; we examine the insurance industry in India through
different regulatory regimes. But, the Insurance Act of 1938 became relevant again in 2000 with
deregulation. With a strong hint of sustained growth of the economy in the recent past, the Indian
market is likely to grow substantially over the next few decades.
Insurance Act, 1938
In 1938, with a view to protect the interest of insuring public, earlier legislation(1928) was
consolidated and amended by the Insurance Act, 1938 with comprehensive provisions for detailed
and effective control over the activities of insurer. For the first time in the history of insurance in
India, the whole business was brought under a unified system of control and its structure
strengthened by statutory regulations. Weaker elements were weeded out; indiscriminate
promotion was checked and speculative insurance was eliminated. The best proof the soundness

of the law was the effective check on large scale liquidations which had marred the name of
insurance in the thirties. In due course, various amendments were made in the Indian Insurance
Act 1938 in subsequent years to improve the regulatory mechanism. The Act of 1938, which in
many respects codified and modernized the laws relating to insurance in the country; suggest the
same noteworthy changes in regulation and organization of business. It was considerable step
forward in the direction to envelop all forms of insurance.
Malhotra Committee
In 1993, the first step towards insurance sector reforms was initiated with the formation of
Malhotra Committee, headed by former Finance Secretary and RBI Governor R.N. Malhotra.
The committee was formed to evaluate the Indian insurance industry and recommend its future
direction with the objective of complementing the reforms initiated in the financial sector.
Key Recommendations of Malhotra Committee
Structure
Government stake in the insurance Companies to be brought down to 50%.
Government should take over the holdings of GIC and its subsidiaries so that these
subsidiaries can act as independent corporations.
All the insurance companies should be given greater freedom to operate.
Competition
Private Companies with a minimum paid up capital of Rs.1billion should be allowed to

enter the industry.
No Company should deal in both Life and General Insurance through a single Entity.
Foreign companies may be allowed to enter the industry in collaboration with the
domestic companies.
Postal Life Insurance should be allowed to operate in the rural market.
Only one State Level Life Insurance Company should be allowed to operate in each state.
Regulatory Body
The Insurance Act should be changed.
An Insurance Regulatory body should be set up.
Controller of Insurance should be made independent.
Investments
Mandatory Investments of LIC Life Fund in government securities to be reduced from
75% to 50%.
GIC and its subsidiaries are not to hold more than 5% in any company. Customer Service.
LIC should pay interest on delays in payments beyond 30 days.
Insurance companies must be encouraged to set up unit linked pension plans.
Computerization of operations and updating of technology to be carried out in the
insurance industry.
Malhotra Committee also proposed setting up an independent regulatory body - The Insurance
Regulatory and Development Authority (IRDA) to provide greater autonomy to insurance

companies in order to improve their performance and enable them to act as independent
companies with economic motives.
Insurance sector in India was liberalized in March 2000 with the passage of the Insurance
Regulatory and Development Authority (IRDA) Bill, lifting all entry restrictions for private
players and allowing foreign players to enter the market with some limits on direct foreign
ownership. There is a 26 percent equity cap for foreign partners in an insurance company.
There is a proposal to increase this limit to 49 percent. The opening up of the insurance sector
has led to rapid growth of the sector. Presently, there are 16 life insurance companies and 15
non-life insurance companies in the market. The potential for growth of insurance industry in
India is immense as nearly 80 per cent of Indian population is without life insurance cover
while health insurance and non-life insurance continues to be well below international
standards.
Regulator Of Insurance Industry In India: IRDA
The Insurance Regulatory and Development Act of 1999 were set out as follows. To provide for
the establishment of an Authority to protect the interests of holders of insurance policies, to
regulate, promote and ensure orderly growth of the insurance industry and for matters connected
therewith or incidental thereto and further to amend the Insurance Act, 1938, the Life Insurance
Corporation Act, 1956 and the General Insurance Business (Nationalization) Act, 1972.
The Act effectively reinstituted the Insurance Act of 1938 with (marginal) modifications.
Whatever was not explicitly mentioned in the 1999 Act referred back to the 1938 Act?

1) It specified the creation and functioning of an Insurance Advisory Committee that sets out
rules and regulation.
2) It stipulates the role of the Appointed Actuary. He/she has to be a Fellow of the
Actuarial Society of India. For life insurers the Appointed Actuary has to be an internal
company employee, but he or she may be an external consultant if the company happens
to be a non-life insurance company. The Appointed Actuary would be responsible for
reporting to the Insurance Regulatory and Development Authority a detailed account of
the company.
3) Under the Actuarial Report and Abstract, pricing of products have to be given in detail.
It also requires details of the basic assumptions for valuation. There are prescribed forms
that have to be filled out by the Appointed Actuary including specific formulas for
calculating solvency ratios
4) It stipulates the requirements for an ADVISOR. For example, insurance ADVISORs
should have at least a high school diploma along with training of 100 hours from a
recognized institution.
5) Under Assets, Liabilities, and Solvency Margin of Insurers, the Insurance Regulatory
and Development Authority has set up strict guidelines on asset and liability management
of the insurance companies along with solvency margin requirements. Initial margins are
set high (compared with developed countries). The margins vary with the lines of
business.

Life insurers have to observe the solvency ratio, defined as the ratio of the amount of
available solvency margin to the amount of required solvency margin: (a) the required
solvency margin is based on mathematical reserves and sum at risk, and the assets of the
policyholders fund; (b) the available solvency margin is the excess of the value of assets
over the value of life insurance liabilities and other liabilities of policyholders and
shareholders funds.
6) It sets the reinsurance requirement for (general) insurance business. For all general
insurance, a compulsory cession of 20% regardless of line of business to the General
Insurance Corporation, the designated national reinsurer was stipulated.
7) Under the Registration of Indian Insurance Companies, it sets out details of registration
of an insurance company along with renewal requirements. For renewal, it stipulates a fee
of one-fifth of one percent of total gross premium written direct by an insurer in India
during the financial year preceding the year. It seeks to give detailed background for each
of the following key personnel: Chief Executive, Chief Marketing Officer, Appointed
Actuary, Chief Investment Officer, Chief of Internal Audit and Chief Finance Officer.
Details of sales force, activities in rural business and projected values of each line of
business are also required.
8) Under Insurance Advertisements and Disclosure, details of insurance advertisement in
physical and electronic media has to be detailed with the Insurance Regulatory and
Development Authority. The advertisements have to comply with the regulation prescribed
in section 41 of the Insurance Act, 1938. The Act of 1938 says, No person shall allow or

offer to allow, either directly or indirectly, as an inducement to any person to take out or
renew or continue an insurance in respect of any kind of risk relating to lives or property
in India, any rebate of the whole or part of the commission payable or any rebate of the
premium shown on the policy, nor shall any person taking out or renewing or continuing a
policy accept any rebate, except such rebate as may be allowed in accordance with the
published prospectus or tables of the insurer.
9) All insurers are required to provide some coverage for the rural sector. It is called the
Obligations of Insurers to Rural Social Sectors
Life Insurance a Basic Need
Life insurance is a contract providing for payment of a sum of money to the person assured or,
failing him, to the person entitled to receive the same, on the happening of certain event.
A family is generally dependent for its food, clothing and shelter on the income brought in at
regular intervals by the bread winner of the family. So long as the he lives and the income is
received steadily, that family is secure; but should death suddenly intervene the family may be left
in a very difficult situation and sometimes, in stark poverty.
Uncertainty of death is inherent in human life. It is this uncertainty that is risk, which gives rise to
the necessity for some form of protection against the financial loss arising from death; insurance
substitutes this uncertainty by certainty.
Few Advantages of Life Insurance

A. It is superior to an ordinary savings plans
B. Insurance encourages and forces thrift
C. Easy settlement and protection against creditors
D. Administering the legacy for beneficiaries
E. Ready marketability and suitability for quick borrowings
F. Tax relief
How Insurance Works-
The mechanism of insurance is very simple. People who are exposed to the same risks come
together and agree that, if any one of the members 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 the same
risk related to water damage, ship sinking, piracy, etc. those owning factories are not exposed to
these risks, but they are exposed to different kinds of risks like, fire, hailstorms, earthquakes,
lightening, burglary, etc. like this, different kinds of risks can be identified and separate groups,
made including those exposed to such risks. By this method, the risk is spread among the
community and the likely big impact on one is reduced to smaller manageable impacts on all.
If a Jumbo Jet with more than 350 passengers crashes, the loss would run into several crores of
rupees. No airline would be able to bear such a loss. It is unlikely that many Jumbo Jets will crash
at the same time. If 100 airline companies flying 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 sharing.
Role of Insurance in Economic Development
For economic development, investments are necessary. Investments are made out of
savings. A life insurance company is a major instrument for the mobilization of savings of
people, particularly from the middle and lower income groups. These savings are
channeled into investments for economic growth.
An insurance companys strength lies in the fact that huge amounts come by way of
premiums. Every premium represents a risk that is covered by that premium. In effect,
therefore, these vast amounts represent pooling of risks. The funds are collected and held
in trust for the benefit of the policyholders.
The management of insurance companies is required to keep this aspect in mind and make
all its decisions in ways that benefit the community. This applies also to its investments.
This is why successful insurance companies would not be found investing in speculative
ventures. Their investments benefit the society at large.
The system of insurance provides numerous direct and indirect benefits to the individual
and his family as well as to industry and commerce and to the community and the nation
as a whole. Those who insure, both individuals and corporate, are directly benefited
because they are protected from the consequences of the loss that may be caused by the

accident or fortuitous event. Insurance, thus, in a sense protects the capital in industry and
releases the capital for further expansion and development of business and industry.
The very existence of risk that is, uncertainty concerning the future, is a severe handicaps
in economic activities. Insurance removes the fear, worry and anxiety associated with this
future uncertainty and thus encourages free investment of capital in business enterprises
and promotes efficient use of existing resources.
Thus insurance encourages commercial and industrial development and there by
contributes to a vigorous economy and increased national productivity.
Present day organization of industry, commerce and trade depend entirely on insurance for
their operation, banks and financial institutions lend money to industrial and commercial
undertakings only on the basis of the collateral security of insurance. No bank or financial
institution would advance loans on property unless it is insured against loss or damage by
insurable perils.
Insurers are closely associated with several agencies and institutions engaged in fire loss
prevention, cargo loss prevention, cargo loss prevention, industrial safety and road safety.
Before acceptance of a risk, insurers arrange survey and inspection of the property to be
insured, by qualified engineers and other experts.
The object of these surveys is not only to assess the risk for rating purposes but also to
suggest and recommend to the insured, various improvements in the risk, which will
attract lower rates of premium and what is more important , reduce the loss potential. For

example, burglary surveyors make recommendation in regard to security measures such as
better locking system, appointment of Watchman, etc. Engineering surveys play a most
useful part in accident prevention as valuable technical advice is provided in respect of
plant and machinery.
Insurance ranks with export trade, shipping and banking services as earner of foreign
exchange to the country. It helps to earn foreign exchange and represent invisible exports.
Structure of Insurance Industry

Historical Perspective
(i) Prior to 1956 242 companies operating
(ii) 1956 - 2001 Nationalization LIC monopoly player Government control
(iii) 2001 -- Opened up sector.
List of Insurance Companies Listed in Different Years
List of Life Insurance Companies
S.No Registratio Date of Name of the Company
. n Reg.
Number
1 101 23.10.2000 HDFC Standard Life Insurance Company Ltd.
2 104 15.11.2000 Max New York Life Insurance Co. Ltd.
3 105 24.11.2000 ICICI Prudential Life Insurance Company Ltd.
4 107 10.01.2001 Kotak Mahindra Old Mutual Life Insurance Limited

5 109 31.01.2001 Birla Sun Life Insurance Company Ltd.
6 110 12.02.2001 Tata AIG Life Insurance Company Ltd.
7 111 30.03.2001 SBI Life Insurance Company Limited.
8 114 02.08.2001 ING Vysya Life Insurance Company Private Limited
9 116 03.08.2001 Bajaj Allianz Life Insurance Company Limited
10 117 06.08.2001 Metlife India Insurance Company Ltd.
11 133 04.09.2007 Future Generali India Life Insurance Company Limited
12 135 19.12.2007 IDBI Fortis Life Insurance Company Ltd.
13 102 23.10.2000 Royal Sundaram Alliance Insurance Company Limited
14 103 23.10.2000 Reliance General Insurance Company Limited.
15 106 04.12.2000 IFFCO Tokio General Insurance Co. Ltd
16 108 22.01.2001 TATA AIG General Insurance Company Ltd.
17 113 02.05.2001 Bajaj Allianz General Insurance Company Limited
18 115 03.08.2001 ICICI Lombard General Insurance Company Limited.
19 131 03.08.2007 Apollo DKV Insurance Company Limited
20 132 04.09.2007 Future Generali India Insurance Company Limited
21 134 16.11.2007 Universal Sompo General Insurance Company Ltd.
22 121 03.01.2002 Reliance Life Insurance company Ltd.
23 122 14.05.2002 Aviva Life Insurance Co. India Pvt. Ltd.
24 127 06.02.2004 Sahara India Insurance Company Ltd.
25 128 17.11.2005 Shriram Life Insurance Company Ltd.
26 130 14.07.2006 Bharti AXA Life Insurance Company Ltd.
27 133 04.09.2007 Future general India life Insurance Co.Ltd

28 135 19.12.2007 IDBI Fortis Life Insurance Company Ltd.
29 136 08.05.2008 Canara HSBC Oriental Bank of Commerce Life Insurance
Company Ltd.
30 138 27.06.2008 Aegon Relegate Life Insurance Company Ltd.
List of General Insurance Companies
1 123 15.07.2002 Cholamandalam General Insurance Company Ltd.
2. 124 27.08.2002 Export Credit Guarantee Corporation Ltd.
3. 125 27.08.2002 HDFC-Chubb General Insurance Co. Ltd.
4. 139 27.06.2008 Bharti Axa General Insurance Company Ltd.
5. 141 15.12.2008 Raheja QBE General Insurance Co. Ltd
CHAPTER-3
COMPANY PROFILE

CHAPTER-3
COMPANY PROFILE

LIFE INSURANCE CORPORATION OF INDIA (LIC)
Life Insurance Corporation of India (LIC) was formed in September, 1956, by an Act of
Parliament, viz., Life Insurance Corporation Act, 1956, with capital contribution from the
Government of India.
The then Finance Minister, Shri C.D. Deshmukh, while piloting the bill, outlined the objectives of
LIC thus to conduct the business with the utmost economy, and a spirit of trusteeship; to charge
premium no higher than warranted by strict actuarial considerations; to invest the funds for
obtaining maximum yield for the' policy holders consistent with safety of the capital; to
render prompt and efficient service to policy holders, thereby making insurance widely popular.
Since nationalization, LIC has built up a vast network of 2,048 branches, 100divisions and 7
zonal offices spread over the country.
The Life Insurance Corporation of India also' transacts business abroad and has offices in Fiji,
Mauritius and United Kingdom. LIC is associated with joint ventures abroad in the field of
insurance, namely, Ken-India ,Assurance Company Limited, Nairobi; United Oriental Assurance
Company Limited, Kuala Lumpur and Life Insurance Corporation (International) E.C.Bahrain.

The Corporation has registered a joint venture company in 26 th December,2000 in Katmandu,
Nepal by the name of Life Insurance Corporation (Nepal) Limited in collaboration with Vishal
Group Limited, a local industrial Group. An off-shore company L.I.C. (Mauritius) Off-shore
Limited has also been set up in 2001 to tap the African insurance market.
General Insurance:
General insurance business in the country was nationalized with effect from 1 st January, 1973 by
the General Insurance Business (Nationalization) Act, 1972. More than 100 non-life insurance
companies including branches of foreign companies operating within viz., the National Insurance
Company Ltd., The New India Assurance Company Ltd., The Oriental Insurance Company Ltd.,
and The United India Insurance Company Ltd. with head offices at Calcutta, Bombay, New Delhi
and Madras, respectively. General Insurance Corporation (GIC) which was the holding company
of the four public sector general insurance companies has since been de linked from the later and
has been approved as the "Indian Re insurer" since 3rd November 2000. The share capital of GIC
and that of the four companies are held by the Government of India. All the five entities are
Government companies registered under the Companies Act, 1956. The general insurance
business has grown in spread and volume after nationalization. The four companies have 2699
branch offices, 1360divisional offices and 92 regional offices spread all over the country. GIC and
its subsidiaries have representation either directly through branches or agencies in 16countries and
through associate locally incorporated subsidiary companies in 14 other countries. A wholly-
owned subsidiary company of GIC, i.e. Indian International Pvt. Ltd. is operating in Singapore

and there is a joint venture company, viz. Ken-India Assurance Ltd. in Kenya. A new wholly
owned subsidiary called New India International Ltd., UK has also been registered.
Objectives of LIC:-
Spread Life Insurance widely and in particular to the rural areas and to the socially and
economically backward classes with a view to reaching all insurable persons in the country
and providing them adequate financial cover against death at a reasonable cost.
Maximize mobilization of people's savings by making insurance-linked savings adequately
attractive.
Bear in mind, in the investment of funds, the primary obligation to its policyholders, whose
money it holds in trust, without losing sight of the interest of the community as a whole; the
funds to be deployed to the best advantage of the investors as well as the community as a
whole, keeping in view national priorities and obligations of attractive return.

Conduct business with utmost economy and with the full realization that the moneys belong to
the policyholders.
Act as trustees of the insured public in their individual and collective capacities.
Meet the various life insurance needs of the community that would arise in the changing
social and economic environment.

Involve all people working inthe corporation to the' best of their capability in furthering the
interests of the insured public by providing efficient service with courtesy.

Promote amongst all ADVISORs and employees of the Corporation a sense of participation,
pride and job satisfaction through discharge of their duties with dedication towards
achievement of Corporate Objective.
Mission

Explore and enhance the quality of life of people through financial security by providing
products and services of aspired attributes with competitive returns, and by rendering resources
for economic development.
Vision
"A trans-nationally competitive financial conglomerate of significance to societies and Pride of
India.
SERVICE LINE OF LIC
Insurance Plans- As individuals it is inherent to differ. Each individual insurance needs
and requirements are different from that of the others. LICs Insurance Plans are policies
that talk to you individually and give you the most suitable options that can fit your
requirement.
Pension Plans - Pension Plans are Individual Plans that gaze into your future and foresee
financial stability during your old age. These policies are most suited for senior citizens
and those planning a secure future, so that you never give up on the best things in life.
Unit Plans- Unit plans are investment plans for those who realize the worth of hard-
earned money. These plans help you see your savings yield rich benefits and help you save
tax even if you don't have consistent income.
Special Plans- LICs Special Plans are not plans but opportunities that knock on your
door once in a lifetime. These plans are a perfect blend of insurance, investment and a
lifetime of happiness!

Group Scheme - Group Insurance Scheme is life insurance protection to groups of
people. This scheme is ideal for employers, associations, societies etc. and allows you to
enjoy group benefits at really low costs.
Withdrawal Scheme
KEY EXECUTIVES
Members on the Board of the Corporation
Shri S.K. Roy Chairman
Shri. S.B. Mainak Managing Director - LIC
Shri V.K. Sharma Managing Director - LIC
Smt Usha Sangwan Managing Director - LIC
Shri Shaktikanta Das
Smt Snehlata Shrivastava
Shri Ashwani Kumar Chairman cum Managing Director, Dena Bank
Smt Manjari Kackar Non-official Member
Shri Sanjay Kallapur Non-official Member

SWOT ANALYSIS
The SWOT analysis involves an in depth study of the strength and weakness of the provided
organization and it also provides information to the promoter, consultant, other agencies and helps
in long term viability of the project.
STRENGTH:
A. It is the oldest and most well experienced player having a Pan India
presence.
B. LIC has a strong and very well developed distribution network.
C. It is having a huge consumer base and is evolved as one of the most powerful brands of
the country.
D. It has a large product portfolio and claim settlement is easier to get.
E. It has the advantage of government guarantee is accompanied with it
F. Largest insurance Company in the world in Customer Base (23 crore
customers)
G. No.1 insurance company in the world in terms of agency (about 1.1 Million
ADVISORs).
H. LIC is No.1 insurer in the world in Volume & Sold around 3.75 Cr. Policies
in 2007-2008.
I. 2nd Biggest Real Estate Owner next to Indian Railways.
J. LIC is one of the highest income tax playing Organization. For Financial Year 2007-08,
LIC has paid advance Tax Rs.2627. 14 Cr. & Service Tax Rs.1292.15 Cr.
K. Have highest insurance Professionals (Club Member ADVISORs).

L. Only 4 countries in the world have more population that LIC`s policy holders.
M. No.1 insurance Company in the world in terms of claims paid.
N. LIC Settles 2.21 claims per second, LIC settled 139 lakhs claims during the year 2007-
2008.15.Prompt settlement of claims (97% maturity claim settled on or before due date).
O. One of the lowest outstanding Claim Ratio in the world (Maturity+ S B Claim-0.07%)
Advanced Technology-
For better Customer Service
A. Computerized and networked 2048 branch offices and 159 satellite offices throughout the
country.
B. Use of High Tech-WAN, LAN, IVRS & EDMS.
C. LIC is second largest PC user in the country.
D. EDMS to make LIC a paperless office- Enabling Policy servicing & payments through all
branches in the country.
E. Premium Payment Facility extended through networked 2048 branches, ECS, ATM's
through internet, online portals, collecting bank (Axis Bank), AP online, through SMS,
through selected ADVISORs, Now LIC Premium can also be paid through.
F. "Suvidha info Serve KIOSKS" all over India.
G. Policy Holder's Portal allow on line access to policy status and other details
H. Info centre set up in 12 cities for customers to interact easily. Dial-1251 for details.
I. 45 interactive Voice Response System (IVRS) centers all over the country to provide
information on policy servicing. Facility is available 24*7, Facility can be availed on
following phone Nos. 1251 OR 020-25514248.

Social Strength
A. LIC - an institution builder promoting many financial and insurance institutes like NSE,
NCDEX, LIC Mutual Fund, Stock Holding Corporation of India, National insurance
Academy, insurance institute of India etc.
B. LIC has foreign operations in Mauritius, Fiji and London and has joint venture operating
in Sri Lanka, Nepal, Bahrain & Saudi Arabia. New offices will bihourly opened in
Australia, USA & Canada.
C. LIC is known as "Pension Provider" of the country.
D. 1st Pension Company in India is floated by LIC as "LIC Pension Fund Ltd" on 21st Nov
2007.
E. First to create waves in micro insurance sector by insuring people below the poverty line.
In year 2007-2008, 8.54 lacs policies sold through "Jeevan Madhur" Plan.
F. Widest range of plans (about 48) for every need of the customer of 0 to 79 years of age.
G. Biggest Portfolio of Group insurance schemes available.
H. "Jeevan Saral" one of the product of LIC got "Best innovation product " award
fromI.R.D.A.
I. LIC has covered lick Risk of 1.13 crore citizens through "AAM ADMI BIMAYOJANA" &
JANASHREE BIMAYOJANA".
J. Very Unique Salary saving Portfolio.
K. Highest Number of Corporate Clients in Group insurance Scheme.
L. Expending Distribution Channel through Ban assurances, Corporate Agencies, Broker ship
& Chief Life Insurance Advisor (CLIA).

M. New East - Central Zonal Office opened at patina to cater to the needs of states of Bihar,
Jharkhand and Orissa. 5 new Divisional offices were also opened in 2007-08.Pune D.O.
was spited in 2 divisions, viz (i) Pune Division and (ii). Pune Division.
Peoples Money for Peoples Welfare.
A. "Golden Jubilee Foundations" established for undertaking charitable activities like
education, health, relief of poverty etc. People's Money for People's Welfare.
B. LIC invested more than 11,630 crores, in infrastructure sector is Rs.56,691crores
C. In socially oriented sector like water, drainage & housing etc, LIC has investedRs.5,635
crores during 2007-08 & total investment in this sector is Rs.32,321 crores.
D. Total investment in Social Sector Rs.89,000 Crs.
E. Different incentive schemes for villages, Schools and Banks under Bima Gram, Bima
School and Bima Banks.
F. Total investment in Nation Building Activities is 5, 76,000 Crs.
Financial Strengths
A. LIC's investment income in 2007-08 was Rs.40,655 crores. Out of Total income of Rs,
1,76,559.28 Crs.
B. Total Assets of the corporation as on 31.3.07 were Rs. 6,74,514.78 Crs.
C. Largest institutional investor in Share Market. On an average Rs.100 crore invested every
day. During the year 2007 LIC earned the profit Rs.10,000 Crs. from the Sale of Equity.
D. Largest Financial institutional investor both Equity market & Term House.

WEAKNESS:
A. Its employees and other staff are lethargic and least motivated to render prompt and
sincere customer service. After sales customer grievance redressed mechanism is
inefficient.
B. ADVISORs not taking into account the needs of people and promote policies having high
commissions only.
C. Very slow decision making process and internal problems between top management and
lower cadre staff.
D. The top management or bosses are medicare and there is large scale corruption in main
office.
E. The development officers and ADVISORs who are the foundation pillars of LIC are not
provided with extra funds and powers to promote its products aggressively high
commissions only.
F. Very slow decision making process and internal problems between top management and
lower cadre staff.
G. The top management or bosses are mediocre and there is large scale corruption in main
office.
H. The development officers and ADVISORs who are the foundation pillars of LIC are not
provided with extra funds and powers to promote its products aggressively.

OPPORTUNITY:
A. Emergence of a huge middle income consumer market in the country.
B. People becoming more aware and demanding so there is scope for a whole lot
of innovative products.
C. Pension markets, health insurance and large real estate portfolio.
D. Todays human life becomes full uncertain, so they prefer protection against the risk.
Therefore they prefer life insurance opportunity for the life insurance industry.
E. To use Internet and e-commerce technologies to dramatically cut the costs and/or to
pursue new sales-growth opportunities. With the help of technology it has become easy for
the companies to reach the customer quickly, easily, efficiently and in a better way. Also
the companies can cut down the cost of operation up to considerable level. Thus
technology has thrown lots of opportunity for the company.
F. Liberalized government policy toward insurance sector: the government has liberalized the
government policy in the life insurance sector. Now a day role of government has
changed. Due to liberalized policy of government the country is benefited in earning
foreign inflows: the domestic company can also collaborate with foreign country and can
create synergy. Thus there is great opportunity for those who can trap it. Exist the option
of joint venture& alliance etc. for companies to create Synergy, value as well as
competitive capabilities for the firms.

THREATS:
A. Private entrants are naturally targeting the profitable and more lucrative segments, by
providing better service, new products and flexibility. They are targeting the bigger
corporate the other clients in the well established metropolitan center. These new entrants
succeeded in eating share of the existing entities. This creates threat among rival firms
itself.
B. Decreased in bank rate: the decreased bank rate is the biggest threat for the life insurance
sector. Fluctuation in the bank rate makes big difference for the life insurance industry. It
has become threats for the life insurance industry.
C. Interest rate of P.F and bank saving create threat to insurance sector. All other saving is
obviously the threat for life insurance sector.
D. Increasing intensity of competition among industry rivals-may cause squeeze (fall) on
profit margins. As at present the awareness level is not much, it is only because the
education level is only 62 %( in which only 10% are well educated).
E. Fraud in insurance sector: the major problem fraud, which affects the life insurance sector.
a) The flight of talent to new entrants is already in evidence, and could be on the rise for
some time to come.
b) The new units, equipped with state of arts equipment and innovative procedure would
have an in-built edge over the erstwhile public sector units, which until recently had no
such opportunity and incentives.
c)

37 Madan Mohan Malaviya University of Technology, Gorakhpur

CHAPTER-4
RECRUITMENT & TRAINING PARAMETERS

Recruitment: Meaning and Definition
Recruitment forms a step in the process which continues with selection and ceases with the
placement of the candidate. It is the next step in the procurement function, the first being the
manpower planning. Recruiting makes it possible to acquire the number and types of people
necessary to ensure the continued operation of the organisation. Recruiting is the discovering of
potential applicants for actual or anticipated organisational vacancies.
According to Edwin B. Flippo, Recruitment is the process of searching for prospective
employees and stimulating them to apply for jobs in the organisation.
In the words of Dale Yoder, Recruiting is a process to discover the sources of manpower to
meet the requirements of the staffing schedule and to employ effective measures for attracting
that manpower in adequate numbers to facilitate effective selection of an efficient working force.
According to Werther and Davis, Recruitment is the process of finding and attracting capable
applicants for employment. The process begins when new recruits are sought and ends when their
applications are submitted. The result is a pool of applicants form which new employees are
selected.
Dales S. Beach writes, Recruitment is the development and maintenance of adequate manpower
resources. It involves the creation of a pool of available labor upon whom the organisation can
depend when it needs additional employees.
Thus, recruitment process is concerned with the identification of possible sources of human
resource supply and tapping those sources. In the total process of acquiring and placing human
resources in the organization, recruitment falls in between different sub-processes as shown in
Figure 1.1.
According to Scott, Clothier and Spriegel the need for recruitment arises out of the following
situations:
Vacancies created due to expansion, diversification, and growth of business.
An increase in the competitive advantage of certain concerns, enabling them to get more
of the available business than formerly.
An increase in business arising from an upswing during the recovery period of a business
cycle
J
H o
u b
m
Pa
Ln S
A E
C L
E E
M C
E T I
N O
T N
Figure 1.1: Recruitment to Human Resource Acquisition Process
Vacancies created due to transfer, promotion, retirement, termination, permanent disability
or death.
The normal population growth, which requires increased goods and services to meet the
needs of the people.
A rising standard of living, which requires more of the same goods and services as well as

the creation of new wants to be satisfied.
Process of Recruitment
Recruitment process passes through the following stages:
o Recruitment process begins when the personnel department receives requisitions
for recruitment from any department of the company, The personnel requisitions
contain details about the position to be filled, number of persons to be recruited,
the duties to be performed, qualifications expected from the candidates, terms and
conditions of employment and the time by which the persons should be available
for appointment etc.
o Locating and developing the sources of required number and type of
employees. Identifying the prospective employees with required
characteristics.
o Developing the techniques to attract the desired candidates. The goodwill of an
organisation in the market may be one technique. The publicity about the company
being a good employer may also help in stimulating candidates to apply. There
may be others of attractive salaries, proper facilities for development etc.
o Evaluating the effectiveness of recruitment process.
According to Famularo, personnel recruitment process involves five elements, viz., a
recruitment policy, a recruitment organisation, a forecast of manpower, the development of
sources of recruitment, and different techniques used for utilising these sources, and a method of
assessing the recruitment programme. The explanation of these is described below:
1. Recruitment Policy: It specifies the objectives of recruitment and provides a framework for

the implementation of the recruitment programme. It also involves the employers
commitment to some principles as to find and employ the best qualified persons for each job,
to retain the most promising of those hired, etc. It should be based on the goals, needs and
environment of the organisation.
2. Recruitment Organisation: The recruitment may be centralised like public sector banks or
decentralised. Both practices have their own merits. The choice between the two will depend
on the managerial philosophy and the particular needs of the organisation.
3. Sources of Recruitment: Various sources of recruitment may be classified as internal and
external. These have their own merits and demerits.
4. Methods of Recruitment: Recruitment techniques are the means to make contact with
potential candidates, to provide them necessary information and to encourage them to apply
for job.
5. Evaluation of Recruitment Programme: The recruitment process must be evaluated
periodically. The criteria for evaluation may consist of cost per applicant, the hiring ratio,
performance appraisal, tenure of stay, etc. After evaluation, necessary improvements should
be made in the recruitment programme.

Figure 1.2 : Place of Recruitment in Selection System
Recruitment Policy
As Yoder et al observe recruitment policy spells out the objectives of the recruitment and provides
a framework for implementations of the recruitment programme in the form of procedures. It may
involve a commitment to broad principles such as filling vacancies with the best qualified
individuals. The recruitment policy may embrace several issues such as the extent of promotion
from within, attitudes of enterprise in recruiting old, handicapped, and minor individuals,
minority group members, part-time employees and relatives of present employees. In addition, the
recruitment policy may also involve the organisation system to be developed for implementing
the recruitment programme and procedures to be employed. Explicitly, an organisational system is
a function of the size of an enterprise. In smaller enterprises, there may be merely informal
recruiting procedures and the line official may be responsible to handle this function along with
their usual responsibilities. On the other hand, in larger organisations, there is usually a staff unit
attached with personnel or an industrial relations department designated as employment or
recruitment office. This specialisation of recruitment enables staff personnel to become highly
skilled in recruitment techniques and their evaluation. However, recruitment remains the line
responsibility as far as the personnel requisition forms are originated by the line personnel, who
have also the final word in the acceptance or rejection of a particular applicant. Despite this, the
staff personnel have adequate freedom in respect of sources of manpower to be tapped and the
procedure to be followed for this purpose.
Recruitment policy covers the following areas:
To prescribe the degree of emphasis. Inside the organisation or outside the organisation.
To provide the weightage that would be given to certain categories of people such
as local population, physically-handicapped personnel, personnel from scheduled
castes/tribes and other backward classes.
To prescribe whether the recruitment would be centralised or decentralised at unit levels.
To specify the degree of flexibility with regard to age, qualifications, compensation
structure and other service conditions.
To prescribe the personnel who would be involved in recruitment process and the
role of human resource department in this regard.
To specify the budget for meeting the expenditures incurred in completing the recruitment
process.
TRAINING:-

Training is a process of learning a sequence of programmed behavior. It is the application of
knowledge & gives people an awareness of rules & procedures to guide their behavior. It helps in
bringing about positive change in the knowledge, skills & attitudes of employees.
Thus, training is a process that tries to improve skills or add to the existing level of knowledge so
that the employee is better equipped to do his present job or to mould him to be fit for a higher job
involving higher responsibilities. It bridges the gap between what the employee has & what the
job demands.
Training refers to a planned effort by a company to facilitate employees learning of job related
competencies. These competencies include knowledge, skills, or behaviors that are critical for
successful job performance.
The goal of training is for employees to master the knowledge, skill, and behaviors emphasized in
training programs and to apply them to their day to day activities. Training is seen as one of
several possible solutions to improve performance. Other solutions can include such actions as
changing the job or increasing employee motivation through pay and incentives. Today there is a
greater emphasis on-
Providing educational opportunities for all employees. These educational opportunities
may include training programs, but they also include support for taking courses offered
outside the company, self-study, and learning through job rotation.
An ongoing process of performance improvement that is directly measurable rather than
organizing one time training events.
The need to demonstrate to executives, managers, and trainees the benefits of training.

Learning as a lifelong event in which senior management, trainer manager, and employees
have ownership.
TRAINING AND DEVELOPMENT OBJECTIVES
The principal objective of training and development division is to make sure the availability of a
skilled and willing workforce to an organization. In addition to that, there are four other
objectives: Individual, Organizational, Functional, and Societal. Training and development is a
subsystem of an organization. It ensures that randomness is reduced and learning or behavioural
change takes place in structured format.
Individual Objectives help employees in achieving their personal goals, which in turn,
enhances the individual contribution to an organization.
Organizational Objectives assist the organization with its primary objective by bringing
individual effectiveness.
Functional Objectives maintain the departments contribution at a level suitable to the
organizations needs.
Societal Objectives ensure that an organization is ethically and socially responsible to the needs
and challenges of the society.
The quality of employees and their development through training and education are major factors
in determining long-term profitability of a small business. If you hire and keep good employees, it
is good policy to invest in the development of their skills, so they can increase their productivity.
Training often is considered for new employees only. This is a mistake because ongoing training
for current employees helps them adjust to rapidly changing job requirements. Reasons for
emphasizing the growth and development of personnel include

Creating a pool of readily available and adequate replacements for personnel who may
leave or move up in the organization.
Enhancing the companys ability to adopt and use advances in technology because of a
sufficiently knowledgeable staff.
Building a more efficient, effective and highly motivated team, which enhances the
companys competitive position and improves employee morale.
Ensuring adequate human resources for expansion into new programs.
Need for Employee Training
Training of employees takes place after orientation takes place. Training is the process of
enhancing the skills, capabilities and knowledge of employees for doing a particular job. Training
process moulds the thinking of employees and leads to quality performance of employees. It is
continuous and never ending in nature.
Training is given on four basic grounds:
1. New candidates who join an organization are given training. This training
familiarizes them with the organizational mission, vision, rules and regulations and
the working conditions.
2. The existing employees are trained to refresh and enhance their knowledge.
3. If any updations and amendments take place in technology, training is given to
cope up with those changes.
4. When promotion and career growth becomes important. Training is given so that
employees are prepared to share the responsibilities of the higher level job.

Training needs can be assessed by analyzing three major human resource areas: the organization
as a whole, the job characteristics and the needs of the individuals. This analysis will provide
answers to the following questions:
Where is training needed?
What specifically must an employee learn in order to be more productive?
Who needs to be trained?
Begin by assessing the current status of the company how it does what it does best and the
abilities of your employees to do these tasks. This analysis will provide some benchmarks against
which the effectiveness of a training program can be evaluated. Your firm should know where it
wants to be in five years from its long-range strategic plan. What you need is a training program
to take your firm from here to there.
Second, consider whether the organization is financially committed to supporting the training
efforts. If not, any attempt to develop a solid training program will fail.

CHAPTER-5
LIC ADVISORS

DEFINITION OF ADVISOR
According to section 182 of Indian contracts Act, an advisor is a person employed to do any
act for another or to represent another in dealing with a third person. In the insurance industry,
the term advisor is ordinarily applied to a person engaged by the insurer to procure new
business.
The insurance Act definers and insurance advisor as one who is licensed under Section 42 of that
Act and is paid by way of commission or otherwise, in consideration of his soliciting of
procuring insurance business, including business relating to the continuance, renewal or revival
of policies of insurance. He is, for all purposes, an authorized salesman for insurance and needs a
license.
An Advisor is one who acts on behalf of another. The another on whose behalf the advisor acts,
is called the principal in this case. The insurance company is the principal in this case. The
lawyer is the advisor of the client, when he argues the case in court. An ambassador is an advisor
of his country. The advisor represents the principal and acts on his behalf.
Some insurers designate their advisors as agents, consultants etc. as if they are independent
Advisor or consultant would not be appointed by an insurance company. He would be
knowledgeable enough as a person to be approached for advice or consultation. Some insurance
advisors may acquire that status. All insurance advisors should strive to attain that status.

Attributes to become Successful LIC Advisor:
You should be outgoing and love to meet people.
You should be ambitious to start your own Business.
You should have Good Communication Skills.
You should have lot of Perseverance.
You should be willing to work hard with lot of Dedication and Devotion.
You should be prepared to accept rejections as stepping stone.
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.
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

1. 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-
1.1 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.
1.2 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.
1.3 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 per
cent 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 years premium is equal to or less than twenty-one per cent thereof, and the rate on the fourth
and fifth years premiums does not exceed sis per cent thereof, 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 years 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
2.1 In a case referred to in clause (a) of sub-section (1), one half per cent of the
premium
2.2 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
2.3 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 years premium is equal to or less than twenty-one per cent thereof, and the rate on the
fourth and fifty years premiums does not exceed six per cent thereof, 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 years 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
In the case referred to in clause (a) of sub-section (3), twenty per cent of the premium
payable on the policy, and
4.1 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 any of
the provisions of the preceding sub-sections by an insurer, any insurance agent who
contravenes the provisions of sub-section (1) or sub-section (3) shall be punishable 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 be
punishable 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
III) R
Single premium policies granting 2%
immediate / deferred annuity e

Other Single premium policies 2%
g
More than 1 premium policies 7.5% of FY premium
granting deferred annuity u

2.0 % of renewals
Other policies 40% of FY premium (After 1st years from l
commencement, 35%)
a
7.5% of renewals for 2nd & 3rd years
t
5% of renewals thereafter
o
ry 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.
IV) Responsibility of the Channel Operations team & Agency team
This function is responsible for conducting Agency licensing / Re-licensing and other agency
servicing.

Sr. No. Particulars Compliance Cycle

1. Before licenses are issued and the agent codes are generated, the On-going
requisite formalities have been completed particularly as regards
Possess at least the minimum qualification,
Completed requisite training,
passed pre-recruitment examination
Required documentations have been completed before starting the
relationship.
TAT - to issue the License to the Agent within 2 working days of
passing of the examination

2. Applications for issuing licenses to act as insurance agents are in line On-going
with the IRDA regulations. In particular it shall be ensured that:
No persons, other than Agent is allowed to sell the policies.
Not to withhold licenses of any agent unless there are serious
reasons which need to be duly recorded.
3. Advisor/Agent codes have been auto blocked immediately on Immediately on
termination or on expiry of their licenses or on termination of their termination.
agreements.
4. In case if the agent/ advisors is found guilty of any *misconduct (*see On-going
prescribed Code of Code), the agency should be terminated
immediately.
5. Maintain a Register of Agents (in electronic form) showing the On-going
following (S 43):

Name and address of each agent
Date of appointment
Date of cessation
6. Below Agency data to be submitted to Compliance team for reporting Half Yearly/ Monthly
by them (Compliance team) to IRDA.
Updated list of Corporate Agents as on March 31 and September
30 TAT - Half yearly by April 10 & Oct 10 respectively.
Details of Termination of Corporate Agent TAT - Monthly by
5th of every month.
List of cases wherein the licenses have been withheld every
month TAT - Monthly by 5th of every month.
Complete details of each person sponsored for examination and
training TAT - Monthly by 5th of every month.
Details of agents whose services are terminated for reasons other
than non-performance TAT - Monthly by 5th of every month.
9. Duly approved advertisements from the Marketing & Compliance Ongoing
department are used/issued by the Agent and in case of
advertisements not developed or issued by the Company; prior
written approval is taken from the Marketing & Compliance
department before making any advertisement.

10. Agents are paid by way of commission as per the limits prescribed by Ongoing
the IRDA and he is not paid in any form any amount in respect of any
policy not effected through him.

11. Only pre-approved sales material/benefit illustrations have been used Ongoing
by the agents/ advisors.

Prescribed Code 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.
DOs & DONTs:
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 Agents 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 dont, 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
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
concerned Manager and he shall be guilty of misconduct.
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.
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
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
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 pre-
approved 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 institutions 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 Companys 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:
a) SOLICITATION
Following needs to be seen:
Evaluate customers life insurance need
Ability of customer to pay premiums over intended policy duration
Suitability of product for him
Explain the product in full
b) PRESENTATIONS
For presentations, please use the pre-approved material or the material provided by the
Company.
c) 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.
d) REBATING / DISCOUNTING-
Rebating is prohibited. Any person making default shall be punishable with fine which
may extend to five hundred rupees.
e) MISREPRESENTING
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.
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 in order to sell insurance is fraudulent.
In the case of any deviations from the above the company shall take strict
disciplinary action as per the approved malpractice matrix.
Misrepresent about tax benefits which could be claimed under any insurance plan.
f) 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 non-compliant:
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 noncomplaint to the process and is found guilty of misconduct:
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:

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.
Illustration of Agency related Complaints/ Misconduct:
Documents that are being presented are not in order /they are forged
or fake.
Improper/wrongful use of company seal/stamp.
Unfair means are used pass in the pre recruitment examination by
the prospective agents/ advisors.
Not completed the requisite practical training
FUNCTION OF AN ADVISOR

Understanding the prospects needs and persuade him to buy a plan of life insurance that
suits his interests best.
Complete the formalities:- paper work, medical examination, which are necessary to get
the policy expeditiously.
Keep in touch to ensure that changing circumstances are reflected in the arrangements
relating to premium payments, nomination and other necessary alterations.
Facilitate quick settlement of claims.
Be totally honest with both the prospect and the insurer.
Not to induce prospects to submit wrong information.
CAREER WITH LIC
Career development is emphasized upon from the very day the agent joins the system. Though
individual meetings with his or her Development Officer, the agent can discuss various issues
related to business development and career enhancement. Expectations from the organization in
terms of chalking a career in the insurance industry are also discussed.
Absorption into the management is another career enhancement option provided at LIC. This
program helps agents build a full time career as a Development Officer in the organization,
offering great potential for managing a team of agents and personal development.
Rewards and Recognition LIC agents are constantly recognized and rewarded for their
performance. Numerous competitions all year round promote healthy competition amongst agents
and recognition for their efforts. Depending on the level of business the agent achieves in a year,
he or she can become a member of various clubs such as the Corporate Club, the Chairmans club,
etc. Each of these clubs have specific performance criteria for qualification and members of these
clubs are entitled to attend seminars held at exotic international and domestic locations each year.
Advisors can also qualify for the renowned MDRT (Million Dollar Round Table), an exclusive
international insurance advisors club.
Insurance Sales Agents - Significant Points
Despite slower-than-average growth, job opportunities should be good for college graduates and
persons with proven sales ability or success in other occupations.
Successful agents often have high earnings, but many who assume agent jobs fail to earn enough
from commissions to meet their income goals and eventually transfer to other careers.
In addition to offering insurance policies, agents are beginning to sell more financial products,
such as mutual funds, retirement funds, NSCs, etc.
BENEFITS OF BEEN AN LIC AGENT:-
I. Rewarding Career - LIC will help people realize their dreams by fulfilling their
financial goals. The difference you make to their lives is more rewarding and
satisfying than you could ever imagine.
II. A Successful Team - By joining LIC, one will be a part of the country's finest team of
life insurance Agents. Last year, we contributed 1317 members to the Million Dollar
Round Table: a global forum that salutes the world's most successful Insurance Agents.
III. Attractive Remuneration - LIC offer one of the best remuneration systems in the
industry that not only takes care of your current earnings, but also guarantees an

earnings for the future. What's more, you can set your own income targets with a
potential to earn as much as you want for the rest of your life.
IV. Independence As an Agent, you will be a true entrepreneur. One have the freedom
to be their own boss: work for yourself, choose your own clients and make your own
money.
V. World- Class Training LIC provide you with the best-in-class training systems,
since that is what differentiates LIC Agent from the rest. Even if you don't have
previous experience in selling, our multi-dimensional training programme conducted
by our qualified in-house training personnel, will make you a specialist in life
insurance sales.
VI. Commitment To Career Agency System Our commitment to the Career Agency
System means that, we support you and your efforts not just today, but at every stage
of your business. We believe in encouraging our Agents to strive towards the highest
levels of success, throughout their careers. In fact, depending on your performance, we
also offer a management career option with the company.
VII. Infrastructure Support- We have invested in creating a state-of-the-art infrastructure
at each of our Branch Offices. You will have access to the necessary tools, technology
and people support that will enable you to build a profitable long-term business.
VIII. Full Range Of Products And Services -You can offer your customers over 50
product combinations of our unique Products and Riders, to help them meet all their

financial goals. In order to give you a greater competitive edge, we are also
continuously working on newer and more innovative products.
IX. Sales And Marketing Support- We support our Agents with innovative sales and
marketing tools. The Sales, Promotions and Marketing collaterals that we provide will
help you take your business to new heights. .
X. Financial Strength
LIC offers you and your customer unmatched financial strength and solidity.

CHAPTER-6
TRAINING DURATION

TRAINING DURATION
The Summer-Training was divided into following modules:
Where we divided the Gorakhpur city in 2 areas (Rural and urban) and went to the people
of different occupations, groups and ages, where via face to face interviewing method we
talked to people and made them aware about the LIC schemes.
TRAINING DURATION:-
START MAY 18 2015
FINISH JUNE 22 2015
NO. OF WORKING DAYS 29
NO. OF HOLIDAYS 05
TRAINING CLASSES 03
TOTAL NO. OF DAYS 31

I. Rural Area- where we took different areas like :-
Chauri Chaura Block
Sardarnagar Block
Bharmpur Block
Khorabar Block
In this area we tried to meet Pradhans under the respective blocks so that with their help
we can meet the different people around the village and also travelled to local shop of
these villages.
II. Urban Area- where we choose the area of
Transportnagar
Gorakhnath
In this area we basically made are segment market to businessmans (those who have
less earning) and used self contacts.

CHAPTER-7
OBJECTIVE OF STUDY

OBJECTIVE OF STUDY
The Basic objective of this Project was:-
To recruit and select Insurance Advisors for LIC.
Basic focus was to link rural people with RCA (Rural Career Agent) Plan & UCA
(Urban Career Agent) Plan of LIC.
To make people aware of LICs benefits to Insurance Advisors.
RCA (Rural Career Agent) Plan:-
In order to face increasing competition in the life insurance business from the foreign and private
sector insurance companies, Life Insurance Corporation of India (LIC) has now decided to focus
more on rural areas which have so far remained untapped.
To achieve the objective, LIC is now in the process of recruiting rural career agents (RCAs). The
corporation already has in operation an urban career agent scheme for policy holders in metros
and urban areas.
The LIC's activities were mostly confined to urban, major towns and semi urban areas but now its
decision to expand its business to rural areas would benefit both a large number of population
living below the poverty line and also be useful in minimizing unemployment.
The main job of such rural career agents is to get life insurance business from the rural areas
where population of a village is less than 5,000.

Youths between the age 18-35 years age group having qualification of 10th Standard, can become
'rural career agents'.
Prior to appointment, the selected persons will have to undergo a 100-hour training as stipulated
by the Insurance Regulatory Development Authority (IRDA) and passing examination from
Insurance Institute of India.
The corporation also gives incentives to RCAs in addition to a stipend of Rs 1200 per month, in
the first year of agency and Rs 600 per month in next year of training. In addition to this stipend,
RCA is also entitled to receive commission as is being paid to other agents.
The corporation also has a 'Bima Gram' scheme for the benefit of small villages under which LIC
extends its financial support to a village to the extent of Rs 25,000 provided the LIC gets 100 life
insurance proposals from a particular village with a less than 5,000 population. The amount is
used for the development of the village.

CHAPTER-8
RESEARCH METHODOLOGY

RESEARCH DESIGN
JOHN.W.BEST -A research design is the arrangement of conditions for collection and analysis
of data in a manner that aims to combine relevance to the research purpose with economy in
procedure.
ROBERT ROSS- Research is essentially an investigation, a recording and an analysis of
evidence for the purpose of gaining knowledge.
ANALYTICAL RESEARCH DESIGN
The question is neutral and provides direction for you to evaluate and explore the topic as it
relates to answering the question. Your thesis statement presents the research question, and the
remainder of your paper supports your thesis. This type of research paper is not a simple
regurgitation of information. Instead, it is your thoughts, conclusions and evaluations of a topic
that is backed up with logical information. Several things are vital in formulating an analytical
research paper:
You answer the research questions objectively.
You have no preconceived notions or opinions about the topic.
You evaluate the topic and draw conclusions from factual information from reliable
sources.
You piece findings together to present the purpose of the paper.
You use serious contemplation and a critical evaluation to answer the research question.


DATA COLLECTION -The study was based on questionnaire method. The study was about the
Recruitment and Selection System. There are two types of data collection:
Primary data Secondary data

Primary data - The primary data are those, which are collected a fresh and
for the first time happen to be original in character. It has been collected
through a Questionnaire and personal interview.
Secondary data- Secondary data are those which have already been collected
by someone else and which have already been passed through the stratified
process. It has collected through the books, journals & Internet.
Source of Data Primary Data (questionnaire and Interview basis)
SAMPLE DESIGN:
Sample size
o Urban- 50 persons
o Rural -150 persons

Area of study

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CHAPTER-9
DATA ANALYSIS

Question. 1 Do you have any knowledge or experience of Insurance ?
43%
YES NO
57%
INTERPRETATION
Out of 200 respondents, 57% respondents had the knowledge about the
insurance sector, whereas 43% were not aware.

Question 2. Do you have experience as an agent
25%
YES
No
75%
INTERPRETATION
Out of 200 respondents, we found that approx 25% respondents had a
experience of working as an advisor not in LIC but in other Insurance
company.

Question 3. Are you interested in being LIC Advisor?
20%
35%
YES NO MAY BE IN FUTURE
45%
INTERPRETATION
Out of 200 respondents, we were able to convince approx 35% to work with
LIC.

Question 4. Can you spare time for attending LIC Training to understand product & how to introduces oneself to custome
30%
45%
YES NO Doubtful
25%
INTERPRETATION
Out of 200 respondents, we found that approx 45% respondents were ready to attend the training
session which LIC use to conducted for their Advisors.

Question 5. How much time can you dedicate per day for this activity?
17% 22%
hr 1-2 hrs 3-4 hrs 5 hrs or more

26%
35%
INTERPRETATION
Out of 70-80 respondents, we found that approx 35% respondents were ready
to give 1-2 hours to this work and were comfortable with their other work.
While 26% were dedicated to give 3-4 hours to this work while 22% were
satisfied with1/2hours & some about 17% where ready for more than 5hours,
to perform their task with full efficiency.

Qustion 6. Do you think that the Training provide is sufficient for the Advisors
40%
Yes No
60%
INTERPRETATION
Out of 70-80 respondents, we found that approx 60% respondents were not at
all satisfied with the LIC 60hours training session as because of their rural
background(as maximum candidate were from rural area).

CHAPTER-10
FINDINGS
FINDINGS
Following are the findings from the Data Analysis:-
1) 57% people have knowledge or experience about LIC Insurance Advisor scheme.
2) 75% people according to the survey belonged to rural region.
3) 75% people have no experience about Insurance.
4) 43% people were convinced to be LIC Insurance Advisors in all.
5) 45% people are ready to attain the LIC training & understanding LIC product.
6) 35% of people who are interested in being an insurance advisor can dedicate their 1-
2hours per day in this activity.
7) 39% people are in support with the training quality of LIC.
CHAPTER-11
SUGGESTIONS
SUGGESSTIONS
An insurance company must work with honesty to win the confident of its agent and
general public.
Duration of training must be reducing as in these day people have no extra time.
Training hours should be made choice of their preference timing.
A special function must organize time to time in which the special prizes distribute among
those agent who perform well.
Better career opportunity must be provided to an adviser, such as on role job, promotion
etc.
Increase the commission of agents.

CHAPTER-10
LIMITATION
There are certain limitation in being a Insurance Advisors.
Time was the major constraint for understanding the long process of
recruitment and selection..
CHAPTER-12
Some people cant pass the eligible criteria.
Fear of rejection isLIMITATION

one of the major limitations in this job.
Lack in communication skill is also a major reason.
CHAPTER-13
CONCLUSION
CONCLUSION
In India, there is throat cut competition in the market of life insurance that brand service
which adopt new strategies for sales.

Recruitment process is fine and it is according to companys policies for recruit
experienced and more skilled employees and they take interest in supplementary income
sources.
Respondents want to arrange the training session for improve their communication and
convince skills. Because they says communication skills is the quality which plays
important role in recruitment and selection process of agents, the dynamic and growth-
oriented organization recognizes communication as an important aspect of the
Recruitment and Selection system for managerial function in a rapidly changing and
economic environment.
Mostly respondents prefer insurance sector for the source of supplementary income as a
part time income. But they does not interested in the supplementary income which offers
flexible working hours and unlimited earning opportunity.

Therefore LIC recognize potential and consistent performance and their dynamic
corporate culture.
CHAPTER-14
ANNEXURE
ANNEXURE (QUESTIONNAIRE)
Q1. What is your age?
1. Below-25 2. 25-30
3. 30-35 4. 35-40
Q2. What is your Gender?
1. Male
2. Female

Q3. What is your current profession?
1. Professional 2. Private Service
3. Public Service 4. Self Employed
5. Any Other

Q4. What is your annual salary?
1. Below 5000 2. 5000-10000
3. 10000-15000 4. Above 15000

Q5. Are you satisfied with your current job?
1. Yes
2. No

Q6. Is there training requires for improve the performance of an advisor
1. Yes
2. No

Q7. According to you, which quality plays important role in recruitment and selection
process of agents?
1. Leadership
2. Qualification
3. Communication

Q8. Is the training duration should be increased?
1. Yes
2. No
3. May be

Q9. Would you be interested in a source of supplementary income?
1. Yes
2. No
3. May be

Q10. Would you be interested in a source of supplementary income offers flexible working
hours and unlimited earning opportunity?
1. Yes
2. No
3. May Be

Bibliography
Websites
http://www.licindia.in/join_our_team_guidelines.htm
www.irdaindia.org
www.thehindubusinessline.com
www.nurcmedianext.com
https://en.wikipedia.org/wiki/Life_Insurance_Corporation_of_India
Magazines
Insurance World
The Outlook Money
Book reference
Research Methodology by C. R. KOTHARI

Rahul Stpnew

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Recruitment and Training Parameter Analysis of

LIC Through Millennium Service Provider

ABOUT THE TRAINING ORGANIZATION

1 Madan Mohan Malaviya Technical University , Gorakhpur

Name of Organization: - Millennium Service Providers (MSP), India.

Millennium Service Providers

Training Center Location: - Gorakhpur, Uttar Pradesh.

service providers is an indigenous brand promotion company working with applications,

2 Madan Mohan Malaviya Technical University , Gorakhpur

information technology, as well as professional training for various domains.

Event Conceptualization & Organizing

3 Madan Mohan Malaviya Technical University , Gorakhpur

More Information About the Organization :-

Gaurav Srivastava and Ankur Tripathi

4 Madan Mohan Malaviya Technical University , Gorakhpur

5 Madan Mohan Malaviya Technical University , Gorakhpur

out of which those who suffer losses may be reimbursed.

benefits. After that, the benefit may not be available.

or life-time, a substitute is made available.

6 Madan Mohan Malaviya Technical University , Gorakhpur

What Is Life Insurance?

death, if it occurs earlier.

Life insurance also triples up as an ideal tax-saving scheme

categories of life insurance: term life, and whole life insurance.

have designated, upon a specific event of insured death.

8 Madan Mohan Malaviya Technical University , Gorakhpur

insurance company, called the fire office, was started in 1680.

Hindustan Cooperative in Kolkata.

swadeshi movement in the early 1900s.

The History of Insurance in India

9 Madan Mohan Malaviya Technical University , Gorakhpur

the life insurance business.

statistical information about both life and non-life insurance businesses.

objective of protecting the interests of the insuring public.

with a capital contribution of Rs. 5 crore from the Government of India.

insurance business in India.

was nationalized and a monopoly was created.

structure was created for the industry.

10 Madan Mohan Malaviya Technical University , Gorakhpur

restricted. No more than 26% of any company can be foreign-owned.

market is likely to grow substantially over the next few decades.

Insurance Act, 1938

strengthened by statutory regulations. Weaker elements were weeded out; indiscriminate

11 Madan Mohan Malaviya Technical University , Gorakhpur

forward in the direction to envelop all forms of insurance.

Key Recommendations of Malhotra Committee

Government stake in the insurance Companies to be brought down to 50%.

subsidiaries can act as independent corporations.

All the insurance companies should be given greater freedom to operate.

Private Companies with a minimum paid up capital of Rs.1billion should be allowed to

12 Madan Mohan Malaviya Technical University , Gorakhpur

Postal Life Insurance should be allowed to operate in the rural market.

The Insurance Act should be changed.

An Insurance Regulatory body should be set up.

Controller of Insurance should be made independent.

Mandatory Investments of LIC Life Fund in government securities to be reduced from

LIC should pay interest on delays in payments beyond 30 days.

Insurance companies must be encouraged to set up unit linked pension plans.

Computerization of operations and updating of technology to be carried out in the