INSURANCE SERVICE PROVIDE BY CANARA BANK

Introduction
Canara Bank is an Indian state-owned bank headquartered in Bangalore, in Karnataka. It was
established at Mangalore in 1906, making it one of the oldest banks in the country. The
government nationalized the bank in 1969. As of November 2015, the bank had a network of
5784 branches and more than 9153 ATMs spread across India. The bank also has offices abroad
in London,Hong Kong, Moscow, Shanghai, Doha, Dubai, and New York.
HISTROY
Ammembal Subba Rao Pai, a philanthropist, established the Canara Hindu Permanent
Fund in Mangalore, India, on 1 July 1906.[2] The bank changed its name to Canara Bank Limited
in 1910 when it incorporated.
Canara Bank's first acquisition took place in 1961 when it acquired Bank of Kerala. Bank of
Kerala had been founded in September 1944 and at the time of its acquisition on 20 May 1961
had three branches. The second bank that Canara Bank acquired was Seasia Midland
Bank (Alleppey), which had been established on 26 July 1930 and had seven branches at the
time of its takeover.[3][4]
In 1958, the Reserve Bank of India had ordered Canara Bank to acquire G. Raghumathmul
Bank, in Hyderabad. This bank had been established in 1870, and had converted to a limited
company in 1925. At the time of the acquisition G. Raghumathmul Bank had five branches.
[5]

The merger took effect in 1961.[4] Later in 1961, Canara Bank acquired Trivandrum

Permanent Bank. Trivandrum Permanent Bank had been founded on 7 February 1899 and had
14 branches at the time of the merger.[4]
Next, Canara Bank acquired four banks in 1963: the Sree Poornathrayeesa Vilasam
Bank, Thrippunithura, Arnad

Bank,Tiruchirapalli, Cochin

Commercial

Bank,

Cochin,

and Pandyan Bank, Madurai. Sree Poornathrayeesa Vilasam Bank had been established on 21
February 1923 and at the time of its acquisition it had 14 branches. Arnad Bank had been

established on 23 December 1942 and at the time of its acquisition had only one branch. Cochin
Commercial Bank had been established on 3 January 1936, and at the time of its acquisition had
13 branches.[4]
The Government of India nationalised Canara Bank, along with 13 other major commercial
banks of India, on 19 July 1969. In 1976, Canara Bank inaugurated its 1000th branch. In 1985,
Canara Bank acquired Lakshmi Commercial Bank in a rescue. This brought Canara Bank some
230 branches in northern India.
In 1996 Canara Bank became the first Indian Bank to get ISO certification for "Total Branch
Banking" for its Seshadripuram branch in Bangalore. Canara Bank has now stopped opting for
ISO certification of branches.
Overseas subsidiaries, branches and offices
Canara Bank established its International Division in 1976. In 1983, Canara Bank opened its first
overseas office, a branch in London. Two years later, Canara Bank established a subsidiary in
Hong Kong, Indo Hong Kong International Finance. In 2008-9, Canara Bank opened its third
foreign operation, this one a branch in Shanghai. Later Canara Bank established a branch each in
Leicester and Bahrain, and converted its Hong Kong subsidiary into a branch. It also has a
representative office in Sharjah.
Together with State Bank of India, Canara Bank established a joint venture in Moscow,
Commercial Bank of India LLC.
Canara Bank provides the general manager and the branch managers for Al Razouki Intl
Exchange Co (LLC), which a number of business leaders and Non-Resident Indians
(NRIs) established in 1981 in the United Arab Emirates to facilitate remittances to India by
tourists and NRIs.
Since 1983, Canara Bank has been responsible for the management of Eastern Exchange
Establishment, Doha, Qatar, which Abdul Rahman M.M. Al Muftah had established in 1979.[6]
Canara Bank opened its seventh overseas branch in New York, USA on 10 June 2014.

Subsidiary companies

Canfin Homes Limited (CFHL), which a network of 110 branches and 28 satellite offices
throughout India.

Canbank Factors Limited

Canbank Venture Capital Fund Limited

Canbank Computer Services Limited

Canara Bank Securities Limited

Canara Robeco Asset Management Company Limited

Canbank Financial Services Limited

Canara HSBC Oriental Life Insurance Company Limited

Regional rural banks

Canara Bank sponsors two regional rural banks (RRB).

Kerala Gramin Bank is the largest RRB in India. Its headquarters are
at Malappuram and it operates in all districts in Kerala. It was established in 1976 as a
Scheduled Commercial Bank. [1]

Pragathi Krishna Gramin Bank has its headquarters at Bellary, Karnataka, and has 645
branches spread over eleven districts.

Canara bank is a state level lead bank in Kerala.

Life Insurance
bank has started a Joint Venture Insurance Company Canara HSBC Oriental Bank of Commerce
Life Insurance Company Limited. The new JV insurance company was launched on 16th of
June 2008. In the JV insurance company, Canara bank has a stake of 51%, HSBC Insurance
(Asia Pacific) Holdings Ltd 26% and Oriental bank of Commerce 23%. We also act as a
Corporate Agent of Our JV Company. For further details log on to www.canarahsbclife.com
1. Canara HSBC Oriental Bank of Commerce Life Insurance Dream Smart Plan
2. Canara HSBC Oriental Bank of Commerce Life Insurance Grow Smart Plan
3. Canara HSBC Oriental Bank of Commerce Life Insurance Future Smart Plan
4. Canara HSBC Oriental Bank of Commerce Life Insurance Insure Smart Plan
5. Canara HSBC Oriental Bank of Commerce Life Shubh Labh Plan
6. Canara HSBC Oriental Bank of Commerce Life Group Secure Plan
7. Canara HSBC Oriental Bank of Commerce Life Smart Sanchay Plan
8. Canara HSBC Oriental Bank of Commerce eSmart Online Pure Term Plan

9. Canara HSBC Oriental Bank of Commerce Smart Monthly Income Plan

10. Canara HSBC Oriental Bank of Commerce Smart Stage Money Back Plan
11. Canara HSBC Oriental Bank of Commerce Smart Goals Plan
12. Canara HSBC Oriental Bank of Commerce Smart Lifelong Plan

Dream Smart Plan

Canara HSBC Oriental Bank of Commerce Life Insurance Dream Smart Plan provides
the flexibility to choose the amount of premium and life cover along with the
investment along with the Option to choose Premium Payment Term as per the
financial capabilities of the customer. This plan caters to need of long term
protection, Investment plan for wealth creation.
The key features of Canara HSBC Oriental Bank of Commerce Life Insurance Dream
Smart Plan are as mentioned below: This is a unit linked Investment cum protection
Endowment plan
Option to choose Premium Payment Term
This plan provides the flexibility to choose the amount of premium and life cover
along with the

 investment patterns as available in fund options available the product as per

investment risk appetite of the proposer. Loyalty Addition by way of free allocation
of Units payable once during the policy term
Choice of 5 investment funds
Flexibility to switch percentage of your existing fund between other funds and
adjust your investment
portfolio. Tax benefit as per section 80C and 10(10D) of Income Tax Act.
eligibility criteria
The eligibility criteria for Canara HSBC Oriental Bank of Commerce Life Insurance
Dream Smart Plan are as follows: Parameters Canara HSBC Oriental Bank of
Commerce Life Insurance Dream Smart Plan Entry Age* Min: 7 years; Max: 60 years
Maturity Age* Max: 80 years Policy Term 20 years Premium Paying Term Min: 10
years; Max: 20 years Premium Paying Mode Only Yearly (Advance Premium: Can be
collected within same financial year but can be adjusted on due date only) Premium
Limits Min Annualized Premium: ` 25,000 Decrease & Increase in the premium is not
allowed

eSmart Term Plan

This solution is for the customers if: Your family is dependent on your income or you need
relieve your family of your loan liability in case of
any unfortunate event on your life. You are looking for pure life insurance cover of Rs 25
Lacs or more and not investments or savings

 Your age is between 18 to 70 years of age (as on last birthday)

You are looking to cover yourself for the next 5/10/15/20/25/30/35/40 years (provided
maximum
maturity age is 75 years)
Can Life assured and proposer be two different individual in eSmart Term Plan?
In this plan, life assured and proposer are the same.
How much will be the annual premium?
Actual premium will depend on companys assessment of risks on your health, lifestyle,
occupation etc. The table below provides annual premium (exclusive of service tax and cesses, as
applicable) for various combinations of age and term for a non-tobacco user;Accidental Death
Benefit shall not be paid on death of the life insured occurring directly or indirectly as a result of
(any of the following): The life insured flying in any kind of aircraft, other than as a bonafide
passenger (whether fare-paying or not) on an aircraft of a licensed airline. The life insured
taking part in any hazardous sport or pastime (including but not limited to hunting,
mountaineering, racing, steeple chasing, bungee jumping, etc.). The life insured performing
service in any active military, air force, naval, paramilitary or similar organization. The life
insured taking part in any strike, industrial dispute, riot, etc. The life insured taking part in any
criminal or illegal activity. Self-inflicted injury, or suicide -whether sane or insane. The
Policyholder being under the influence or abuse of drugs, alcohol, narcotics or psychotropic

Future Smart Plan

Canara HSBC Oriental Bank of Commerce Life Insurance Future Smart Plan is a unit linked
saving cum protection Endowment plan designed for the benefit of Child. Its a comprehensive
plan, which will not only ensure protection but also used for building savings corpus for various
milestones. The benefits under the product are designed such, that in case of the unfortunate

death of the Life Assured, the immediate, intermediate and future needs of the child/beneficiary
are addressed.
Explain the key features of Future Smart Plan. Unit Linked saving-cum-protection Endowment
Plan
Limited Pay/ Regular Pay Option available
Beneficiary can include only child (naturally or legally adopted) can be beneficiary at proposal
stage. Post
death of beneficiary, another child shall be nominated as beneficiary. However, in absence of
another child, any person with insurable interest in life assured can be beneficiary. 5 Investment
Fund Options are available.
Multiple Fund Management Options (Auto Rebalancing, Safety Switch Option)
Milestone Withdrawals option available, to fulfill the need of higher education of the child
. Death Benefit: Upon death of life assured during the Policy Term, to take care of the future
needs of the
child, SA is paid immediately & the company funds all future premiums. This will also be
applicable in case of disability (TPD) of the Life Assured. Fund Value will be paid at maturity
as lump sum. Tax benefit as per section 80C and 10(10D) of Income Tax Act

Group Secure - Education Loan Plan

Group Secure Education Loan proposition is exclusively designed for the Education Loan
borrowers of Canara Bank. The unique selling propositions of this plan are as mentioned below;
Reducing cover: Sum Assured reduces as per loan amortization schedule at inception of cover

 Joint Borrower coverage: Two lives Parent and child can be covered Three lives Both
parents and child can also be covered
Sum Assured up to 120% of loan: Reduces the risk of under insurance in case of increase in
floating interest rates
Moratorium Period: Coverage will be provided during moratorium period with interest
accumulation
Scenario 1: Single borrower Age: 20 years male student Loan amount: 4 Lakh Cover Term: 10
years (Moratorium Period of 5 years and Repayment period of 5 years) Premium Calculation:
Step 1: Look up the premium table with moratorium period of 5 years (Table 1). Step 2: Select
the appropriate premium rate from the cell corresponds to age 20 years and term 10 years.
Premium rate selected is 9.81. Step 3: Calculate the premium amount as follows: Premium =
9.81*400000/1000 + 12.36% => 4,410 (Premium rounded-up to next rupee) # If above student is
female aged 20 years, then rate to be considered for calculating premium will be the rate for a 17
year male. Hence, the premium rate selected will be 9.39. Premium = 9.39*400000/1000 +
12.36% => 4,221 (Premium rounded-up to next rupee)
Scenario 2: Two borrowers Joint Basis Option (each borrower will be covered for 100% sum
assured) Age: 20 years male student and 45 years old father Loan amount: 4 Lakh Cover Term:
10 years (Moratorium Period of 3 years and Repayment period of 7 years) Premium Calculation:
Step 1: Look up the premium table with moratorium period of 3 years (Table 2). Step 2: Select
the appropriate premium rate from the cell corresponds to age 20 years and term 10 years.
Premium rate selected is 8.2. For father aged 45 years, the premium rate is 21.92 Step 3:
Consider joint borrower discount (for two borrowers 15% on younger life) while calculating
the premium.
Group Secure - Home Loan
Group Secure Home Loan proposition is exclusively designed for the Home Loan borrowers of
Canara Bank. The unique selling propositions of this plan are as mentioned below;
Reducing cover: Sum Assured reduces as per loan amortization schedule at inception of cover

 Joint Borrower coverage: A maximum of 3 Joint Borrowers may be allowed

Sum Assured up to 120% of loan: Reduces the risk of under insurance in case of increase in
floating interest rates
Moratorium Period: Coverage will be provided during moratorium period.
A maximum of 3 Joint Borrowers may be allowed. 2 options are available:
Option 1: Joint Basis: Each of the joint borrowers will be insured for 100% of the initial sum
assured. The premium rate charged for youngest life assured will get rebate as mentioned in
section #26
Option 2: Loan share percentage: The initial sum assured will be split between the joint
borrowers in the ratio of the loan as stated in the membership form.
Processing of cases at Insurers HUB as per the steps mentioned below; a. Application forms
with necessary supporting documents received at Insurers hubs through courier / hand delivery
to be date-time stamped and entered in Inward tracker. b. Hub associate to scrutiny the
membership forms, premium calculator and documents for completeness as per checklist. Hub
associate will reject if membership form is Incomplete or required documents have not been
submitted. c. Rejected membership forms to be returned/couriered to respective sales/bank
personnel. d. Scan and upload all pages of the membership forms for further processing. e.
Region wise consolidated MIS to be sent to Group Operations on daily basis for each days
logins with status (i.e. accepted/rejected).

Profile of the Bank

Widely known for customer centricity, Canara Bank was founded by Shri Ammembal Subba Rao
Pai, a great visionary and philanthropist, in July 1906, at Mangalore, then a small port town in
Karnataka. The Bank has gone through the various phases of its growth trajectory over hundred
years of its existence. Growth of Canara Bank was phenomenal, especially after nationalization

in the year 1969, attaining the status of a national level player in terms of geographical reach and
clientele segments. Eighties was characterized by business diversification for the Bank. In June
2006, the Bank completed a century of operation in the Indian banking industry. The eventful
journey of the Bank has been characterized by several memorable milestones. Today, Canara
Bank occupies a premier position in the comity of Indian banks. With an unbroken record of
profits since its inception, Canara Bank has several firsts to its credit. These include:

 Launching of Inter-City ATM Network

Obtaining ISO Certification for a Branch
Articulation of Good Banking Banks Citizen Charter
Commissioning of Exclusive Mahila Banking Branch
Launching of Exclusive Subsidiary for IT Consultancy
Issuing credit card for farmers
Providing Agricultural Consultancy Services

Over the years, the Bank has been scaling up its market position to emerge as a major 'Financial
Conglomerate' with as many as nine subsidiaries/sponsored institutions/joint ventures in India
and abroad. As at September 2012, the Bank has further expanded its domestic presence, with
3650 branches spread across all geographical segments. Keeping customer convenience at the
forefront, the Bank provides a wide array of alternative delivery channels that include 3184
ATMs, covering 1182 centres. Several IT initiatives have been undertaken during the year, which
include Funds Transfer through Interbank Mobile Payment Services (IMPS) in ATMs, ASBA
facility to net banking users, E-filing of tax returns and facility for viewing details of tax
deducted at source, Terminal at 223 branches for customers to use net banking, SMS/e-mail
alerts for all transactions done through ATM, net banking, POS, mobile banking, online
payments irrespective of amounts, online loan applications and tracking facility, generation of
automatic pass sheets through e-mail and automatic renewal of term deposits. Under
Government business, the Bank has implemented internet based application for UGC Maulana
Azad National Fellowship Scheme, Web portal for National Scheme for Girl Child Secondary
Education, Electronic Accounting Systems of e-Receipts-Customs (EASeR-C) for collection of
customs duty and e-payment of commercial taxes module for UP, Karnataka, Delhi and Tamil
Nadu.
Not just in commercial banking, the Bank has also carved a distinctive mark, in various
corporate social responsibilities, namely, serving national priorities, promoting rural
development, enhancing rural self-employment through several training institutes and
spearheading financial inclusion objective. Promoting an inclusive growth strategy, which has
been formed as the basic plank of national policy agenda today, is in fact deeply rooted in the
Bank's founding principles. "A good bank is not only the financial heart of the community, but
also one with an obligation of helping in every possible manner to improve the economic
conditions of the common people". These insightful words of our founder continue to resonate
even today in serving the society with a purpose. The growth story of Canara Bank in its first
century was due, among others, to the continued patronage of its valued customers, stakeholders,
committed staff and uncanny leadership ability demonstrated by its leaders at the helm of affairs.
We strongly believe that the next century is going to be equally rewarding and eventful not only
in service of the nation but also in helping the Bank emerge as a "Global Bank with Best

Practices". This justifiable belief is founded on strong fundamentals, customer centricity,

enlightened leadership and a family like work culture.

Vision
To emerge as a Best Practices Bank by pursuing
global benchmarks in profitability, operational
efficiency, asset quality, risk management and
expanding the global reach.
Mission
To provide quality banking services with enhanced customer orientation, higher
value creation for stakeholders and to continue as a responsive corporate social
citizen by effectively blending commercial pursuits with social banking.

Awards and Achievements during 2012-13

Canara Bank received 2nd Runner Up award for 'Best Online Bank' among Public Sector Banks
at IBA Banking Technology Awards 2011
Canara Bank received 2nd Runner Up award for 'Best Customer Relationship Initiative' among
Public Sector Banks at IBA Banking Technology Awards 2011
Canara Bank received IDRBT Best Bank Award Among Large Banks For "Use of Technology
for Financial Inclusion" from the hands of RBI Governor Dr. D Subbarao.
Service Units Package
First Bank to introduce Centralized Solution for Service Units (CSSU), developed in-house
adopting the latest technology in the I.T. Industry
Awards and Achievements during 2011-12
Under the implementation of Rajbhasha, the Bank received Indira Gandhi Rajbhasha Puraskar
Yojna-2009-10 - Encouragement Prize.
NABARDs Best Performance Award, 2010-11, for SHG Credit Linkage and Best Performing
Farmers Club Award of NABARD, 2010-11, in Karnataka.
The Bank was conferred 5 Awards by the Public Relations Council of India (PRCI), in the
following categories
Silver Award for Corporate Advertisement - Single Language
Bronze Award for Annual Report
Bronze Award for Corporate Brochure on CSR activities
Bronze Award for Corporate Single Advertisement - English
Bronze Award for Shreyas In-house Magazine - English
Received during 2011-12

Canara Bank was awarded coveted skoch award for financial inclusion on 5.01.2012 at New
Delhi. The award was handed over by Dr C Rangarajan, Chairman Prime Ministers. Economic
Advisory Council to Smt Archana Bhargava Executive Director Canara Bank in a glittering
function held at New Delhi. The other dignitaries present on the occasion were Dr D Damodaran
Former Chairman SEBI, Dr Govinda Rao, Mr Yogesh Aggarwal Chairman PFRDA. A certificate
of merit was handed over to S S Bhat General Manager Financial Inclusion Wing for Canara
Banks role in providing Access to Banking and Financial Services. Citation reads as "Canara
Bank has a hand in every arena when it comes to promoting financial inclusion through skilling
and self employment. During last one year it has shown significant improvement in its financial
inclusion efforts. " Canara Bank deems it a great honour and would redouble its efforts for the
cause of financially excluded
The Bank was conferred with National Award - 2011 for excellence in the field of Khadi and
Village Industries - Best Bank, South Zone for PMEGP.

SHARE TRANSFER SYSTEM

Interms of SEBI guidelines, the Registrar and Transfer agent of the Bank is extending the
facility of simultaneous transfer -cum dematerialisation of shares to the investors. On
transfer of shares in the name of the transferee , they are being apprised to submit letters to
their depository participants for dematerialisation of shares. On receipt of Demat request
forms, the shares are dematerialised and confirmation through electronic mode is sent. If
the demat request number is not received within a period of 30 days, the duly transfered
share certificate is despatched to the transferee.

PAN requirement for transfer of shares in Physical Form :

As per the guidelines of the Securities and Exchange Board of India (SEBI), for securities market
transactions and off-market / private transactions involving transfer of shares in physical form, it
shall be mandatory for the transferee/s to furnish copy of PAN Card to the Registrars and
Transfer Agents (RTA) for registration of such transfer of shares.
Further, it shall be mandatory to furnish a copy of PAN in the following cases : 1. Deletion of name of the deceased shareholder(s), where the shares are held in the name of two
or more shareholders.
2. Transmission of shares to the legal heir(s), where deceased shareholder was the sole holder of
shares.
3.Transposition of shares - when there is a change in the order of names in which physical shares
are held jointly in the names of two or more shareholders.
DETAILS REGARDING DEPOSITORIES:
Names of Depositories for Dematerialisation:
National Securities Depository Ltd (NSDL)
Central Depository Services (India) Ltd (CDSL)
The Bank has entered into an agreement with National Securities Depository Ltd and Central
Depository Services (India)Ltd as an issuer company for Dematerialisation of Bank shares. In
accordance with the directions of the Securities and Exchange Board of India, trading in Canara
Bank Shares by all categories of Investors will only be permitted in dematerialised form.

priority Sector Lending in last 4 years

Growth in Priority Sector Lending over last 3 years

Segments

Outstandings

Growth

March'2008

March2011

QTM

Priority

43,203

70,757

27,554

63.78

Agriculture

17,996

29,656

11,660

64.79

Direct Agri

12,897

22,669

9,772

75.77

Education

1,737

3,503

1,766

101.67

Micro Credit

173

339

166

95.95

Weaker Sections

7,528

17,823

10,295

136.76

SC/STs

2,055

5,087

3,032

147.54

Minority

4,551

11,718

7,167

157.48

Agri Disbursement

11,443
22,374
10,931
INTRODUCTION OF INSURACNE IN INDIA

95.53

The insurance industry of India consists of 53 insurance companies of which 24 are in life
insurance business and 29 are non-life insurers. Among the life insurers, Life Insurance
Corporation (LIC) is the sole public sector company. Apart from that, among the non-life

insurers there are six public sector insurers. In addition to these, there is sole national re-insurer,
namely, General Insurance Corporation of India (GIC Re). Other stakeholders in Indian
Insurance market include agents (individual and corporate), brokers, surveyors and third party
administrators servicing health insurance claims.
Out of 29 non-life insurance companies, five private sector insurers are registered to underwrite
policies exclusively in health, personal accident and travel insurance segments. They are Star
Health and Allied Insurance Company Ltd, Apollo Munich Health Insurance Company Ltd, Max
Bupa Health Insurance Company Ltd, Religare Health Insurance Company Ltd and Cigna TTK
Health Insurance Company Ltd. There are two more specialised insurers belonging to public
sector, namely, Export Credit Guarantee Corporation of India for Credit Insurance and
Agriculture Insurance Company Ltd for crop insurance.

Market Size
India's life insurance sector is the biggest in the world with about 360 million policies which are
expected to increase at a Compound Annual Growth Rate (CAGR) of 12-15 per cent over the
next five years. The insurance industry plans to hike penetration levels to five per cent by 2020.
The countrys insurance market is expected to quadruple in size over the next 10 years from its
current size of US$ 60 billion. During this period, the life insurance market is slated to cross US$
160 billion.
The general insurance business in India is currently at Rs 78,000 crore (US$ 11.7 billion)
premium per annum industry and is growing at a healthy rate of 17 per cent.
The Indian insurance market is a huge business opportunity waiting to be harnessed. India
currently accounts for less than 1.5 per cent of the worlds total insurance premiums and about 2
per cent of the worlds life insurance premiums despite being the second most populous nation.
The country is the fifteenth largest insurance market in the world in terms of premium volume,
and has the potential to grow exponentially in the coming years.
Investments
The following are some of the major investments and developments in the Indian insurance
sector.

Foreign Direct Investment in the insurance sector stood at US$ 341 million in MarchSeptember, 2015, showing a growth of 152 per cent compared to the same period last
year.

Insurance firm AIA Group Ltd has decided to increase its stake in Tata AIA Life
Insurance Co Ltd, a joint venture owned by Tata Sons Ltd and AIA Group from 26 per
cent to 49 per cent.

Canada-based Sun Life Financial Inc plans to increase its stake from 26 per cent to 49 per
cent in Birla Sun Life Insurance Co Ltd, a joint venture with Aditya Birla Nuvo Ltd,
through buying of shares worth Rs 1,664 crore (US$ 249 million).

Nippon Life Insurance, Japan's second largest life insurance company, has signed
definitive agreements to invest Rs 2,265 crore (US$ 348 million) in order to increase its
stake in Reliance Life Insurance from 26 per cent to 49 per cent.

The Central Government is planning to launch an all-in-one insurance scheme for farmers
called the Unified Package Insurance Scheme (Bhartiya Krishi Bima Yojana). The
proposed scheme will have various features like crop insurance, health cover, personal
accident insurance, live stock insurance, insurance cover for agriculture implements like
tractors and pump sets, student safety insurance and life insurance.

Government launched a special enrolment drive, Suraksha Bandhan Drive comprising of

sale of gift cheques and launch of deposit schemes in bank branches, to facilitate
enrolment under Pradhan Mantri Suraksha Bima Yojana (PMSBY) and Pradhan Mantri
Jeevan Jyoti Bima Yojana (PMJJBY).

To increase the subscriber base and ensure wider reach, the Central Government has
eased several norms for its flagship insurance scheme Atal Pension Yojana (APY),in
terms of more options for periodical contributions, voluntary and premature exits and
simplified penalty for payment delays.

Bennett Coleman and Co. Ltd (BCCL), the media conglomerate with multiple
publications in several languages across India, is set to buy Religare Enterprises Ltds
entire 44 per cent stake in life insurance joint venture Aegon Religare Life Insurance Co.
Ltd. The foreign partner Aegon is set to increase its stake in the joint venture from 26 per

cent to 49 per cent, following governments reform measure allowing the increase in
stake holding by foreign companies in the insurance sector.

GIC Re and 11 other non-life insurers have jointly formed the India Nuclear Insurance
Pool with a capacity of Rs 1,500 crore (US$ 226 million) and will provide the risk
transfer mechanism to the operators and suppliers under the CLND Act.

State Bank of India has announced that BNP Paribas Cardif is keen to increase its stake in
SBI Life Insurance from 26 per cent to 36 per cent. Once the foreign joint venture partner
increases its stake to 36 per cent, SBIs stake in SBI Life will get diluted to 64 per cent.

Bangladesh has granted permission to the Life Insurance Corporation of India (LIC) to
run its business, making it the second foreign insurance company to operate in the
country.

Reliance Life Insurance Company (RLIC) today said it will add 20,000 agents across
India in this financial year as part of its expansion plans. It will increase their agency
force by 20 per cent which now stands at 100,000.

Government Initiatives
The Government of India has taken a number of initiatives to boost the insurance industry. Some
of them are as follows:

The Insurance Regulatory and Development Authority (IRDA) of India has formed two
committees to explore and suggest ways to promote e-commerce in the sector in order to
increase insurance penetration and bring financial inclusion.

IRDA has formulated a draft regulation, IRDAI (Obligations of Insures to Rural and
Social Sectors) Regulations, 2015, in pursuance of the amendments brought about under
section 32 B of the Insurance Laws (Amendment) Act, 2015. These regulations impose
obligations on insurers towards providing insurance cover to the rural and economically
weaker sections of the population.

The Government of India has launched two insurance schemes as announced in Union
Budget 2015-16. The first is Pradhan Mantri Suraksha Bima Yojana (PMSBY), which is a
Personal Accident Insurance Scheme. The second is Pradhan Mantri Jeevan Jyoti Bima
Yojana (PMJJBY), which is the governments Life Insurance Scheme. Both the schemes
offer basic insurance at minimal rates and can be easily availed of through various
government agencies and private sector outlets.

The Uttar Pradesh government has launched a first of its kind banking and insurance
services helpline for farmers where individuals can lodge their complaints on a toll free
number.

The select committee of the Rajya Sabha gave its approval to increase stake of foreign
investors to 49 per cent equity investment in insurance companies.

Government of India has launched an insurance pool to the tune of Rs 1,500 crore (US$
226 million) which is mandatory under the Civil Liability for Nuclear Damage Act
(CLND) in a bid to offset financial burden of foreign nuclear suppliers.

Road Ahead
India's insurable population is anticipated to touch 750 million in 2020, with life expectancy
reaching 74 years. Furthermore, life insurance is projected to comprise 35 per cent of total
savings by the end of this decade, as against 26 per cent in 2009-10.
The future looks promising for the life insurance industry with several changes in regulatory
framework which will lead to further change in the way the industry conducts its business and
engages with its customers.
Demographic factors such as growing middle class, young insurable population and growing
awareness of the need for protection and retirement planning will support the growth of Indian
life insurance.

Insurance education

s for insurers. AIGIEA, AIIEA, AIIEF, AILICEF, AILIEA, FLICOA, GIEAIA, GIEU and
NFIFWI cater to the employees of the insurers. In addition, there are a dozen Ombudsman
offices to address client grievances.
Insurance education[edit]
A number of institutions provide specialist education for the insurance industry, these include;

National Insurance Academy, Pune, specialized in teaching, conducting research and

providing consulting services in the insurance sector. NIA offers a two-year PGDM program
in insurance. NIA was founded as Ministry of Finance initiative with capital support from the
then public insurance companies, both Life (LIC) and Non-Life (GIC, National, Oriental,
United & New India).

Institute of Insurance and Risk Management, Hyderabad, was established by the regulator
IRDA. The institute offers Postgraduate diploma in Life, General Insurance, Risk
Management and Actuarial Sciences. The institute is a global learning and research center in
insurance, risk management, actuarial sciences. They provide consulting services for the
financial industry.

Amity School of Insurance Banking and Actuarial science (ASIBAS) of Amity

University, located in Noida and established in 2000, offers MBA programs in Insurance,
Insurance and Banking, and M.Sc./B.Sc. actuarial sciences to a Post Graduate Diploma in
Actuarial Sciences.

Pondicherry University is offering mba in insurance management. Pondicherry university

is the only central university which offers insurance management in India.

Birla Institute of Management Technology is a graduate business school located in

Greater Noida, established in 1988, offers a PGDM-IBM program in insurance business
management. This program was launched in 2000 by the Centre for Insurance and Risk
Management and is accredited by the Insurance Regulatory and Development Authority. Life
Office Management Association (LOMA), USA is BIMTECH's educational partner and

BIMTECH is an approved centre for LOMA examination. The Chartered Insurance

Institute (CII), UK has accorded recognition (by way of credits) to the BIMTECH PGDMIBM program. Their two-year PGDM program in insurance business has been recognized as
equivalent to the Associate level of the Insurance Institute of India, Mumbai.

National Law University, Jodhpur offers a two-year MBA and one year MS (for
engineering graduates) program in insurance.

To become an insurance advisor in India, Insurance Act, 1938 mandates that the individual has to
be "a Major with sound mind". After the advent of IRDA as insurance regulator, it has framed
various regulations, viz. training hours, examination and fees which are amended from time to
time. Since November 2011 IRDA has introduced a syllabus (IC-33) conceived and developed
by CII, London. The syllabus mainly aims to make an Insurance Agent a financial professional.
Recent Initiatives: On 09 th May 2015 NDA Government led by Shri.Narendra Modi initiated
three social Insurance Security schemes named ATAL PENSION YOJANA,PRADHAN
MANTHRI JEEVAN JYOTHI YOJANA, PRADHAN MANTHRI SURAKSHA YOJANA on a
massive scale such as 8 crore people joined in these schems in just 03 weeks and still the number
growing.
The insurance sector went through a full circle of phases from being unregulated to completely
regulated and then currently being partly deregulated. It is governed by a number of acts.
The Insurance Act of 1938[4] was the first legislation governing all forms of insurance to provide
strict state control over insurance business.Life insurance in India was completely nationalized
on 19 January 1956, through the Life Insurance Corporation Act. All 245 insurance companies
operating then in the country were merged into one entity, the Life Insurance Corporation of
India.
The General Insurance Business Act of 1972 was enacted to nationalize about 100 general
insurance companies then and subsequently merging them into four companies. All the
companies were amalgamated into National Insurance, New India Assurance, Oriental Insurance
and United India Insurance, which were headquartered in each of the four metropolitan
cities.Until 1999, there were no private insurance companies in India. The government then
introduced the Insurance Regulatory and Development Authority Act in 1999, thereby de-

regulating the insurance sector and allowing private companies. Furthermore, foreign investment
was also allowed and capped at 26% holding in the Indian insurance companies.
In 2006, the Actuaries Act was passed by parliament to give the profession statutory status on par
with Chartered Accountants, Notaries, Cost & Works Accountants, Advocates, Architects and
Company Secretaries.A minimum capital of US$80 million(Rs.400 Crore) is required by
legislation to set up an insurance business.

Authorities
The primary regulator for insurance in India is the Insurance Regulatory and Development
Authority of India (IRDAI) which was established in 1999 under the government legislation
called the Insurance Regulatory and Development Authority Act, 1999.[5][6]
The industry recognises examinations conducted by IAI (for 280 actuaries), III (for 2.2 million
individual agents, 680 corporate agents, 380 brokers and 29 third-party administrators) and
IIISLA (for 8,200 surveyors and loss assessors). There are 9 licensed Web aggregators. TAC is
the sole data repository for the non-life industry. IBAI gives voice to brokers while GI Council
and LI Council are platforms for insurers. AIGIEA, AIIEA, AIIEF, AILICEF, AILIEA, FLICOA,
GIEAIA, GIEU and NFIFWI cater to the employees of the insurers. In addition, there are a
dozen Ombudsman offices to address client grievances.

IMPORTANCE OF INSURANCE IN INDIA

Insurance is the only sector which garners long term savings
Insurers are increasingly introducing innovative products to meet the specific needs of the
prospective policyholders. An evolving insurance sector is of vital importance for economic
growth. While encouraging savings habit it also provides a safety net to both enterprises and
Individuals.
Insurance Companies receive, without much default, a steady cash stream of premium or
contributions to pension plans. Various actuary studies and models enable them to predict,
relatively accurately, their expected cash outflows.
Liabilities of Insurance companies being long-term or contingent in nature, liquidity is excellent
and their investments are also long-term in nature. Since they offer more than the return on
savings in the shape of life-cover to the investors, the rate of return guaranteed in their insurance
policies is relatively low. Consequently, the need to seek high rates of returns on their
investments is also low. The risk-return trade off is heavily tilted in favour of risk.
As a combined result of all this, investments of insurance companies have been largely in bonds
floated by GOI, PSUs, state governments, local bodies, corporate bodies and mortgages of long
term nature.

Generates Long term funds for infrastructure and strong positive correlation between
development of capital markets and insurance/pension sector
For GDP to grow at 8 to 10%, qualitative improvement in infrastructure is essential. Estimates of
funds required for development of infrastructure vary widely. An investment of 6,19,600 crore is
anticipated in the next 5 years. Tenure of funding required for infrastructure normally ranges
from 10 to 20 years. The insurance industry also provides crucial financial intermediary services,
transferring funds from the insured to capital investment, critical for continued economic
expansion and growth, simultaneously generating long-term funds for infrastructure
development.
In fact infrastructure investments are ideal for asset-liability matching for life insurance
companies given their long term liability profile. According to preliminary estimates published
by the Reserve Bank of India, contribution of insurance funds to financial savings was 14.2 per
cent in 2005-06, viz., 2.4 per cent of the GDP at current market prices. Development of the
insurance sector is thus necessary to support continued economic transformation. Social security
and pension reforms too benefit from a mature insurance industry.
The insurance sector in India, which was opened up to private participation in the year 1999, has
completed over seven years in a liberalized environment. With an average annual growth of 37
per cent in the first year premium in the life segment and 15.72 per cent growth in the nonlife
segment, together with the largest number of life insurance policies in force, the potential of the
Indian insurance industry is still large.
Life insurance penetration in India was less than 1 per cent till 1990-91. During the 1990s, it was
between 1 and 2 per cent and from 2001 it was over 2 per cent. In 2005 it had increased to 2.53
per cent.

Spread of financial services in rural areas and amongst socially less privileged
IRDA Regulations provide certain minimum business to be done
- in rural areas
- in the socially weaker sections
Life Insurance offices are spread over nearly 1400 centres. Presence of representative in every
tehsil deeper penetration in rural areas.
Insurance agents numbering over 6.24 lakhs in rural areas.
Policies sold in rural areas (2004-05) - No. of policies - 55 lakhs, Sum assured 46,000 crores.
Social security - No. of lives covered 2003-04 17.4 lakhs 2004-05 42.1 lakhs

Insurance has evolved as a process of safeguarding the interest of people from loss and
uncertainty. It may be described as a social device to reduce or eliminate risk of loss to life and
property.
Insurance contributes a lot to the general economic growth of the society by provides stability to
the functioning of process. The insurance industries develop financial institutions and reduce
uncertainties by improving financial resources.
1. Provide safety and security:
Insurance provide financial support and reduce uncertainties in business and human life. It
provides safety and security against particular event. There is always a fear of sudden loss.
Insurance provides a cover against any sudden loss. For example, in case of life insurance
financial assistance is provided to the family of the insured on his death. In case of other
insurance security is provided against the loss due to fire, marine, accidents etc.

2. Generates financial resources:

Insurance generate funds by collecting premium. These funds are invested in government
securities and stock. These funds are gainfully employed in industrial development of a country
for generating more funds and utilised for the economic development of the country.
Employment opportunities are increased by big investments leading to capital formation.
3. Life insurance encourages savings:
Insurance does not only protect against risks and uncertainties, but also provides an investment
channel too. Life insurance enables systematic savings due to payment of regular premium. Life
insurance provides a mode of investment. It develops a habit of saving money by paying
premium. The insured get the lump sum amount at the maturity of the contract. Thus life
insurance encourages savings.
4. Promotes economic growth:
Insurance generates significant impact on the economy by mobilizing domestic savings.
Insurance turn accumulated capital into productive investments. Insurance enables to mitigate
loss, financial stability and promotes trade and commerce activities those results into economic
growth and development. Thus, insurance plays a crucial role in sustainable growth of an
economy.
5. Medical support:
A medical insurance considered essential in managing risk in health. Anyone can be a victim of
critical illness unexpectedly. And rising medical expense is of great concern. Medical Insurance
is one of the insurance policies that cater for different type of health risks. The insured gets a
medical support in case of medical insurance policy.

6. Spreading of risk:
Insurance facilitates spreading of risk from the insured to the insurer. The basic principle of
insurance is to spread risk among a large number of people. A large number of persons get
insurance policies and pay premium to the insurer. Whenever a loss occurs, it is compensated out
of funds of the insurer.
7. Source of collecting funds:
Large funds are collected by the way of premium. These funds are utilised in the industrial
development of a country, which accelerates the economic growth. Employment opportunities
are increased by such big investments. Thus, insurance has become an important source of
capital formation.
The economic development of India was dominated by socialist influenced policies, stateowner
sector, and red tape and extensive regulations, collectively known as License Raj. The Indian
economic development got a boost through its Economic reforms in 1991 and again through its
renewal in the 2000. Insurance serves a number of valuable economic functions that are largely
distinct from other types of financial intermediaries. Insurance contribution materially to
economic growth by improving the investment climate and promoting a more efficient mix of
activities then would be undertaken, in the absence of risk management instrument. Insurance
sector in India is one of the most booming sectors of the economy and is growing at the rate of
15-20 percent per annum. In India, insurance is a flourishing industry, with several national and
international players competing with each others and growing at rapid rates. Indian insurance
companies offer a comprehensive range of insurance plans, a range that is growing as the
economy matures and the wealth of the middle classes increases. Due to the growing demand for
insurance, more and more companies are now emerging in the Indian insurance sector. The
economy of India is the eleventh largest in the world by nominal GDP and the forth largest by
Purchasing Power Parity (PPP). KEYWORDS: License Raj, Economic reform, financial
intermediaries, Investment climate, Risk management instrument, Comprehensive range,
Nominal GDP, PP.

For economic development investments are necessary. Investments are made out of savings. Life
Insurance Company is a major instrument for the mobilization of savings of people, particularly
from the middle and lower group. All good life insurance companies have huge funds
accumulated through the payments of small amounts of premium of individuals. These funds are
invested in ways that contribute substantially for the economic development of the countries in
which they do business The system of insurance provides numerous direct and indirect benefits
to the individuals and his family as well as to industry and commerce and to the community and
the nation as a whole. 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.
SCOPE OF THE INSURANCE IN INDIA
Insurance is a nice-looking option for investment but most people are not aware of its advantages
as an investment option. Remember that foremost and first, insurance is about risk cover and
protection. By buying life insurance, you buy peace of mind. Insurance also serves as an
excellent tax saving mechanism. The Government of India has provided tax incentives to life
insurance products in order to facilitate the flow of funds into productive assets
.
The insurance sector has opened up for private insurance companies with the enactment of IRDA
Act, 1999. A large number of companies are competing under both general and life Insurance.
The FDI cap/equity in this sector is 26% and the proposals have to be cleared by Insurance
Regulatory and Development Authority (IRDA) established to protect the interest of holder of
Insurance policy and act as a regulator and facilitator in the industry.
Some of the major players in this sector are LIC, Max New York Life Insurance, Bajaj Allianz,
ICICI Prudential, HDFC Standard Life, Metlife Insurance, Birla Sun Life Insurance, etc
various types of instruments and policies are coming up in the market to attract more clients.
Most of the population of India is not insured, hence there is a lot of scope in this sector and a
number of companies are planning to enter the sector.

Life insurance is a financial cover for a contingency linked with human life, like death, disability,
accident, retirement etc. It provides a definite amount of money in case the life insured dies
during the term of the policy or becomes disabled on account of an accident.138
When a human life is lost or a person is disabled permanently or temporarily there is loss of
income to the household. So everyone who has a family to support and is an income earner needs
life insurance. The idea underlying the concept of life insurance is that when your family
members or dependants depend on you financially: you need to secure their future. Having your
life insured is akin to promising your family that they wont ever face a financial problem,
whether you are there or not because your responsibilities do not end with you. It means buying
life insurance is like buying peace of mind for lifetime
Thus, the significance of having a life insurance lies in the peace of mind that it brings along.
Apart from this it promotes savings, assist the family in odd situations, gives tax benefits and
facilitates easy loans thereby securing the future of insured. But in order to have 138
http://www.pnbmetlife.com/downloads/policyholderhandbook.pdf. Accessed on 14/10/13 at 8:30
P.M. 58 a financially secured future, you have to pay the insurer a life insurance premium,
which is either a regular annual payment or onetime payment as the case may be.
There are several types of insurance plans for specific needs. One of the categories is traditional
insurance plans such as term insurance, endowment and many back up plans. Such plans offer
multiple benefits in terms of life cover and returns, providing security and safety to insured. The
other category is market linked plans, also known as ULIPS. These plans provide both
protection and savings combined with flexibility to the covered person. As these products are
linked to capital markets, they may have the potential to deliver better returns than tradition plans
Life Insurance is the most popular form of Insurance as it transfers the financial risks associated
with your death to an insurance company. General Insurance like fire, marine, property, vehicle
etc. transfer the risk associated with your property to an insurance company so that you dont
have to pay out of pocket for any property damage covered under the terms of the insurance
policy. The central point of difference between the two is that life insurance is a non-indemnity
policy and the event insured is certain.

At present, life insurance enjoys maximum scope because the life is the most important property
of the society or an individual. Each and every person requires the insurance. This insurance
provides protection to the family at the premature death or gives adequate amount at the old age
when earning capacities are reduced. The insurance is not only a protection but is a sort of
investment as a certain sum is returnable to the insured at the death or at the expiry of a period.

To understand life insurance we have to first understand the scheme of insurance. Insurance is a
co-operative device to spread the loss caused by a particular risk over a number of persons who
are exposed to it and who agree to insure themselves against the risk.4 Under the plan of
insurance, a large number of people associate themselves to share different types of risks
attached to human life and property. The aim of all types of insurance is to make provision
against such risks. In other words, it is a provision which a prudent man makes against inevitable
contingencies, loss or misfortune.5 In this way, life insurance is a social device to share the risk
of loss of life.
The whole idea of insurance has developed on the fact that human life is full of uncertainties and
the life of a person itself is very uncertain. Eventualities do cast their shadows, and therefore one
has to equip oneself with possible means so as to face the unforeseen. It is well said that Life is
full of risks. For property, there are fire risks, for shipment of goods, there are perils of sea, for
human life, there is the risk of death or disability and so on and so forth.
Life insurance is a husbands privilege, a wifes right and a childs claim.2 The scheme of life
insurance provides an assurance that if such an event happens, the person or his dependents
would get financial assistance to bear the loss
It has been aptly said that life insurance offers the safest and surest means of establishing a
socialistic pattern, perhaps not without a lot of sweat but certainly without blood and tears. It
stabilizes the economic security of the policy holder and at the same time contributes its might to

promotion of industry by providing the necessary capital and supports various social security
measures.3