Board of Directors (1)

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INTRODUCTION OF INSURANCE

Introduction of Insurance:Its a promise of compensation for specific potential future losses in exchange for

a periodic payment. Insurance is designed to protect the financial well-being of an

individual, company or other entity in the case of unexpected loss. Some forms of

insurance are required by law, while others are optional. Agreeing to the terms of

an insurance policy creates a contract between the insured and the insurer. In

exchange for payments from the insured (called premiums), the insurer agrees to

pay the policy holder a sum of money upon the occurrence of a specific event. In

most cases, the policy holder pays part of the loss (called the deductible), and the

insurer pays the rest.

Examples include car insurance, health insurance, disability insurance, life

insurance, and business insurance.

DEFINITION OF INSURANCE:

1. financial protection against loss or harm:

an arrangement by which a company gives customers financial protection against

loss or harm such as theft or illness in return for payment premium

2. money paid by insurance company:

the sum of money that an insurance company pays or agrees to pay if a specific

undesirable event occurs

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3. premium:

The payment made to obtain insurance

My car insurance has gone up again.

4. insurance business:

the commercial business of providing insurance

5. means of protection:

an act, measure, or provision that gives protection against an undesirable event or

risk

provided a map as insurance against getting lost

OTHER DEFINITIONS OF INSURANCE:

A contract in which one party agrees to compensate another party for anylosses or damages caused by risks identified in the contract in exchange forthe payment of a lump sum or periodic amounts of money to the first party.www.dreamsintorealty.biz/index.cfm/fuseaction/terms.list/letter/I/contentid/

BD03506D-9E28-4661-95C36DCFB79ED020

Insurance, in law and economics, is a form of risk management primarilyused to hedge against the risk of a contingent loss. Insurance is defined asthe equitable transfer of the risk of a potential loss, from one entity to

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another, in exchange for a premium. ...en.wikipedia.org/wiki/Insurance

Promise of reimbursement in the case of loss; paid to people or companiesso concerned about hazards that they have made prepayments to a...

Policy: written contract or certificate of insurance; "you shouldhave read the small print on your policy."

Indemnity: protection against future loss.wordnet.princeton.edu/perl/webwn

Protection against loss. The insured sacrifices a small certain loss (thepremium) for protection against a large uncertain loss (e.g. an accident fire

or death). The insurance company assumes the risk by employing the law oflarge numbers and the principle of risk spreading.www.bizadvisor.org/

A system to protect persons against the risks of financial loss by transferringthe risks to a large group who share the financial losseswww.millerandzois.com/Maryland-Insurance-Glossary.html

A side agreement when someone is all-in for a player in a pot to put upmoney that guarantees a payoff of a set amount in case the opponent winsthe pot.www.homepokertourney.com/poker-glossary.htm

A contract that provides compensation for specific losses in exchange for aperiodic payment. An individual contract is known as an insurance policy,and the periodic payment is known as an insurance premium.www.warrenbrothers.ca/RealEstateTerminology.php

TYPES OF INSURANCE:

1. Life insurance:

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It provides finances to the family of the policyholder.

2. Non-life insurance:

A contract in which one party agrees to pay for

another party's financial loss resulting from a specified event (for example, a

collision, theft, or storm damage).It covers all risk related to materialistic things

used in our life.

BENEFITS OF INSURANCE:

The existence of a sound insurance market is an

essential component of any successful economy and the proof of this can be seen

in the many parts of the world.

The main benefits of insurance are:

It provides financial protection in any mishap.

It provides peace of mind.

It enables loss control.

It is source of investments of funds.

It is a source of invisible earnings.

INSURANCE COMPANIES:

Insurance companies are financial intermediaries

that, for a price, will make a payment if an insured event occurs.

TYPES OF INSURANCE COMPANIES:

There are two types of insurance companies:

1) LIFE INSURANCE COMPANIES:

The principal event that the Life Insurance Company insures against is death.

Upon the death of a policyholder a life company agrees to make either a lump-sum

payment or a series of payments to the beneficiary of the policy. Life Insurance

protection is not, the only financial is product sold by these companies; a major

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portion of the business of life companies is the area of providing retirement

benefits.

2) PROPERTY AND CASUALTY INSURANCE COMPANIES:

Property and

casualty insurance companies insure against wide variety of occurrences. The

under noted perils can be covered under the property casualty insurance:

1. Fire2. Atmospheric disturbances3. Earthquake4. Riot strike damages5. Explosion

6. Other damages7. Theft8.

HISTORY OF INSURANCE:

You may argue that history since long ago. Some

historians take the route of insurance back to roman times. However, insurance in

its modern from came into existence about half of this millennium around coastal

towns of Venice and Geneva. Trades in those cities go to far areas to do trade in.

Sea ships did the shipment of goods. In the seas and oceans there remain a constantdanger of unfriendly weather and looters. Thus during the voyage there is a risks

for goods as well as for life.

The traders in those cities devised the methods of insurance to help their families

in case of any misfortune happens. As time passed this method was started being

used for all types of accidents.

HISTORY OF INSURANCE COMPANIES IN PAKISTAN:

At the time ofindependence in 1947, Pakistan had 77 Insurance Companies out of which 7 were

local and 70 were foreign resident companies. There was neither reinsurance nor a

public sector at that time. This situation remains till 1952. In 1952, the

Government of Pakistan established Pakistan Insurance Corporation as a

reinsurance company and asked all the insurance companies to cede 10% of all

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their business to Pakistan Insurance Corporation. For these reasons, in addition to

other factor, 40 of these foreign companies wound up their business and left

Pakistan. In 1993, there were 57 insurance companies in the private sector and

three in the public sector.

Up till now there are 10 foreign resident insurance companies, 47 local (national)

insurance companies and 3 public sector insurance concerns.

Insurance industry in Pakistan is dominated by a small number of players. Then

top three insurance companies of the country control more 50% of the total

Premium paid. The biggest market in Pakistan is of accident insurance which

accounts for 37% of the total insurance business. The second most popular

category is fire insurance which claims another 37%. The remaining 26%

business is accounted for by marine business. Adamjee Insurance is the outrightwinner in each of the three categories. The second largest insurance company in

each of the sectors is EFU.

Review of life insurance with Non-life insurance

The insurance industry plays an important role in the financial system by providing

indemnification of financial risk in the economy and also serves as an institutional

investor for both capital and money market instruments.Like many other developing countries, the size of Pakistans insurance industry is

relatively small in proportion to its GDP. Table 1 shows the penetration of

insurance as a ratio of gross premiums to GDP. The total size of insurance

business in various countries depends on the nature of insurance markets,

regulatory environment, accounting procedures and financial development.

Moreover, the demand for insurance depends on real disposable income of the

prospective policyholder, the individuals preference about the need for financial

security, economic environment, interest rates, and inflation and insurance

premium rates. Furthermore, cultural and religious aspects of a country may also

affect the development of insurance business. The insurance markets in developing

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countries are characterized as suppliers of insurance services as supply usually

exceeds demand in these economies. In case of Pakistan where 67.5 percent of the

population lives in rural areas and given the low per capita income, the insurance

industry has not been able to create sizeable demand for its services.

Insurance Penetration in CY2010

Gross premiums as percentage of GDP at market prices

Structure of Insurance Industry:

The insurance market in Pakistan is broadly categorized in two main classes, life

insurance and non-life insurance. Moreover, the country has one reinsurance

company that carries out reinsurance activities and further spreads the risks. The

insurance market is highly concentrated in urban areas and many insurance

companies are subsidiaries of large industrial groups that were created mainly to

reduce the outflow of funds in the form of premiums, to manage the risks of these

industries and to generate profits out of it. At present there are 54 insurance

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Countries Total Non-life life

USA 8.8 4.3 4.5

Brazil 2.1 1.8 0.4UK 15.8 3.1 12.7

China 1.8 0.7 1.1

India 2.3 0.6 1.8

Malaysia 3.7 1.6 2.1

Indonesia 1.2 0.6 0.5

Pakistan* 0.5 0.3 0.2


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companies out of which 49 companies offer non-life insurance and 5 offer life

insurance services Table.2. The non-life insurance industry also includes six

companies that also provide health insurance coverage.

Assets Structure of Insurance Companies

Total Assets

(Rs. In Million)

2005 132,017.1

2006 149,448.6

2007 169,821.4

2008 193,117.6

2009 217,685.4

Structure of Life Insurance fund

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Life Fund

(Rs. In Million)

2005 122,775.2

2006 137,958.8

2007 156,737.3

2008 177,459.1

2009 199,445.3

Composition of Investments and Investment

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Investment Income

(Net of InvestmentExpenses)

(Rs. In Million)

2005 13,105.5

2006 14,923.8

2007 17,505.2

2008 19,134.6

200921,544.7


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Total Premium Income:

(Rs. In Million)

2005 13,820.1

2006 15,991.6

2007 18,716.7

2008 22,695.3

2009 28,366.9


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Total Income

(Rs. In Million)

2005 26,925.6

2006 30,915.4

2007 36,221.9

2008 41,829.9

2009 49,911.6


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Investment Portfolio

(Rs. In Million)

2005 124,983.7

2006 142,158.8

2007 161,965.8

2008 182,874.2

2009205,804.2

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Premium Income - Group Life

(Rs. In Million)

2005 2,560.1

2006 2,879.6

2007 2,809.6

2008 3,543.2

2009 3,513.7


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Board of directors

Mr. Kamal Afsar Chairman

Mr. Bashir Ahmed Director

Mr. Sharbat A. Changazi Director

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Mrs. Spenta Kandawalla Director

Mr. Ch. Javaid Hussain Director

Mr. Syed Hur Riahi Gardezi Director

Additional secretary Director

Ministry of Commerce, Govt. of Pakistan

Secretary Board

Mr.Shahid Aziz Khan

Companys management

Executive directors:

Mr. Javaid khan [email protected]

Mr. Ijaz Ahmed [email protected]

Mr. Syed Arshad Ali [email protected]

Ms. Nargis Ghaloo [email protected]

Divisional Heads:

Mr. Ansar Hussain (GM) [email protected]

Investment

Mr.Sohail Hashmi (GM) [email protected]

Personnel & General Service

Mr.Sher Ali Khan (GM) [email protected]

Internal Audit & EvaluationMr. Akber Ali Hussain (DGM) [email protected] & Analysis

Mr. Nasir Javed Khan (DGM) [email protected] Estate

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Mr. Khizar Hayat Aamir (DGM) [email protected] & Accounts

Mr. Saleem Khaliq (DGM) [email protected]

Mr. Manzoor Ahmed (DGM) [email protected]

Mr. Shahrukh Sabzwari (DGM) [email protected]

Mr. Nadeem Bessey (DGM) [email protected] & Pension

Mr. Latif A. Chaudhry (DGM) [email protected]

Law

Mr. M. Saeed Khan (DGM) [email protected] Holder Services

Regional chiefs

Mr. Muhammad Aslam Sabir [email protected] Manager

Central Region Lahore

Raja Zafar Ali Shan [email protected] General Manager

Northern Region Islamabad

Ch. Madad Ali Anjum [email protected]

Deputy General ManagerMultan Region Multan

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Mr. M. Ahmed Amjad (Acting) [email protected] General ManagerSouthern Region Karachi

Branches network

1. Central Region2. Multan Region3. Southern Region4. Northern Region

Central Region:

Gujranwala zone

Lahore zone

Faisalabad zone

Sialkot zone

Sargodha zone

Multan Region:

Rahim yar khan zone

Sahiwal zone

Multan zone

Bahawalpur zone

Dera Gazi khan zone

Southern Region:

Karachi zone

Hyderabad zone

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Mirpur khas zone

Sukkhar zone

Karachi zone (central)

Karachi zone (south)

Quetta zone

Larkana zone

Northern Region:

Islamabad zone

Rawalpindi zone

Peshawar zone

Swat zone

MARKETING:

Around the world, people and organizations are faced with the task of selling their

goods and services to new and existing customers. The whole process of

persuading others that they need and want what you can sell them has developed

into a business discipline known as MARKETING.

Bu interacting with the people or organizations that they serve, mergers can

understand more easily what their customers want, and such understanding

provides a strong platform for selling them goods and services. Marketing goes

beyond mere interaction with customers, or beyond simply understanding them. it

uses the knowledge gained from that interaction and understanding to provide

solutions to customers' requirements and, thus, generate business.

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DEFINITION OF MARKETING:

A social and managerial process whereby individuals and groups obtainwhat they need and want through creating exchanging value with others.

The achievement of corporate goals through meeting and exceedingcustomer needs better than the competition.

Marketing is the management process responsible for identifying,anticipating and satisfying customers' requirements.

DEVELOPING THE MARKETING MIX:

Once the company has decided on its overall marketing strategy, it is ready to

begin planning the details of the marketing mix, one of the major concepts in

modern marketing.

DEFINITIONS OF MARKETING MIX:

The set of controllable tactical marketing tools-product, price, place andpromotion- that the firm blends to produce the response it wants in the target

market.EXPLANATION:

The marketing mix consists of everything the firm can do to influence the demand

for its products. The many possibilities can be collected into four groups of

variables known as the "four Ps": product, price, place and promotion.

PRODUCT:

It means the goods and services combination the company offers to the target

market. For marketing purposes, PRODUCT is a generic term that includes

services. In broad definition, as organization's products are the physical or actual

items or services it is offering to the market. Products and services are often

modified, redesigned, repackaged or discontinued during the life of organization.

For an organization in the service sector, the product might be an insurance policy,

or the efficient and accurate drafting of a legal document.

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In STATE LIFE INSURANCE CORPORATION OF PAKISTAN, its products

which are available for its customers are in three categories i.e;

Individual life plans, group life plans & policies for gulf, are given below;

1. INDIVIDUAL LIFE PLANS:

Under individual life plans, there are 14 policies that are:

A. Whole Life AssuranceB. Endowment AssuranceC. Sadabahar PlanD. Anticipated Endowment AssuranceE. Shad Abad AssuranceF. Jeevan Sathi Assurance

G. Child Education &Marriage AssuranceH. Child Protection AssuranceI. Sunehri PolicyJ. Shehnai PolicyK. Optional Maturity EndowmentL. Nigehban PlanM. Muhafaz plus Assurance

N. Supplementary Covers

2. GROUP LIFE & PENSION PLAN:

Under group life and pension plan, there are 7 plans. These are:

1. Term Insurance Scheme2. Provident Fund Insurance Scheme3. House Building & Parquets Insurance Scheme4. Pay Continuation Scheme5. Group Endowment Insurance Scheme

6. Group Pension Scheme7. Private Education

3. INSURANCE PLANS FOR GULF COUNTRIES:

Nine plans are available for Gulf that are:

a) Whole Life Assurance

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b) Endowment Assurancec) Anticipated Endowment Assuranced) Shad Abad Assurancee) Jeevan Sathi Assurance

f) Child Education & Marriage Assuranceg) Child Protection Assurance Wealth Builder Planh) Supplementary Covers

PRICE:

Price is the amount of money customers have to pay to obtain the products. It

comprises the recommended or actual price of the product or service in the market.

STATE LIFE INSURANCE CORPORATION OF PAKISTAN comprises

different price of products from its customers.

Premium or price can be charged in the following ways;

a. Yearlyb. Half Yearlyc. Quarterlyd. Monthly

Rate of interests and premium rate is calculated

Rate Of premium depends upon the age of a person. If the age ishigher, then more rates will be charge and if age is low then low ratewill be charge. Rate also depends upon the maturity period

Check age and term, then find factor and multiply with sum assured.In this way, premium is calculated.

If life proposed has hazardous working, then this section charges O/EOccupational Extra.

The premium, which is charged by the underwriter, is from 4-7 Rs.and it is the normal rate. E.g. 5Rs. * Sum Assured = rider premium.

Different tables are used for calculating the rate of premium.

PLACE:

It includes the company activities that make the product available to target

customers. Place is sometimes regarded as a misleading name for this part of

marketing mix. It means the distribution channels for the products & services and

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describes the locations and ways in which the buyer experiences it. For a hard

product, 'place' may be a retail outlet or a mail- order catalogue, while for an

accountancy practice, 'place' may be its own premises, its website or its client's

office.

STATE LIFE INSURANCE CORPORATION has;

Four Regional Offices,

Twenty-Six Zonal Offices,

A few Sub-Zonal Offices,

111 Sector Offices, and

A network of 461 Area Offices across the country for Individual LifeInsurance.

PROMOTION:

Promotion means activities that communicate the merits of the products and

persuade target customers to buy it. Promotion is the collective word covering all

communications with existing and potential customers. It includes advertising,

personal selling, public relations, sponsorship, trade exhibitions, direct mail and

website advertising. The image the company creates through its promotional

activities can also influence a wider audience, for instance shareholders, journalistsand, of course, its own staff.

STATE LIFE INSURANCE COMPANY OF PAKISTAN promotes its sales by;

Change advertising

Change personnel selling activities

Review and improve communications with customers

Change the way service is delivered

Change service levels by segment

Management Hierarchy of New Business Department.

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Assistant

general

manager


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UNDERWRTTING

Policy ISSUUE

New Business:It is one of the most effective means of generating personal savings with coverage

of life risk. The main function is risk management and to collect the premium at

early stages.

The main function of this department is as follow:

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Manager

DeputyManager

Deputy

Manager

Assistant

Manager

Assistant

Manager

Staff Staff


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Receiving the proposal form from policy holder by market.

An underwriting of these proposal forms and evaluate that which proposal

form is acceptable and which are not, if acceptable on what premium.

Issuance policy documents an evidence of contract.

There are different sub- sections which perform different functions related to new

business as mentioned below:

Proposal section

Under writing department

In this department following are included:

1. Panel of doctors

2. Duplication section

3. Premium calculation section

Policy issue section

We discuss in detail about sections. We will see different plans which are

available for policy holder. Some of them are given below.

Procedure of new business:

Marketing force is expected to place business with complete disclosure of facts.

In marketing force all people are related to field work and they all are on contract

bases. These people go to clients by themselves and they convince the people to

purchase policy. Then sales rap fills proposal form for that customer. Then

proposal form comes in new business for the allotment of proposal number where

proposal number for a particular customer is allotted. Then process of underwriting

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is done. If the customer fulfills the requirements of underwriting then further

process continues otherwise request is rejected and underwriter suggests some

other alternative. If underwriter accepts the proposal then calculation for premium

is done. After the calculations of premium the policy number is allotted and policy

bond is issued to the customer.

Proposal section:

Now policy comes on counter of proposal section. At counter data is feed in

computer for record to avoid any fraud or misrepresentation. At counter serial

numbers is issued and also do entry in proposal register and then number is

allotted to life proposed.If any case is N.T.U. (NOT TAKEN UP) due to any incomplete requirement in

proposal form then he has to complete it within one week. If he will not come

back within 3 months then his case will be cancelled and if he now wants to

apply again he has to submit a new case.

After completing all requirements life proposed has to submit a fee at cash

counter in case of Non-medical case. In case of medical no fee will be

submitted.

Under writing department:

When an insurance company receives any application then the company will

evaluate the application to determine the degree of risk represented by the

proposed insured. After assessing the risk company can establish the

premium amount to charge the applicant. This assessment of risk is done by

under writers.

What is under writing?

Is also called selection of risk, is the

process of assessing and classifying the degree of risk that proposed insured

represents under writing occurs in all types of insurance, but the factors

that influence the process of risk selection change with types of insurance

involved.

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Underwriters will evaluate the case at different bases but main are four.

1. Financial bases

2. Medical bases

3. Legal bases

4. Occupational bases

Financial bases:

The life insurance office has to strive to see that the insurance protection

sought by an applicant has a realistic relationship to his financial needs and

status. The possibility of over insurance beyond the financial standing ofapplicant and his legitimate need, have to be checked. The column related to

occupation ownership of land and sales representatives confidential report

helps in arriving at an estimable figure of income of applicant.

Medical bases:

The medical angle or aspect include the build of the applicant, that is height

weight etc., his past medical history, family history, history of accident andany present ailments/impairments.

Legal bases:

An appraisal of this aspect of risk would enable the life insurance office to

determine whether or not the contract to be entered into would have legal basis

and effects. For example, a contract which would have no legal value is issuing

an insurance policy to minor where the proposal form and declaration relating

to health has not been countersigned by an adult as propose.

Occupational bases:

The rate of insurance premium for life and supplementary contracts differ from

occupation to occupation depending upon the degree of hazard or extra hazard

involved. There are certain occupations on the bases of which applicants would

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be denied certain supplementary contracts. The story does not end here because

there are certain occupations such as stunt performance where office would

decline to issue even simple life insurance policy much less to allow

supp.accidental contracts.

Now we will see in detail that what aspects under writer will consider in

the proposal form and what is there importance while evaluating the

cases.

First of all we divide the policy holder in 3 broader aspects.

Male

Female

Juvenile(children)

And then it is classified in more specified way.

Medical

Non-medical

Financial

Medical Underwriting:

In medical underwriting proposer should be taken for

medical examination only to the authorized examiner in the proposers own

locality and it should be taken out only at doctors clinic. Medical examiner is

instructed to forward the report when completed, direct to concerned underwriting

department of corporation.

There are certain tests which are necessary for medical examination. Which are

following?

a) MR..Medical report by an authorized examiner with appropriate limit.

b) PUR..Pathological Urinalysis report.

c) ECG..Electro cardiogram at rest.

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AIB cover should not be more than three times of proponents annual income and

should be according to sum assured.

It is preferred to have documentary evidence of financial worth in all cases

exceeding five lacks ,included sum assured+ FIB+AIB+RPR+TSAR of previous

policies. However, if the concerned sales manager completes the agents report on

proposal form, then the documentary evidence of income may not be insisted

unless,

1) The total sum assured is up to 10lacs and the sales managers confidential

report on prescribed Performa duly verified by the area manager is

submitted.

2) Where TSAR exceeds 10 lacks but below 25 lacks, the area manager should

give separate confidential report on prescribed Performa duly verified by the

sector head.

3) Where TSAR is between 25 lacks and 50 laces. The sector head should give

confidential report duly verified by the zonal head on prescribed Performa;

4) Where TSAR is over fifty laces, all other due requirements including

following are to be furnished;

a. Independent confidential report, duly verified by the zonal head.

b. Swiss Re financial questionnaire form

c. Direct evidence of income or financial worth justifying the cover

applied for.

Insurance of Female lives:

Insurance will be available to female lives as per following categorization:

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Category A:

Those with independent and self-earned income from employment in government

departments, schools, colleges, universities, multi-national companies, banks, and

well established private firms or by practicing as qualifier lawyer, qualified

medical practitioner, qualified accountant or owner of business should be treated at

par with males. Qualifications must normally be substantiated with proof of

vocation.

Category B:

Those with independent earned income from business as sleeping partners, from

land, investments, shares, or services in private un-regulated, on-recognized small

organizations. No restriction to plan of insurance, supplementary contracts and

sum assured will apply. However, qualifications must normally to be substantiated

with proof of source of income. Health requirements to be treated at par with

males up to 2 lacks sum at risk. Medical report tests shall apply beyond 2 lacks

sum at risk.

Category C:

Housewives and others with no independent earned income, ladies having

unsteady source of income from vocation like tailoring, handicrafts, milk selling,

animals and birds breeding, tutoring , etc,. Fall under this category. Full medical

report, sales manager report shall be required and sum at risk will be restricted to

200,000/= without any rider except in case of housewives in table 19 where

following provisions shall apply.

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a) House-wives at least metric: Treat at par with males without any rider. Full

medical report by a lady doctor and other tests as applicable and proof of

education are required.

b) Under-Metric (including illiterates) house-wives: policies without any rider

on female lives may be entertained provided medical on female life is

conducted by a lady doctor and sales managers satisfactory report is

submitted. In case of illiterate proponent, sector heads separate satisfactory

moral hazard exclusion report will be required.

Category D:

Females who dont fall under any category from A to C are not insurable and their

proposals should be declined.

Calculation section:

In calculation section calculation premium is done. Premium can be paid in the

following ways;Yearly

Half Yearly

Quarterly

Monthly

Rate of interests and premium rate is calculated.

Rate Of premium depends upon the age of a person. If the age is higher,

then more rates will be charge and if age is low then low rate will be charge.

Rate also depends upon the maturity period

Different tables are used for calculating the rate of premium.

Most commonly used tables are;

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Table 03

Table 05

Table 07

Table 12

Table 18

Table 19

Policy issue department:

After completing the process of under writing policy

will send in policy issue department. Here data is entered in computer which is

called Punching. After punching different riders and preambles are attached with

contract. In case of surrender schedule is also attached with it. In policy issue

department all data is also recorded in policy issue register which has following

format:

Format of policy register:

Then two types of stamps are also embossed on it.

Revenue stamp

Insurance stamp

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After embossing stamps policy is completed and one copy of this policy bond is

send to policy holder and one is send to PHS department for providing future

services to policy holder

The medical form contains the same particulars as the non-medical form, the only

difference in medical form is:

MEDICAL EXAMINARS CONFIDENTIAL REPORT TO THE

CORPORATION

Its particulars are:

How long have you known the insured?

National Identity Card Co.

Mark of Identification

Measurements

Height -------------Meter ------------- cm

Weight ------------ kg

Chest Full Inspiration & Expiration

Abdomen at umbilicus

35

Date

Policy No. Proposal

No.

Sum

assured

Policy Fee Premiu

m

Mode Agent

Balance

Table

& term

Specie the

date when

the policy

No. is

allotted

It will

remain the

same

throughout

the

maturity

period

It is the

identifica

tion of

previous

record

Total

amount

of the

policy

It will be

added in

the

premium

The

amount

paid by

the

client

It shoes

whether

the

payment

is yearly,

half

yearly,

quarterly

or

monthly

It shoes the

commission

of field

worker

It sho

the

term

period


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Pulse At rest

Rate per minute

Irregularities (No. & Type)

Blood Pressure

Systolic

Diastolic 5th phase (one cessation of sound)

There are three headings to answer this:

Lying down

Sitting Down

Standing

And last head under D is:

Instrument Used

Any Heart Murmur

Is there any sign of past or present disease of the following type?

1. Respiratory.2. Digestive.

3. Genital-Urinary.

4. Cardio Vascular.

5. Glandular.

6. Nervous System.

7. Brain.

8. Bones & Joints.

1. How old does he/she look?

2. Is his/her appearance healthy?

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3. Any impairments of sight or hearing?

4. Any disease of gums or teeth?

5. Which teeth are missing?

6. Are dentures worn?

7. Any deformity, lameness or other physical defect?

8. Any hernia (Reducible or Irreducible).

Urine Analysis

Sp. Gravity ------------ Sugar --------------Albumen

Was urine passed in your clinic?

Female Section

Any sign of past or present disease of the breast?

Any sign of pregnancy?

Have past confinements resulted in complications?

Any sign of past or present disease of female reproductive organs etc.

Heart SectionTo be completed in cases

1. Exercise Test. (Ten ascend on an ordinary chair)

a) Pulse.

b) Any Dyspnea of heart after exercise?

c) If there is a murmur, how did exercise affect if?

o No effect.

o Accentuated.

o Reduced or disappeared.

2. Other Particulars of murmur if any

a) Type, Systolic, Diastolic, Presystolic at, Apex, Base.

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b) Transmission, Axillia, Scapula, None.

c) Is it heard when breath is held?

o While Standing?

o While recumbent?

3. Other questions on heart

a) Any Hypertrophy?

b) Is heart Normal?

c) Apex located in ----------- interspaced ----------- cm.

To left of medisternal (midbody) line

Examiners remarks amplifying answer to any previous question or on any

other adverse feature.

Examiners Signature & Seal with date, time, Address & Authorized

Limit Rs.

Non-Medical proposal form:

Around 4 lakh Sum Assured of age 40 is grouped in non-medical category.

Two sheets are attached with these forms

1. Policy brief sheet (for office use)

2. Underwriting sheet

In non-medical proposal form, proposed is required to give correct and truthful

answers of the question asked n the proposal form. It is also stated in the form that

any concealment of fact or untrue statement shall render the contract void able and

no benefit under the contract shall be paid.

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It includes general information:

Name

N.I.C no.

Father s name

Birth place

Date of birth

Sex

Age proof

Nationality

Religion

Address

Occupation detail

Monthly income

Detail regarding other policies (if any)

Plan

Table

Term

Sum assured

Details of riders (if any)

Detail of usual medical attendant

Nominee

It also includes Life proposals personal statement of health:

In this statement, medical examiner is required to ask all the question and record

the life proposed answers in own handwriting. These include the information

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Family history

Height

Weight

Chest insp in cm

Chest exp in cm

Change of weight in past 12 months

Average daily consumption of any kind of drugs

Physical impairments (if any) etc

It also includes field agent confidential report.

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Management hierarchy of PHS department

ALTERATION O.R COU

41

Assistant General

Manager

Deputy Manager Deputy Manager

Assistant

manager

Assistant

manager

Staff Staff

Manager


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SURRENDER DEPT. Loan DEPT

42

Assistant General

Manager

Manager

Deputy Manager Deputy manager

Assistant managerAssistant

manager

StaffStaff


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Death claims sec. Maturity claim sec

43

Assistant

GeneralManager

Manager

Deputy

Manager

Deputy

Manager

Assistant

Manager

Assistant

Manager

Executive

officerStaff


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Policy Holder Services department:

The main function of PHS department is to provide services to policy holder. TheDepartment is divided into following cells to provide better facilities to the

Policyholder.

The PHS contains the following sections,

1) Revival (Renewal) and Alteration Section.

2) Surrender & Policy loan Section.

3) Claim section.

a) Death claim.

b) AIB Claim.

c) Survival Benefit

d) Maturity claims

A. Revival & Alteration section:

The following functions are performed in this section:

Change the amount of policy.

Policy is stopped, premium is late and Policy Holder wants to renew his

policy.

Alteration:

The following functions are performed in alteration section.

1. Transfer of policy

2. Change of nominee

3. Issuance of duplicate policy

4. Removal of occupation extra

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5. Removal of medical extra

6. Increase in sum assured

7. Increase in term of policy

8. Decrease in term

9. Change from without profit to with profit

10.Change of mode of payment

11.Paid up on request

12.Difference in age

13.Detachment of supplementary contract

14.Attachment of supplementary contract15.Special revival or redating

16.Agency transfer

17.Assignment and reassignment

18.Change of plan

Late fee: if policy holder fails to submit the premium then 3 months grace

period is given to him. If the policyholder deposits the premium within the 90

days then its late fee will not be charged. After 90 days the PH will pay the

premium plus amount of late fee.

Single premium*10%*3/12

This formula is for grace period to give him waiver. From 10,000-15,000 late

fee is favorable for policy holder because then 50% waiver is given to them and

50% is chargeable. If late fee is 1000 then 50% waiver is given.

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If late fee is 2000 then 1000 will be waived and fee is above 4000 then 25%

will be deducted from that amount.

If policy is going to be mature within 3 months then no exemption will be

given.

In case of survival benefit of S.A will be given and its duration will be

divided by 3.

Shifting of policy from one city to another city.

1. Transfer of policy :

i. For this purpose policyholder requests that he wants to transfer his policyout of city.

ii. The policy would be shifted if policy has completed its two years

iii. Policy having no loan and if maturity is at least two years left.

iv. Policy cant be shifted if any premium is short.

v. NOC (no objection certificate) is required.

vi. Then print out of the status of the policy in which all details are present

and copy is send to zone.

vii. Further loan and surrender department will check it for loan position.Then advice is send to zone to change the policy. In last original file is

send to that zone for record keeping.

viii. In the last verification letter is send from central zone to other zone, andone copy is send to management and one is to policy holder.

2. Change of nominee:

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If nominees death occurs then policy holder will send request to PHS department

for change of nominee. Then PHS department send Re-nomination form which

he has to fill and further documents are required.

1. NIC

2. NIC copy of nominee

3. Re-nominee from

After all documents received then in register they will change new

nominee.

Guardian ship: in case of minor if guardian is nominee then for changing

nominee same is the procedure.3. Issuance of duplicate policy document:

When policy is prepared then one copy is also provided to PHS

department for duplication.

If policy holder need duplicate then he has to send request. If sum

assured is 50,000 then there is no need of newspaper aid.

If policy is above 50,000 then that aid is must.20-100 Rs. Affidavit is

required for mentioning that his policy is lost.

4. Removal of occupation extra:

This is depending upon policy holders business and age. If occupation is

hazardous then extra premium is charged. If afterwards he change his

occupation so he has to send request to PHS department and on his

request his extra premium is made at surrender value.

5. Removal of medical extra:

For removal of medical extra, in case of big amount all tests are required.

If any fault then M.E. is charged and if he becomes healthy ten he can

change his new premium. He has to pay only alteration f will charge.

6. Increase in sum assured:

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If he has taken the policy of 100,000 S.A and he wants to increase his

S.A so he has to send request to department. PHS department will call

file from record room and check the status. If any premium is due so

policy holder has to pay it. If any medical is required then that is also

demanded and premium +late fee also charged.

7. Decrease in sum assured:

If policy holder wants to decrease his sum assured then the same will be

procedure but increase sum assured amount will not be refunded back to

him.

8. Increase in term:First policy was 10 year term. Now policy holder wants to increase its

term for 20 year, for this purpose he has to give application. After

calculation his term will increased but due to small term more premium

was charged that more premium will not refunded back although now

premium is less.

If within 5 years he has done alteration in 2nd or 3rd year then first 3 year

premium will refund back to him but not of 1st year.

9. Decrease in term:

For decrease in term same is the procedure but extra remaining premium

will be taken from him.

10. Change from without profit to with profit:

If policy holder taken policy with profit and now he wants to convert it in

without profit then simple endorsement will be done. The only difference

will come in bonuses. (05) (555).

11. Change of mode of payment:

For changing mode of payment of policy different calculations will be

done on yearly, quarterly, or half yearly bases.

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Yearly------ calculation will be done and add 100.

Half yearly------- .52 factors will be multiply*installments of premium

and 100 will be added.

Quarterly---------.27 factors will be calculated and 100 will added in it.

12. Change of A.N.F. option:

There are two options in policies which are issued.

Automatic paid-up

Automatic loan premium

If within one year he will not pay premium then after one month grace

period policy will lapse and this option is in both policies.

Automatic paid-up:

If he has submit 3 or 4 premiums and now he has not submit up- coming

installment then benefit will be stop and it is lapsed. Now if he wants to

continue his policy then he has to submit late fee and other

requirments.25% deduction will be given to him in late fee.

Automatic premium loan:

In this option if he has submitted 5-6 installments and then he has not

submitted any premium. Then automatically from his sum assured

premium will be paid till his sum assured will become less then his

installment. Afterward if he wants to continue then late fee will be

charged to him.25% exemption will not be given to him.

13. Difference in age:

If any difference in age then he has to give an application and on his

request new age calculation will be done and if his age is 40 years then

they can demand for medical or affidavit.

If age is more than 60 then extra premium will also charged.

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15. Do you now have or ever had Heart Disease, Diabetes, High Blood

Pressure, Stroke, T.B., Jaundice, Cancer, Nervous or Psychological Disorder

or other Liver, stomach and Renal Diseases? If so, specify with dates.

16. In your Family, is there a history of insanity suicide or any other disease,

listed in Question 15 above or does any of them have an infectious or

hereditary disease? If so specify.

17. Are you in good health? If not, describe the disease.

18. If Defense or Ex-Defense personnel, PIA Flight Crew or Plant Protection

Pilot, state latest medical category.

19. Have you ever been discharged on medical grounds from service /employment? If so, give detail.

20. Are you presently engaged or intend to engage in any hazardous occupation

or pastime? If so, give detail.

21. Give details of each and every other policy or proposal including that

declined/pending/postponed/cancelled/not taken up/lapsed/paid-

up/surrender/accepted with extra premium/restrictions or modifications.

22.If female, state

i. Date of last delivery.

ii. Date of any miscarriages or caesareans (give reasons).

iii. Are you Pregnant?

iv. Any history of female disease?

v. LMP date.

Surrender Value Section

This deals the cases in which policyholder wants to finish policy before

maturity.

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Process of Surrendering the Policy:

1) First of all, the policyholder gives an application to surrender his policy.

2) Surrender section evaluates his policy.

3) If his policy fulfills the requirements then Calculations of actual amount and

bonuses are done.

4) Then policy file is sent to Audit department for checking.

5) Then Policy file is sent to B&A for further checking.6) Then payment voucher is made by the PHS and again transferred to Audit and

B&A. Now in B&A cheque is prepared and given to customer.

Requirement to surrender the policy:

a) The policyholder should pay At least 2 premiums.

b) Policyholder should take the following documents

Copy of NIC

Payment receipt

Original policy bond

B. Policy Loan Section:

It is a section of Policy Holder Services department. The purpose of this

section is to arrange the loans for the policyholders against their policy

bond.

Process of Getting Loan:

First of all loan form is issued to Policy Holder at Rs. 12.

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2) The policyholder fills the form.

2) Loan section evaluates his policy.

3) If his policy fulfills the requirements then Calculations of loan is done against

his policy. The amount of loan is 80% of his paid premium. But if he has renewed

his policy then the loan will be 70% of his paid premium policy. In some special

cases, if policyholders requests then 90% loan is granted to PH against his paid

premium.

4) Then policy file is sent to Audit department for checking.

5) Then Policy file is sent to B&A for further checking.

6) Then payment voucher is made by the PHS and again transferred to Audit andB&A. Now in B&A cheque is prepared and given to customer.

Requirement for Granting the Loan:

There should be at least 3 premiums paid by the policyholder.

In loan form, there must be signature of policyholder.

The policyholder must have its own bank account.

In JEVAN SATHI Plan there must be a joint account for both of

husband and wife.

Attestation of at least sales officer is required.

Attested copy of NIC is also required.

The premium payment mode must be yearly.

An interest rate of 13% would be charged against the loan.

Options of getting loan:

There are two options for policyholder to getting loan. These are Option A and

Option B.

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OPTION A:

If two installments are missing, then loan is not granted to

policyholder.

OPTION B:

If two installments are missing, then these installments are deducted

from the loan amount and remaining amount is granted to the policyholder.

D.CLAIM SECTION:

Maturity claims:Maturity claims are payable at maturity date, mentioned in

policy document OR it could be calculated by adding term of policy in D.O.C. of

the policy.

STEPS:

Month wise master list is present that which policies are maturing. There

is record room in which all policy record is present. Two month advance policies

are call. On the recite of original file from record room match with file from

master list. Check the status of the policy. Is the policy is lapsed, auto surrender or

is enforced?

If policy is lapsed we issue a Regret letter.

If policy is Auto surrender computerized calculation and manually checked.

If policy is enforced then they create a JOURNAL VOUCHER which is

computerized and approved by competent authority. One copy is send to B&A

department and one is filed. And further process will remain continue at individual

level.

Survival benefit:

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A.I.B. Claims:

In case of accident, policyholder gives application to the claim

section. AIB section issue AIB form to the policyholder. Policyholder also

intimate to S.R which timely indicates that he has got the claim intimation. If he

(policyholder) is not able to timely intimate then within 90 days he has to inform

the department that he got an accident. After 90 days it will call late intimation.

After receiving the intimation from policyholder department will check policy that

has he A.I.B. claim and was the policy enforce or not? Then investigate by the

department about the reasoning of accident.

This checking is to about the nature of the injury or disability that is this cover in

policy or not? Disability depends on nature of accident. In case of temporary

disability indemnity will be paid for 52 weeks and he has still not recovered, then

in that case ANNUITY will start.10%p.a. of A.I.B. sum assured will be paid and

premium will waived for the period of this annuity.

Accidental Death Benefit (ADB):

This supplementary cover will provide for payment of an additional amount equal

to sum insured in the event of death by an accident as defined in the contract. On

payment of a modest premium, a handsome accidental coverage is obtained

through this supplementary cover. ADB is highly recommended for individuals

who travel daily through road transport.

The cover is available to lives between 5 and 55 years of ages. Maximum term of

this supplementary benefit is not allowed to exceed the premium paying term of

the basic policy, or 60 years of age of the life proposed whichever is earlier.

Death claims:

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Claim which arises with the death of the insured policyholder is called death

claims. As the death happened of policyholder intimation from his nominee is send

to the department. They will check the policy status and call file from record room

and endorse DEATH CLAIM STEMP on file. Then they allot a claim number and

issue claim form with CONDOLENCE LATTER. Then they calculate the death

claims liability which is prepared in computer. On recite of claim papers attach

with original file and send to the Z.C.C. (ZONAL CLAIM COMMITTEE) for

approval of claim.

In death claim the point to be noted is that if death occurred within 3 years from

D.O.C. or from D.O.R. the case is send to the investigation department for

verification whether deceased was in good health at the time of policy revival.

File is send to the audit department after auditing Discharge voucher is issued.

Then precede for the death claim payments by paying Payment voucher. Then

file is send to the B&A department and finally check is send to the bank of

claimant.

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BUDGET AND ACCUNTS DEPARTMENT:

This Department maintains the records of all the cash transactions. It prepares

payroll for the regular employees. It also takes care of the fringe benefits such as

medical facilities provided to the office staff.

Commission that is paid to the SR, SO, SM are also calculated and paid through

this department. Payment on behalf of the other zones and preparation of bank

reconciliation statements are also function of this department.

The Principal Office sends Annual Budget to the department and the department isresponsible for proper utilization of cash disbursements. The department also send

budget forecast for new budget proposal.

SECTIONS IN B & A:

The Budget and Account Department is divided into sections. Each section has

some responsibility. The sections of B&A Department are:

Cash Counter

Banking cell & General ledger

I. Collection

II. Disbursement

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Commission

Pay roll

Cash counter:

For the collection of cash, B&A department has a cash counter. When a

policyholder comes to pay his premium, they check whether the policyholder is

able to pay his premium or not by checking his policy status. If the policyholder

comes within 90 days after the due date, then he is considered as able to pay his

policy otherwise he is not able. If the policyholder comes after 90 days, then they

send him to the PHS Department. PHS Department charges the late fee. There are

different modes of cash collection. These modes are:

By Cash

By Check

By Money Order

By Draft

By Pay Order

Types of accounts:

There are different accounts for cash collection, renewal of policy, for daily

collection. There are different codes are used in computer program for these

adjustments.

675------- for cheque submission

571------- for suspense account

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Consolidated cheques:

Any policy holder who have more than one policies so he will make one cheque

and mentioned all his policy numbers for whom he wants to submit premium and

submit it at cash counter.

Codes:

Codes which are used in Reconciliation statements are as follow:

571-------------suspense a/c

696-------------late fee

99999--------consolidated cheques

Reconciliation statement should reconcile with general ledger. Local cheques,

outstation cheques, dishonor cheques, cash bank debit charges these all entries

64

By bank advice send to Insurance co. Cr.

Credit advice.

To-------------A/C------------ Date---------

We have credited youre a/c under cheque no.

-------------- of---------------

Under silo shad no--------

Realized in OBC/Lading.

Rupee--------------------------------

Office-------- office-----------


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should balance with each other. The method which is used to check the balance of

ledger is as follow:

Cash-cheques-dishonor cheques+ opening balance =general ledger

Cash dishonor=amount

Amount collection of J.L+ collection in ledger=amount

Amount opening balance=ledger collection

Disbursement:

Cheques which are issued and those are cashed so there adjustment is called

disbursement. Checks remain valid for 6 months.

For cash disbursement, first the voucher is prepared, signed and prepared by

authorized officer, for the person to whom the payment is made. This voucher is

audited in case of having the amount in excess of Rs. 10000. These vouchers are

punched (feeding) in the computer. Voucher listings are prepared. Errors and

omission are checked reconciled. After these the cash book is maintained, cheques

are prepared, and these cheques are sent to concerned party. Bank Statement is

prepared daily by the authorized banker regarding total collection and payments of

cheques i.e. realization of cheques. These banks Statements are punched into the

computer. The data in floppy regarding Cash Book and Bank Statements is sent to

Principal Office (PO) Karachi. Different ledgers are prepared in P.O. and these are

sent to different zones for further reconciliation. Errors and omissions are

corrected.

Date Wise Total Lists of Cheques Enchased.

List of Cheques Issued (Cash Book).

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List of Unmatched Cheques of Bank & Cash Book Files.

Along with the above ment ioned l is ts , a Daily Cheques

Realization Report is prepared.

Cheques which are not cashed they are kept in OUTSTANDING

account . These cheques are kept in reserve for 2.1/2 year. I f

policy holder come back to take its cheque then check is written

off in disbursement account otherwise written off in the same

head.

Di fferen t account has d iff eren t codes under which these

disbursement entries are recorded. These are as given below

754-----------081AB Sales Representatives

755-----------081AC Sales Officers

Sales Managers

Area Managers

560-----------080AC Pay Roll

Employee Expenses

Exception list:

If any e rror occur s in i ssued checks then they are kep t in

exception list.

Reserve codes which are figured in credit portion

532ZA---------560A/C

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532AB---------754A/C

532AA---------755A/C

Bank charges:

There are different bank charges which are also maintained in

ledger. These are stop payment, check photocopied.

Budget:

Budget is prepared annually. Proposed Budget is sent to Principal Office

consolidated all budget of all zone. The funds of different heads of proposed

budget are transferred to Zonal Office wholly or partially. It is assumed that each

year First Year Premium (FYP) is increased by 25%. From principle office

approved and allocated budget is sent to the zones keeping in view their previous

expenses and there estimation of budget.

Following are the main types of budget:

Basic Salary Budget

Over Time Budget

Prize budget

Repairing Budget

Traveling Expense Budget

Pension Budget

Income Budget

Claim Budget

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Commission Budget

Admin. Expenses Budget

Entertainment Budget

News Paper Budget

Administration & Claim Budget is estimated by considering previous year actual

expenses. Zonal & Regional Offices have separate budgets. If the funds

transferred from PO Karachi are less than the proposed budget, additional funds

are acquired from PO whenever required. The Budget Register is maintained in

the department for employee/ party/ expense is debited and cash is credited. No

additional expense is made when the budget is in short.

Commission section:

The commission of agents is calculated by the Commission Section.

First Premium Receipt (FPR) i s prepared by the New Business

Depar tment and i s sent to Commission Section to calcula te the

commission of agents. This receipt is feed into the computer. And a

computer program separates the commission of each member i.e. Sales

Manager, Sales Officer, sales Representative. Person comes with cash

that is going to purchasing policy and all his personal details to cover

insurable risk. They take four prints, which are:

1. Policy Sheet

2. SR Payment List

3. SO Payment List

4. SM Payment List

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The columns of policy sheet are:

Date

Policy No.

Table & Term

Mode

Premium

Code of Area Manager

Code of Sales Manager

Code of Sales Officer

Code of Sales Representative

The columns of SR Payment List, SO Payment List and SM Payment

List are all same and they are given below:

SR/SO/SM Code

Name

Premium

Commission Rate

Total commission

Tax (10% on commission)

Net Commission

The commission rates vary with the amount of FYP and term of the

policy. The commission rates are given in the table below,

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Further the tax is deducted @ 10% of commission from the

commission of agents. In commission section different types of loans

are given on fulfillment of certain requirements and targets to agents

i.e. Emergency Advance, Eid Advance, Conveyance Loan, and House

Building Loan.

Commission rates for S.R.

20above years------13.5 %( exclude 10% tax)

1519 year ------26.78 %( ----- ------ )

1014 years -------23.63%

2.5% extra commission is paid to S.R. i f he completes his quota

quarterly

Commission rate for S.O.:

20above term-----13.50%

70

Agents category COMMISSION RATES

First Year Second Year Third Year &

onwards

SR 35% 10% 5%

SO 15% 2% 1%

SM 8% 1% %


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1519 ---------------11.48%

1014---------------10.13%

Commission rate for S.M.:

20above term -------7.20%

1519-------------------6.12%

1014------------------5.40%

2% extra commission will be paid to S.M. if he completes i ts quota

quarterly and annually.

Procedure of commission payments:

Sales representative ledger for the month is formed in which al l

details are present that how much amount they have to pay or recover

from agents.

Sales representatives are registered with SECP for validity to act as

insurance agents. So they dont do any misconduct. If any intimation

letter is sent to S.A. or S.M of recovery from them then voucher is

formed in which payment which has to recover from him, his name,

and his code number, cheque number, are mentioned.

Commission manager check this voucher and in charge of commission

approved it which is ready to pay. Then it is sent to the check section

and they issue cheque number of whichever amount it is.

If more then 10-15000 amount cheque then it is approved by zonal

accountant. For additional precautionary measures more then 10,000-

15,000 amount cheque a letter is sent to bank to prevent to issue non-

authorized person. If person come with cheque to cash it they check

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the letter record which is sent by state life. Cheque is signed by two

authorized officers to keep counter check. When voucher is formed it

is also entered in computer . Oracle and ERD systems are used in

computer customized input screen which automatically demand for

input.

For the month work their MONTHLY FIELD WORK STATEMENT is

formed with detail of their work performance. Bonus is paid to agents

on yearly bases.

PRIZE AND AWARD:

The prize & awards are given to field force who are achieved the highest FYP at

any time announced by SLIC.

EID ADVANCE:

Previous year total earning of SR/SO/SM becomes entitlement.

EMERGENCY ADVANCE:

It is given to SO, SM on the basis of previous year earning on the renewal

premium. For SR previous 2 years earnings become entitlement of loan.

Payment and Pay Roll Section:

In B&A Department Salary of the employees is calculated. Different

allowances are offered to the employees. Loan facilities are available

for the employees. Tax is deducted from salary. A provision of

recoveries of the loan is made.

There are different modes of payment of salaries to employees.

In cash

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In form of cheque

There are different cost centers and budget is allocated according

to their cost center.

Staff payments:

Salary to staff members is in form of advance for current month.1/3 r d

of salary is net payable to staff person.

If staff member wants to take 2 month advance salary then that is paid

in installments.

Leave Encashment:

There is also facility to staff members to take leave encashment. There

are 18 casual leaves are allowed to staff members. In which 36 are un-

earned. In this 24 days payment is paid to employee and remaining 12

days are treated as leave.

The calculation of leave encashment is done by following formula:

Total payable/30* 24days (according to days)

Followings are addition to the salary of the employees:

Basic Pay.

Special/ Technical Pay.

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10% tax is also deducted if his basic salary is more then 3,000.

Car loan is deducted for 12 months.

Loans:

Followings are the different types of loans, which can be availed by

employees of SLIC managed by salary section:

Two Month Advance Salary.

Loan-I against PF (3 Basic Pay).pf will be cut from staff loan.

More than 50 years if Pf will apply then it are non-refundable

and no interest rate will charge on pf loan.

Loan-2 against Pf (12 Basic Pay or 90% of PF employee own

contribution, whichever is less).

Car Loan @ Rs. 55000 and Rs. 150000 for s taff & off icer

respectively and 1/3 will be paid by employee and 3/4v paid by

state life. Car policy loan is paid in 60 installments for 5 years at

8% rate of interest.

House Building Loan

FOR STAFF

FOR OFFICERS

1-8 grade payment is according to their salary.

45%gross salary*basic SALARY=AMOUNT OF LOAN

1-3 grade 150 at 8%interest rate.

4-8 grade 20 at 8% interest rate.

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8-omward grade from 30 basic salaries payment is made.

All loan payments are made from shareholders fund. Installment of

loan i s according to services.min.2 years and maximum 16 year

services are required. In which employee will get payment of loan in 3

installments and when deduction of installment starts after one year

then 8% interest is charged for deferred years.

Service factor for installments:

Now installment depends on service years.

16 years---------- 180 installments

Loan amount*10.148per/month

2 years------------12 installments

Pay scale of officers category:

General Manager--------------------25595-1257-55763

Deputy General Manager----------22190-992-45998

Assistant Manager------------------18981-950-41781

Manager------------------------------17553-897-39081

Deputy Manager--------------------12467-850-32867

Assistant manager------------------10007-685-26447

Executive officer--------------------6939-496-18843

After preparation of salary payable (Addition & Deduction) the data is

punched (feeding) into the computer database. Different types of lists

are prepared such as total loan payment, recovery, allowances etc.

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AGENCY DEPARTMENT:

Service provided by the State life is intangible and therefore are not

acquired at the counter by the people, who need it, so it must be sold

them through persuasive method. Field force of state l ife plays an

effective role in selling of intangible products (Insurance Plans). In

order to maintain the record of the field force agency department was

establ ished. The main func tion of thi s depar tment inc ludes

recruitment, promotion, and termination of the field force, allied and

medical facility for field force. This department is also responsible

for issuance and renewal of licenses to the field force.

Recruitment of field force:

There are two types of recruitment in field force category.

Regular Sales representatives

Stipend scheme

Appointment of Regular SR:

The Sales Representative (SR) is appointed by Agency department but

also appointed by SO/SM. The requirement and conditions for the

appointment of SR is as follows:

Minimum qualification is required metric and they shall be required to

complete Foundation course of 3 months duration.

Age at entry must not be less than 18 years.

There is no stipend is given to them. They received only commission

paid by SLIC.

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years Second year persistency ratio

requirement

1 s t year 65%

2n d year 70%

3 rd year 75%

Renewal persistency:

He must complete his quota of 65% for renewal persistency.

For example:

FYP in 2006=487045

2nd year persistency=77.25%

Renewal persistency=97.60%

65% of quota=325000

Renewal +SYP of 2006:925157+360247=1285404

6% of 1285404=55509

After inclusion=487045+55509=542554(quota

completed)

SRs Commission:

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Basic commission rate :( with effect from 01.01.2002)

Basic commission as % of premium

Types of policies

Policies other

than those

specified in

And, below

Premium paying

period of policy

a) 1 year

b) 2 year

c) 3 year

d) 4 year

e) 5 year

f) 6 year

g) 7year

h) 8 year

i) 9 year

First policy

year

2.00%

4.00%

6.00%

8.00%

10.00%

12.005

14.00%

16.00%

18.00%

Second

policy

year

Nil

2.00%

5.00%

5.00%

5.00%

5.00%

5.00%

5.00%

5.00%

Third

policy year

Nil

Nil

5.00%

5.00%

5.00%

5.00%

5.00%

5.00%

5.00%

a) At least 10

year but less

than 15 years

b) At least 15

26.25% 10.00% 5.00%

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He must have minimum 4 productive SR.

Criteria of promotion from SM TO AM

Must have working at least for 3 years as SM;

Must have secured the following total FYP for category A&B:

A= Rs. 40, 00,000, B= Rs. 36, 00,000

And last year FYP must not be less than:

A= Rs. 20, 00,000, B= Rs. 15, 00,000

Number of policies in the last year must not be less than:

A= 200, B= 150

Must have minimum Second Year Persistency of 70% in the immediate

preceding year and minimum Second Year Persistency of 65% of the

previous year of the immediate preceding year;

Must have 20 productive SR in his control and each SR must have last

year FYP of Rs. 25000 each (As for A&B Category);

Minimum 2 SO should be qualified to SM;

Annual quota must have:

A= Rs. 30, 00,000, B= Rs. 18, 00,000

Where the persistency rate is less than 65% or greater than 75% then

unadjusted % cost is adjusted as follow:

I. Persistency less than 65%/adjusted % cost=unadjusted

cost*65% /actual persistency

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II. Persistency greater than 75%/adjusted cost=unadjusted

cost*75%/actual persistency

TERMINATION & DEMOTION

Any agent of SLIC, who

behave negatively, violates the rules & regulation or indulge fraud or

mal-practice, can be terminated by the Zonal Head. Any agent who

fails to meet the annual quota of FYP is demoted to immediate lower

rank of the field force.

LICENSE

The license to work as agent for SLIC is issued by the

Controller of Insurance Karachi. At specific interval of time, a list of

the field force is transferred to controller of Insurance Karachi for

new and renewal of license. The list of license fee is given below:

SR (New License for 1st Year)

= Rs. 50

SR ( Renewal of License) = Rs. 150

SR (Renewal with late fee) = Rs. 250

SO/SM (Renewal of License) = Rs. 250

S/O SM ( Renewal with late fee) = Rs. 400

Facilities provided to SR, SO, SM, AM:

The Agency department is also involved in the following matters of Field Persons,

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Medical of field Persons.

Rent

Contest arrangement (Giving the prizes to those who make good business)

Car rent is provided to AM and it is revised time to time, and this rent is

provided on following condition:

a) If car is hired by him for his use

b) If he use the car owned by him or his wife

c) If he uses the car which he has agreed to purchase from SLIC on

conditions that the agreed price will be paid by him in installments

and that under the agreement of purchase the title of car will be

transferred to him after the payment of all due installments.

d) If he purchase a car through bank loan, which is registered in his

name or his wife name and that of bank jointly.

Furniture is also provided to SM or AM, on their demand while

keeping in a view heir FYP quota.

There is list of slabs in which all details as stationary are present bywhich we know how much quantity of stationary will be provided to

SM or SR.

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Conventions are arranged for field force.

87

Types of policy Premium paying

period of policy

Basic commission as percentage of

premium

First policy

year

Second

policy

year

Third policy

year

I. Policies

other then

those

specified

in

II. And

III. below

a) 1 year

b) 2 year

c) 3 year

d) 4 year

e) 5 year

f) 6 year

g) 7 year

h) 8 year

i) 9 year

1.00%

2.00%

3.00%

4.00%

5.00%

6.00%

7.00%

8.00%

9.00%

Nil

2.00%

2.00%

2.00%

2.005

2.00%

2.00%

2.00%

2.00%

Nil

1.00%

1.00%

1.00%

1.00%

1.00%

1.00%

1.00%

1.00%

j) At least 10

years but less

than 15 years

k) At least 15

years but less

than 20 years

l) 20 years and

more

11.25%

12.75%

15.00%

2.00%

2.00%

2.00%

1.00%

1.00%

1.00%

All premium paying

periods

a) 1 year

b) 2 year or

5.00%

1.00%

3.75%

2.00%

Nil

0.40%

1.00%

Nil

0.40%


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Bonuses provided to SR:

A. Productive bonus: If in a year the FYP received through a SR is at least

20% of his annual FYP quota, he will be paid a Productive Bonus of 2.1/2%

of FYP of that quarter. No productive bonus in rest of any quarter shall be

payable if the FYP received through the SR is less than 20% of his annual

FYP quota.

B. Additional productivity bonus:

If in any calendar year the SR complete the annual FYP quota and also

meets the second year persistency ratio requirements, he will be paid an

ADDITIONAL PRODUCTIVITY BONUS of 22 % of FYP of that quarter.

One time cash compensation: if any SR is promoted to SO then

6000 is paid to SO and 8000 to SM under which SR was working.This is one time in a year. From this 10% tax is also deducted.

Bonuses provided to SO:

1. Over riding commission to SO & SM:

This over ridding commission is for the second policy year and the third and later

policy years are applicable only to the premiums received in the calendar year in

respect of policies sold up to 31st December of last year.

2. Productivity bonus:

The same are the conditions for SO the only difference is percentage which

is paid on FYP quota.

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3. Personal business:

SO shall be allowed to do personal business to the extent of 50% of his total

FYP production in the first year of his promotion as SO.

SM is not allowed to do his personal business not exceeding 25% of his

FYP production through his entire unit.

SM can also do business through direct bona fide SRs not exceeding 50%

of the total premium through his entire unit.

Management Hierarchy of P&GS Department

89

Assistant General

Manager

Manager


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Confidential cell medical stationary

Personal & general services department:

It is key roll department for all other departments. The office & general matters are

dealt in P&GS Department. This department has the sole responsibility and

authority of the disciplinary action of the employees. Selection, recruitment,

termination of the employees is the main functions of the P&GS Department. This

department also deals in medical facility to the office employees, leaves and

similar other general services. The stationary used in different department is

maintained in this department. The daily correspondence is dispatched in this

department.

Sections in P&GS:

90

Deputy

Manager

Deputy

Manager

Deputy

Manager

Assistant

Manager Assistant

Manager

Assistant

Manager

StaffStaff

Staff


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