INTRODUCTION OF RECRUITMENT AND SELECTION

According to Edwin B. Flippo, Recruitment is the process of searching the candidates for employment and stimulating them to apply for jobs in the organisation. Recruitment is the activity that links the employers and the job seekers. A few definitions of recruitment are: A process of finding and attracting capable applicants for employment. The process begins when new recruits are sought and ends when their applications are submitted. The result is a pool of applications from which new employees are selected. It is the process to discover sources of manpower to meet the requirement of staffing schedule and to employ effective measures for attracting that manpower in adequate numbers to facilitate effective selection of an efficient working force.

PURPOSE AND IMPORTANCE

Attract and encourage more and more candidates to apply in the organisation. Create a talent pool of candidates to enable the selection of best candidates for the organisation. Determine present and future requirements of the organization in conjunction with its personnel planning and job analysis activities. Recruitment is the process which links the employers with the employees. Increase the pool of job candidates at minimum cost. Help increase the success rate of selection process by decreasing number of visibly under qualified or overqualified job applicants. Help reduce the probability that job applicants once recruited and selected will leave the organization only after a short period of time. Meet the organizations legal and social obligations regarding the composition of its workforce. Begin identifying and preparing potential job applicants who will be appropriate candidates. Increase organization and individual effectiveness of various recruiting techniques and sources for all types of job applicants

RECRUITMENT AND SELECTION PROCESS The recruitment and selection is the major function of the human resource department and recruitment process is the first step towards creating the competitive strength and the strategic advantage for the organisations. Recruitment process involves a systematic procedure from sourcing the candidates to arranging and conducting the interviews and requires many resources and time. A general recruitment process is as follows:

1. Identifying the vacancy: The recruitment process begins with the human resource department receiving requisitions for recruitment from any department of the company. These contain: Posts to be filled Number of persons Duties to be performed Qualifications required Preparing the job description and person specification. Locating and developing the sources of required number and type of employees (Advertising etc). Short-listing and identifying the prospective employee with required characteristics. Arranging the interviews with the selected candidates. Conducting the interview and decision making

2. Job analysis
The starting point to a recruitment effort is to perform a job analysis and/or in some cases a task analysis, to document the actual or intended requirements of the job. From these the relevant

information is captured in such documents as job descriptions and job specifications. Often a company will already have job descriptions that represent a historical collection of tasks performed. Where already drawn up, these documents need to be reviewed or updated to reflect present day requirements. Prior to initiating the recruitment stages a person specification should be finalised to provide the recruiters commissioned with the requirements and objectives of the project. 3.Sourcing Sourcing is the use of one or more strategies to attract or identify candidates to fill job vacancies. It may involve internal and/or external advertising, using appropriate media, such as local or national newspapers, specialist recruitment media, professional publications, window advertisements, job centres, or in a variety of ways via the internet. Alternatively, employers may use recruitment consultancies to find otherwise scarce candidates who may be content in their current positions and are not actively looking to move companies may be proactively identified. This initial research for so-called passive candidates, also called name generation, results in a contact information of potential candidates who can then be contacted discreetly to be screened and approached. 4.Screening and selection Suitability for a job is typically assessed by looking for relevant skills, knowledge, aptitude, qualifications and educational or job related experience. These can be determined via: screeningrsums (also known as CVs); job applications; interviews. More proactive idenification methods include psychological, aptitude, numeracy and literacy testing. the testimony of references, Many recruiters and agencies use applicant tracking systems to perform the filtering process, along with software tools for psychometric testing. In many countries, employers are legally mandated to ensure their screening and selection processes meet equal opportunity and ethical standards. In addition to the above selection assessment criteria, employers are likely to recognise the value of candidates who also have the so-called 'soft skills', such as interpersonal or team leadership and have the ability to reinforce the company brand through their behaviour in front of customers and suppliers. Multinational organisations and those that recruit from a range of nationalities are also concerned candidates will fit into the prevailing company 'culture'. . 5.Lateral hiring "Lateral hiring" refers to a form of recruiting; the term is used with two different, almost opposite meanings. In one meaning, the hiring organization targets employees of another, similar organization, possibly luring them with a better salary and the promise of better career opportunities. An example is the recruiting of a partner of a law firm by another law firm. The new lateral hire then has specific applicable expertise and can make a running start in the new job. In some professional branches such lateral hiring was traditionally frowned upon, but the practice has become increasingly more common. An employee's contract may have a non-compete clause preventing such lateral hiring. In another meaning, a lateral hire is a newly hired employee who has no prior specific applicable expertise for the new job, and for whom this job move is a radical change of career. An example

is the recruiting of a university professor

to become chairman of the board of a company.

6.Onboarding
"Onboarding" is a term which describes the process of helping new employees become productive members of an organization. A well-planned introduction helps new employees become fully operational quickly and is often integrated with a new company and environment. Onboarding is included in the recruitment process for retention purposes. Many companies have onboarding campaigns in hopes to retain top talent that is new to the company; campaigns may last anywhere from 1 week to 6 months.

RECRUITMENT AND SELECTION SOURCES Every organisation has the option of choosing the candidates for its recruitment processes from two kinds of sources: internal and external sources. The sources within the organisation itself (like transfer of employees from one department to other, promotions) to fill a position are known as the internal sources of recruitment. Recruitment candidates from all the other sources (like outsourcing agencies etc.) are known as the external sources of recruitment. SOURCES OF RECRUITMENT

EXTERNAL SOURCES

1. PRESS ADVERTISEMENTS Advertisements of the vacancy in newspapers and journals are a widely used source of recruitment. The main advantage of this method is that it has a wide reach. 2. EDUCATIONAL INSTITUTES Various management institutes, engineering colleges, medical Colleges etc. are a good source of recruiting well qualified executives, engineers, medical staff etc. They provide facilities for campus interviews and placements. This source is known as Campus Recruitment. 3. PLACEMENT AGENCIES Several private consultancy firms perform recruitment functions on behalf of client companies by charging a fee. These agencies are particularly suitable for recruitment of executives and specialists. It is also known as RPO (Recruitment Process Outsourcing) 4. EMPLOYMENT EXCHANGES Government establishes public employment exchanges throughout the country. These exchanges provide job information to job seekers and help employers in identifying suitable candidates.

5. LABOUR CONTRACTORS Manual workers can be recruited through contractors who maintain close contacts with the sources of such workers. This source is used to recruit labour for construction jobs.

6. UNSOLICITED APPLICANTS Many job seekers visit the office of well-known companies on their own. Such callers are considered nuisance to the daily work routine of the enterprise. But can help in creating the talent pool or the database of the probable candidates for the organisation.

7. EMPLOYEE REFERRALS / RECOMMENDATIONS Many organisations have structured system where the current employees of the organisation can refer their friends and relatives for some position in their organisation. Also, the office bearers of trade unions are often aware of the suitability of candidates. Management can inquire these leaders for suitable jobs. In some organizations these are formal agreements to give priority in recruitment to the candidates recommended by the trade union.

8. RECRUITMENT AT FACTORY GATE Unskilled workers may be recruited at the factory gate these may be employed whenever a permanent worker is absent. More efficient among these may be recruited to fill permanent vacancies. INTERNAL SOURCES 1. TRANSFERS The employees are transferred from one department to another according to their efficiency and experience. 2. PROMOTIONS The employees are promoted from one department to another with more benefits and greater responsibility based on efficiency and experience. 3. Others are Upgrading and Demotion of present employees according to their performance. 4. Retired and Retrenched employees may also be recruited once again in case of shortage of qualified personnel or increase in load of work. Recruitment such people save time and costs of the organisations as the people are already aware of the organisational culture and the policies and procedures. 5. The dependents and relatives of Deceased employees and Disabled employeesare also done by many companies so that the members of the family do not become dependent on the mercy of others. FACTOR EFFECTING RECRUITMENT AND SELECTION The recruitment function of the organisations is affected and governed by a mix of various internal and external forces. The internal forces or factors are the factors that can be controlled by the organisation. And the external factors are those factors which cannot be controlled by the organisation. The internal and external forces affecting recruitment function of an organisation are: FACTORS AFFECTING RECRUITMENT

The internal forces i.e. the factors which can be controlled by the organisation are: 1. RECRUITMENT POLICY The recruitment policy of an organisation specifies the objectives of recruitment and provides a framework for implementation of recruitment programme. It may involve organizational system to be developed for implementing recruitment programmes and procedures by filling up vacancies with best qualified people. FACTORS AFFECTING RECRUITMENT POLICY Organizational objectives Personnel policies of the organization and its competitors. Government policies on reservations. Preferred sources of recruitment. Need of the organization. Recruitment costs and financial implications. 2. HUMAN RESOURCE PLANNING Effective human resource planning helps in determining the gaps present in the existing manpower of the organization. It also helps in determining the number of employees to be recruited and what qualification they must possess. SIZE OF THE FIRM The size of the firm is an important factor in recruitment process. If the organization is planning to increase its operations and expand its business, it will think of hiring more personnel, which will handle its operations.

3. COST Recruitment incur cost to the employer, therefore, organizations try to employ that source of recruitment which will bear a lower cost of recruitment to the organization for each candidate.

4. GROWTH AND EXPANSION Organization will employ or think of employing more personnel if it is expanding its operations. EXTERNAL FACTORS The external forces are the forces which cannot be controlled by the organisation. The major external forces are: 1. SUPPLY AND DEMAND The availability of manpower both within and outside the organization is an important determinant in the recruitment process. If the company has a demand for more professionals and there is limited supply in the market for the professionals demanded by the company, then the company will have to depend upon internal sources by providing them special training and development programs. 2. LABOUR MARKET Employment conditions in the community where the organization is located will influence the recruiting efforts of the organization. If there is surplus of manpower at the time of recruitment, even informal attempts at the time of recruiting like notice boards display of the requisition or announcement in the meeting etc will attract more than enough applicants. 3. IMAGE / GOODWILL Image of the employer can work as a potential constraint for recruitment. An organization with positive image and goodwill as an employer finds it easier to attract and retain employees than an organization with negative image. Image of a company is based on what organization does and affected by industry. For example finance was taken up by fresher MBAs when many finance companies were coming up.

4. POLITICAL-SOCIAL- LEGAL ENVIRONMENT Various government regulations prohibiting discrimination in hiring and employment have direct impact on recruitment practices. For example, Government of India has introduced legislation for reservation in employment for scheduled castes, scheduled tribes, physically handicapped etc. Also, trade unions play important role in recruitment. This restricts management freedom to select those individuals who it

believes would be the best performers. If the candidate cant meet criteria stipulated by the union but union regulations can restrict recruitment sources.

5. UNEMPLOYMENT RATE One of the factors that influence the availability of applicants is the growth of the economy (whether economy is growing or not and its rate). When the company is not creating new jobs, there is often oversupply of qualified labour which in turn leads to unemployment.

6. COMPETITORS The recruitment policies of the competitors also effect the recruitment function of the organisations. To face the competition, many a times the organisations have to change their recruitment policies according to the policies being followed by the competitors. EXTERNAL FACTORS The external forces are the forces which cannot be controlled by the organisation. The major external forces are: 1. SUPPLY AND DEMAND The availability of manpower both within and outside the organization is an important determinant in the recruitment process. If the company has a demand for more professionals and there is limited supply in the market for the professionals demanded by the company, then the company will have to depend upon internal sources by providing them special training and development programs. 2. LABOUR MARKET Employment conditions in the community where the organization is located will influence the recruiting efforts of the organization. If there is surplus of manpower at the time of recruitment, even informal attempts at the time of recruiting like notice boards display of the requisition or announcement in the meeting etc will attract more than enough applicants. 3. IMAGE / GOODWILL Image of the employer can work as a potential constraint for recruitment. An organization with positive image and goodwill as an employer finds it easier to attract and retain employees than an organization with negative image. Image of a company is based on what organization does and affected by industry. For example finance was taken up by fresher MBAs when many finance companies were coming up.

4. POLITICAL-SOCIAL- LEGAL ENVIRONMENT Various government regulations prohibiting discrimination in hiring and employment have direct impact on recruitment practices. For example, Government of India has introduced legislation for reservation in employment for scheduled castes, scheduled tribes, physically handicapped etc. Also, trade unions play important role in recruitment. This restricts management freedom to select those individuals who it believes would be the best performers. If the candidate cant meet criteria stipulated by the union but union regulations can restrict recruitment sources.

5. UNEMPLOYMENT RATE One of the factors that influence the availability of applicants is the growth of the economy (whether economy is growing or not and its rate). When the company is not creating new jobs, there is often oversupply of qualified labour which in turn leads to unemployment.

6. COMPETITORS The recruitment policies of the competitors also effect the recruitment function of the organisations. To face the competition, many a times the organisations have to change their recruitment policies according to the policies being followed by the competitors. RECRUITMENT AND SELECTION POLICY OF AN ORGANISATION In todays rapidly changing business environment, a well defined recruitment policy is necessary for organizations to respond to its human resource requirements in time. Therefore, it is important to have a clear and concise recruitment policy in place, which can be executed effectively to recruit the best talent pool for the selection of the right candidate at the right place quickly. Creating a suitable recruitment policy is the first step in the efficient hiring process. A clear and concise recruitment policy helps ensure a sound recruitment process. It specifies the objectives of recruitment and provides a framework for implementation of recruitment programme. It may involve organizational system to be developed for implementing recruitment programmes and procedures by filling up vacancies with best qualified people. COMPONENTS OF THE RECRUITMENT POLICY

The general recruitment policies and terms of the organisation

Recruitment services of consultants

Recruitment of temporary employees

Unique recruitment situations

The selection process

The job descriptions

The terms and conditions of the employment

A recruitment policy of an organisation should be such that:

It should focus on recruiting the best potential people.

To ensure that every applicant and employee is treated equally with dignity and respect.

Unbiased policy.

To aid and encourage employees in realizing their full potential.

Transparent, task oriented and merit based selection.

Weightage during selection given to factors that suit organization needs.

Optimization of manpower at the time of selection process.

Defining the competent authority to approve each selection.

Abides by relevant public policy and legislation on hiring and employment relationship.

Integrates employee needs with the organisational needs.

FACTORS AFFECTING RECRUITMENT POLICY

Organizational objectives

Personnel policies of the organization and its competitors.

Government policies on reservations.

Preferred sources of recruitment.

Need of the organization.

Recruitment costs and financial implications.

RECENT TRENDS OF RECRUITMENT AND SELECTION

The following trends are being seen in recruitment: OUTSOURCING In India, the HR processes are being outsourced from more than a decade now. A company may draw required personnel from outsourcing firms. The outsourcing firms help the organisation by the initial screening of the candidates according to the needs of the organisation and creating a suitable pool of talent for the final selection by the organisation. Outsourcing firms develop their human resource pool by employing people for them and make available personnel to various companies as per their needs. In turn, the outsourcing firms or the intermediaries charge the organisations for their services. STRATEGIES OF RECRUITMENT AND SELECTION Recruitment is of the most crucial roles of the human resource professionals. The level of performance of and organisation depends on the effectiveness of its recruitment function. Organisations have developed and follow recruitment strategies to hire the best talent for their organisation and to utilize their resources optimally. A successful recruitment strategy should be well planned and practical to attract more and good talent to apply in the organisation. For formulating an effective and successful recruitment strategy, the strategy should cover the following elements: 1. Identifying and prioritizing jobs Requirements keep arising at various levels in every organisation; it is almost a never-ending process. It is impossible to fill all the positions immediately. Therefore, there is a need to identify the positions requiring immediate attention and action. To maintain the quality of the recruitment activities, it is useful to prioritize the vacancies whether to focus on all vacancies equally or focusing on key jobs first.

2. Candidates to target The recruitment process can be effective only if the organisation completely understands the requirements of the type of candidates that are required and will be beneficial for the organisation. This covers the following parameters as well:
o

Performance level required: Different strategies are required for focusing on hiring high performers and average performers.

Experience level required: the strategy should be clear as to what is the experience level required by the organisation. The candidates experience can range from being a fresher to experienced senior professionals.

Category of the candidate: the strategy should clearly define the target

candidate. He/she can be from the same industry, different industry, unemployed, top performers of the industry etc.

3. Sources of recruitment The strategy should define various sources (external and internal) of recruitment. Which are the sources to be used and focused for the recruitment purposes for various positions. Employee referral is one of the most effective sources of recruitment.

4. Trained recruiters The recruitment professionals conducting the interviews and the other recruitment activities should be well-trained and experienced to conduct the activities. They should also be aware of the major parameters and skills (e.g.: behavioural, technical etc.) to focus while interviewing and selecting a candidate.

5. How to evaluate the candidates The various parameters and the ways to judge them i.e. the entire recruitment process should be planned in advance. Like the rounds of technical interviews, HR interviews, written tests, psychometric tests etc. RECRUITMENT MANAGING SYSTEM Recruitment management system is the comprehensive tool to manage the entire recruitment processes of an organisation. It is one of the technological tools facilitated by the information management systems to the HR of organisations. Just like performance management, payroll and other systems, Recruitment management system helps to contour the recruitment processes and effectively managing the ROI on recruitment. The features, functions and major benefits of the recruitment management system are explained below: Structure and systematically organize the entire recruitment processes.

Recruitment management system facilitates faster, unbiased, accurate and reliable processing of applications from various applications.

Helps to reduce the time-per-hire and cost-per-hire.

Recruitment management system helps to incorporate and integrate the various links like the application system on the official website of the company, the unsolicited applications, outsourcing recruitment, the final decision making to the main recruitment process.

Recruitment management system maintains an automated active database of the applicants facilitating the talent management and increasing the efficiency of the recruitment processes.

Recruitment management system provides and a flexible, automated and interactive interface between the online application system, the recruitment department of the company and the job seeker.

Offers tolls and support to enhance productivity, solutions and optimizing the recruitment processes to ensure improved ROI.

Recruitment management system helps to communicate and create healthy relationships with the candidates through the entire recruitment process.

Recruitment approaches There are a variety of recruitment approaches and most organisations will utilise a combination of two or more of these as part of a recruitment exercise or to deliver their overall recruitment strategy. In summary five basic models more commonly found are:An in-house personnel or human resources function may in some case still conduct all stages of the recruitment process. In the smallest organisations recruitment may be left to individual managers. More frequently whilst managing the overall recruitment exercise and the decision-making at the final stages of the selection process external service providers may undertake the more specialised aspects of the recruitment process. Outsourcing of recruitment to an external provider may be the solution for some small businesses and at the other extreme very large organisations Employment agencies are established as both publicly-funded services and as commercial private sector operations. Services may support permanent, temporary, or casual worker recruitment. They may be generic agencies that deal with providing unskilled workers

through to highly-skilled managerial or technical staff or so-called niche agencies that specialize in a particular industrial sector or professional group. Executive search firms for executive and professional positions. These firms operate across a range of models such as contingency or retained approaches and also hybrid models where advertising is also used to ensure a flow of candidates alongside relying on networking as their main source of candidates. Internet recruitment services including recruitment websites and job search engines used to gather as many candidates as possible by advertising a position over a wide geographic area. In addition social network sourced recruitment has emerged as a major method of sourcing candidates. In-house recruitment Many employers undertake at least some if not most of their own in-house recruitment, using their human resources department, front-line hiring managers and recruitment personnel who handle targeted functions and populations. In addition to coordinating with the agencies mentioned above, in-house recruiters may advertise job vacancies on their own websites, coordinate internal employee referrals, work with external associations, trade groups and/or focus on campus graduate recruitment. Some large employers choose to outsource all or some of their recruitment process (recruitment process outsourcing) however a much more common approach is for employers to introduce referral schemes where employees are encouraged to source new staff from within their own network. Internal recruiters An internal recruiter (alternatively in-house recruiter or corporate recruiter) is member of a company or organization and typically works in the human resources (HR) department. Internal recruiters may be multi-functional, serving in an HR generalist role or in a specific role focusing all their time on recruiting. Activities vary from firm to firm but may include, screening CVs orrsums, conducting aptitude or psychological testing, interviewing, undertaking reference and background checks, hiring; administering contracts, advising cansidates on benefits, onboardingnew recruits and conducting exit interviews with employees leaving the organisation. They can be permanent employees or hired as contractors for this purpose. Contract recruiters tend to move around between multiple companies, working at each one for a short stint as needed for specific hiring purposes. The responsibility is to filter candidates as per the requirements of each client. 3.Employee referral An employee referral program is a system where existing employees recommend prospective candidates for the job offered, and if the suggested candidate is hired, the employee who

referred receives a cash bonus. In some cases the organization provides the employee referral bonus only if the referred employee stays with the organization for stipulated time duration (most cases 3 - 6 months). Referral bonus depends on the grade of the referred employee, higher the grade higher the bonus however the method is not used for senior level hiring. 4.Outsourcing An external recruitment provider may suit small organisations without the facilities to recruit. In typically the largest organisations a formal contract for services has been negotiated with a specialist recruitment consultancy. These are known in the industry as Recruitment Process Outsourcing.

Introduction 1.1 Introduction Of The Insurance Industry

Overview The story of insurance is probably as old as the story of mankind. The same instinct that prompts modern businessmen today to secure themselves against loss and disaster existed in primitive men also. They too sought to avert the evil consequences of fire and flood and loss of life and were willing to make some sort of sacrifice in order to achieve security. Though the concept of insurance is largely a development of the recent past, particularly after the industrial era past few centuries yet its beginnings date back almost 6000 years. The first two decades of the twentieth century saw lot of growth in insurance business. From 44 companies with total business-in-force as Rs.22.44 crore, it rose to 176 companies with total business-in-force as Rs.298 crore in 1938. The Insurance Act 1938 was the first legislation governing not only life insurance but also non-life insurance to provide strict state control over insurance business. Some of the important milestones in the life insurance business in India are: 1818: Oriental Life Insurance Company, the first life insurance company on Indian soil started functioning. 1870: Bombay Mutual Life Assurance Society, the first Indian life insurance company started its business.

1912: The Indian Life Assurance Companies Act enacted as the first statute to regulate the life insurance business. 1928: The Indian Insurance Companies Act enacted to enable the government to collect statistical information about both life and non-life insurance businesses. 1938: Earlier legislation consolidated and amended to by the Insurance Act with the objective of protecting the interests of the insuring public. 1956: 245 Indian and foreign insurers and provident societies are taken over by the central government and nationalized. LIC formed by an Act of Parliament, viz. LIC Act, 1956, with a capital contribution of Rs. 5 crore from the Government of India. The General insurance business in India, on the other hand, can trace its roots to the Triton Insurance Company Ltd., the first general insurance company established in the year 1850 in Calcutta by the British. Some of the important milestones in the general insurance business in India are: 1907: The Indian Mercantile Insurance Ltd. set up, the first company to transact all classes of general insurance business. 1957: General Insurance Council, a wing of the Insurance Association of India, frames a code of conduct for ensuring fair conduct and sound business practices. 1968: The Insurance Act amended to regulate investments and set minimum solvency margins and the Tariff Advisory Committee set up. 1972: The General Insurance Business (Nationalisation) Act, 1972 nationalised the general insurance business in India with effect from 1st January 1973. With largest number of life insurance policies in force in the world, Insurance happens to be a mega opportunity in India. Its a business growing at the rate of 15-20 per cent annually and presently is of the order of Rs 450 billion. Together with banking services, it adds about 7 per cent to the countrys GDP. Gross premium collection is nearly 2 per cent of GDP and funds available with LIC for investments are 8 per cent of GDP. Yet, nearly 80 per cent of Indian population is without life insurance cover while health insurance and non-life insurance continues to be below international standards. And this part of the population is also subject to weak social security and pension systems with hardly any old age income security. This itself is an indicator that growth potential for the insurance sector is immense. A well-developed and evolved insurance sector is needed for economic development as it provides long term funds for infrastructure development and at the same time strengthens the risk

taking ability. It is estimated that over the next ten years India would require investments of the order of one trillion US dollar. The Insurance sector, to some extent, can enable investments in infrastructure development to sustain economic growth of the country. India has come a full circle from being an open competitive market to nationalization and back to a liberalized market again. Tracing the developments in the Indian insurance sector reveals the 360 degree turn witnessed over a period of almost two centuries. Present Scenario The Government of India liberalized the insurance sector in March 2000 with the passage of the Insurance Regulatory and Development Authority (IRDA) Bill, lifting all entry restrictions for private players and allowing foreign players to enter the market with some limits on direct foreign ownership. The opening up of the sector is likely to lead to greater spread and deepening of insurance in India and this may also include restructuring and revitalizing of the public sector companies. In the private sector 14 life insurance and 8 general insurance companies have been registered. A host of private Insurance companies operating in both life and non-life segments have started selling their insurance policies.. Life Insurance Market The Life Insurance market in India is an underdeveloped market that was only tapped by the state owned LIC till the entry of private insurers. The penetration of life insurance products was 19 percent of the total 400 million of the insurable population. The state owned LIC sold insurance as a tax instrument, not as a product giving protection. Most customers were underinsured with no flexibility or transparency in the products. With the entry of the private insurers the rules of the game have changed. The 12 private insurers in the life insurance market have already grabbed nearly 9 percent of the market in terms of premium income. The new business premiums of the 12 private players has tripled to Rs 1000 crore in 2002- 03 over last year. Innovative products, smart marketing and aggressive distribution. That's the triple whammy combination that has enabled fledgling private insurance companies to sign up Indian customers faster than anyone ever expected. Indians, who have always seen life insurance as a tax saving device, are now suddenly turning to the private sector and snapping up the new innovative products on offer. The private insurers also seem to be scoring big in other ways- they are persuading people to take out bigger policies. Buoyed by their quicker than expected success, nearly all private insurers are fast- forwarding the second phase of their expansion plans.

Major Insurance Players

Licenses have been issued for the following companies BIRLA SUN LIFE Life Insurance Limited BIRLA SUN LIFE Life Insurance Company Limited HDFC Standard Life Insurance Company Limited Birla Sun Life Insurance Company Limited TATA AIG Life Insurance Company Limited Max New York Life Insurance Company Limited SBI Cardiff Life Insurance Company Limited ING Vysya Life Insurance Company Limited Bajaj Allianz Life Insurance Company Limited MetLife Life Insurance Company Limited Aviva Life Insurance Company Limited AMP Sanmar Life Insurance Company Limited Sahara India Life Insurance Limited Sri Ram Life Insurance Limited

Protection of the interests of policyholders: IRDA has the responsibility of protecting the interest of insurance policyholders. Towards achieving this objective, the Authority has taken the following steps:

IRDA has notified Protection of Policyholders Interest Regulations 2001 to provide for: policy proposal documents in easily understandable language; claims procedure in both life and non-life; setting up of grievance redressal machinery; speedy settlement of claims; and policyholders' servicing. The Regulation also provides for payment of interest by insurers for the delay in settlement of claim.

The insurers are required to maintain solvency margins so that they are in a position to meet their obligations towards policyholders with regard to payment of claims.

It is obligatory on the part of the insurance companies to disclose clearly the benefits, terms and conditions under the policy. The advertisements issued by the insurers should not mislead the insuring public.

All insurers are required to set up proper grievance redress machinery in their head office and at their other offices.

The Authority takes up with the insurers any complaint received from the policyholders in connection with services provided by them under the insurance contract. 1.2 COMPANY PROFILE BIRLA SUN LIFE Life Insurance BIRLA SUN LIFE Life Insurance Company is a joint venture between ICICI Bank, a premier financial powerhouse and Prudential plc, a leading international financial services group headquartered in the United Kingdom.

ICICI was established in 1955 to lend money for industrial development. Today, it has diversified into retail banking and is the largest private bank in the country. Prudential plc was established in 1848 and is presently the largest life insurance company in UK. BIRLA SUN LIFE is currently the No. 1 private life insurer in the country. For the financial year ended March 31, 2005, the company garnered Rs 1584 crore of new business premium for a total sum assured of Rs 13,780 crore and wrote nearly 615,000 policies. The Company recognizes that the driving force for gaining sustainable competitive advantage in this business is superior customer experience and investment behind the brand. The Company aims to achieve this by striving to provide world class service levels through constant innovation

in products, distribution channels and technology based delivery. The Company has already taken significant steps to achieve this goal. India's Number One private life insurer, BIRLA SUN LIFE Life Insurance Company is a joint venture between ICICI Bank-one of India's foremost financial services companies-and Prudential plc- a leading international financial services group headquartered in the United Kingdom. Total capital infusion stands at Rs. 23.72 billion, with ICICI Bank holding a stake of 74% and Prudential plc holding 26%. BIRLA SUN LIFE was the first life insurer in India to receive a National Insurer Financial Strength rating of AAA (Ind) from Fitch ratings. For three years in a row, BIRLA SUN LIFE has been voted as India's Most Trusted Private Life Insurer, by The Economic Times - AC Nielsen ORG Marg survey of 'Most Trusted Brands'. As we grow our distribution, product range and customer base, we continue to tirelessly uphold our commitment to deliver world-class financial solutions to customers all over India. FACT SHEET THE COMPANY BIRLA SUN LIFE Life Insurance Company is a joint venture between ICICI Bank, a premier financial powerhouse, and Prudential plc, a leading international financial services group headquartered in the United Kingdom. BIRLA SUN LIFE was amongst the first private sector insurance companies to begin operations in December 2000 after receiving approval from Insurance Regulatory Development Authority (IRDA). BIRLA SUN LIFE 's capital stands at Rs. 23.72 billion with ICICI Bank and Prudential plc holding 74% and 26% stake respectively. For the first quarter ended June 30, 2007, the company garnered Rs. 987 crore of weighted retail + group new business premiums and wrote over 450,000 retail policies in the period. The company has assets held to the tune of over Rs. 18,400 crore. BIRLA SUN LIFE is also the only private life insurer in India to receive a National Insurer Financial Strength rating of AAA (Ind) from Fitch ratings. The AAA (Ind) rating is the highest rating, and is a clear assurance of BIRLA SUN LIFE 's ability to meet its obligations to customers at the time of maturity or claims. For the past six years, BIRLA SUN LIFE has retained its position as the No. 1 private life insurer in the country, with a wide range of flexible products that meet the needs of the Indian customer at every step in life.

Distribution BIRLA SUN LIFE has one of the largest distribution networks amongst private life insurers in India. It has a strong presence across India with over 680 branches and over 235,000 advisors. The company has over 23 bancassurnace partners, having tie-ups with ICICI Bank, Federal Bank, South Indian Bank, Bank of India, Lord Krishna Bank, Idukki District Co-operative Bank, Jalgaon Peoples Co-operative Bank, Shamrao Vithal Co-op Bank, Ernakulam Bank, 9 Bank of India sponsored Regional Rural Banks (RRBs), Sangli Urban Co-operative Bank, Baramati Cooperative Bank, Ballia Kshetriya Gramin Bank, The Haryana State Co-operative Bank and Imphal Urban Cooperative Bank Limited. Products Insurance Solutions For Individuals BIRLA SUN LIFE Life Insurance offers a range of innovative, customer-centric products that meet the needs of customers at every life stage. Its products can be enhanced with up to 4 riders, to create a customized solution for each policy holder. Savings Solutions

SavenProtect is a traditional endowment savings plan that offers life protection along with adequate returns. CashBak is an anticipated endowment policy ideal for meeting milestone expenses like a childs marriage, expenses for a childs higher education or purchase of an asset. LifeTimeSuper offer customers the flexibility and control to customize the policy to meet the changing needs at different life stages. Each offer 4 fund options Preserver, Protector, Balancer and Maximiser. LifeLink Super is a single premium Unit Linked Insurance Plan which combines life insurance cover with the opportunity to stay invested in the stock market. Premier Life Gold is a limited premium paying plan that offers customers life insurance cover till the age of 75. InvestShield Life New is a unit linked plan that provides premium guarantee on the invested premiums and ensures that the customer receives only the benefits of fund appreciation without any of the risks of depreciation. InvestShield Cashbak is a unit linked plan that provides premium guarantee on the invested premiums along with flexible liquidity options.

Protection Solutions

LifeGuard is a protection plan, which offers life cover at very low cost. It is available in 3 options level term assurance, level term assurance with return of premium and single premium.

HomeAssure is a mortgage reducing term assurance plan designed specifically to help customers cover their home loans in a simple and cost-effective manner.

Child Plans SmartKid education plans provide guaranteed educational benefits to a child along with life insurance cover for the parent who purchases the policy. The policy is designed to provide money at important milestones in the childs life. SmartKid plans are also available in unit-linked form both single premium and regular premium. Education Insurance Plans Education insurance under the SmartKid brand provides guaranteed educational benefits to a child along with life insurance cover for the parent who purchases the policy. The policy is designed to provide money at important milestones in the child's life. SmartKid plans are also available in unit-linked form - both single premium and regular premium

Retirement Solutions

ForeverLife is a retirement product targeted at individuals in their thirties. Market-linked retirement products LifeTime Super Pension is a regular premium market-linked pension plan. Golden Years: is a limited premium paying retirement solution that offers tax benefits up to Rs 100,000 u/s 80C, with flexibility in both the accumulation and payout stages.

Health Solution

Health Assure and Health Assure Plus: Health Assure is a regular premium plan which provides long term cover against 6 critical illnesses by providing policyholder with financial assistance, irrespective of the actual medical expenses. Health Assure Plus offers the added advantage of an equivalent life insurance cover Cancer Care: is a regular premium plan that pays cash benefit on the diagnosis as well as at different stages in the treatment of various cancer conditions. Diabetes Care and Diabetes Care Plus*: 1st ever critical illness insurance cover for diabetics. Hospital Care*: Hospital Care offers a Cashless hospitalization facility in more then 3000 network hospitals Crisis Cover : is a 360-degree product that will provide long-term coverage against 35 critical illnesses, total and permanent disability, and death

Note (*) products Re-launched on 1st July 2006

Group Insurance Solutions BIRLA SUN LIFE also offers Group Insurance Solutions for companies seeking to enhance benefits to their employees. ICICI Pru Group Gratuity Plan: ICICI Prus group gratuity plan helps employers fund their statutory gratuity obligation in a scientific manner. The plan can also be customized to structure schemes that can provide benefits beyond the statutory obligations. ICICI Pru Group Superannuation Plan: ICICI Pru offers a flexible defined contribution superannuation scheme to provide a retirement kitty for each member of the group. Employees have the option of choosing from various annuity options or opting for a partial commutation of the annuity at the time of retirement. ICICI Pru Group Term Plan: ICICI Prus flexible group term solution helps provide affordable cover to members of a group. The cover could be uniform or based on designation/rank or a multiple of salary. The benefit under the policy is paid to the beneficiary nominated by the member on his/her death. Flexible Rider Options ICICI Pru Life offers flexible riders, which can be added to the basic policy at a marginal cost, depending on the specific needs of the customer. 1. Accident Benefit: If death occurs as the result of an accident during the term of the policy, the beneficiary receives an additional amount equal to the rider sum assured under the policy. If the death occurs while traveling in an authorized mass transport vehicle, the beneficiary will be entitled to twice the sum assured as additional benefit. Accident & Disability Benefit: This rider option pays 10% the sum assured under the rider every year till next 10 years on Accidental Permanent Disability of 2 Organs. Critical Illness Benefit: protects the insured against financial loss in the event of 9 specified critical illnesses. Benefits are payable to the insured for medical expenses prior to death.

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Income Benefit: This rider pays the 10% of the sum assured to the nominee every year, till maturity, in the event of the death of the life assured. It is available on SmarKid, SecurePlus and CashPlus Waiver of Premium: In case of total and permanent disability due to an accident, the premiums are waived till maturity. This rider is available with SecurePlus and CashPlus. Choice of Six Investment Options :-

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BIRLA SUN LIFE offers you the opportunity of selecting between investment options to match your investment priorities. 1) Protector:An Investment Option with investment indebt and money market instruments. 2) Maximiser :An investment option with investment in equity and equity related instruments. 3) Balancer :An investment option with investment in a mix of equity and debt oriented instruments. 4) Preserver :An investment option with investment in low-risk instruments like cash and call money markets. 5) Flexi Growth:New Fund (NFO) launched in March 2007, Long term returns from an equity portfolio lare,mid and small cap companies. 6) Flexi balanced:Balance of capital appreciation and stable returns from an equity (large,mid & small cap companies) & debt portfolio.

Vision and Mission Their vision is to make BIRLA SUN LIFE Life Insurance Company the dominant new insurer in the life insurance industry. This they hope to achieve through their commitment to excellence, focus on service, speed and innovation, and leveraging our technological expertise. The success of the organisation will be founded on its strong focus on values and clarity of purpose. These include: Understanding the needs of customers and offering them superior products and service

Building long lasting relationships with their partners Providing an enabling environment to foster growth and learning for their employees

And above all building transparency in all our dealings. They believe that they can play a significant role in redefining and reshaping the sector. Given the quality of their parentage and the commitment of their team, they feel that tere will be no limits to their growth. DISTRIBUTION BIRLA SUN LIFE has one of the largest distribution networks amongst private life insurers in India, having commenced operations in 150 cities and towns in India, stretching from Bhuj in the west to Guwahati in the east, and Jammu in the north to Trivandrum in the south. The company has 9 bank partnerships for distribution, having agreements with ICICI Bank, Bank of India, Federal Bank, South Indian Bank, Lord Krishna Bank, and some co-operative banks, as well as over 300 corporate agents and brokers. It has also tied up with NGOs, MFIs and corporates for the distribution of rural policies. BIRLA SUN LIFE has recruited and trained more than 1, 90,000 insurance advisors to interface with and advise customers. Further, it leverages its state-of-the-art IT infrastructure to provide superior quality of service to customers RegisteredOffice : ICICI Towers 9thfloor, Bandra-Kurla Complex Mumbai - 400 051. Tel: 494 3232 Regional Office : 8th floor EROS Coorporate Tower,Nehru place, New Delhi-110011.Tel:46554405 Delhi office : 3rd floor Videocon Towers E-1, Rani Jhansi Road New Delhi - 110055. Tel: 601 3232

BIRLA SUN LIFE Life Insurance opens office in Dubai In a move to consolidate its position in the Gulf region, BIRLA SUN LIFE Life Insurance (BIRLA SUN LIFE ), India's No. 1 private life insurance company, today opened its representative office in Dubai, becoming the first private life insurer from India to open an office in the Emirate.

At BIRLA SUN LIFE we offer pragmatic, world-class solutions. Put simply, solutions with a lot of common sense. Solutions that take care of your four basic financial needs - Earning, Saving, Investing and Spending. So you live your life to the fullest, sans worries.