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STATE LIFE INSURANCE CORPORATION

Internship Report

Submitted To: Sir Irshad Submitted By: Muhammad Yasir Mi09MBA039 2009-2011

Hailey College Of Banking & Finance

TABLE OF CONTENTS
Sr. No 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 Description ACKNOLEGEMENT EXCETIVE SUMMARY HISTORY OF INSURANCE What is insurance Terms Classes of insurance 4is of insurance Principles STATE LIFE INSURANCE CORPORATION History Function Organizational Structure DEPARTMENT PRODUCTS FINANCIAL ANALYSIS RATIO ANALYSIS SWOT MY EXPERIENCE RECOMMENDATION CONCLUSION BIBLIOGRAPHY Page No. 3 4 5 7 8 12 17 19 22 23 25 27 37 84 128 140 144 152 158 159 161

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ACKNOWLEDGEMENT

With the name of ALLAH the Most Beneficial and Merciful. I completed my internship in State Life Insurance Corporation of Pakistan. I am really pleased to have a professional learning experience in one of leading insurance organizations of country. In these six weeks I worked in different departments and I am truly thankful to all officers and staff who entirely give assistance to me. I am also grateful to my honorable teachers, Sir Irshad, Sir Riaz Ahmed Mian and all other teachers who motivated me to work hard and taught me techniques to learn work. The account of acknowledgement will remain incomplete if I do not express my sincere appreciation, indebtedness and gratitude to my
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encouragement for me.

parents and siblings. They have always been a source of

EXECUTIVE SUMMARY:
I have recently completed my internship in State Life Insurance Corporation OF Pakistan, Western, Zone Lahore in which I got training from its different departments. The structure, the fashion of working & the dedication of the employees in SLIC is really commendable. State Life Insurance Corporation OF Pakistan (SLIC) has a solid foundation since 1972 in Pakistan, and main objective is to provide its customers with safe, secure and trustworthy service through wide range of products. In this report I have given a very brief review of Profile of State Life Insurance Corporation OF Pakistan, all the products provided by the SLIC and in this regard I have tried to give all the information of SLIC. Then I have discussed about my learning in entire internship in all departments of State Life Insurance Corporation OF Pakistan. During my internship I worked in Underwriting, Claims and Accounts department and I successfully completed all the task/duties that were assigned to me. I have made it possible to write each and every thing that I have learnt there. I have all my practical efforts in the form of this manuscript thats the asset for my prospect career.
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Then I have done a detailed Financial Analysis as well as SWOT Analysis. Finally I have given some recommendations about State Life Insurance Corporation OF Pakistan.

HISTORY

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OF INSURANCE

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HISTORY OF INSURANCE

In some sense we can say that insurance appears simultaneously with the appearance of human society. We know of two types of economies in human societies: natural or non-monetary economies (using barter and trade with no centralized nor standardized set of financial instruments) and more modern monetary economies (with markets, currency, financial instruments and so on). The former is more primitive and the insurance in such economies entails agreements of mutual aid. If one family's house is destroyed the neighbors are committed to help rebuild. Granaries housed another primitive form of insurance to indemnify against famines. Often informal or formally intrinsic to local religious customs, this type of insurance has survived to the present day in some countries where modern money economy with its financial instruments is not widespread. In the late 1680s, Edward Lloyd opened a coffee house that became a popular haunt of ship owners, merchants, and ships' captains, and thereby a reliable source of the latest shipping news. It became the meeting place for parties wishing to insure cargoes and ships, and those willing to underwrite such ventures. Today, Lloyd's of London remains the leading market (note that it is an insurance market rather than a company) for marine and other specialist types of insurance, but it operates rather differently than the more familiar kinds of insurance. Insurance as we know it today can be traced to the Great Fire of London, which in 1666 devoured more than 13,000 houses. The devastating effects of the fire converted the development of insurance "from a matter of convenience into one of urgency, a change of opinion reflected in Sir Christopher Wren's inclusion of a site for 'the Insurance Office' in his new plan for London in 1667."A number of attempted fire insurance schemes came to nothing, but in 1681 Nicholas Barbon, and eleven associates, established England's first fire insurance company, the 'Insurance Office for Houses', at the back of the Royal Exchange. Initially, 5,000 homes were insured by Barbon's Insurance Office.

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WHAT INSURANCE IS ?
A promise of compensation for specific potential future losses in exchange for a periodic payment. Insurance is designed to protect the financial wellbeing 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. The transaction involves the insured assuming a guaranteed and known relatively small loss in the form of payment to the insurer in exchange for the insurer's promise to compensate (indemnify) the insured in the case of a financial (personal) loss. The insured receives a contract, called the insurance policy, which details the conditions and circumstances under which the insured will be financially compensated.

TERMS RELATING INSURANCE


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SUM ASSURED
An amount payable to the assured (agreed in advance),at an agreed time.

LIMIT OF INDEMNITY
An amount payable to the insured, commencerating with his loss or damage subject to the maximum limit agreed in advance.

INTERMIDIARY/BROKER
A person or firm who arranges a cover with the Insurer/Assurer on behalf of the Insued/Asssured,In consideration of a commision,payable by the Insurer/Assurer.

POLICY
Policy is a document which shows that a contract has been made between the Insurer/Assurer and Insured/Assured. It is not called a contract in itself.
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PROPOSAL FORM
Through Proposal Form Insured/Assured presents various type of information to the Insurer/Assurer for obtaining a cover for risk. There is other method adopted in the market also to present the risk such as representation by the agent/broker or surveys in case of complex nature of general insurance rieks.

PREMIUM
An amount paid by the insured/assured in consideration of accepting the risk by the insurer/assurer. Premium includes, pure premium, commission paid to the agent/broker, administrative expenses and profit.

UNDERWRITER
Underwriter is a person working in an insurance company, who evaluate the risk presented by the insured/assured as to whether to accept or reject the risk and if it is accepted on what premium and terms and conditions.

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CLAIMS MANAGER
Claims manager is called the watch dog of the funds of the policy holders being managed by the insurance company. Incase of claim he has to assess whether the claim is payable under the terms and conditions of the policy or not and if payable what should be the quantum of the claim.

ARBITRATOR
Arbitrator is a person who resolve dispute if arising between the insurer/assurer and insured/assured .Its decision is final and binding under the law.

RE-INSURANCE COMPANY
A company from where insurer/assurer seeks cover over and above the amount which he can bear in case of claims as per resources available with him.

CLAIM
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An occasion which on trigging the operative clause of the policy,is notified by the insured/assured to the insurer/assurer for payment of agreed sum assured or indemnity according to loss sustained.

ABSOLUTE LIABILITY
A legal doctrine causing one party always to be responsible for payment of damage claims, regardless of circumstances causing the loss. This doctrine has been applied to those using explosive or keeping dangerous animals as pets.

ACTUARY
An insurance company mathematician, who compiles statistics of losses, develops insurance rates calculates dividends, and evaluates the financial standing of insurance company.

CAPTIVE INSURANCE

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An insurance company operated by a main company or group of companies, to insure its own risks. A part of self insurance plan.

CASH VALUE
The saving feature associated with permanent life insurance. The result of a initial period when premium payments exceed mortality and other charges.

INSURABLE INTEREST
The ability to demonstrate that the insured event is capable of causing a financialloss to the person owing the insurance. To collect from a property insurance contract, the insurable interest must be demonstrated at the time of the loss. In life insurance the insurable interest must exist when the policy is begun.

CLASSES OF INSURANCE
The insurance is mainly divided in following two major classes of business.

Insurance

General Insurance

Life Assurance

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GENERAL INSURANCE
General insurance or non-life insurance policies, including automobile and homeowners policies, provide payments depending on the loss from a particular financial event. General insurance typically comprises any insurance that is not determined to be life insurance General insurance means managing risk against financial loss arising due to fire, marine or miscellaneous events as a result of contingencies, which may or may not occur. General Insurance means to Cover the risk of the financial loss from any natural calamities viz. Flood, Fire, Earthquake, Burglary, etc.. i.e. the events which are beyond the control of the owner of the goods for the things having insurable interest with the utmost good faith by declaring the facts about the circumstances and the products by paying the stipulated sum , a premium and not having a motive of making profit from the insurance contract.
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Some of the General Rules:

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1. Mis-description : The insurance policy shall be void and all the premiums paid by insured may be forfeited by the insurance company in the event of mis-presentation or mis-declaration and/or non-disclosure of any material facts.

2. Reasonable care : The insured shall take all reasonable steps to safeguard the property insured against any loss or damage. Insured shall exercise reasonable care that only competent employees are employed and shall take all reasonable precautions to prevent all accidents and shall comply with all statuary or other regulations .

3. Fraud : : If any claim under the policy may be in any respect fraudulent or if any fraudulent means or device are used by the insured or any one acting on the insureds behalf to obtain any benefit under the insurance policy, all the benefits under the insurance policy may be forfeited.

LIFE ASSURANCE
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Life assurance is a contract between the policy holder and the insurer, where the insurer promises to pay a designated beneficiary a sum of money (the "benefits") upon the death of the insured person. Depending on the contract, other events such as terminal illness or critical illness may also trigger payment. In return, the policy holder agrees to pay a stipulated amount (the "premium") at regular intervals or in lump sums. In some countries, death expenses such as funerals are included in the premium; however, in the United States the predominant form simply specifies a lump sum to be paid on the insured's demise. The value for the policy owner is the 'peace of mind' in knowing that the death of the insured person or if he lives too long, or if he becomes disabled, will not result in financial hardship. Life policies are legal contracts and the terms of the contract describe the limitations of the insured events. Specific exclusions are often written into the contract to limit the liability of the insurer; common examples are claims relating to suicide, fraud, war, riot and civil commotion.

ORIGION OF LIFE ASSURANCE


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Risk protection has been a primary goal of humans and institutions throughout history. Protecting against risk is what insurance is all about. Life insurance came about a little later in ancient Rome, where burial clubs were formed to cover the funeral expenses of its members, as well as help survivors monetarily. With Rome's fall, around 450 A.D., most of the concepts of insurance were abandoned, but aspects of it did continue through the Middle Ages, particularly with merchant and artisan guilds. These provided forms of member insurance covering risks like fire, flood, theft, disability, death, and even imprisonment. During the feudal period, early forms of insurance ebbed with the decline of travel and long-distance trade. But during the 14th to 16th centuries, transportation, commerce, and insurance would again reemerge. And similar to ancient Rome, burial societies were formed in the Buddhist period to help families build houses, and to protect widows and children. However, it was after 1840 that life insurance really took off in a big way. The trigger: reducing opposition from religious groups.

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LIFE-BASED CONTRACTS
Life-based contracts tend to fall into two major categories: Protection policies designed to provide a benefit in the event of specified event, typically a lump sum payment. A common form of this design is term insurance. Investment policies where the main objective is to facilitate the growth of capital by regular or single premiums. Common forms (in the US) are whole life, universal life and variable life policies.

INSURANCE VS ASSURANCE
The specific uses of the terms "insurance" and "assurance" are sometimes confused. In general, in jurisdictions where both terms are used, "insurance" refers to providing cover for an event that might happen (fire, theft, flood, etc.), while "assurance" is the provision of cover for an event that is certain to happen. In the PAKISTAN both forms of coverage are called "insurance", principally due to many companies offering both types of policy, and rather than refer to themselves using both insurance and

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assurance titles, they instead use just one.

4 Is of Insurance Service
The 4 Is refers to the different dimensions/ characteristics of any service. Unlike pure product, services have its own characteristics and its related problems. So the service provider needs to deal with these problems accordingly. The service provider has to design different strategies according the varying feature of the service. These 4 Is not only represent the characteristics of different services but also the problems and advantages attached to it. These 4 Is are

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INTANGIBILITY

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Insurance is a guarantee against risk and neither the risk nor the guarantee is tangible. Hence, insurance rightly come under services, which are intangible. Efforts have been made by the insurance companies to make insurance tangible to some extent by including letters and forms.

INCONSISTENCY
Service quality is often inconsistent. This is because service personnel have different capabilities , which vary in performance from day to day. This problem of inconsistency in service quality can be reduced through standardization, training and mechanization.

INSEPARABILITY
Services are produced and consumed simultaneously. Consumers cannot and do not separate the deliverer of the service from the service itself. Interaction between consumer and the service provider varies based on whether consumer must be physically present to receive the service.

INVENTORY
No inventory can be maintained for services. Inventory carrying costs are more subjective and lead to idle production capacity. When the service is available but there is no demand, cost rises as, cost of paying the people and overhead remains constant even though the people are not required to provide services due to lack of demand. In the insurance sector however, commission is paid to the agents on each policy that they sell. Hence, not

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much inventory cost is wasted on idle inventory. As the cost of agents is directly proportionate to the policy sold.

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PRINCIPLES OF INSURANCE
In every sort of contract there are some principles which must be followed in order to accomplish the contract. Following are the principles of every insurance contract.

INDEMNIFICATION LEGALLITY INSURABILITY

INSURABILITY
Risks that are insurable can be categories in following categories:

LARGE NUMBER OF SIMILAR EXPOSURE UNITS


Since insurance operates through pooling resources, the majority of insurance policies are provided for individual members of large classes, allowing insurers to benefit from the law of large numbers in which predicted losses are similar to the actual losses. Exceptions include Lloyd's of London, which is famous for insuring the life or health of actors, sports

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figures and other famous individuals. However, all exposures will have particular differences, which may lead to different premium rates.

DEFINITE LOSS
The loss takes place at a known time, in a known place, and from a known cause. The classic example is death of an insured person on a life insurance policy. Fire, automobile accidents, and worker injuries may all easily meet this criterion. Other types of losses may only be definite in theory. Occupational disease, for instance, may involve prolonged exposure to injurious conditions where no specific time, place or cause is identifiable. Ideally, the time, place and cause of a loss should be clear enough that a reasonable person, with sufficient information, could objectively verify all three elements.

ACCIDENTAL LOSS
The event that constitutes the trigger of a claim should be fortuitous, or at least outside the control of the beneficiary of the insurance. The loss should be pure, in the sense that it results from an event for which there is only the opportunity for cost. Events that contain speculative elements, such as ordinary business risks or even purchasing a lottery ticket, are generally not considered insurable.

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LARGE LOSS

The size of the loss must be meaningful from the perspective of the insured. Insurance premiums need to cover both the expected cost of losses, plus the cost of issuing and administering the policy, adjusting losses, and supplying the capital needed to reasonably assure that the insurer will be able to pay claims. For small losses these latter costs may be several times the size of the expected cost of losses. There is hardly any point in paying such costs unless the protection offered has real value to a buyer.

AFFORDABLE PREMIUM
If the likelihood of an insured event is so high, or the cost of the event so large, that the resulting premium is large relative to the amount of protection offered, it is not likely that the insurance will be purchased, even if on offer. Further, as the accounting profession formally recognizes in financial accounting standards, the premium cannot be so large that there is not a reasonable chance of a significant loss to the insurer. If there is no such chance of loss, the transaction may have the form of insurance, but not the substance.

CALCULABLE LOSS
There are two elements that must be at least estimable, if not formally calculable: the probability of loss, and the attendant cost. Probability of loss
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of a reasonable person in possession of a copy of the insurance policy and a

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is generally an empirical exercise, while cost has more to do with the ability

proof of loss associated with a claim presented under that policy to make a reasonably definite and objective evaluation of the amount of the loss recoverable as a result of the claim

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INTODUCTION OF STATE LIFE

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HISTORY

The Life Insurance Business in Pakistan was nationalized during March 1972. Initially Life Insurance business of 32 Insurance Companies was merged and placed under three Beema Units named A, B and C Beema Units. However, later these Beema Units were merged and effective November 1, 1972 the Management of the Life Insurance Business was consolidated and entrusted to the State Life Insurance Corporation of Pakistan. State Life Insurance Corporation of Pakistan is headed by a Chairman and assisted by the Executive Directors appointed by Federal Government. Up to July 2000 the Corporation was run by Board of Directors constituted under Life Insurance (Nationalization) Order 1972. In July 2000, under Insurance Ordinance 2000, the Federal Government reconstituted the Board of Directors of State Life which runs the affair of this Corporation. The basic structure of the Corporation for Individual Life Insurance consists of Four Regional Offices Few Sub-Zonal Offices

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Twenty-Six Zonal Offices

111 Sector Offices 461 Area Offices For Group & Pension there are Four Zonal Offices 6 Sector Offices 20 Sector Heads

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FUNCTIONS PERFORMED BY OFFICES

Zonal Offices
The Zonal Offices deal exclusively with Sales and Marketing Underwriting of Life Insurance Policies and the Policyholders Services

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Regional Offices

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Regional Offices, each headed by a Regional Chief, supervise business activities of the Zones functioning under them.

Principal Office
The principal office, based at Karachi, is responsible for corporate activities such as investment, real estate, actuarial, overseas operation, etc.

MAJOR ACHIEVEMENTS

The major function of the State Life Insurance Corporation of Pakistan is to carry out Life Insurance Business; however, it is also involved in the other related business activities such as

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securities

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Investment of policyholders fund in Government

Stock market Real Estate The major achievements of State Life are as under: 1. The Corporation has reduced up to 33% in the premiums on the past and potential Life Policies for the benefit of the Policyholders. 2. It is a profitable organization and it paid Rs.2.657 billion as dividend to the Government of Pakistan since its inception in 1972. 3. State Life has played very vital role in the economy by providing employment to the people of the country i. ii. iii. As permanent employees As part of its marketing force Investing the huge funds in different sectors of the economy.

4. . The Investment Portfolio of State Life as at 31.12.2009 stands at Rs.191.445 billions. 5. Investment portfolio also includes investment in Real Estate which stands at a i. Book value Rs.2.538 billion as at 31.12.2009 6. Whereas i. Fair value is Rs.21.681 billion as at 31.12.2009

7. The Paid up Capital increased from Rs.10 million in 1972 to Rs.1, 100
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million in 2009.

8. The Premium income increased from Rs.0.317 billion in 1972 to 28.367 billion in 2009. 9. Similarly Investment income including rental income increased from Rs.0.81 billion in 1972 to 274.152 billion in 2009. 10.Total statutory fund of State Life stands at Rs.199.445 billion in 2009 as against Rs.1.494 billion in 1972. 11.State Life is smoothly striving towards its objective of making life insurance available to large section of the society by extending it to common man. As at December, 2009 the total number of policies in force Under individual life 2.895 million

Under group life insurance 3.754 million

CHRONOLOGY OF EVENTS
Taking over of management of life insurance companies 19 March 1972 Establishment of state life insurance corporation Reduction of premium rates on new policies Reduction of premium rates on old policies Establishment of UK branch 1st Nov, 1972 1st Nov, 1972 1st Jan, 1973

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1st Jan, 1974

Merger of units and formation of zones Establishment of branch office in Dubai Establishment of agency office in Kuwait Establishment of Multan zone Establishment of Faisalabad zone Establishment of Gujranwala zone Establishment of Sucker zone Establishment of branch office in Pakistan

1st Oct, 1975 July 1978 May, 1983 1st Oct, 1985 1st march, 1986 1st July 1986 1st April, 1990 May, 1992

CORE VALUES
MISSION:
To remain the leading insurer in the country by extending the benefits of
insurance to all sections of society and meeting our commitments to our policy holders and the nation.

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QUALITY POLICY:

To ensure satisfaction of our valued policyholders in processing new business, providing after sales service and optimizing return on Life Fund through a quality culture and to maintain ourselves leading life insurer in Pakistan

OBJECTIVES:
To run life insurance business on sound line. To run life insurance business on sound line. To provide more efficient service to the policyholders. To maximize the return to the policyholders by economizing on expenses and increasing the yield on investment. To make life insurance a more effective means of mobilizing national savings. To widen the area of operation of life insurance and making it available to as large a section of the population as possible, extending it from the comparatively more affluent sections of society to the common man in towns and villages. To use the policyholders fund in the wider interest of the community.

ORGANIZATIONAL STRUCTURE

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CHAIRMAN

EXECUTIOVE DIRECTOR

DIVISONAL HEAD

ZONAL HEAD

DEPUTY GENERAL MANAGER

ASST GENERAL MANAGER

MANAGER

DEPUTY MANAGER

ASST MANAGER

EXECUTIVE OFFICER

ASST SUPERINTEND ENT

SUPERINTEND ENT

OFFICE ASST

SENIOR OFFICE ASST

RECORD

NAB QUASID

QUASID

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MANAGEMENT HIERARCHY:

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CHAIRMAN

EXECUTIVE DIRECTOR

DIVISIONAL HEADS

REGIONAL HEADS

ZONAL HEADS

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BOARD OF DIRECTORS:

Mr. Shahid Aziz Siddiqi from 12-06-2008 Mr. Qamar Zaman Chaudhry Mrs. Spenta Kandawalla Mr. Aslam Faruque Mr. Amin Qasim Dada Mr. Rasheed Y. Chinoy Syed A. Wahab Mehdi Syed Hur Riahi Gardezi

CHAIRMAN DIRECTOR DIRECTOR DIRECTOR DIRECTOR DIRECTOR DIRECTOR DIRECTOR

SECRETARY BOARD:
Mr. Akbar Ali Hussain

BOARD AUDIT COMMITTEE:


Syed Hur Riahi Gardezi CHAIRMAN Mrs. Spenta Kandawalla MEMBER Mr. Aslam Faruque MEMBER Mr. Rasheed Y. Chinoy MEMBER Syed A. Wahab Mehdi MEMBER Mr. Sher Ali Khan SECRETARY

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AUDITORS:
PAKISTAN
M/s. Riaz Ahmed & Company, CHARTERED ACCOUNTANTS M/s. Avais Hyder Liaquat Nauman CHARTERED ACCOUNTANTS

GULF COUNTRIES
M/s. Sajjad Haider & Co., CHARTERED ACCOUNTANTS

APPOINTED ACTUARY:
Mr. Shujaat Siddiqui MA, FIA, FPSA,

PRINCIPAL OFFICE:

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Telephones: 99202800-9 UAN 111-111-888

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State Life Building No.9, Dr. Ziauddin Ahmed Road, Karachi-75530

Cable: "STATELIFE" Telex: 21079 SLIC-PK Fax: 99202820 E-mail: edpgs@statelife.com.pk Website: www.statelife.com.pk

Regions:
There are 4 regions in Pakistan headed by regional chiefs responsible for looking after all the zones under his administration. These regions are; Southern Region Central Region Multan Region North Region

Zones:
There are 26 zones in Pakistan headed by the zonal head responsible for procurement of business to achieve the set business target of the organization. The basic structure of the Corporation consists of: Four Regional Offices, Twenty-Six Zonal Offices, A few Sub-Zonal Offices, 111 Sector Offices, A network of 461 Area Offices across the country for Individual Life Insurance;

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Four Zonal Offices, 6 Sector Offices with 20 Sector Heads for Group & Pension are involved in the Marketing of Life Insurance Plans policies and products offered by State Life and a Principal Office. The Zonal Offices deal exclusively with Sales and Marketing. Underwriting of Life Insurance Policies and the Policyholders Services. Regional Offices, each headed by a Regional Chief, supervise business activities of the Zones functioning under them. The Principal Office, based at Karachi, is responsible for corporate activities such as investment, real estate, actuarial, overseas operations, etc. Karachi (Southern) Zone Karachi (Central) Zone Karachi (Eastern) Zone Hyderabad Zone Quetta Zone Sukkur Zone Mirpurkhas Zone Larkana Zone Lahore Central Zone Lahore Western Zone Gujranwala Zone Faisalabad Zone Sargodha Zone Sialkot Zone Multan Zone Sahiwal Zone
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RahimYar Khan Zone Dera Ghazi Khan Zone Bahawalpur Zone Peshawar Zone Rawalpindi Zone Abbottabad Zone Gujrat Zone Islamabad Zone Mirpur (AK) Zone Swat Zone

Group and Pension:


There are 4 zonal offices of Group &Pension and under these zones there are many sector offices; Group and Pension Rawalpindi Zone Group and Pension Peshawer Zone Group and Pension Karachi Zone Group and Pension Lahore Zone

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SLIC has following departments which performs the different


functions of SLIC. These departments are;

Audit Department

New Business Department

Agency Department

Finance & Accounting Department

Policyholder Service Department

Personal & General Service Department

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AUDIT DEPARTMENT
Audit department of state life do internal audit of transactions which occur on daily basis. Management of any organization is responsible for ensuring that proper accounting records are kept and its assets are safeguard. To best discharge this responsibility instituting a system of internal control is essential to ensure that work is properly carried out by the employees. The organization then relay on its system for the production of reliable management information and the financial accounts , and to prevent ERROR,FRAUD AND LOSS OF ORGANIZATIONS ASSETS actually internal audit is a part of internal control.

Internal Control:
Internal control may be defined as whole system of control, financial and otherwise, established by the management in order to carry out the business of the organization in an ordinary manner, safeguard its assets and secure, as far as possible .the accuracy & reliability of its records. It may be noted that the concept of internal control goes beyond financial and accounting matters and the custody of organization assets to include controls designed to improve operational efficiency and adherence to organization policies.

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Objects of Internal Audit


Internal audit is an independent appraisal function established within an organization to examine and evaluate its activities as service to the organization. The object of internal audit is to assist member of the organization is effective discharge of their responsibilities. To this end internal auditing furnishing those with analyses, appraisal, recommendations, counsel, and information concerning the activities are viewed.

Internal auditor should:


1. Review the system to ensure compliance with those policies, plans, procedures, laws and regulations which could have a significant impact on operations and report, and determine whether the organization is in compliance. 2. Review the means of safeguard assets and as appropriate verify the existence of such assets. 3. Appraise the economy and efficiency with which resources are employed. 4. Internal auditor should be independent of the activities they audit
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Internal auditors are independent when they can carry out their work freely and objectively.

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TYPES OF INTERNAL AUDIT: Pre- audit:


Audit before making payment is called pre audit.

Post- audit:
Audit after making payment is called post audit. In GROUP & PENSION mainly is pre audit is used.

External-audit:
The audit which is done through the external parties like chartered firms. GOVT organization audit/Commercial Audit: Audit of the Pakistani GOVT owned organization is done through the AGP

Objectives Of Internal Accounting Controls:


The system of internal accounting control is intended not only to maintain an adequate method of processing accounting data but also to safeguard the organization against possible financial loss due to fraud or error. The control is designed to ensure that; The organization receives and enters its accounting records, all the income
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and revenue to which it is entitled.

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All expenditure is properly authorized. All assets are properly recorded and safeguard. All liabilities are properly recorded and provision is made for known or expected losses. The accounting records provide a reliable basis for the preparation of accounts.

Internal Audit Role In State Life:


Accurate information is one of the essential factors in the process of decision making both policy and management; this is as true in state life as in any other organization. in the absence of accurate and dependable information management/board of directors are unable to make policy and management decisions .as the function is passed downward to the infrastructure of state life, function of internal audit apart from the verification of financial evaluation to pin point week areas in the system, internal control .in state life some items are subject to pre-audit while some are subject to post-audit.

List of payment subject to post audit:

changes.

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All payment vouchers of salaries, except December, January and

Staff overtime fortnightly. Monthly fixed overtime to staff Entertainment to officers for sitting late Monthly officers entertainment and newspapers Monthly car rental to officers Monthly tea expenses to staff Air ticket Air insurance Telephone antiseptic bills Labor charges Office telephones Current t monthly salary advances

Payments subject to pre-audit:


All increase in retainer ship payments will be pre audited. All payment vouchers of recoveries on account of bank loan association/union subscription p.f contributions, income tax at source and insurance premium, will be pre-audited in July and
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December only.

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All cases where accident benefit is payable will continue to be preaudited.

NEW BUSINESS DEPARTMENT


Management Hierarchy Of New Business Department

A.G.M

MANAGER

DEPUTY MANAGER

ASSISSTANT MANAGER

STAFF

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The business of SLIC is initiated through new business department (NBD) when insurance sales rep sells policy to any client then this department handles all the document procedures Mr malik nazir ahmad is the incharge of new business department. In this department as the name shows, new contracts start between proposes and insurance company. Proposer is a person who applies for the insurance protection. Main function of the NB is underwriting

The department is responsible for processing the new business introduced by the sales force right from receiving a proposal on the counter to mailing the policy document to the policy holder It has various sections to perform the different task relating to the acceptance or rejection of risks for life insurance, the proposals are received and initially is checked in all respects Completion of all columns and then processed by the underwriters depending upon whether they have been introduced under the medical or non medical scheme. The risk is assessed keeping in view

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the following factors

personal data , occupation ,physical and social features , health , family history of the prospect , moral hazard , source of income , nomination , relationship between the nominee and the prospect . Previous life insurance history of the prospect if any, field officers or sale representative confidential report included in the proposal from, Financial underwriting i.e. Source of income, its legality and proof, relationship between the prospects income and sum assure .in case of field officers or sale representatives reports have more importance. After this assessment, the underwriting decision is made which may be acceptance of a risk at ordinary rate or with loading, calling additional evidences relating to health or financial status of the prospect, postponing for a definite period or straight away declination. Premium rates, installments are the checked and first premium receipts are issued on receiving payments. In the last, policy contract are issued under intimation to the field force, and concerned department like commission payment, agency

is the function on new business department. This is also a key

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administration, computer division and marketing. This in brief terms

function as the underwriters are responsible for the financial health of life institution. By accepting good risks they promote profitability and growth, which helps in meeting the financial obligations of the life institutions towards the policyholders, its employees and government.

Process of dealing with new customer:


First of all sale rap motivate the customer to take policy. Then sale rap fills proposal form for that customer. Then sale rap takes Rs 500 as token money as underwriting fee for customer. Then proposal form come in new business for allotment of proposal number where proposal number for a particular customer is allotted. Then process of underwriting 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 of premium is done. After the calculation of premium the policy number is allotted and policy bond is issued to customer.
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Sections of New Business


1. Proposal section 2. Underwriting section 3. Calculation section 4. Policy issue section 5. Computer section

1. Proposal Section:
In proposal section policy number is allotted to a new customers proposal for future reference. All the work performed in proposal section is entered in a register called proposal register. First of all issue the proposal number and then record the proposal number, serial no, age, table & term and then SR, AR, PR no and the name of owner of policy form. These proposal forms are attaching with balance statements with the issue no but those policy form that have no balance statements take a side. Those who have balance statements send it to the underwriting department. There are some other forms which have some objections if they are clear

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2. Underwriting Section:

53

than recorded into the ledger to OK its mean ok.

Underwriting is the process through which the underwriter assesses the risk associated with the insurance proposal. Underwriter verififies the proposal information provided in the proposal form. If he feels that client should have a medical check up than SLIC have its own panel of doctors to provide medical assistance.

Types of underwriting
I. II. Lay underwriting Final authority

I.

Lay underwriting:

A junior underwriter who checks all the documents of policyholder, if the documents are correct, then he sends to final authority. II. Final authority:

A person who checks all the documents and decision of lay underwriter makes final decision. Underwriting panel: The underwriting specialist check the case thoroughly and see his name, NIC no, age, weight, height, nominee, name occupation and address. if

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medical report or other tests of medical.

54

they think there is something wrong then they must be conscious and call

If they seem that case are correct they fill the form of policy brief sheet of bottom line which they enter the height, weight and also give the rate about to see his occupation and they can also use some code which they give different occupational person. For example carpenter code is 161.if they forget the code of any occupational person then they give code of 078.they think that 078 codes, is best solution. They sign the form and send to doctors.Doctors panel: The doctor panel head is known as CMA (CHIEF MEDICAL ADVISOR) i.e. Dr Naeem and also authorized doctors Dr Saira who has recommended the case by underwriters for medical reports etc. They must check the nominee name, NIC no and his occupational stress. if the policy holder has some disease problem then they can mark them his case by N.D and they can also give a declaration certificate that if he die during two years then the company cannot pay the claim. The maximum limit of N.D case is 15, 00,000. If the policyholder has government employee then they can give the categories no 4 such as school teacher, doctor etc. but if they are carpenter, bricks holder then they can give 5,6. There are basically three categories of female. Government job and education
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Private illiterate

55

Household

But the male have only one category. If the case has 10, 00,000 then only one person sign but if they are Rs 20, 00,000 then they are Rs 30, 00,000 then three persons can check. If the policyholder are smoker then they will allow only smoking daily 6 up to 10.but if they smoke 20 up to 25 then they are not capable to grant the policy. The doctors also decide & check the age and check the underwriting requirement table e.g. if the person age is 18-40 then they have Rs 200,000 sum insured and they are non-medical case.

3. Calculation section:
In calculation section calculation of premium is done. Premium can be pay in the following way; Yearly Half yearly Quarterly Monthly

Rate of interest and premium rate is calculated.

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Rate of premium depends upon the age of a person. If the age is higher, then more rates will be charged and if age is low then low rate will be charged. Rate also depends upon the maturity period. Different tables are used for calculating the rate of premium. Most commonly used table is; Table 03 Table05 Table07 Table 12 Table 18 Table 19 4. Policy issue section:

After completing the calculation, the number is allotted to policy holder .in policy issue section; all the records are maintained in the policy register.

5. Computer section
New business department has its own computer section, which contains all the records of policy holders. The department is computerized in

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allowed to each policyholder. There are two prints used for office work.

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1995.window AIX version 3 is used for sorting the data. A code number is

One is raw print 7 the other is office copy. The raw print is used to check the record of each policyholder. And the office copy is used for their record. smart term program IBM are used and they start login by college and then enter the new business department and open the whole table of proposal form no and his bio data. first they can enter table a and then proposal no and series that means proposal forms series and then his name are also enter and policy no and then also enter the table and term and then issuing date of underwriting and date of receipt and write his date of birth ,age, mode i.e.

Yearly Quarterly Monthly Similarly they can allot the no and then write postal code i.e.078 and then his address. So write the sum assured and enter the AIB value and the rate which they can allot. They Can enter the series vise FIB NO and they give the command of print with the recipient printer no 03

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AGENCY DEPARTMENT

Management Hierarchy Of Agency Department:

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ASSISSTANT GENERAL MANAGER

MANAGER

DEPUTY MANAGER

ASSISSTANT MANAGER

STAFF

State life is one of those few organizations whose product is not over the counter but it has to be introduced to the expected buyer through a huge marketing. The marketing force, usually known as field workers, is regulated

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called agency administration department

60

through an important department which in insurance industry is

The agency administration results, trained, promote and provide services to its field workers so as to ensure them skilled profession, sound career, handsome income and many fringe benefits to ease their life. Service provided by the SLIC is tangible 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 SLIC is tangible and therefore is persuasive method. Field force of SLIC plays an effective role in selling of intangible products. In order to maintain record of the field force agency department was established. The head of agency department is Mr. Shakeel Ansari and executive officer Mr. Asif mir .the main function of this department includes recruitment, promotion, and termination of field force, allied and medical facility for field force. This department is also responsible for issuance and renewal of licenses to the field force. State life has two levels of recruitment.

Recruitment: 61
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The sale representative is appointed by SO/SM .The requirement and conditions for the appointment of SR are as follows. State life has two level of recruitment.

Regular sales representatives:


Minimum qualification required is matric Age at entry must not be less than 18 years. Annual quota for SR is Rs 10000 Application for the issuance of license is necessary and is renewed after each 3 years. An application form, along with license fee Rs 50, attested photocopies of documents and nomination form is submitted to the agency department .a code number is allotted at the submission of application to SR and he can start working as agent of the SLIC of Pakistan.

Graduate sales representatives:


Must be graduate required Less than 30 years of age having N.I.C.

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They are paid stipend.

Both above type of sale representative are registered under insurance ordinance 2000 and insurance rules 2002.they are required to get their registration renewed after every two years and submit a statement and declaration annually as required under above referred ordinance & rules .Their primary job is to sell life insurance policies.

Promotion:
SR is promoted, upon fulfillment of certain terms and conditions and on achievement of business targets, to SO. Similarly SO is promoted to SM and SM to AM.

Criteria of promotion from SR to SM:


Two year working as SR: In case of promotion of SR to SO some one must have to achieve the target of 312,000 in his collected business in first year and the same in second year. Must have at least 20 policies enforce on different lives. Must have achieved a minimum second year persistency of 75% in the immediate preceding year. Must have achieved a minimum renewal persistency of 90% in the immediate proceeding year

Criteria of promotion from SO to SM:


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Must have working of minimum 2 years as SO In case of promotion of SO for SM someone must have to achieve the target of 612000 of his collected business in first year and the same in second year Must have at least persistency of 70% in the immediate proceeding year Must have minimum renewal persistency of 90% in the immediate preceding year; Must have minimum 4 productive SR

Appointment as SR SM & SO:

In response to our application to the state life insurance corporation of Pakistan for registration as a sale representing must confirming it under the contract with the legal status of a state life agent which means an agent whose name appear in the register of agent maintained by the corporation and who has valid and subsisting the contract in writing with the corporation to act as an agent (as distinct from an employee under state life employee service regulation 1973). The main contract should be effective date of your registration. Following are the basic terms and condition.

This appointment is subject to the provisions of the insurance ordinance 2000, insurance rules 2002 and Securities and Exchange

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rules and regulations framed by the government and the securities

64

Commission rules 2002 as amended from time to time and other

and exchange commission of Pakistan and order and directives issued from time to time. Your area operation must be signed. The contract is issued on the basis of the statement and declaration made by you in your application for registration. You will have to appear in person for such courses and or other tests and or interviews shall be constructed as an admission on your part that you are not a bona fide .Your minimum qualification for entering into agency contract shall be matriculation and you should require completing the foundation course of three months duration. Your performance wills received on quarterly basis .after your appointment if you fail to complete your quarterly quota in two consecutive complete quarters; the corporation reserves the right to terminate this contract.

Prize & Awards:


The field workers are motivated by giving those prizes and awards on their monthly and yearly achievements. The height of it is an annual convention which held at a prominent place of prestige in the country in which all the qualities around the country share their knowledge and experience, enjoy recreational activities and above all get benefit of company of successful seniors. They disperse filled with thrill and

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enthusiasm to go at more height to catch new stars.

Other Benefits:
In order to run their offices company maintained furnishes offices are provided and those who wish to open their officers, as they desire are paid cash compensation in lieu of an office to maintain their own offices. State life give their field workers and families a due care for which they are covered for indoor and outdoor medical treatment, consultation from senior doctors and for clinical investigation from reputed pathological labs .In case of chronic diseases additional medical facilities are given. Their lives are also covered for heavy sum of insurance against accident and death through variety of Group Insurance Policies. The Company pays the premiums and for additional coverage subsidized rate of premium is charged which is deducted from their commission.

Termination and Demotion:


Any agent of SLIC, who behave negatively, violates the rules and regulation or indulge fraud or mal-practice, can be terminated by the

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demoted to immediate lower rank of the field force.

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zonal head. Any agent who fails to meet the annual quota of FYP is

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 IST year) = Rs 50 SR (renewal of license) SR (renewal with late fee) SO/SM (renewal of license) = Rs 150 = Rs 250 = Rs 250

SO/SM (renewal with late fee) = Rs 400 The agency department is also involved in the following matters of field persons, 1. Medical of field persons 2. Rent

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

Renewal of SR, SO and SM:


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Mr .Afzal Ch deal with the work of renewal of registration of field workers SRs apply for renewal of his registration every year and his expiry limit is for two year. SO and SM apply for renewal of their registration every year and their expiry limit is only one year. In case if someone is delayed for the renewal, the agency manager has authority to cancel the registration or carry his registration. Renewal form is available from stationary department having annual statement and declaration by an annual agent, signed by the persons applying for renewal. ZCC (zonal certification committee) will sign the renewal application comprising of three members (AM, sector heads, zonal heads) and shall [pass the renewal application.

Cash compensation for SO & SM


When any SR is promoted as SO, onetime cash compensation is made to the SO of that SR who is promoted .this compensation is as If his business is less than 500,000 then 6000 will be given to that SO. If business is greater than 500,000 and above then 10,000 will be given to that SO. Similarly when SO is promoted to SM, one time cash compensation to the SM of that SO.
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If his business is above 500,000 and below 100, 00,000 than 8000 will be given to that SM, and if business is above 10, 00,000 than 12000 will be given to the SM as one time cash compensation.

Medical facilities to SO & SM:

When any SO or SM achieve the persistency of 75% he qualifies for the medical facilities received from SLIC. He becomes registered from a specific registration form; registration should be completed from 31 March. A card is issued after registration to the field workers. SO are given the card limits from Rs 3000 to Rs 4000.SM is given the card limit from 3000 to 6000 rupees. These limits should be used only in respect of medicine facility and normal delivery. Other surgical and other medical facilities will also to be paid to the workers, when they need .these have no limit. Some medical stores are in the panel of SLIC from where the field worker can purchase the required medicine. Likewise there are some authorize hospitals (ittefiq hospital, shalamar hospital) from where the field workers can obtain the surgical and other hospitalization benefit.

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FINANCIAL AND ACCOUNT DEPARTMENT


This department maintains the record of all the cash transactions. It prepares payroll for the regular employees and disburses the amount. It also takes care of the fringe benefit such as medical facilities provided to the office staff. Commission that is paid to sales representatives, sales officers and sales managers are also calculated and paid through this department.

To keep the corporation on financial track balance sheets and income statement also prepared on annually, monthly and weekly basis. The principal office sends annual budget to the department and department is responsible for proper utilization of cash disbursements. The

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department also send budget forecast for new budget proposal.

Payment on behalf of the other zones and preparation of bank reconciliation statements are also function of this department. This department consists of following section: Commission Salary Disbursement Loan Cash counter

COMMISSION:
Commission department facilitates the field force by offering commission and due bonuses .the department is directed to calculate and analyze the earning of last year, providing advances and loans to field force and offer other fringe benefits to motivates the field force. Commission is only give to commission based persons who are SM, SO AND SR. Commission is calculated from the premium after subtracting the tax. Then check that SM not takes any advanced loan and any claim from zonal, regional.

Structure of commission:

First year premium SR-------- 35% SO------- 15% SM------ 8%

QUARTER BONUS

2%

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2.5%

71

2.5%

Persistency bonus:
It gives on the persistency of the last year business. On 80% business the commission is 1.1 percent. On 81, it is 1.2 and onward.

Second year premium SR-------- 10% SO------- 2% SM------ 1% THIRD YEAR PREMIUM SR------ 5% SO----- 1% SM----- 0.5%

SALARY & LOAN:

Employees are lying in the four categories Related to their appointment and their promotion. According to their category the funds, benefits and salary are gives to employees. In this section loan application and salary form are filled here related their category and then according to that make the voucher slip and passed by the officer.

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CASH COUNTER:

72

In cash counter premium and loan amount is submitted .There is two accounts for policy holders. First year account e.g. 1173 A/C Renewal A/C 1089 A/C is account no of renewal account.

Collection is done in two ways: Cash Cheque

Different accounts no for renewal

Renewal on time Renewal with late fee Loan Lapsed policies Alteration Other zone Wrong policy

675 696 383 571 572 573 570

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POLICYHOLDER & SERVICE DEPARTMENT


Management Hierarchy Of PHS Department:

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ASSISTANT GENERAL MANAGER

MANAGER

DEPUTY MANAGER

DEPUTY MANAGER

ASSISTANT MANAGER

ASSISTANT MANAGER

STAFF

STAFF

PHS department performs following functions. Renewal or revival of policies Alteration in the policy Payments of death claims Payment of maturity claims Payment of injury claims

Renewal/ Revival of Policies:


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PHS does renewal or revival of policies. Renewal of policies is done when term of the policy ends and policyholder wants to renew his policy. Revival is done of those policies which has been lapsed due to none payment of policies premium. A lapsed policy may be revived during the lifetime of the life insured, but within a period of 5 years from the due date of the first unpaid premium and before the date of maturity. Revival of a lapsed policy is considered either on non-medical or medical basis depending upon the age of the life insured at the time of revival and the sum to be revived.

Alteration:
Alteration may be done in table or in conditions or in sum insured. The endorsement will be attached with original policy documents for alteration purpose.

Kinds of alteration
Calculated alteration Contractual alteration

Calculated alteration

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This alteration includes alteration in Sum insured Table & term Load After revival term & condition Special revival after revival Change in terms & conditions

Contractual alteration For legal point of view this alteration is called contractual alteration. Alteration may have specified period for alteration in the policies for example in anticipated policies before the 4 year of term of policy alteration can be made. In Jeevan Sathi policy if any alteration is done it should be done with in one year. For this policy the evaluation will be on Financial aspect Physical aspect Moral aspect

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Mode of payment is usually yearly then policy holder in the time on need say to change it in the monthly, quarterly, half yearly. Excess is charged for this purpose.
Half yearly Quarterly Monthly 52 % of annual premium 27 % annual premium 9% of annual premium

Procedure for Maturity Claims:


A good news letter is send to policyholder consists of following information. It is a matter of great pleasure that your policy has matured. It is a time to fulfill the goals that you had set years back. For collecting maturity benefits, please send a written request along with following documents to your servicing State Life zonal office: Original policy document Copy of National Identity Card Maturity discharge voucher duly verified by your bank If your signature has changed over the years, please send us your three specimen signatures of old and new styles.
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Immediately on receipt of above documents, we will process the case further for payment of amount due, if any, against maturity claim under above policy.

Procedure for Death Claim:


State Life insurance policies provide wide range of benefits in case of death of the persons covered against them. If loved one covered under any of State Life has expired, you should lodge a death claim with state life. All you have to do is to send a written intimation to the zonal office of State Life servicing the policy against which you are lodging a death claim. State life will, after evaluating the case, contact for other required documents for processing of death claim.

Survival Benefit Claim:


If Anticipated Endowment Assurance policy has completed 1/3rd or 2/3rd term of the policy, it can withdraw a sum equal to 25% of the sum insured of policy. For withdrawal of Survival Benefit, send a written request along with following documents to the servicing State Life zonal office:
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i.

Original policy document

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ii. iii. iv.

Copy of National Identity Card Survival Benefit discharge voucher duly verified by your bank If the signature of persons has changed over the years, then are need to send three specimen signatures of old and new styles

Immediately on receipt of above documents, state life will process the case for payment of amount due, if any, against survival benefit claim under above policy.

Injury Claim:
If State Life insurance policy contains an Accidental Death & Indemnity Benefit (AIB) supplementary cover, and the insured have sustained an injury as specified in the contract, he can apply to state life for an injury claim within 20 days of sustaining the accident. For lodging injury claim, there is need to send a written intimation of the accident mentioning therein the date of accident to servicing State Life zonal office. After receipt of intimation from insured, the case will be further looked into and zonal office will contact accordingly.

Procedure for Loan against Insurance Policy:


State Life insurance policy provides a valuable facility of loan to meet

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net surrender value of policy. On policy loans, state life charge markup @

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immediate financial exigencies. Policyholder can avail a loan up to 80% of

of 10% per annum compounded semiannually. If policyholder is interested to avail loan under his policy, he can apply for loan.

Procedure for Volunteer Policy Surrender


If policy holder wants to surrender his policy he informs to the state life about its decision and fills a form of surrender of policy after that his request will be entertained and surrender amount will be transferred to policyholder.

PROCEDURE OF DEATH CLAIMS IN GROUP LIFE INSURANCE;


Procedure to lodge Death Claim
Procedure / requirement for the settlement of death claims Death intimation, on death of any government employee, the department / employer sends the written death intimation to the Incharge Claims concerned G&P zone along with the death certificate.

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On receiving the death intimation, the department / employer would sent the claim forms C & D by the claim department of the Group & Pension Zone. The Department / employer is required to fill in the claim forms C & D, properly sign and stamp them and send them back to the concerned G&P zone, alongwith the following requirements.

1. Death certificate, issued by Local Municipal body, Cantonment bodies, Union Councils, Services hospital, Government hospitals, Semi Government hospitals, Railway hospitals and Trust hospitals (any one of the above). In case of tribal areas, the death certificate issued by political agents, Commissioner, Assistant Commissioner, Magistrate Class-I are also acceptable. 2. NIC of the deceased and the claimants (attested photocopies). 3. Pension book in original for post retirement death (the same would be returned back after verification). 4. Attestation: All the photocopies must be attested by the concerned Gazetted officer. NOTE: The provision of all above requirements would ensure the quick settlement of the claims. Deficiency of any one of the above would result in the delay in the claim settlement.

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Commercial Groups:
Procedure / Requirement for the settlement of Death/Disability Claims:
1. Death intimation: The policyholder/employer is required to send the written death intimation, to the Incharge Claims of concerned Group & Pension zone. 2. On receipt of intimation, after necessary checking, the necessary claim forms would be sent to the policyholder/employer by the Claims department of the Group & Pension zone. 3. The policy holder/employer is required to fill in the claim forms, properly sign and stamp them and send them back to the G&P zone along with the following requirements.

For Death Claims:


1. Death certificate, issued by the local bodies, cantonment board, services hospitals, government hospitals, semi government hospitals and railway hospital. (Any one of above)
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2. Last attending physicians statement.

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3. Post Mortem report and FIR/police investigation report in case of Accidental death benefit.

A. For Age proof: i. ii. iii. iv. v. vi. School/college certificate showing date of birth National Identity card Valid passport Discharge certificate (in respect of ex-defense forces Personnel) Certificate of age by the policyholder organization Birth certificate issued by local body/cantonment board (Any one of the above)
B.

For disability claims:

1. Employees statement. 2. Employers statement. Attending Surgeons statements. (Claim forms A, B, and C, respectively). 3. X-rays and medical investigation reports etc, if any.

Officer).

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4. (All the photo copies must be attested by the concerned Gazetted

5. The provision of all above requirements would ensure the quick settlement of the claims. 6. Deficiency of any one of the above would result in the delay in the claim settlement.

PERSONNEL & GENERAL SERVICE DEPARTMENT


This division has dual functions 1. 2. Personnel management General services

This department performs following functions;

FUNCTIONS: Personal Management


Personnel policies, motivation, incentive and implementation of service regulations Office management development Personnel management Liaison with government labor relations and maintenance or office discipline including investigation against officers and staff
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General Services
Procurement
Purchase of goods and services Uniforms Communication Other services

Maintenance
Office machines & equipment Furniture & fixture Transport & conveyance Telephone and telex Receipt and dispatch Assets register Service like canteen security and cleanliness

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Relation of personnel & general service department with other departments:

AUDIT

P&GS
NEW BUSINESS B& F

Management Hierarchy:

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MANAGER P&GS

ASST. MANAGER

STAFF

SECTIONS:
Personnel Section:
All the employee matters such as appointment, promotion, demotion, transfer and allowances are dealt by personnel section. Annual confidential reports- ACR the employees are prepare, under the supervision of this section, by the departmental heads. For the appointment of the staff, an advertisement is initiated in the newspaper. Zonal head is competent authority for this appointment. This appointment also depends on the business of zonal office .the appointment of officers is done by principal office Karachi or regional office. Selection

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committee constituted by zonal head conducts test and interview.

For promotion of the employees, there are ACRS are necessary and minimum three years are required to remain in one cadre. Each employee is promoted by the criteria and instructions set by principal office. PO or Regional office does promotion of officers. In Lahore there are 362 office employees, 9 sector head and 43 area managers (AM).

Sub Sections:
There are no of subsections in this department;

1. Medical Section:
All the medical expenses are beard by SLIC provided that these are incurred in approved hospital the expenses of medicine are reimbursed. The reimbursement of medicine is not allowed to staff (having grade 1 to 8) but they are given Rs 1500 per month in shape of salary as medicine allowance.

2. Leave Section:
Following are the two main types of leaves: Casual leave Medical leave 18 days casual leaves are allowed to all employees in a year .the medical leave or application leave is allowed for 48 days in a year .unused leaves
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are accumulated and after two years these leaves in excess of 180 days can be encashed,in case of death all leaves, not utilized, can be enchased.

3. Rent Section:
When sale manager is promoted to area manager he is categorized as A, B, C, and he is entitled to his own office at his own choice at the expenses of state life .a good location is selected by AM. After selection of place, zonal head is informed about the location, by application written by AM. This application is transfer to P&GS department for the analysis of location of the office. This location is analyzed by zonal rent committee (ZRC). A lease agreement is made with the landlord after analyzing the approved map for the location and property registration form. The office rent entitlement for categories of A, B, C, Am is Rs .2000, Rs 2000, & Rs 2000-10000 P.M. respectfully.

4. Stationary Section:
This section maintain the record of stationary such as paper, pencil, envelops printed letters, forms, calculators, etc .when ever any department requires the stationary ,the concerned department fills a requisition slip. The stationary is issued to concerned department and is recorded in the register.

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5. Capital Section:
This section is responsible for purchase, sale and maintenance of furniture & fixture; equipment etc .a zonal procurement committee is constituted for purchase of assets. The assets are purchased from suitable supplier after critically analyzed the quotation offered by different venders. Each year assets are depreciated @ 10% p.a. the entry for the purchase asset is made in the register for fixed assets. Each year the closing balance is intimated to PO Karachi.

6. Daily Attendance:
All the employees of Group and pension call their attendance before starting their duty. If any employee is not at time than he will call late attendance and three late attendances will be considered a casual leave.

7. Record Of Employees:
There is complete record of employees who are at work or have retired. And all necessary data is maintained about every employee as date of appointment, date of retirement, promotions, medical services and all other data.
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PRODUCTS

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As we know that SLIC has dominated life insurance market and it acquires about 90%market share of life insurance. So it has introduced a great number of products and it is offering products appropriate for every inhabitant of Pakistan SLIC offers different products for Individual life

Group life insurance

INDIVIDUAL LIFE PRODUCTS

Whole Life Assurance:


It is a unique combination of protection and savings at a very economical premium. Death at any time before age 85 years terminates payment of

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the event the insured survives to the policy anniversary at age 85 years, the

93

premiums and the sum insured and attached bonuses become payable. In

policy matures and the sum insured plus bonuses become payable. Under this plan the rates of bonuses are usually much higher than the other plans and they help in increasing not only protection but also the investment element of the policy substantially. This plan is best suited for youngsters who have at initial stages of their careers and cannot afford to pay high premiums. Individuals who anticipate requirement of a lump sum in far future can also this plan

Endowment Assurance:
Its a safest and surest method of guaranteed cash provision either at a specified time or at death (Allah forbid). Under these policies, the sum insured plus bonuses are payable at the end of the specified number of years or at death of the life insured if earlier. Premiums are payable for the specified number of years or till death, if earlier. The benefits under the plan can be further increased by attaching supplementary covers. The plan serves the requirements of a family in various shapes by way of financial help at retirement, education of children or provision of capital for business.

Anticipated Endowment Assurance: 94


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This is a modified form of endowment assurance and is also called Three Payment Plan. Besides fulfilling the long-term financial needs, it also helps

in meeting the short-term financial exigencies. As the name suggests, the plan offers three payments throughout term of the policy. The plan offers survival benefits equal to 25% of sum insured on completion of 1/3rd and 2/3rd term of the policy. If the policyholder does not withdraw the survival benefits, a very attractive special reversionary bonus is available. On completion of term of the policy, the remaining 50% sum insured plus accrued bonuses shall be payable. If the life insured expires during term of the policy, sum insured, accrued bonuses, unclaimed survival benefits and special reversionary bonuses are payable. The plan is suitable for the individuals who have long-term financial needs but also anticipate requirement of money relatively earlier. Three Payment Plan helps fulfilling these short-term financial needs without terminating the actual contract.

Sadabahar Plan:
Sadabahar is an anticipated endowment type with-profit plan that provides lump sum benefit at certain stages during the premium-paying term or on earlier death. In addition, this plan has a built-in Accidental Death Benefit (ADB) rider so that the policyholder gets an additional sum assured in case of death due to an accident. This plan is a safe instrument for cash provision at the time of need. With
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this plan, the policyholder can secure greater protection and continued

prosperity for the family at affordable cost affordable cost.

Admissible Ages and Terms this plan is available to all members of the general public, aged from 20 to 60 years nearest birthday. Both males and females may purchase this plan. Terms offered under this plan are 12, 15, 18, 21, 24, 27 and 30 years.

Survival Benefits:
On completion of one-third of the policy term, 20% of basic sum assured can be taken by the policyholder. Another 20% of the sum assured can be taken on completion of two-third of the policy term and the remaining 60% of basic sum assured plus accrued bonuses (if any) shall be payable at the end of the policy term in the event of survival of the assured.

1) If the option to withdraw an installment of 20% sum assured is not exercised on the due date or within 6 months after the due date, a special bonus will automatically be added to the policy at the end of 6 months. In this event:

2) On death of the assured while the policy is in force, the special bonus

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will be payable in addition to (1) Basic Sum Assured (2) Other

Reversionary Bonuses accrued on the policy and (3) the amount of any installment left with State Life.

3) On the maturity date, the special bonus will be payable together with all the installments of the sum assured remaining with State Life, in addition to regular reversionary bonuses accrued on the policy.

4) So long as the policy remains in force, the policyholder may surrender the unclaimed installment of sum assured together with the related special bonus. The aggregate cash surrender value of the two shall not be less than the amount of the said unclaimed installment.

5) The reversionary bonuses as per usual practice will continue to be allotted each year on the basic sum assured (if in force) as and when Actuarial Surplus is declared. However the unclaimed installments of the sum assured and related special bonus will not participate in State Lifes Actuarial Surplus.

Death Benefits:

The full basic sum insured plus accrued bonuses are payable on death of

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a result of an accident, additional amount equal to one basic sum assured,

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insured any time while the policy is in force. In addition, if death occurs as

subject to maximum limit, will be paid. The usual maximum on the ADB of Rs. 4 million will apply and premium will be calculated accordingly Bonuses: This policy will participate in State Lifes surplus. Rates of bonus applicable will be 25% higher than those on anticipated endowment plan. Under endowment insurance these plans are available.

Shad Abad Assurance:


Shad Abad Plan is an extended form of endowment assurance. The benefits under the policy increase manifold in the event of death of the life insured. On completion of term of policy, sum insured plus bonuses attached to the policy are payable. However, on death during the policy term, the death benefit consists of double of sum insured with accrued bonuses. In case of death due to accident, the death benefit consists of four times the sum insured plus bonuses. The coverage can be further widened by attaching supplementary covers with the policy. This plan meets the requirements of those who appreciate the basic savings
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purpose of endowment assurance but also like some additional cover to protect loved ones in case they die, Allah forbid, before maturity.

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Child Education & Marriage Assurance:


Child Education & Marriage Assurance is a plan for the protection of childs future. It provides a lump sum benefit for the child at the completion of the policy term. On completion of term of the policy, full sum insured together with the accrued bonuses become payable to the policyholder. If the policyholder dies (Allah forbid) before completion of the term, a family income benefit of Rs 240 per 1000 sum insured per annum is paid to the child until the completion of policy term. Further, future premiums under the policy are waived and policy remains in force with full sum insured and continues to participate in State Lifes surplus and receive bonuses. Upon the completion of policy term, the child gets two options of either getting the proceeds in a lump sum or in five equal installments.

i.

Continue the policy in the same manner as earlier by switching the plan for the benefit of another child.

ii.

Get a refund of all the previous premiums paid till the death of the child or the cash value of the policy, whichever is higher and terminate the contract.
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iii.

Continue the policy without naming another child in which case the benefit of Refund of Premium [as provided above under condition (b)] will not be available. Child Education & Marriage Plan is suited for the parents who are conscious about the future of their children. The term of the plan is such that the lump sum benefit becomes payable when the child attains a predetermined age of 18, 21 or 25 years. These ages may be selected considering the occasion at which children generally need financial assistance for higher education, marriage, or setting up business. Depending upon your individual needs, the plan is available in two separate versions of with and without built-in family income benefit. In

addition to parent, this plan can also be affected by grandparents, uncles, aunts or any other person who is paying for the maintenance of the child

Jeevan Sathi Assurance:


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This is a joint life plan and covers lives of two partners say husband and wife simultaneously. Premiums are payable till the end of the specified term or till death of either of the insured persons, if earlier. The plan contains extensive benefits; an overview of which appears as under: On the death of the first life, the sum insured will be paid to the survivor. Further premiums under the policy will be waived, but the insurance protection of the second life will continue. Also, the policy will continue to participate in profits of the Corporation. On death of the second life, again the sum insured will be paid together with the attaching bonuses. In this event the policy will terminate. If the second life survives the term of the policy, he or she will be paid sum insured together with the attached bonuses, even though the sum insured has been paid once, on the death of the first life. If both the lives survive the term of the policy, the sum insured will be paid to them jointly, only once, together with the attached bonuses. Different supplementary covers are also available for increasing coverage under the policy.

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Child Protection Assurance:

This is a joint life assurance and covers the lives of child and either of the parents. If the policyholder and the child both survive full term of the policy, sum insured and accrued bonuses become payable. If the policyholder dies before completion of term of the policy the payment of premiums ceases and the child is paid an income of Rs 100/- per thousand sum insured per annum till the completion of the policy term. On completion of policy term, sum insured inclusive of bonuses accrued till the death of the policyholder is paid to the child. If the child dies (Allah forbid) before maturity of the policy and during lifetime of the policyholder, the death claim payable to the policyholder depends on the age at death of the child. As the name suggests, the plan is suitable for parents who want to cater

of the family. The plan has a unique feature of providing coverage on the

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future financial needs of their children in case of death of the breadwinner

life of child. The coverage of the policy can further be widened by attaching supplementary covers.

Sunehri Policy:
Sunehri Policy is an innovative life insurance product. It is flexible, secure and meets the challenges of inflation quite economically. Under a special feature of this plan, from third policy year onwards, sum insured under the policy and premium will increase by 6% per annum without providing any evidence of insurability. From the third policy year onward, the policyholder is provided with a statement showing the buildup of cash value of the policy and sum insured for the year. The policy also participates in the surplus of State Life and currently the rate of bonus is Rs 105 per thousand per annum of the adjusted opening cash value.

Optional Maturity Endowment:


It is an endowment assurance with a built in option to mature early. The plan is available for individuals aged 20 to 45 years. The policyholder has following options regarding maturity of this plan.

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After the policy has been in force for 20 years or more, the policyholder gets an option to mature the policy for a proportionately reduced sum insured.

After the policy has been in force for 20 years or more, the policyholder, depending on his or her needs, can mature the policy in parts.

Let the policy mature at originally selected term. In this case the policyholder gets an additional bonus.

The policy participates in bonuses declared by State Life from time to time. Please click here for details of bonuses currently available for this plan. Coverage under the policy can also be enhanced by attaching supplementary covers.

Nigehban Plan:
This plan provides term insurance cover for a period ranging from 5 to 10 years. As the name suggests, this plan is meant to provide protection during the term of the policy only i.e. sum insured is payable on death if it occurs

carry any survival benefits, maturity benefits, surrender values, loan values etc. The policies will be without profits. The plan is available in two

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during the term of insurance while the policy is in force. The plan does not

versions namely, with single premium and with annual premiums. Attaching certain supplementary covers can widen the coverage under the plan.

Muhafaz Plus Assurance:


Muhafaz Plus provides a substantial sum of money on maturity or earlier death (Allah forbid) of the life insured. On maturity, the policyholder will receive sum insured plus bonuses attached with the policy. However if the life insured dies before completion of term of the policy, basic sum insured plus attached bonuses will be paid to the dependants immediately. In case of death due to accident, the double of the sum insured is paid. In addition, the dependents will also be paid an income of Rs 240 per thousand sum insured per annum for a fixed period of 15 years. The first payment will fall due on the policy anniversary immediately after the death of the life insured.

SHEHNAI POLICY:
Features:
Shehnai Policy is an innovative life insurance product. It provides a solution to the problems of many concerned parents who want to save now in order to provide for their childrens higher education, marriage and

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other expenses when the need arises. The term of the plan is such that the lump sum benefit becomes payable as the child attains the age of 25 years. Shehnai Policy also caters from the ravages of inflation. This is done by the option of automatic increase of 6% per annum in sum insured and premium from third policy year onward. From the fourth policy year onward, the policyholder is provided with a statement showing the buildup of cash value of the policy and sum insured for the year. The policy also participates in the surplus of State Life and currently the rate of bonus is Rs 105 per thousand per annum of the adjusted opening cash value

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SUPPLEMENTARY CONTRACTS
SLIC offers a number of supplementary covers to enhance coverage under different plans. These supplementary covers can be attached with the main policy and are not available exclusively. Accidental Death & Indemnity Benefit (AIB) Accidental Death Benefit (ADB) Family Income Benefit (FIB) Waiver of Premium (WP) Special Waiver of Premium (SWP) Term Insurance (TI) Guaranteed Insurability (GI) Refund of Premium Rider (RPR) Hospital & Surgical Benefit (H&S)

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Accident Death & Indemnity Benefit (AIB):


This supplementary cover provides for payment of additional amount equal to the sum insured under the policy in the event of death by accidental means, or in the event of loss of two or more limbs or loss of sight in both eyes. One-half of the sums insured will be paid for loss of one limb; one-third of sum insured in the event of loss of one eye and onefourth of sum insured will be paid for loss of thumb and index finger. Moreover, weekly indemnities are also available for total and partial disability of the life insured as a result of the accident. If the life insured becomes permanent and total disable, an annuity of 10% of sum insured will be payable for a maximum period of ten years. AIB is suitable for office commuters and individuals who travel and use different modes of transport. The rates of premium for this supplementary benefit range from Rs 4 to Rs10 per thousand sum insured depending upon the occupational rating of proposer for standard lives whose age should be between 18 to 55 years. AIB can be attached with following plans:

Whole Life Assurance Endowment Assurance Anticipated Endowment Assurance Jeevan Sathi Assurance

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Child Education & Marriage Assurance Shad Abad Assurance Shehnai Policy Child Protection Assurance (For adult life only) Muhafiz Plus Assurance Nigehban Plan Optional Maturity Plan

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

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ADB can be attached with following plans:

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proposed whichever is earlier

Whole Life Assurance Endowment Assurance Anticipated Endowment Assurance Jeevan Sathi Assurance Child Education & Marriage Assurance Shehnai Policy Child Protection Assurance Muhafiz Plus Assurance Nigehban Plan Optional Maturity Plan

Family Income Benefit (FIB):


This supplementary cover provides that incase of death of the life insured during term of this cover, an annuity of 10% to 50% per annum of the basic sum insured will be payable till the completion of term of this cover. For instance, if a life insured has taken 25% FIB supplementary cover for 20 years on his policy having sum insured of Rs 1,000,000. If the life insured expires during term of FIB, say at the end of fourth year, an annual sum of

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Rs 250,000 will be payable for rest of 16 years.

While the basic plan provides a lump sum, FIB provides a regular stream of income to the dependents and helps in meeting the day to day expenses. This supplementary cover is available to lives between 18 and 55 years of ages. It can be attached with following plans: Whole Life Assurance Endowment Assurance Anticipated Endowment Assurance Jeevan Sathi Assurance Child Education & Marriage Assurance Shad Abad Assurance Shehnai Policy Child Protection Assurance (For adult life only) Muhafiz Plus Assurance Optional Maturity Plan

Waiver of Premium (WP):


This supplementary cover provides for waiver of due premiums in the event of the life insureds Total and Permanent Disability caused by accident as defined in the contract. With the help of WP, the life insured gets relieved of vagaries of paying premiums in case of his or her being

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incapacitated as a result of accident. The rate of premium for standard risk will be Rs 0.50 to 1.00 per thousand of sum insured depending upon the age of life insured. WP is available to lives between 18 and 55 years of ages. It can be attached with following plans:

Whole Life Assurance Endowment Assurance Anticipated Endowment Assurance Jeevan Sathi Assurance Child Education & Marriage Assurance Child Protection Assurance (For adult life only) Muhafiz Plus Assurance Optional Maturity Plan

Special Waiver of Premium (SWP):


This supplementary cover will provide for waiver of premiums under the policy incase of the life insureds Total and Permanent Disability due to accident or disease which renders him unable to engage in any occupation. With the help of SWP, the life insured gets relieved of vagaries of paying premiums incase of his or her being incapacitated as a result of accident or

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disease. SWP is available to lives between 20 and 55 years of ages. SWP can be attached with following plans:

Whole Life Assurance Endowment Assurance Anticipated Endowment Assurance Jeevan Sathi Assurance Child Education & Marriage Assurance Child Protection Assurance (For adult life only) Optional Maturity Plan

Term Insurance (TI):


In the event of death of the life insured during term of TI supplementary cover, the sum insured will be payable in addition to the benefits payable under the basic policy. Suppose, Mr. A, covered under a policy of Rs 1,000,000, also attaches TI supplementary cover with his policy. Incase of his death during term of TI, a sum equal to Rs 1,000,000 will be payable under this supplementary cover. This will be in addition to the benefits payable under main policy.

want to enhance coverage of their policy substantially on payment of a

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This supplementary cover is an excellent opportunity for individuals who

meager amount of premium. TI is available to lives between 18 and 55 years of age. TIR can be attached with following plans:

Whole Life Assurance Endowment Assurance Anticipated Endowment Assurance Jeevan Sathi Assurance Child Education & Marriage Assurance Shad Abad Assurance Shehnai Policy Child Protection Assurance (For adult life only) Muhafiz Plus Assurance Optional Maturity Plan

Guaranteed Insurability (GI):


Under this supplementary cover, State Life gives the policyholder a right to purchase additional life insurance up to specified maximum amounts on specified further dates at standard rates, without evidence of insurability being required at such later dates. The specific further dates on which additional insurance can be taken are the policy anniversaries of the basic policy nearest the 25th, 28th, 31st, 34th,

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37th and 40th birthdays of the life insured. Thus the option dates for various issue ages

Issue Ages No of Option Dates

Option Date Ages

10 24 25 27 28-30 31-33 34-36 37

6 5 4 3 2 1

25, 28, 31, 34, 37, 40 28, 31, 34, 37, 40 31, 34, 37, 40 34, 37, 40 37, 40 40

This supplementary cover is available only to standard lives between 10 and 37 years of ages and who are not engaged in hazardous occupations. Only one GI will be issued on the life of any one person. GI is available only at the time of issue of the basic policy and can not be attached to the policy after its issuance.

can get benefit from this supplementary cover. It saves them from providing any further evidence of insurability incase they desire to

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Individuals who foresee increase in their insurance needs in the near future

enhance coverage under the policy. GI can be attached with following plans: Whole Life Assurance Endowment Assurance Anticipated Endowment Assurance Child Education & Marriage Assurance Optional Maturity Plan

Refund of Premium Rider (RPR):


RPR provides for refund of premiums paid under the policy in the event of death of the life insured during term of the policy. It is an ideal form of enhancing the life cover under the policy with a modest increase in premium. This supplementary cover is available to lives between 20 and 60 years of ages. The available term ranges from 10 to 25 years. RPR can be attached with following plans: Endowment Assurance Anticipated Endowment Assurance Shad Abad Assurance Child Protection Assurance (For adult life only) Optional Maturity Plan

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Hospital And Surgical Benefits (H&S):


This supplementary cover provides benefits in case of hospitalization of the life insured, in State Lifes approved hospitals, as a result of sickness or accident. On payment of double amount of premium specified for H&S, the benefits and their limits will also be doubled. H&S is available to lives between 18 and 50 years of ages. The available term ranges from 10 to 25 years. RPR can be attached with following plans:

Whole Life Assurance Endowment Assurance Anticipated Endowment Assurance Jeevan Sathi Assurance Shad Abad Assurance Child Protection Assurance (For adult life only) Optional Maturity Plan

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GROUP LIFE INSURANCE PRODUCTS


These includes Term Insurance Scheme House Building & perquisites Insurance Scheme Pay Continuation Scheme Group Endowment Insurance Scheme

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Term Insurance Scheme:

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Group Pension Scheme

Group Term Insurance Plan provides life insurance coverage to the member of a group, such as the employees of an employer. The amount of coverage of each member is determined with reference to either his designation or salary or employment category or some other similar variable. This plan provides insurance protection to the members of a group at a very affordable minimum possible cost, 24 hours coverage around the world. By promoting a sense of financial security amongst the employees it contributes to improving the working environment for the employer resulting in higher productivity. In most cases the employer is legally obliged to provide insurance cover to his employees. This plan helps the employer to fulfill this requirement. Premiums are tax-deductible for the employer. Total premium under group term insurance is lower as compared to sum of premium of all policies if issued individually to each life, due to savings in expenses. On death of any insured member the sum assured on his life is paid for the benefit of his surviving family. This benefit is payable regardless of the total number of the deaths even if the total amount paid out exceeds the total premiums received under the policy. However, if in any three-year period State Life earns a net profit on

policyholder, depending upon the total number of members in the scheme. This share can go up to 90% in case of large sized schemes.

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any policy, then some share in the profit is passed on to the

The supplementary contracts or riders which can be attached with this scheme are:

PTD (Accident) Rider:


Under this rider the insured member is entitled to payment of the sum assured in case of any accident causing permanent and total disability, which includes loss of two limbs or two eyes or loss of hearing in both ears or severe facial disfigurement. If the disability is permanent but not total then some percentage of the sum assured is payable depending upon the severity of the disability. In this regards the same schedule of disabilities is applicable as is prescribed under the labor laws. In case of a temporary accidental disability causing absence from work a fortnightly benefit calculated at the rate of Rs. 3,000 per month or the monthly salary whichever is less is payable.

A.D.B. Rider:
Under this rider the death benefit of an insured member is doubled if the death was caused by an accident.

Natural Disability Rider:


Under this Rider if an, insured member is rendered incapable of pursuing

disability caused by disease or sickness then he is entitled to the sum assured as benefit.

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any occupation or vocation for gainful employment due to permanent

Critical Illness Rider:


If an employee contracts any of the following critical illnesses while insured under this rider then he is entitled to the rider sum assured as benefit. Covered critical illnesses include.

Heart attack Coronary Artery by-pass surgery Stroke Cancer Kidney Failure Major organ transplant such as heart, kidney or liver

The insured member must survive for at least 31 days after contracting the illness to become eligible for his benefit. Some restrictions apply during the first two years of coverage. Suitable For: The plan is suitable for employers who desire to provide financial security to their employees by means of insurance coverage or for members of a professional body or association or some welfare association or a social club who desire to avail insurance protection on their life.

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House Building & Perquisites Insurance Scheme:


Under this plan each member of the group is insured for the total amount of loan outstanding against him inclusive of accumulated interest. The amount of Insurance is the actual amount of loan outstanding on the date of death whereas the premium is charged on the average loan outstanding over the whole policy year. It provides financial security to employers and financial institutions against the risk of untimely death of any of their indebted employee or client. Very often the family of the deceased person is not is a position to repay the loans taken out by him, especially if the deceased person was the sole breadwinning member of the family. In such a case the insurance coverage provides an assurance to the creditor that he would be able to recover his capital without causing hardship to the distressed family. The creditor is also protected from the headache of constantly monitoring cases of delayed repayments of loan in hardship cases caused by unforeseen death of a bread winning family member. The premium due under this policy may be recovered by the creditor from the borrowers along with the loan repayment installments.

Benefits:

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Benefits of this plan are In case of death of an insured member of the scheme the total amount of the loan outstanding against him including accumulated interest is payable to the policyholder. In case State Life earns a profit on any policy during a 3-year period, the policyholder is also entitled to some share in the profits depending upon the size of the group. Riders or supplementary contract that can be attach with this plan is PTD (Accident) and NDB rider may be attached with this plan. These riders provide insurance cover against permanent disability due to accidental and natural causes rendering the insured member unable to earn a livelihood for himself and his family. In such a case the attaching riders can facilitate the creditor in recovering the outstanding amount of loan. This plan is suitable for employers who have a scheme for providing loans to their employees for house building, purchases of conveyance or any other goods of household use. It is also suitable for banks that are in the business of granting loans to their clients for purchase of house or conveyance or for some business venture. Similarly leasing companies and other financial institutions with similar facility may find this plan quite attractive.

Pay Continuation Scheme:


1. Manpower is still considered as one of the most important elements of productions in spite of the dramatic growth of microchip based
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automation in all walks of life, especially in commerce and industry. The overall efficiency of an organization therefore depends upon the quality of the manpower of its employees. The more devoted, hardworking and loyal the employees the higher the reward to the employer in the form of greater efficiency and profitability. Quality manpower can be attracted by offering a good employee benefits package based on ensuring security and peace of mind of the workforce so that a greater commitment is obtained from them. This is why the enlightened employer pays particular attention to the welfare and well being of their workforce through various employee benefits scheme.

2. One of the functions of such schemes is to provide protection to the employees dependants in the event of his death. Progressive employers do provide group insurance which pays a lump sum to the dependants. This however does not last long. What is required in addition is a regular monthly income for a period of time. To meet this Requirement State Life proudly presents a plan, which offers invaluable protection to the employees family during his working life. The familys regular monthly income is protected for 15 years or until age 60 whichever is earlier. In this way coverage is provided for pay upon the death of the employee. This is illustrated by the following example: -

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a. Supposing the pay of an employee is Rs 2000/- per month. If death takes place at age 47 then the benefits payable will be Rs 2000/- per month up to age 60, i-e., for a period of 13 years. Total amount payable Rs.3,12,000/-

b. If death takes place at age 35 then the benefit payable will be 2,000/- per month for a period of 15 years. Total amount payable Rs. 3,60,000/3. Annual premiums will be calculated on the basis of the employees pay and his age and will be payable at the beginning of each scheme year. If this policy qualify for profit commission it will be payable in accordance with the rules at the end of 3 years. 4. Cover without medical evidence is allowed on the same basis as group term with the monthly benefits being converted into a lump sum equivalent. The total of the benefits so arrived at should, however not exceed the maximum allowable under the policy.

Group Endowment Insurance Scheme: 125


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Group Endowment Scheme is a unique saving and protection scheme through which the employees of an employer can enjoy insurance

protection throughout their service and also get a lump sum cash amount upon their retirement if they survive up to retirement. In Pakistan most employers do not operate any pension scheme for their employees although some employers may have a provident fund scheme or a gratuity scheme. The expected benefits at retirement under a typical provident fund scheme and gratuity scheme combined are woefully inadequate for a retiring employee for maintaining his standard of living after retirement unless he supplements these benefits with his own personal savings. Keeping this in view some employers may wish to encourage a habit of saving amongst their employees for their own welfare. Group Endowment Insurance Scheme can be a means of introducing a compulsory saving scheme for the employees under the sponsorship of the employer. Participation in the scheme is usually compulsory. However, if participation in the scheme is voluntary, at least 75% of eligible employees must participate.

Benefits:

Under this scheme each employee is provided insurance protection for an amount which may be flat or depends upon the designation or salary of the employee. The amount of insurance is payable on maturity or death if it occurs earlier. In most cases the term of the endowment insurance for each

his retirement date.

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employee is determined in such a way that the policy matures at or near

This enables the maturity proceeds to coincide with retirement and supplement the retirement benefits.

Profit Participation:
The endowment insurance is issued on a with profits basis. The same bonus rate is applicable as for the corresponding individual endowment insurance policies.

Premium Rates
The same premium rates are applicable as for individual endowment policy but with the added attraction that in group form some volume discounts are also applicable depending upon the size of the annual premium.

Surrender Value
The policy acquires Surrender Value in respect of a member after insurance cover has been in force for at least two years on that member and no premiums are in default.

Loan Facility
Under this scheme if the member needs immediate liquidity and a policy has acquired Surrender Value in respect of member, he/she can avail a maximum loan of 80% of the net surrender value of the policy.

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Continuation Privileges :
If an employee leaves the service of the employer, he can surrender his policy against the Net Surrender Value. He is also provided with the option of continuing his endowment insurance coverage in an individual capacity without any evidence of good health, for the same sum assured and term as he was enjoying during his service. The premium rates applicable to the policy are the same as are generally applicable to the same class of business in and individual capacity. The ADB, PTD (Accident) and NDB can be added to this policy if desired.

Suitable For:
This plan is suitable for employers who desire to inculcate a habit of saving amongst their employees in addition to providing them insurance against premature death.

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Group Pension Scheme:


State life, have become increasingly aware of the predicament of progressive employers wanting to better the lifestyle of their employees by providing financial security and job satisfaction, but not being able to do so, due to lack of availability of avenues and opportunities. This booklet is a guide to the State Lifes Pension Scheme that enables an employer to provide substantial benefits to employees and ensure a higher state of well being for them. It explains the institution, administration and benefits of the pension scheme and with the help of expert professionals in our Pensions Division, we can assist you in availing it, in your own and your employees interest. Our representatives will only be too pleased to be of any service to you.

Introduction:
Once the working life of an individual is over, or he has retired, what will he live on? This is a question which every individual faces during his working life and is of equal importance to a concerned employer. Personal savings, Provident Fund and Gratuity are the normal assets he acquires. If

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not spent prudently, these assets can fritter away in a short time.

State lifes Pension Scheme is the only source which provides a steady monthly income, when other sources of income stop. This booklet explains step-by-step the nature of the Pension Scheme, how it operates and what are its benefits to the employer as well as to the employees. What is Pension Scheme ? Basically it is a saving, or call it a contribution, which is collected during the working life of an individual and invested profitably. After retirement the individual is entitled to a steady monthly income from a fund built up from the earlier savings. In a sense, it is a reward to the employee, granted today, while money is to be received on retirement.

Benefits/Why a Pension Scheme ?


We advise a pension scheme due to following benefits to the Employees: o After retirement when the monthly pay-cheque stops, the individual starts receiving a regular monthly income in the form of a pension. o While contribution to the scheme, the individual gets a tax concession.

reduction in his standard of living. o All pensions are completely tax-free.

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o The individual, after retirement, need not fear of a drastic

o Retirement comes as planned and not abruptly as a shock.

Benefits to the Employer:

Contributions to the Pension Scheme by the employer are treated as business expenses and deductible in full.

The knowledge that at the end of the career, the employee will get a regular pension helps to build up his job loyalty and the adherence to the job, to the employers satisfaction.

Employer does not have to find money to compensate an employee when he ceases to work.

Shows that the Management cares for their staff and is concerned about their welfare.

Attracts new employees. Retirement of personnel is planned in advance, removing uncertainty both for the employer and the employee.

Promotion channels in the management hierarchy are unclogged.

Comparison with Provident Fund and Gratuity:


a. Provident Fund :

employee along with interest accumulated over the years is handed over to the employee on his retirement.

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This is like a savings bank. The contribution of the employer as well as the

However, in case an employee wishes to leave before retirement is due, employers contribution may not have to be paid; or only part payment may be made.

b.

Gratuity :

Gratuity is exclusively the employers contribution for the benefit of the employee. From half to a full months salary is credited for every year of service. Reserves are set aside in the balance sheet but they do not attract tax concession, unless it is a funded scheme. The security of the employee to receive the gratuity is dependent on the continued existence of the employer and his profits, except in case of a funded scheme.

c.

Pension Scheme:

In comparison with the aforementioned two retirement benefits the Pension Scheme has distinct advantages: Payments through Pension Scheme are guaranteed for life. A pensioner can look forward to his retirement with confidence and security. Pension Scheme is the only method through which regular income accrues to an employee after retirement.

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The payment of the pension is not dependent upon the fortune of the employer. Lump sum comparable to those received from Gratuity or Provident Fund, can still is drawn by commutation or the pension while maintaining a steady monthly income. State Life maintains a full-fledged pension Department capable of handling each and every scheme in the most competent and professional manner. It has actuaries, lawyers and other experts, besides offering a unified administrative, technical and investment service. An employer can relieve himself of the tedious and cumbersome work by using the professional service offered by State Life, the major ones being: Designing a Pension Scheme according to am employers exact requirements, in addition to determining the rate of contribution etc. Preparation of explanatory documents, if required, for consideration by employees. Assisting the employers legal advisers with the preparation of Trust deed and Rules. Providing reasonable assistance in negotiations with the Central Board of revenue for approval of the scheme.

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Maintenance of Individual records of members of the scheme, their contributions, the employers contribution, and pension accrued etc. Facilities for payment of pensions, when due

Security:
All policies issued by State Life are guaranteed and enjoy full financial security, backed by the Government under Article 35 of Life Insurance Nationalization Order 1972.

Payment of Pension
The pension will be payable by monthly installments; commencing from the retirement of member and ceases upon his death.

Guaranteed Payments
By incorporating a Guaranteed Pension period, payment can be ensured for a defined period say 5 to 10 years, whether or not a pensioner is alive after retirement, if, however, a pensioner survives the guaranteed period, pension will continue throughout his lifetime.

Supplementary Benefits
They may be termed as supplementary, but are indeed those invaluable finishing touches that make the picture complete. Employees would not

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feel secure unless their families were provided for in the event of their untimely demise. At a little extra cost employees may be given peace of mind by providing these benefits, some of which are listed below:-

a) Widow's Pension (upon death in service)


The pension will be payable to the wife of a member if he dies while in service. Normally, a widows pension is one half of the members pension entitlement.

b) Widows Pension (upon death after retirement)


The pension is payable to the wife if the member dies after retirement. In this case also a widows pension is one half of the pension the member was receiving. The widows pension, in either case would be payable for life but would cease in the event of remarriage.

c) Orphan's Benefits
The inclusion of orphans benefits in Pension Scheme along with the widows pension, gives the scheme a level of completeness. A normal scale of orphans benefit is 33% of the widows pension per child, payable upon the childs attainment of age 18 or earlier marriage. Limit is imposed on the number of children who can claim such benefits.

d) Retirement Aspects

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Pension will be payable to a member according to a predetermined scale on the normal retirement date fixed by the employer.

e) Early Retirement
A member who retires before his normal retirement date on account of becoming incapacitated, or for any other reason, may be granted a reduced immediate pension to commence on the day following the actual date of retirement.

f) Late Retirement
A member who remains in employers service after the normal retirement date will receive an appropriately increased pension on retirement.

g) Withdrawal Benefits :
If a member withdraws from the service of the employer before the normal retirement date due to any reason and without any entitlement to early retirement pension, his future contribution, or contribution made on his behalf, will cease. Benefits to be paid on withdrawal will depend upon the withdrawal from service rules of the scheme. In such a case one of the following procedures may be adopted:

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i.

Refund of contribution:

If a member withdraws from the contributory scheme a refund is made of all the contributions made by the employee. ii. Deferred Paid-Up Pension:

A withdrawing member may be allowed a deferred paid-up pension of the amount accrued to his account on the date of withdrawal. The reduced pension will commence on his normal retirement date.

Group Provident Fund Insurance Scheme:


Group Provident Fund Insurance Scheme provides life insurance coverage to the members of the provident fund scheme of an employer. The amount of coverage of each member depends upon his age and the amount of his provident fund balance at any time.

What Need Does It Fulfill?


Young employees normally have short service to their credit and consequently their Provident Fund balance is also quite meager. In case of unfortunate death of such a person the provident fund amount is not adequate for meeting the financial needs of the family such as schooling of the children, their marriage expenses and housing accommodation. Group Provident Fund Insurance Scheme is specially designed to meet such an eventually since the benefits under the scheme are on a sliding scale.

Benefits:
On the death of any member of the provident fund scheme his family is paid a lump sum amount equal to the amount of his fund balance on the

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date of his death multiplied by a factor depending upon the age of the employee at death. The factors applicable for a typical scheme are already given above however the employer in a particular case may adjust these factors to suit his own special requirements. If the scheme has 200 or more members then at the end of three years the fund is also entitled to some share in the profits depending upon the size of the scheme.

Riders:
Any rider which can be added with group term insurance plan can also be added with this plan such ADB, PTD (Accident), NDB or Critical Illness Cover

Education Continuation Scheme:


Education of children is clearly cherished by every parent. While parent is alive there is no problem. But unforeseen can happen sometimes disrupting the education of children. To protect against these Eventualities State life has designed this plan.

AIM:
The purpose of this plan is to provide smooth continuation of education of child until he/she completes education.

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FINANCIAL ANALYSIS

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PRIMIUM Income- Individual Life:

YEAR (RS. IN MILLION) 2005 2006 2007 2008 2009 2010 11,260.0 13,112.0 15,907.1 19,152.1 24,853.2 31,943.0

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Sales

2006 2007 2008 2009 2010

35000 30000 25000 20000 15000 10000 5000 0

PREMIUM INCOME-INDIVIDUIAL LIFE

2005

2006

2007

2008

2009

2010

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Premium Income-Group Life


(RS. IN MILLION) 2,560.1 2,879.6 2,809.6 3,543.2 3,513.7 3,705.3

YEAR

2005 2006 2007 2008 2009 2010

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GROUP LIFE
4000 3500 3000 2500 2000 1500 1000 500 0 2005 2006 2007 2008

Year

(Rs. In Millions)

2005 13,105.5 2006 14,923.8 2007 17,505.2 2008 19,134.6

Investment Income

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2009 21,544.7 2010 27434.1

INVESTMENT INCOME
30000 25000 20000 15000 10000 5000 0 2005 2006 2007 2008 2009 2010

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Total Premium Income:

Total Premium Income: YEAR 2006 2007 2008 2009 2010 (Rs. In Millions) 30915.4 36221.9 41829.9 49911.6 63072.9

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TOTAL INCOME
70000 60000 50000 40000 30000 20000 10000 0 2006 2007 2008 2009 2010

Investment Portfolio:

Investment Portfolio

Year 2005 2006 2007

(Rs. In Millions) 124,983.7 142,158.8

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161,965.8

2008 2009 2010

182,874.2 205,804.2 235,934.5

250000 200000 150000 100000 50000 0

INVESTMENT PORTFOLIO

2005

2006

2007

2008

2009

2010

Life Fund:

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Life Fund Year (Rs. In Millions) 2005 2006 2007 2008 2009 2010 122,775.2 137,958.8 156,737.3 177,459.1 199,445.3 230,422.0

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LIFE FUND
250000 200000 150000 100000 50000 0 2005 2006 2007 2008 2009 2010

Total Assets:
Total Assets Year (Rs. In Million) 2005 2006 2007 2008 2009 132,017.1 149,448.6 169,821.4 193,117.6 217,685.4

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2010

251,478.1

ASSETS
300000 250000 200000 150000 100000 50000 0 2005 2006 2007 2008 2009 2010

HORIZONTAL ANALYSIS:

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Profit and Loss Account Return on government securities Interest income loan & advances to employees Interest income on bank deposits Net investment income Expenses not attribute to statutory fund Surplus appropriated to shareholders fund Profit before tax Taxation Profit after tax Earnings per share

2008 (%) 5.19 0.844 110.50 12.34 15.03 37.15 31.05 36.39 28.49 5.15

2009 (%) (5.58) 16.16 55.65 13.97 (23.7) 10.57 11.24 18.43 7.61 7.61

BALANCE SHEET
Issued subscribed & paid-up capital Accumulated surplus Net shareholder equity Balance of statutory fund

2008 (%) 22.2 (58.26) 5.8 13.22

2009 (%) 0 231.3 18.6 12.38

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Staff retirement benefits Outstanding claims Premium received in advance Amount due to other insurers Amount due to agents Accrued expenses Inter-fund balance Others Total creditors & accruals Total liabilities Total equity & liabilities

8.6 19.57 15.44 38.61 41.51 34.87 (36.01) 109.64 22.15 13.77 13.77

13.57 21.01 1.77 74.37 41.27 31.27 49.65 29.44 16.54 12.68 12.72

BALANCE SHEET
Assets
Cash & others Current & other accounts Deposits maturing within 12 months Fixed deposits maturing after 12 months

2008 (%) 42.83 277.4 41.76 44.85

2009 (%) 51.45 3.91 6.32 23.37

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Loan secured against life insurance policies Loan secured against other assets Unsecured loan Investment properties Investments Premium due but unpaid Amount due from insurer/reinsurer Agents balance Investment income due but outstanding Investment income accrued Taxation-payment less provision Prepayments Inter-fund balances Sundry receivables Other Furniture, fixture, office equipment Total assets

19.37 0.09 1.56 4.5 10.27 20.27 177.11 0 9.87 17.5 4996 2.09 (36.01) 48.50 17.37 7.75 13.71

20.93 4.11 11.70 4.15 15.39 5.57 80.65 0 22.89 16.63 1984.8 13.03 49.65 180.53 15.20 10.19 12.72

RATIO ANALYSIS: 153


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CASH RATIO

2008

2009

1.267

0.874

INTERPRETATION:
The cash ratio or the SLIC shows a slight change during these two years. Company should give intention toward this change otherwise it effect company in the future.

CLAIM RATIO

2008

2009

56.31%

55.43%

INTERPRETATION:
Claims ratio is decreasing gradually it is a positive sign and corporation must tried to decrease it.

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EXPENSE RATIO

2008

2009

9.15%

12.56%

INTERPRETATION:
As the business of the company is expanding so the expense is on increasing side. But management should tried to keep it into a acceptable limits.

COMMISSION RATIO

2008

2009

26.04%

28.333%

INTERPRETATION:
Due to inflation and increase of work force of the corporation this ratio is increasing.

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FIXED ASSET RATIO

2008

2009

26.04%

28.33%

INTERPRETATION:
This shows a positive sign for the company as its on increasing side which shows that company is efficiently using its fixed assets to generate sales.
TOTAL ASSETS TURNOVER RATIO 11.75% 13.03% 2008 2009

INTERPRETATION:
Another positive sign for the company as its increasing. Company is using its assets to generate more and more sales of policies.

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ASSETS TO EQUITY

2008

2009

161.44%

153.43%

INTERPRETATION:
This ratio shows how much of the assets of the company is owned by company as compare to the assets taken on lease.

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SWOT ANALYSIS

STRENGTHS:

Number One Player:


SLIC is ranked 1st among the life insurance business of Pakistan. It has about 90% of life insurance business of the industry.

Sound Financial Position:


State life has authorized capital of Rs.1, 100 million. It is a great strength of company to have such a big amount of authorized capital. That is why it is enjoying good financial position.

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Skill Work Force:


The staff of SLIC is well trained and skilled

Comprehensive Customer Inside:


SLIC is well wear of its targeted customer and it has a very clear picture of their requirements.

Easy Policy Wordings:


The of policies carefully design in a simple and plain language so that even a illiterate customer can understand it easily. For customer assistance for both English and Urdu

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Government Assistance:
SLIC is Government organization and it gets support from the government in different ways. It increases its stability and Goodwill.

Zero Percent Fraud:


The working mechanism of SLIC is so good so no one can make fraud neither the staff members nor customer.

Good Reputation:
SLIC has good reputation in the market. It is recognize as one of the best insurance companies of the country.

An Established Distribution Channel:


It has a pretty good distribution channel. It sales its products through its efficient work force and advertisement

In-Depth Knowledge of the Industry:

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SLIC has very good knowledge of the industry. About its competitors and the area it has to work.

Corporative Atmosphere:
The working atmosphere of SLIC is very corporative and friendly. The work force is eager to helps its customer.

Computerization:
State has done the record of policyholder computerized .so the policyholder can access to their record of policy immediately. And the officers can also access the record when they want. It is a great benefit for officers of the company and an advantage for the company.

WEAKNESSES:
Political recruitments:
SLIC is GOVT Corporation and working under Ministry of Commerce. Ministers cannot hinder in managerial decisions but some hiring are done on political pressure and ill competent people are handled which reduces proficiency of work.

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Marketing:
As the marketing play a vital role in sale of policies and in case of SLIC it is usually done by the persons who dont possess good knowledge of the insurance.

IT Problem:
SLIC is a leading corporation in insurance sector. But mostly computers which are being used by staff are outdated. Such a big organization should develop its own IT system with complete security. But unfortunately about all data in SLIC is maintained handily.

Feed Back:
The Corporation does not have any effective and efficient feedback channel to disseminate sales force suggestions to upper management. Further, organization has no well organize system for feedback between office employees and manager, managers and Board of Directors.

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OPPORTUNITIES:
Increase in Growth
Increase in growth is the major aim of any company, as well as SLICs. Increasing in growth by having more market share, by having more sales and by increasing the quality and in line services will result in the increase in the overall growth of the SLIC... Increase in growth needs a long term strategic planning. The broader view of the market and demand. The capability to utilize the recourse more efficiently then to the competitors.

Government Support:
As SLIC is government organization. So it can take advantage of the Government policies while making of its own rules for the corporation which can expand its operations.

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Innovation:

SLIC also bring so many innovations in their present product, like they decrease the maturity duration of policy or can decrease sun assured of policy etc

Insured Population:
In Pakistan 2% to 3% population is insured while rest of the population provides opportunity to life insurers to enhance their business.

THEARTS:
Privatization:
State life has a threat of being privatization

Natural Disasters:
Natural Disasters are one of the big threats for the SLIC. In Pakistan floods, earth quakes and many other natural disturbances occurs periodically. When this happens the heavy amount of claims occurs which cannot be easily settled. And thus sometimes gives a heavy loss. Recently last years flood, many claims occurred.

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Religious and Cultural Resistances:


Pakistan is an Islamic country and the culture here is based on Islamic principles. One the controversy in the Insurance company services and the Religion is that the Islam doesnt allow the Insurance. And people resist for insurance, and avoid the advertising of Insurance. This leads in lack of knowledge and benefit about the insurance.

Inflation:
The trend of the inflation is on the increasing side due to which people left with less money to pay for such expenses

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MY EXPERIENCE IN WESTERN ZONE

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I started my internship in State Life Insurance Corporation, on 27th of June, 2011. My incharge for my internship was Sir Jawad Iqbal . He was a gentle and corporative personality. He made schedule for my six weeks internship program. I worked in 6 different departments, a week in each department. The departments in which I worked are as follow:

1. 2. 3. 4. 5. 6.

Financial and accounts department. Policy holder and service department New business department Agency department Internal audit department Personnel and general services department

1. Financial

and Accounts Department:

The 1st department in which I went in SLIC was F&A. Mr. Sajjad was my incharge in that department. He was a friendly person and he tried his level best to transfer his knowledge to me. First two days he told me about payments and payroll. In the remaining days he taught about preparation of vouchers, banking, ledger and reconciliation of accounts etc.

2. Policy

Holder and Service Department:

My second week was in Policy Holder and Service department. In this department I learned about :

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a) Renewal or revival of policies b) Alteration in the policy c) Payments of death claims d) Payment of maturity claims e) Payment of injury claims

3. New

Business:

I spent my third week in New Business department. This is the department from where the business of policy begins. In this department I learned the processing of new business that is carried forward by the sale force. The main function of this department is the assessment of the risk. The risk is assessed by keeping in view the different factors like personal data , occupation ,physical and social features , health , family history of the prospect , moral hazard , source of income , nomination , relationship between the nominee and the prospect .

4.

Agency Department:

a) Recruitment b) Promotion

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My forth week in SLIC was in its agency department. In this department I came to know about:

c) d) e) f)

Prize & awards Benefits License Termination and Demotion of the employees.

5. Internal

Audit.

I spent my second last week of internship in internal audit department. Syed Ehtaram was our incharge in this department, who was also the head of audit department. In this department I learned why audit is necessary? What are different types of audit in SLIC? Audit is carried out to check out fraud,error and any loss to the assest of the organization. There are two main heads of audit , these are:a) Internal audit b) External audit

a) Internal audit This is the internal function of the organization and carried on by the employees hired by the organization. b) External audit This is carried by a third party like Govt or any other firm. There are two further types of audit:a) Pre audit(audit before the payment is made) b) Post audit(audit after the payment is made)

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6.

Personnel and General Service Department:

My last week of internship was in personnel and General service department. In this department I learned about the personnel management of State Life Insurance Corporation. I came to know about Personnel policies, motivation, incentive and implementation of service regulations. This department has many sub sections like capital section, employees record and attendance sections etc. I was really impressed with the way SLIC used to keep record of their employees. SLIC is very strict about attendance; even they use to keep eye on the attendance of internees. In the end I would like say that I had a really good experience of working in State Life. The management especially the senior management gave me time from their busy schedule and I learned a lot about insurance and especially about SLIC from them. I am thankful to all the stuff of SLIC who helped me out in my time of need and to my respected teacher who guided me to join such organization.

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CONCLUSION & RECOMMENDATIONS

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RECOMMENDATION
State Life Insurance Corporation Of Pakistan is a leader in insurance market. Like every other organization SLIC also has some pros and cons but in this organization drawbacks are very few and most of the things are up to the mark. However, I would like to recommend some suggestions for the betterment of State Life Insurance Corporation.

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These recommendations are:-

Marketing jobs should be assigned to those personnel who have perfect knowledge of insurance. Online selling facility of policies should be made available. This will increase the number of customers of the SLIC.

There should be a blend of young blood with the senior staff. This will help the junior members to learn from the experience of senior management. State Life struggles to stay ahead in technical adoption. It should adopt technological changes of modern era.

Refreshment trips for the staff must be arranged so that the working potential of the staff will be increased The management should keep in touch with the customers and take the proper feed back by the customers. This will provide satisfaction to their customers.

CONCLUSION
It was splendid experience for me that makes me familiar with business environment and culture of SLIC was so comfortable and it provides me real life working opportunity in short span of time. Management of SLIC is true asset of Corporation and such a competent and experienced people are working here who make a Government institute corruption free and the market leader. SLIC is

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providing life Security coverage to about 6.00 million person of the country. Apart from this it provides self finance jobs to thousands of the countrymen, and mobilized the country economic and financial resources, and also contributes a lot to Government in terms of providing funds.

BIBLIOGRAPY
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I took assistance in preparation of my projects on State Life Insurance Corporation. My course books Class Notes during our class lectures

Booklets provided by the concerned organizations In house newsletters of State Life Insurance Corporation.

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Special Instructions and guideline by teachers

E-Data Sources: www.kse.com www.iap.gov.pk www.secp.gov.pk www.businessplus.com www.wrightreport.co www.brecorder.com www.cii.co.uk/ www.lloyds.com/

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