Business development: One of the responsibilities of the IRDA as business

development and towords this, it has been taking many initiatives. Business development
and involves product development, decision on the promotional mix and customer care.
Product development: The process of identifying the areas and the need for new
product, and designing and developing them to meet the requirements of the target group is
called as product Development. This process calls for extensive idea generation using the
proceess of ideation. In a compititive environment, companies are exposed to the risk of
losing the market if they fail to percive the changing needs and introduce new offers. In
insurance market, new products are generally develop, to meet following objective
1. To meet the challenges of competition. 2. To gain a better market share. 3. To reposition
the exesting product 4. To gain technical and cost advantages
The process of new product involves 1. Scaning the environment to identify emerging
needs. 2. Product testing and testing market. 3. Developing a suitable market mix for
promotion The information explosion in the last one decade had made the hiter to insulated
indian customers sensitive to the global market., they have also started demandimg
alternative products. The opening up of the sector has given alternative to the customers., it
has given them an opportunity to exercise the exit option if they are not satisfied with the
offer of the company.
Policy holder protection : To insure that companies with real intensions to be in the
insurance business and to serve the policy holders alone, the regulator imposes strict norms
to be satisfied before a licenced is granted to act as an insursance company. In case of joint
ventures, the credentials of the foreign venture partner are checked through the home
regulatior., in India, the income tax payment records are verified to ascertain the asset
liability management of the applicant and the level of compliance. Such strict norms have
earned india the reputation that is indian regulations macth the best in the world.
In the compatitive insurance market, the major responsibility of a regulator is
safeguarding the interest of the policy holder the regulator is required to insured that the
customer get a fair deal from insurance compines and intermediaries.
Apart from the IRDA attending to the complaints received directly from the policy holders
and taking these up with the cpanies concern, it has suggestet that insurance companies
should have representation from the consumer on the board.
To insure the safety of the investment of the fund of the policy holder, the IRDA has
frame regulations regarding the investment of the funds also, to insure that companies
remain solvent and honor the claims, the authority has prescribed solvency margins for
insurance companies. Some of the important regulations framed by the IRDA for the
protection of policy holder are as follows:
Appointed actuary regulations 2000 and qualification of actuaries regulation 2004,

 The insurance advisory committee (meetings) regulation 2000 insurance advertisement

and disclosure regulation 2000
Protection of policy holders interest regulation 2002
Protection of policy holder interests (amendment) regulation 2002
Micro insurance regulation 2005. Accounting standards: Globally, accounting
standards are undergoing vast changes. To achieve uniform standards in global accounting
practices, the International Accounting Standard Committee (IFAC) was formed in 1973. In
1977, the International Federation of Accounts (IFAC) took shape. This two bodies address
various issues relating to accounting and audit practices.
The institution of cost and works accountant of India and the institute of charted
accountant of corporate members of both international bodies. In addition to the above
bodies, in 2000, a new organization called as the international Accounting Standards Boards
(IASB) was set up to develop global standard in accounting. In india, to bring in uniformity
among the various companies and also to fall in line with the accounting standard of the
inatitute of charted accountants of india (ICAI), the IRDA frame the preparation of financial
statements and auditors report of insurance companies regulations 2002 regulations and
subsequently amended witj the regulation to suit the specific requirements of insurance
industry this regulations aim at streamlining matters relating to the submittions of financial
statements and the auditors report. In consultation with the ICAI, the authority has prepare
accounting standards for the life insurance and general insurance industry apart from the
changing format, some of the traditional nomen clature has also changed accounting
requirement have been made the responsibility of the corporate offices. The standards also
provide for segment reporting, preparation of cash flow as direct statement, an maintainance
of separate account of investments pertaining to the policy holder and share holder.
Their is an emerging view that as insurance is specalised subjects, instead of following
accounting standard of the (ICAI), seperate norms are on the line of the standard suggested
by IASB and reporting standard can be develop.
There is also a school of thoughts that feels that looking at the global changes in the
acconting of pension and life insurance funds and indias aspiration to become a global
player, the Indian insurance. Industry may also have to follow accepted international
practices. The various developments in the pension markets had discredited the existing
differential accounting methods to bring in better financial discipline, the IASB and the
financial accounting board of USA have agreed to consider pension accounting as a joint
project to avoid any profit manipulation. As a step towards bringing in uniformity in
accounting practices of life offices in EU, fund managers have agreed to standardize the
format for reporting the embedded value, that reflects the inherent value of life insurance
policies in force, indicating the future earnings and profitability.
Code of conductlife insurer: The IRDA, after its advent , has been initiating many
steps to ensure the safety of the policy holders and the proponents. Towards this, the IRDA,
through the life insurance council of india,

a body that has representation from all life insurance companies in india, had introduced a
code of selfregulation. The salient features of the voluntary code lays down that:
The sales illustration of the companies should have the approval of the appointed actuary
and should have been authorised by the company for use by the sales personnel.
The sales presentation should help the customer take an infied decision.
The interest assptions at the higher and lower rates should be as decided by the life
insurance council from time to time, and the illustration should be worked out on both higher
and lower return basis.
The illustration should also bring out the cinditions of surrender and the surrender value,
and also whether it us granted or not.
The sales illustration should clearly state that some of the benefit are guranteed and some
others are available depending upon the future performance of the company.
Customer satisfaction: In business, a customer is one who frequents a business to
avail of the products or services offered by it. A customer need not always be a consumer.,
he/she may be an intermediary between the final consumer and the business. In the contex
of insurance, the agents and brokers are the major intermediaries and, for the companies,
this segment is also a customer group.
Marketing authorities are of the view that the time has come for the business to nurture and
care for its customers. With farreaching developments in IT anss the new economy replacing
the old economy, the knowledge customer occupies the centre stage. Customers, unlike
those of the past, want to be heard and they are no longer prepared to put up with defective
products and services. Because of ever increasing demands, companies are laying great
stress on customer relations management. Customer relations involves:
Making customers a delight lot.
Getting closer to the customer.
Creating a roundtheclock helpline and providing assistance.
Listening patiently and carefully to the customer grievences.
Providing a quick and proper response to customer grievances.
Um tune with todays customer needs, developing websites to create product awareness
and also to use this tool to listen to the customer.
Using the satisfied customer as a medium of publicity. For the monopolistic indian
insurance business, the term customer profile was an unknown phrase. Now when the
governmentcontrolled business, has to face competition from within or without,

understanding the customer become very important both for the public and private sector
companies.
Information technology and insurance: In the postliberalisation era of the Indian
insurance industry, the one innovation that has enabled the insurance industry to be more
customercentric is the access to information by anyone from any part of the world.
This has become possible due to the mindboggling developments in information
technology, or IT, a blanket term to cover the various techniques involved in communication
that came into
vorgue in 1980. In short, IT represents the various techniques involved in the art of
converting data into information and its presentation to the enduser.
According to james Mac hubert, a distinguishing feature of the new information
technology is that it has no leader. Technologists come together like a school of fish or a
flock of birds. For example, in the past, big business organisations were managed from a
particular head office. On the other hand, with the internet and worldwide net access, any
individual can setup any thing and can easily global business circles.
The increasing use of IT in all professions make it incumbent upon all to conform to
international standards to meet global requirements. With a view to streamline and provide
legal framework for IT related issues and transactions, the parliament of india passed the
information technology act in mat 2000. Its salient features are:
For legal purposes, digital signatures and records will be treated as valid documents.
Emails transactions will be considered as valid transations.
The act, in its present form, does not talk of IPR, copyrights or trademark rights.
The most significant advantage of IT in the insurance industry, particularly in the life if
sectors, is the replacement of traditional method og policy servicing.the following steps have
already been taken by many insurance companies, including the stateowned LIC. Various
offices are networked to the cooperate office through Wide Area Network (WAN) internal
operations through a Local Area Network (LAN). Integration of various risk assessment
mechanism enables the insurer to asess the risk more precisely and price the cover.
Besides, proper data mining and warehousing will help insurance companies in proper
assessment of risk and managing customer relation.
The furure scenario: With technology developments and business crossing borders
and becoming global, organisations can no longer think that the future is going to be an
extension of the past. Future business may only carry certain genes of the parents
companies of the past. This will be true of the presentday indian insurance giants, LIC and
the stateowned insurance companies.