2006 07 Eng

ANNUAL REPORT 2006-07
ANNUAL REPORT
2006-07
INSURANCE REGULATORY AND DEVELOPMENT AUTHORITY

Head Office 3rd Floor, Parisrama Bhavan Basheerbagh, Hyderabad 500 004 Phone : +91-40-23381100 Fax : +91-40-66823334 Website: www.irda.gov.in; E-mail: [email protected] Delhi Office 3 Floor, Jeevan Tara Parliament Street New Delhi 110 001 Phone : +91-11-23747648 Fax : +91-11-23747650
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Letter of Transmittal
December, To The Secretary Department of Economic Affairs Ministry of Finance North Block New Delhi 110 001 Sir,
2007
In accordance with the provisions of Section 20 of the Insurance Regulatory and Development Authority Act, 1999, we are sending herewith a copy of the Annual Report of the Authority for the financial year ended 31st March, 2007 in the format prescribed in the IRDA (Annual Report Furnishing of returns, statements and other particulars) Rules, 2000, notified on 14th June, 2000 in Part II of Section 3, Sub Section (ii) of the Gazette of India, Extraordinary.
Yours faithfully, (C.S. Rao)
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CONTENTS
MISSION STATEMENT TEAM AT IRDA OVERVIEW Performance in the first half of 2007-08 PART I POLICIES & PROGRAMMES A) B) General economic environment Appraisal of the insurance market i) World insurance scenario ii) Indian insurance industry Life insurance Non-life insurance Research and development activities undertaken Review (i) Protection of interests of policyholders (ii) Maintenance of solvency margins of insurers (iii) Monitoring of re-insurance (iv) Monitoring of investments of the insurers (v) Health insurance (vi) Business in the rural and social sector (vii) Accounting and actuarial standards I) Accounting Standards II) (a) Appointed Actuary System (b) Actuarial Standards (viii) Crop Insurance (ix) Micro-Insurance (x) Directions, Orders and Regulations issued by the Authority (xi) Right to Information Act PART II REVIEW OF WORKING AND OPERATIONS (i) (ii) Regulation of insurance and re-insurance companies Intermediaries associated with the insurance business - Insurance agents - Corporate agents - Insurance brokers - Channel-wise New Business Performance - Surveyors and loss assessors (iii) Litigations, appeals and court pronouncements (iv) International cooperation in insurance .... .... .... .... .... .... .... .... .... 47 47 47 47 47 47 49 49 51 .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... 5 9 12 12 13 19 27 27 27 27 31 34 37 38 39 39 40 41 41 43 46 46 .... .... .... .... 1 3
C) D)
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(v) (vi) (vii) (viii) (ix)
Public Grievances Insurance Associations and Insurance Councils Functioning of Ombudsman Committees Review of the advisory functions performed by the Authority PART III STATUTORY FUNCTIONS OF THE AUTHORITY
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54 57 58 59 60
a. b.
c. d. e. f. g. h.
Issue to the applicant a certificate of registration, renew, modify, withdraw, suspend or cancel such registration. Protection of the interests of policyholders in matters concerning assigning of policy, nomination by policyholders, insurable interest, settlement of insurance claim, surrender value of policy and other terms and conditions of contracts of insurance. Specifying requisite qualifications, code of conduct and practical training for intermediary or insurance intermediaries and agents. Specifying the code of conduct for surveyors and loss assessors Promoting efficiency in the conduct of insurance business Promoting and regulating professional organizations connected with the insurance and reinsurance business Levying fees and other charges for carrying out the purposes of the Act 66 Calling for information from, undertaking inspection of, conducting enquiries and investigation including audit of the insurers, intermediaries, insurance intermediaries and other organizations connected with the insurance business Control and regulation of rates, advantages, terms and conditions that may be offered by insurers in respect of general insurance business not so controlled and regulated by the Tariff Advisory Committee under section 64U of the Insurance Act, 1938 (4 of 1938) Specifying the form and manner in which books of account shall be maintained and statement of accounts shall be rendered by insurers and other insurance intermediaries Regulating investment of funds by insurance companies Regulating maintenance of margin of solvency Adjudication of disputes between insurers and intermediaries or insurance intermediaries Supervising the functioning of the Tariff Advisory Committee Specifying the percentage of premium income of the insurer to finance schemes for promoting and regulating professional organizations referred to in clause f Specifying the percentage of life insurance business and general insurance business to be undertaken by the insurer in the rural or social sectors Exercising such other powers as may be prescribed PART IV ORGANIZATIONAL MATTERS
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61 62
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62 63 63 64 64 64
i.
....
65
j. k. l. m. n. o. p. q.
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65 66 66 66 66 66 70 70
i. ii. iii. iv. v. vi. vii.
Organization Meetings of the Authority Human Resources Promotion of Official Language Status of Information Technology in IRDA Accounts ISO 2000 Registration
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71 71 71 71 72 72 72
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viii. IRDA Journal ix. Acknowledgments BOX ITEMS 1. 2. 3. 4. Solvency Operational risks in the Insurance industry Financial Sector Assessment Program Effect of Detariffing on Non-Life Insurance Sector TEXT TABLES 1. Key Market Indicators 2. Number of Registered Insurers in India 3. Distribution of Offices of Life Insurers as on 31st March, 2007* 4. Paid up Capital: Life Insurers 5. No. of New Policies issued: Life Insurers 6. Premium Underwritten by Life Insurers 7. Market Share of Life Insurers 8. Commission Expenses of Life Insurers 9. Operating Expenses of Life Insurers 10. Dividends Paid: Life Insurers 11. Paid up Capital: Non-Life Insurers and Re-Insurer 12. No. of New Policies issued: Non-Life Insurers 13. Premium Underwritten by Non-life Insurer (within India) 14. Gross Direct Premium income in India 15. Premium (Within India) Underwritten by Non-life Insurers - Segment wise 16. Ratio of outside India Premium to total Premium 17. Gross Direct Premium from Business outside India: Non-life insurers 18. Underwriting Losses: Non-Life Insurers 19. Operating Expenses: Non-Life Insurers 20. Commission Expenses 21. Investment Income 22. Incurred Claims Ratio 23. Dividends Paid: Non-Life Insurers 24. Net Retained Premium on Indian Business as Percentage of Gross Direct Premium (Excl. GIC) 25. Re-Insurance placed within India and outside India as percentage of Gross Direct Premium in India (excl. GIC) 26. Re-Insurance ceded outside India on Indian Business (excl GIC) 27. Share of Member Companies in the Indian Market Terrorism pool 28. Rating of Terrorism pool 29. Investments of Insurers 29(I). Total Investments-Instrument-Wise 29(II). Total Investments-Fund-Wise 29(III). Investments of Life Insurer: Fund wise 30. Total Investments: Fund wise 31. Investments of Non-Life Insurer: Fund wise 32. TPA (Infrastructure) 33. Third Party Administrators - Claims Data
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73 73
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28 44 52 67
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10 10 10 13 14 14 16 17 17 19 20 20 20 21 22 22 23 23 24 24 24 25 26 32 32 33 33 33 34 34 35 35 36 36 37 38
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34. 35. 36. 37. 38. 39. 40. 41.
Brief Details of Crop Insurance Policies of AIC Ltd. List of Products introduced by AIC Ltd. Individual New Business Premium of Life Insurers for 2006-07 Group New Business Premium of Life Insurers for 2006-07 Channel-wise Status of Grievances - Non-Life Insurers Status of Grievances - Non-Life Insurers (Half Year Ended Sept. 2007) Status of Grievances - Life Insurers Disposal of Complaints by Ombudsman - 2006-07 LIST OF STATEMENTS
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42 43 48 49 55 55 56 59
1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22. 23. 24. 25. 26. 27. 28. 29. 30. 31. 32. 33. 34.
Financial Saving of the Household Sector (Gross) International Comparison of Insurance Penetration International Comparison of Insurance Density Policy Holders Account: All Life Insurers Share Holders Account: All life Insurers Balance Sheet: All Life Insurers Life Insurance Corporation of India: Capital Redemption and Annuity Certain Business (Non Participating) Policy Holders Account Life Insurance Corporation of India: Capital Redemption and Annuity Certain Business (Non Participating) - Share Holders Account Life Insurance Corporation of India: Capital Redemption and Annuity Certain Business (Non Participating) - Balance Sheet Policy Holders Account: Public Sector Non-life Insurers Share Holders Account: Public Sector Non-life Insurers Balance Sheet: Public Sector Non-life Insurers Policy Holders Account: Private Sector Non-Life Insurers Share Holders Account: Private Sector Non-life Insurers Balance Sheet: Private Sector Non-life Insurers General Insurance Corporation (GIC) - Policy Holders Account General Insurance Corporation (GIC) - Share Holders Account General Insurance Corporation (GIC) - Balance Sheet Export Credit Guarantee Corporation Ltd.(ECGC) - Policy Holders Account Export Credit Guarantee Corporation Ltd.(ECGC) - Share Holders Account Export Credit Guarantee Corporation Ltd. (ECGC) - Balance Sheet Agricultural Insurance Corporation (AIC) Ltd. - Policy Holders Account Agricultural Insurance Corporation (AIC) Ltd. - Share Holders Account Agricultural Insurance Corporation (AIC) Ltd. - Balance Sheet Net Retentions of Non-life Insurers: 2006-07 Gross Direct Premium Income in India Net Premium Income (Earned) Underwriting Experience and Profits of Public Sector Companies Underwriting Experience and Profits of Private Sector Companies Incurred Claims Ratio Public Sector Incurred Claims Ratio Private Sector Equity Share Capital of Insurance Companies Fee Structure for Insurers and various intermediaries Fund-wise pattern of Investments of Life Insurers
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77 78 80 82 84 86 88 89 90 91 93 94 95 99 100 101 102 103 104 105 106 107 108 109 110 111 112 113 114 115 116 117 118 119
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35. 36. 37. 38. 39. 40. 41. 42. 43. 44. 45. 46. 47. 48. 49. 50. 51. 52. 53. 54. 55. 56. 57. 58. 59. 60.
Pattern of Investments of Non-life Insurers Status of Grievances - Life Insurers (2006-07) Status of Grievances - Non-life Insurers (2006-07) Status of Grievances - Non-life Insurers (Half year ended September, 2007) Third Party Administrators - Claims Data: 2006-07 Performance of Ombudsmen at different centres: Complaints disposal for the Year ending 31st March, 2007: Life Insurance Performance of Ombudsmen at different centres : Complaints disposal for the Year ending 31st March, 2007: Non-life Insurance Performance of Ombudsmen at different centres: Complaints disposal for the Year ending 31st March, 2007: Life and Non-Life Insurance combined First Year (Including Single Premium) Life Insurance Premium Total Life Insurance Premium Gross Direct Premium of Non-Life Insurance (Within & Outside India) Individual Business (Within India) Business in force (Number of Policies) Individual Business (Within India) Business in force (Sum Assured) Individual Business (Within India) Forfeiture/Lapse Policies in respect of Non-Linked Business Solvency Ratios of Life Insurers (2006-07) Solvency Ratios of Non-Life Insurers (2006-07) Individual Business (within India) - Details Forfeiture/Lapse Policies in respect of Non-Linked Business Individual New Business Performance of Life Insurances for 2006-07 Channel Wise Group New Business Performance of Life Insurances for 2006-07 Channel Wise State Wise Spread of Individual Agents Insurer wise as at 31st March, 2007 Details of Individual Agents of Life Insurers Individual Death Claims No. of Life Insurance offices as on end March Distribution of offices of Life Insurers as on 31st March, 2007 Geographical Distribution of officesCompany-wise Individual New Business UnderwrittenCompany-wise LIST OF ANNEX
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123 124 125 126 127 128 129 130 131 132 133 134 135 136 137 138 139 140 141 142 144 145 146 147 148 149
I II III
Insurance Companies operating in India Regulations framed under the IRDA Act, 1999 (a) Appointed Actuaries of Life Insurers (b) Appointed Actuaries of Non-Life Insurers IV (a) Indian Assured Lives Mortality (1994-96) (modified) ultimate (b) Mortality Rates of Annuitants in LIC of India LIC A (96-98) ultimate V Life Insurance products cleared during the financial year 2006-07 VI Non-life Products Introduced during the financial year 2006-07 VII Obligatory Cessions received by GIC VIII Registered Brokers (State - wise Break-up) IX Circulars / Orders / Notifications issued by the Authority X Annual Statement of Accounts for the year ended March 31, 2007 XI Addresses of Insurers, Intermediaries and Ombudsman
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153 154 155 156 157 158 159 163 166 167 168 173 193
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MISSION STATEMENT
To protect the interest of and secure fair treatment to policyholders; To bring about speedy and orderly growth of the insurance industry (including annuity and superannuation payments), for the benefit of the common man, and to provide long term funds for accelerating growth of the economy. To set, promote, monitor and enforce high standards of integrity, financial soundness, fair dealing and competence of those it regulates; To ensure speedy settlement of genuine claims, to prevent insurance frauds and other malpractices and put in place effective grievance redressal machinery; To promote fairness, transparency and orderly conduct in financial markets dealing with insurance and build a reliable management information system to enforce high standards of financial soundness amongst market players; To take action where such standards are inadequate or ineffectively enforced; To bring about optimum amount of self-regulation in day to day working of the industry consistent with the requirements of prudential regulation.
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TEAM AT IRDA Year 2006-07 CHAIRMAN C. S. Rao MEMBERS C.R. Muralidharan K.K. Srinivasan G. Prabhakara Dr.R. Kannan PART-TIME MEMBERS Vijay Mahajan Sunil Talati Ela R. Bhatt Dr. Sanjiv Misra
DIRECTOR GENERAL (RESEARCH & DEVELOPMENT) Dr. D.V.S. Sastry EXECUTIVE DIRECTORS Prabodh Chander V. Vedakumari CONSULTANTS M. M. Siddiqui Kunnel Prem K. Subrahmanyam
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OVERVIEW
The Indian economy has witnessed a remarkable real GDP growth in 2006-07. This upswing has resulted from higher production in both manufacturing and services sectors while agriculture and allied activities have not shown a similar improvement. Services sector and manufacturing sector led the development path with growth rate of 11.0 per cent each. Agricultural sector registered a positive rate of growth at 2.7 per cent; however, it was much lower than the growth rate of 6.0 per cent registered in 2005-06. Thus, the overall real GDP growth was 9.4 per cent in 2006-07 as against 9.0 per cent in 2005-06. Within the services sector, trade, hotels, transport and communications and financing, insurance, real estate and business services have registered double digit rate of growth. As a result of higher growth, the per capita income has increased; gross domestic savings as a percentage of GDP increased to 32.4 per cent in 2005-06 from 31.1 per cent in 2004-05. The saving rate of the household sector in financial assets has increased to 11.7 per cent in 2005-06 compared to 10.2 per cent in 2004-05. However, saving rate in the form of physical assets declined to 10.7 per cent from 11.4 per cent observed in 2004-05. Savings of private corporate sector has increased to 8.1 per cent of GDP in 2005-06 as compared to 7.1 per cent in 2004-05. Higher savings improved the investment situation at the economy level to 33.8 per cent of GDP in 2005-06 as against 31.5 per cent in 2004-05. Gross capital formation as per cent of GDP in the private corporate sector worked out to 12.9 per cent (9.9 per cent in 2004-05). Gross capital formation rate in the public sector has increased to 7.4 per cent marginally higher than 7.1 per cent in 2004-05. Thus, higher investment rates in both private corporate and public sectors of the economy will have a long term impact on the overall growth path. Monetary policy during 2006-07 has managed a higher real growth path despite pressures from actual and expected inflation. The prices of fuel, power, light and lubricants have caused the rise of inflation in 2006-07. Higher commodity prices for primary food articles and manufactured products and demand conditions have contributed to the rise in inflation. Inflation measured by variations in the WPI on a year-on-year basis increased from 4.0 per cent at end-March 2006 to 5.9 per cent at end-March 2007. On an average basis, WPI inflation was higher at 5.4 per cent in 2006-07 when compared to that of 4.4 per cent in 2005-06. Consumer price inflation for industrial workers registered, on year-on-year basis, an increase of 6.7 per cent in March 2007 compared with 4.9 in March 2006. Consumer price index for industrial worker averaged to 6.7 per cent in 2006-07 compared with 4.4 per cent in 2005-06. Domestic equity and bullion markets have also played significant role in the inflationary situation. Some of the key macroeconomic indicators suggest that the consumer price inflation have eased in most of the economies except in India, China and South Africa. The Indian financial markets were calm during 2006-07 except for some volatility at certain points of time due to changes in cash balances and capital flows. Despite certain tightness in the uncollateralized call money market, call rates averaged at 7.22 per cent 2006-2007. In the money market there has been a shift from uncollateralized to the collateralized market in 2006-07, as collateralized market accounted for about 70 per cent of the total valume in money market. Along with nationalized banks, insurance companies and mutual funds have been major money lenders in the Collateralized Borrowing and Lending Obligation market. The issuance of commercial paper has seen a mixed response; however, the weighted average discount rates on commercial paper have increased to 11.33 per cent during the fortnight ending March 31, 2007 from 8.59 per cent observed at the corresponding period in the previous year. Yields on treasury bills have also seen a sharp rise during 2006-07. The government securities market showed an increase in yields both at short term and long term. Whereas the yield spread on securities above 1 year has declined at a faster rate, the deposit rates and lending rates of both public sector and private sector banks have moved up in year 2006-07. The gap in yield spread between 5 year government securities and 5 year AAA-rated bonds have widened by 142 basis points at end-March 2007. In the primary market, resources mobilized through public issues amounted
to Rs.32,382 crore during 2006-07. Mobilization of resources through private placement amounted to Rs. 84,307 crore. In the domestic secondary market, the BSE Sensex at end-March 2007 increased by 15.9 per cent on top of an increase of 73.7 per cent a year ago. Strong corporate profitability and liquidity support from foreign institutional investors and domestic mutual funds kept the stock market buoyant despite certain sharp corrections on few occasions. Major global stock indices showed mixed trends during 2006-07. The short term interest rates rose in some of the developed economies, whereas yield on the long term government bonds exhibited a mixed trend. The balance of payments condition indicated vibrancy and strength in the external sector during 2006-07. The merchandise exports and non-oil import remained robust, though there was some deceleration as compared to the previous year. Indias share in world trade has increased to 1.2 per cent in 2006 from 1.1 per cent in 2005. Indias merchandise export reported a growth of 22.5 per cent in 2006-07 as compared to 23.4 per cent in the previous year. Commodities like engineering goods and petroleum products have recorded strong growth whereas export of commodities like chemicals and related products, gems and jewellery, textiles, and related products recorded a moderate growth. Indias merchandise imports moderated to 27.8 per cent during 2006-07 from 33.8 per cent in the previous year. During 2006-07, US remained the major destination for Indias export accounting for 14.9 per cent of Indias total exports. Growth in oil imports moderated to 29.8 per cent in 2006-07 as against 47.3 per cent in 2005-06. Indias external debt has increased by US $ 28.6 billion during 2006-07 and stood at US $ 155.0 billion by end March 2007. Indias foreign exchange reserves stood at US $ 199.2 billion on March 31, 2007 as compared with US $ 151.6 billion on March 31, 2006. The Indian currency has shown a two way movement against US dollar, euro, Japanese yen and pound sterling. The rupee has appreciated against US dollar by 2.3 per cent and Japanese yen by 2.7 per cent while it depreciated against euro by 6.8 per cent and pound sterling by 9.1 per cent. Global economic activity gathered further pace in 2006, with growth accelerating to 5.5 per cent from 4.9 per cent in 2005.
Growth in developing Asia accelerated from 9.2 per cent in 2005 to 9.7 per cent in 2006 due to strong global demand, favourable terms of trade and easy access to external finance. The volume of world trade increased to 9.4 per cent from 7.5 per cent in 2005. The World Economic Outlook predicts that global real GDP growth on the basis of purchasing power parity, to be lower at 5.2 per cent in 2007-08 compared to 5.5 per cent in 2006-07. The growth in the world trade volume is also expected to decelerate from 9.4 per cent in 2006 to 7.1 per cent in 2007 and 7.4 per cent in 2008. The global headline inflation has picked up momentum even though the core inflation has not shown much change. There has been a noticeable rise in volatility in the international financial markets. With financial globalization the exposure of emerging markets to risky financial assets has increased which in turn has led to increased risk appetite of institutional investors in search of higher yields. The improved global economic activity has also impacted the insurance business. The world insurance premium in 2006 accounted for US $ 3723 billion; of which US $ 2209 billion was in life insurance and US $ 1514 billion in non-life insurance. Profitability improved for both life and non-life insurance companies in 2006 as compared to 2005. The Central Statistical Organization, in February 2007 has revised upwards the real GDP growth for 2006-07 to 9.4 per cent. Progress in all the three sectors has contributed towards the growth with the industrial and services sectors playing the vital role. The industrial sector has gained momentum with improvement in investment and sectoral policies. Further, to sustain the accelerating growth rate of this sector, Union Budget 2007 has declared a reduction in custom duties and other taxes. The improved performance in the domestic economy is also reflected in the insurance industry. Higher per capita income, domestic savings and availability of more instruments for parking surplus funds have facilitated growth in the activities of financial services: Savers risk appetite has also been increasing which can be seen by the growth in unit linked products provided by the life insurers. The premium underwritten in India and abroad by life insurers in 2006-07 has grown by 47.38 per cent as against 27.78 per cent in
2005-06. First year premium including single premium accounted for 48.45 per cent of the total life premium, whereas renewal premium accounted for the remaining. First year premium including single premium recorded a growth of 94.96 per cent in 2006-07 compared to 47.94 per cent in 2005-06, driven by a significant jump in the unit-linked business. The private life insurers have increased their market share from 14.25 per cent in 2005-06 to 18.08 per cent in 2006-07. This has not affected the growth of LIC, as the premium collected by LIC in 2006-07 has increased by 40.79 per cent over the premium collected in 2005-06. In the case of general insurers the growth was 21.51 per cent as against 15.62 per cent in the previous year. In 2006-07, the four public sector general insurers had reported a growth of 8.18 per cent (6.87 per cent in the previous year) in underwriting of premium within and outside India whereas eight private sector insurers reported a growth of 61.24 per cent. The market share of private insurers had increased to 34.72 per cent compared to 26.34 per cent in 2005-06 implying a decline in the market share of the public sector insurers. The number of policies underwritten by the private insurers increased by 51.48 per cent whereas it declined by 2.25 per cent for public insurers. The Authority, visualizing the large opportunities for growth of insurance in India has been making efforts at widening and deepening the market. It has also recognized that competition among the companies has impacted their efficiency in production, innovation and claim management. Further, new untapped market is being exploited by the private insurers forcing the public insurers to come out with innovative schemes. The Authority feels that there is scope for new entrants to spread the message of insurance among the people; It, however, adopts a cautious and deligent approach in licensing firms to undertake insurance business in India. All out efforts are being made by the Authority in spreading health insurance. Further, micro-insurance is encouraged to cater to the needs of the poor people. The insurers responded positively to these developmental plans of IRDA, a new stand alone Health Insurance company has started its business in 2006-07. The existing companies are expanding their geographical operations. During 2006-07, 1508 offices as defined under Sec 64VC of Insurance Act 1938 have been
added. The number of policies issued in 2006-07 by private insurers registered 100 per cent increase over those issued in 2005-06. The total premium underwritten by the life insurers recorded a growth of 47.38 per cent in 2006-07. The well laid out and carefully thought of road map put in place by the Authority for removal of tariffs in the general insurance industry was a historic event of 2006-07. The apprehensions of many were put to rest as no marked fluctuations were observed in the rates. Though it is too early to assess the impact of detariffication, the initial behaviour of the market has been normal. As the market becomes more competitive companies move to put in good underwriting practices and innovate new products so as to retain their earlier market shares. The Authority is concerned with the market behaviour of the players and the way they sell their products to the consumers. The Authority lays stress on these issues and advised the insurers to restrain from misselling their products to the consumers by inflating the benefits of such products. Further the complex structure of the market forces evolving in the light of detariffing necessitated the Authority to recognize importance of the market supervision as well as financial supervision. In view of this, the Authority conducted inspections of the insurance companies to look into underwriting processes and based on the reports of the inspecting team, some of actions have been initiated. Performance in the first half year of 2007-08 (i) Life insurance The life insurers underwrote a premium of Rs. 33159.53 crore during the six months in the current financial year as against Rs. 29664.64 crore in the comparable period of last year recording a growth of 11.78 percent. Of the total premium underwritten, LIC accounted for Rs. 22761.49 crore and the private insurers for Rs. 10398.04 crore. The premium underwritten by the LIC declined by 2.87 percent while that of private players grew by 66.91 percent, over the corresponding period in the previous year. The number of policies written at the industry level increased by 69.09 per cent. The number of policies written by LIC increased by 61.61 per cent whereas in the case of private insurers the increase was
99.18 per cent. Of the total premium underwritten, individual premium accounted for Rs. 28470.56 crore. and the remaining Rs. 4688.97 crore came from the group business. In respect LIC, individual business was Rs. 18889.84 crore and group business was Rs. 3871.65 crore. In the case of private insurers, it was 9580.72 crore and Rs. 817.32 crore respectively. The market share of LIC was 68.64 per cent in premium collection and 76.55 per cent in number of polices underwritten. In the corresponding period of last year these shares were 79.00 per cent and 80.09 per cent respectively. The number of lives covered by life insurers under the group scheme was 131.19 lakhs recording a growth of 50.20 per cent over the previous period. Of the total lives covered under the group scheme, LIC accounted for 102.33 lakhs and private insurers 28.86 lakhs. The life insurers covered 54.82 lakh lives in the social sector with a premium of Rs. 83.21 crore. In the rural sector the insurers underwrote 43.38 lakh policies with a premium of Rs. 4340.81 crore. (ii) Non-Life insurers Non-life insurers underwrote a premium of Rs. 13904.01 crore during the first half of the current financial year recording a growth of 11.68 per cent over Rs. 12449.87 crore underwritten in the same period of last year. The private sector non-life insurers underwrote a premium Rs. 5441.52 crore as against Rs. 4340.57 crore in the corresponding period of the previous year, recording a growth of 25.36 per cent. Public sector non-life insurers underwrote a premium of Rs. 8462.49 crore which was higher by 4.36 per cent (Rs. 8109.30 crore in the first half of 2006-07). The market share of the public insurers, and the private players was 60.87 and 39.13 per cent respectively. ECGC underwrote credit insurance of Rs. 313.24 crore as against Rs. 293.02 crore in the previous
year, a growth of 6.90 per cent. Segment wise the premium underwritten in the Fire, Marine and Miscellaneous segments was Rs. 2220.93 crore, Rs. 900.02 crore and Rs. 10783.06 crore recording a growth of -11.69 per cent, 1.88 per cent and 19.13 per cent, respectively over the corresponding period of the previous year. The corresponding number of policies segment wise were 16.59 lakh, 6.88 lakh and 251.02 lakh respectively. i.e., a growth of -2.56, 1.45 and 28.49. Premium underwritten by the private sector insurers in these segments during April- September, 2007 was Rs. 874.03 crore, Rs. 294.96 crore and Rs. 4272.53 crore, respectively reporting growth of 11.73, 1.15 and 39.68 per cent. In terms of number of policies, the private insurers issued 3.14 lakh, 1.53 lakh and 77.68 lakh policies in the Fire, Marine and Miscellaneous segments reporting a growth of, 42.49, 8.54 and 57.67 per cent respectively. The policies underwritten in the corresponding period of the previous year were 2.21 lakh, 1.41 lakh and 49.27 lakh respectively. The growth in terms of policies underwritten by the private insurers was 55.73 per cent. Premium underwritten by the pubic sector insurers in these segments during April-September, 2007 was Rs. 1346.90 crore, Rs. 605.06 crore and Rs. 6510.53 crore respectively reporting growth of -11.66, 2.23 and 8.64 per cent. In terms of number of policies, the pubic insurers issued 13.44 lakh, 5.34 lakh and 173.34 lakh policies in the Fire, Marine and Miscellaneous segments reporting a growth of -9.28, -0.41 and 18.65 per cent respectively. The policies underwritten in the corresponding period of the previous year were 14.82 lakh, 5.37 lakh and 146.09 lakh respectively. The growth in terms of policies underwritten by the public insurers was 15.55 per cent.
PART I POLICIES AND PROGRAMMES

A. GENERAL ECONOMIC ENVIRONMENT The Indian economy, commensurate with strong global growth, exhibited a robust performance during 2006-07. Real GDP backed up by double digit growth in services sector and industrial sector increased to 9.4 per cent in 2006-07 as against 9.0 per cent in 2005-06. Indias share in world GDP thus has increased to 6.3 per cent in 2006 measured in terms of purchasing power parity. Growth in per capita income also accelerated to 8.4 per cent in 2006-07 from 7.4 per cent in 2005-06. At the sectoral level, real GDP growth originating from agriculture and allied activities decelerated from 6.0 per cent in 2005-06 to 2.7 per cent in 2007, partly attributable to base effect and uneven monsoon. While the total food grains production increased marginally, non-food grains production has been lower than the earlier level. Real GDP growth originating from industrial sector, on the other hand, increased to 11.0 per cent in 2006-07 from 8.0 per cent recorded in 2005-06 mainly due to strong manufacturing activity. This has been substantiated by the movements in the index of industrial production also. The growth in IIP accelerated from 8.2 per cent in 2005-06 to 11.5 per cent in 2006-07. In terms of use based classification, while acceleration in growth was observed in basic goods, capital goods and intermediate goods, there has been a deceleration in the case of consumer goods. The infrastructure sector witnessed improved performance during 2006-07 over its subdued performance in the preceding two years. However, the growth in infrastructure sector was lower than the overall industrial growth. However, growth in infrastructure industries (with a weight of 26.7 per cent in the IIP) increased to 8.6 per cent in 2006-07 from 6.2 per cent in the previous year. The improvement in the performance of infrastructure was due to turn around in the growth in crude petroleum and higher growth in electricity and petroleum refinery products. Small scale industries continued to record a steady progress in 2006-07. This sector accounted for 40 per cent of the industrial output and 47 per cent in the manufactured exports of the economy. Performance of the corporate sector was optimistic with favourable investment activity together with export and import conditions. The services sector has been an important sector in the Indian economic growth process in the recent years. GDP originating from the services sector recorded a growth rate of 11.0 per cent in 2006-07 compared to10.3 per cent in 2005-06. The performance of this sector was mainly driven by trade, hotels, transport and communications (13.0 per cent in 2006-07 against 10.4 per cent in 2005-06). The financing, insurance, real estate and business services have grown by 10.6 per cent as compared to 10.9 per cent in 2005-06. Within this sub sector, GDP emanating from insurance has contributed to 17.0 per cent in 2006-07 which showed an increase over the previous year. Saving and Capital Formation The CSO released the estimates for GDP at the economy and at sectoral levels for 2006-07. However, the estimates of savings and capital formation are released with a lag of one year i.e., the latest such estimates are released for 2005-06. The RBI estimates the gross financial savings of the household sector and released the same for 2006-07. As such the review pertains to savings and capital formation for 2005-06 and gross financial assets for 2006-07. Growth during 2006-07 was mostly driven by domestic demand led by investment. Gross domestic savings as a per cent of GDP at current market prices, increased from 31.1 per cent in 2004-05 to 32.4 per cent in 2005-06 as a result of higher increase in private corporate and household savings. The household savings rate has increased from 21.6 per cent in 2004-05 to 22.3 per cent in 2005-06. This was due to an increase in savings in the form of financial assets (11.7 per cent in 2005-06 against 10.2 in 2004-05). There was a marginal decline in household savings in the form of physical assets. The saving rate of private corporate sector has increased from 7.1 per cent in 2004-05 to 8.1 per cent in 2005-06. On the other hand there was a marginal decline in public sector savings from 2.4 per cent of GDP in 2004-05 to
2.0 per cent in 2005-06. While the domestic savings rate increased by 1.3 percentage points in 2005-06, the domestic investment rate increased by 2.3 percentage points from 31.5 per cent in 2004-05 to 33.8 per cent in 2005-06 taking recourse to higher foreign savings to the extent of 1.3 per cent. Of the gross financial assets of the household sector in 2005-06, currency and deposits constituted 55.8 percent which is much higher than 45.7 per cent observed in 2004-05, clearly showing the preference of households towards banks. Insurance funds accounted for 14.0 per cent in 2005-06 lower than 15.7 per cent in 2004-05. Of this life insurance funds accounted for 13.4 per cent with postal insurance and state insurance accounting for 0.3 per cent each. As a percentage of GDP insurance funds accounted for 2.3 per cent in 2005-06 more or less at the same level to that in 2004-05. Investments in the form of small savings constituted 12.2 per cent in 2005-06 sharply declining from 19.6 per cent in 2004-05. Provident and pension funds accounted for 10.5 per cent of financial assets of households in 2005-06 as against 13.0 per cent in 2004-05. However, these funds maintained the same share in GDP at 1.8 per cent. Preliminary estimates place the financial savings of the household sector in 2006-07 at 11.6 per cent of GDP the same as the revised estimates for 2005-06. Financial assets of the household sector are placed at 18.4 per cent of GDP in 2006-07. Of this, currency and deposits constituted 64.3 per cent much higher than 55.8 per cent observed in 2005-06. Insurance funds accounted for 15.0 per cent; of which 14.6 per cent was constituted by life insurance funds. As a percentage of GDP, insurance funds accounted for 2.8 in 2006-07 as against 2.3 in 2005-06. Postal insurance and state insurance funds constituted 0.2 per cent each. Investments in small savings accounted for 4.9 per cent in 2006-07 which is around one-third of its level in 2005-06. Provident and pension funds accounted for 9.2 per cent of financial assets of households in 2006-07. Price Situation Inflation remained firm in many countries including India during 2006-07 reflecting high commodity prices and strong demand
conditions. Inflation in India, as measured by movements in the whole sale price index on a year on year basis rose to 5.9 per cent on March 31, 2007 from 4.0 per cent a year ago. Supply pressures emanating from higher prices of primary articles and demand pressures due to high growth contributed to the higher inflation rate. Primary articles and manufactured products contributed to the high inflation rate in 2006-07. Shortfalls in domestic supply of major agricultural crops together with high international prices are the major causes for inflation in primary articles. Inflation in primary articles rose to 10.7 per cent on March 31, 2007 from 4.8 per cent a year ago. Inflation in manufactured products was due to strong growth and higher demand and high capacity utilization. Inflation in manufactured products increased to 6.1 per cent on March 31, 2007 from 1.9 per cent a year ago. Fuel group inflation which contributed more to the inflation in the preceding two years (2004-05 and 2005-06) eased significantly in 2006-07. Fuel group inflation as on March 31, 2007 was 1.0 per cent as against 8.3 per cent a year ago and 10.5 per cent two years ago. Base effect and cuts in prices were the causes for this low inflation. However, the fuel group inflation peaked to 9.9 per cent on June 17, 2006 and moderated significantly later. On an average basis, the wholesale price inflation (average of 52 weeks) was higher at 5.4 per cent in 2006-07 compared to 4.4 per cent in 2005-06. Consumer price inflation was above the wholesale price inflation all through the year, reflecting higher food prices as well as their higher weightage in the basket of consumer goods. Consumer price inflation for industrial workers for the month of March 2007 was 6.7 per cent on a year on basis, which was higher than 4.9 per cent recorded for the same month of the previous year. On an average basis consumer price inflation for industrial workers was 6.7 per cent in 2006-07 higher than 4.4 per cent for the previous year. DOMESTIC FINANCIAL MARKETS Various initiatives were undertaken so as to deepen and widen the domestic financial markets. The implementation of Fiscal Responsibility and Management Act 2003 necessitated several structural and developmental measures in the government securities market. Insurance companies have extended the facility to trading in government securities market on screen
based order-driven anonymous NDS order matching module. Steps were taken to make the Indian capital market more efficient, transparent and investor friendly. During 2006-07, short term interest rates increased further in a number of economies as many central banks tightened the monetary policy to contain inflation and to stabilize inflationary expectations. Financial markets in India remained generally orderly during 2006-07. Money Market Money market rates rose up and moved along the policy rates during 2006-07. Some spells of volatility was observed in the money market at certain times due to changes in capital flows and cash balances. There was a rise in the interest rates in various segments of the money market. The call rate averaged to 7.22 per cent during 2006-07 and remained within the corridor during September December 2006 set by the Reserve Banks repo and reverse repo rates. Due to tight liquidity conditions, the call rate was higher than the repo rate and the weighted average call rate touched 16.88 per cent on December 29, 2006. Though the call rate eased to some extent at different points of time, thereafter it hardened and reached an intra-year high of 54.32 per cent on March 30, 2007. In line with movements in call rate, the interest rates in the collateralized segments of money market also increased during 2006-07. The collateralized segment (market repo outside Liquidity Adjustment Facility and Collateralized Borrowing and Lending Operations) accounted for about 70 per cent of the total volume. The interest rates in the market repo segment averaged to 6.34 per cent. In the Collateralized Borrowing and Lending Operations, the interest rates averaged to 6.24 per cent. Interest rates in both these markets were lower than call money rates. The interest rates in the collateralized segments of the money market though hardened were below the call rates during 2006-07. Some of the major lenders in the CBLO markets are the mutual funds and insurance companies. Interest rates in other segments of money market also increased. The weighted average discount rate of Certificates of Deposit increased from 8.62 per cent at end March 2006 to 10.75 per cent at end March 2007. Similarly, the weighted average discount rate of Commercial Paper increased from
8.59 per cent during the fortnight ended March 31, 2006 to 11.33 per cent during the fortnight ended March 31, 2007. Foreign Exchange Market The Indian currency exhibited two way movements in the range of Rs.43.14 to Rs.46.97 per US dollar during 2006-07. The rupee initially depreciated against US dollar due to higher crude oil prices and FII outflows. Subsequently, the rupee strengthened backed up by moderation in crude oil prices, large capital inflows and weakness in US dollar in international markets. The exchange rate was Rs.43.60 per US dollar at end March 2007. The Indian rupee appreciated by 2.3 per cent against US dollar, 2.7 per cent against Japanese Yen; however it depreciated by 9.1 per cent against Pound sterling and 6.8 per cent against Euro. Forward premia also increased during 2006-07 due to interest rate differentials. In view of increase in domestic flows remaining in excess of the current account deficit, the overall balance of payments showed a surplus resulting an accretion of US $ 47.6 billion to the foreign exchange reserves. Foreign exchange reserves comprising of gold, SDR, foreign currency assets and reserve position at IMF reached to US $ 199.2 billion at end March 2007. Government Securities Market Yields on government securities in the secondary market hardened during 2006-07. The government securities market showed an increase in short term as well as long term yield. Yields on 10 year paper moved up from mid-April 2006 and reached the intra-year peak of 8.40 per cent on July 11, 2006. This upward movement was basically due to sustained domestic demand for credit, higher crude oil prices, hike in domestic fuel prices and reverse repo rate. The 10 year yield was 7.97 per cent as on March 31, 2007 which was 45 basis points higher than the level as on March 31, 2006. The yield curve flattened during 2006-07 with spread between 1 year and 10 year narrowed down to 42 basis points at end-March 2007 from 98 basis points at end March 2006. The gap in yields between 5 year government securities and 5 year AAA-rated bonds has widened to 142 basis points by end-March 2007 from 91 basis points at end-March 2006.
Primary Market Resources raised from primary market through public issues increased to Rs.32,382 crore during 2006-07 from Rs.26,940 crore mobilized in 2005-06. However, the number of public issues (119) were lower than 138 in the previous year. All the issues were by private sector excepting for one. Of the 119 issues 116 were for equity and the remaining 3 for debt. The total resources mobilized through equity were Rs.31,535 crore. Of the 119 public issues, 75 issues were initial public offerings. The Indian corporate sector relied heavily on private placement route. The private corporate sector mobilized Rs.84,307 crore through 1539 private placements more than double the amount mobilized in 2005-06. Moreover the resources raised by Indian corporates from the American Depository Receipts and Global Depository Receipts have increased by 49.8 per cent to Rs.17,005 crore during 2006-07 from Rs.11,352 crore in 2005-06. ADRS accounted for Rs.8268 crore and GDRS for Rs.8737 crore. The net resources mobilized by Mutual Funds increased by 78.1 per cent to Rs.93,985 crore in 2006-07 from Rs. 52779 crore in the previous year. Net assets managed by Mutual Funds also increased significantly by 40.7 per cent to Rs.3,26,292 crore from Rs.2,31,863 crore are in 2005-06. Bulk of resources mobilized by Mutual Funds during 2006-07 was under debt market schemes. This may be partly attributed to risk aversion on the part of investors. Secondary Market Indian Stock market gained further in 2006-07. The BSE Sensex increased by 15.9 per cent at end March 2007over and above the increase of 73.7 per cent a year ago. Strong corporate profitability, continued liquidity support from FIIS and domestic mutual funds buoyed up the stock market. The domestic stock market moved in line with the developments in global equity markets. On February, 2007 the BSE sensex moved to 14652, an all time high, before closing at 13072 on March 30, 2007. As such the market capitalization of the BSE increased by 17.3 per cent. Activity in the wholesale debt market was however subdued with turnover declining by 53.9 percent to Rs.219106 crores in 2006-07. To sum up, the domestic financial markets remained orderly during 2006-07 although there was some volatility especially in the last two weeks of March, 2007. Interest rates have edged up in all the market segments and moved in tandem
with the policy changes. The foreign exchange market exhibited a two way movement and the stock markets reached record highs in 2006-07. EXTERNAL SECTOR Sustained growth and vibrancy in the external sector was reflected in Indias balance of payments during 2006-07. Net surplus under invisibles financed the large merchandise gap. As such, the current account deficit remained modest and as a proportion of GDP was 1.1 per cent in 2006-07; the same level as in 2005-06. The overall balance was a surplus resulting into further increase in foreign exchange reserves. Net capital flows increased in 2006-07 reflecting the investors confidence in Indias growth prospects. During 2006-07 net capital flows were US Dollar 44.9 billion constituting external commercial borrowings and foreign direct investment. Foreign direct investment increased by US $19.5 billion due to progressive liberalization of FDI policy and simplification of procedures. Among the emerging economies, India has emerged as the second most preferred country next to China for FDI. The net external assistance India received worked out to US $ 1.8 billion during 2006-07. India, in the form of technical cooperation and training, is also extending assistance to other countries like Bhutan, Nepal etc. Global economic growth in 2006 accelerated to 5.5 per cent from 4.9 per cent in 2005. The slow down in US was compensated by accelerated growth in Japan and Euro area. Among the developing economies, China and India continued to exhibit strong growth. Increase in global demand was reflected in growth in volume of world merchandise trade from 7.5 per cent in 2005 to 9.4 per cent in 2006. According to IMF, the global growth may be some what moderated to 5.2 per cent in 2007. This may result into decrease in volume of trade and private capital flows. The volume of world trade is expected to decelerate to 7.1 per cent in 2007. Uncertainties in international oil prices, inflationary expectations may be the downside risks in the growth prospects. First Quarter Review Industrial production remained buoyant during April-June 2007, led by manufacturing activity. The growth in IIP during
this period accelerated to 11.0 per cent compared to 8.0 per cent observed in the corresponding period of 2006. According to use based classification while basic, capital and consumer goods showed higher growth, intermediate goods showed a deceleration. The growth in infrastructure industries was 6.9 per cent during this period as against 7.4 per cent observed in April-June 2006. The lead indicators presented a mixed response in the performance of services sector. Wholesale price inflation has moderated to 4.1 per cent on August 4, 2007 from 5.9 per cent at the end March 2007 and 5.1 per cent a year ago. Fuel group inflation turned negative due to cuts in domestic fuel prices. However, international crude oil prices increased from its march level. Primary articles inflation was 9.4 per cent (5.2 per cent a year ago) and manufactured products inflation was 4.4 per cent (3.8 per cent a year ago). The average wholesale inflation price increased to 5.4 per cent on August 4, 2007 from 4.4 per cent a year. Consumer price inflation continued to be higher than WPI inflation mainly because of higher prices for food articles and their higher weight in the consumer basket. Financial markets have remained stable upto June 2007. Short term interest rates have eased from end March 2007 levels. Overnight interest rates exhibited volatility due to movements in Government cash balances. Call rates were below 1 per cent on a number of occasions in June 2007. During May-July 2007 the call rates averaged to 3.37 per cent. During that period, the rates in the collateratised segment were lower than the call rate; 2.15 per cent in CBLO and 2.49 per cent in market repo. Upto August 17, 2007 the Indian rupee moved in the range of Rs.40.24 to 43.15 per US dollar. In the secondary market of government securities, the yield on 10 year security moved in the range of 7.80 to 8.41 per cent upto August 17, 2007. The 10-year yield was 8.01 per cent as on that day four basis points higher than end March 2007. To sum up, the growth momentum of 2006-07 is continuing in the current financial year also. Inflation has eased, but inflationary expectations have not totally subsided. International oil prices are hardening. The slow down in US economy is continuing with more integration among countries, the risks transfers may be quicker.
B. APPRAISAL OF INSURANCE MARKET The contours of insurance business have been changing across the globe and the ripple effects of the same can be observed in the domestic markets as well. An evolving insurance sector is of vital importance for economic growth. While encouraging savings habit it also provides a safety net to both enterprises and individuals. The insurance industry also provides crucial financial intermediation services, transferring funds from the insured to capital investment, which is critical for continued economic expansion and growth, simultaneously generating long-term funds for infrastructure development. In fact investments in infrastructure are ideal for asset-liability matching for life insurance companies given their long term liability profile. Development of the insurance sector is necessary to support the structural changes in the economy. Social security and pension reforms too benefit from a mature insurance industry. The insurance sector in India, which was opened-up for private participation in the year 1999 has completed seven years in a liberalized environment. Since opening up of the insurance sector in 1999, 24 private companies have been granted licenses by 31st March, 2007 to conduct business in life and general insurance. Of the 24, 15 were in the life insurance and nine (including a standalone health insurance company) in general insurance. During the last seven years capital amounting to Rs.9625.28 crore was brought in by the private players, of which the contribution of the foreign partners has been Rs.2174.28 crore. During this period the average annual growth of first year premium in the life segment worked out to 47.06 per cent and in the non-life segment it was 16.87 per cent. The industry services the largest number of life insurance policies in the world. Yet Indian insurance industry has scope to further expansion with a large untapped potential. The Authority and the industry have been playing an active role in increasing consumer awareness. Insurance companies in general and private insurance companies in particular, are reaching out to untapped semi-urban and rural areas through advertisement campaigns and by offering products suitable to meet the specific needs of the people in these segments. The insurers are increasingly introducing innovative products to meet the specific needs of the prospective policyholders.
Innovative products, imaginative marketing, and aggressive distribution enabled fledgling private insurance companies to sign up Indian customers faster belying expectations at the time of opening up of the sector. At the time of opening up of the sector, life insurance was viewed as a tax saving device. Of late policyholders perspective is slowly changing towards taking insurance cover irrespective of tax incentives. The insurable populace is looking for products which suit their specific requirements. As of now a variety of choices are available in the market meeting the requirements of different cross-sections of the society and across age groups.
TABLE 1 KEY MARKET INDICATORS Life and non-life market in India (Total Premium) Global insurance market (as on 31st December, 2006) Rs.181971.61 crore (US $ 41.74 billion) US $ 3723 billion Inflation adjusted growth: 5.0 per cent Growth in premium underwritten in India and abroad in 2006-07 Geographical restriction for new players Equity restriction Foreign promoter can hold up to 26 per cent of the equity Registration restriction Composite registration not available Life: 47.38 per cent Non-life: 21.51 per cent None
TABLE 2 NUMBER OF REGISTERED INSURERS IN INDIA Type of business Life Insurance General Insurance Re-insurance Total Public Sector 1 6 1 8 Private Sector 16* 11^ 0 27 Total 17 17 01 35
* One has been granted registration in 2007-08 ^ Two have been granted registration in 2007-08
Of the non-life insurance companies in the public sector, there are two specialized insurance companies viz. Agricultural Insurance Company, which handles Crop Insurance business and Export Credit Guarantee Corporation which transacts export credit insurance. In addition, there are two standalone health insurance companies in the private sector, of which one is yet to commence operations. Expansion of Offices While there were 2199 offices in the life insurance industry by March 2001, the number has increased to 5373 by the end of 2006-07. During the period, while the number of offices of LIC has increased from 2186 to 2301 the offices of the private sector players increased from a mere 13 in 2001 to 3072 in 2006-07.
TABLE 3 DISTRIBUTION OF OFFICES OF LIFE INSURERS AS ON 31st MARCH, 2007* Insurer Private total LIC Industry total Metro 316 233 549 Urban Semi-urban Others 848 499 1347 1362 797 2159 546 772 1318 Total 3072 2301 5373
With the registration of Bharti Axa Life Insurance Co. Ltd., the number of companies operating in the life insurance industry has increased to sixteen. The new entrant commenced underwriting life premium in August, 2006. By end March 2007, there were sixteen life and sixteen non-life insurance companies (including the national re-insurer). Apollo DKV, another standalone health insurance company and Future Generali Insurance Co. Ltd. and Future Generali Indian Life insurance Co. Ltd. were granted Certificate of Registration in 2007-08 and are in the process of commencing operations.
* Offices opened after seeking approval of the Authority

Note: 1) Data collected from life insurers through a special return. 2) Based on the HRA classification of places done by the Ministry of Finance. Metro : Urban : Semi-urban : Others : Delhi, Mumbai, Chennai and Kolkata. A, B-1 and B-2 class cities of the HRA classification. C class cities of the HRA classification. Places not listed in the HRA classification.
10
10
11
P n tra n e e tio
Pen tra e tion
Pe etra n n tio 10 12 14 0 2 4 6 8
4 5 6
10 12 14 16 18 6 8
0 1 2 3
B angladesh P hillipines K ait uw P akistan S audia A rabia N igeria E gypt A lgeria P eru India Indonesia V ietnam G reece S Lanka ri O an m M exico P C R hina S ingapore Lithuania H ong K ong Iran C hile E cuador D inican R om epublic Turkey R ania om U E A
S ud A b a ia ra ia A e lg ria V n zu la ee e C sta R o ica R ssia u U in kra e O a mn Ira n K w it u a N e ig ria D m ica R p b o in n e u lic E ao cu d r Tu y rke S ia M n n g erb o te e ro L tvia a Tu isia n U ga ru u y Ice n la d B a ulg ria Rmn o a ia Jo a rd n U E A P kista a n E yp g t B n lad sh ag e P ru e E S lva o l a dr L a ia ithu n S Ln ri a ka C lo b o m ia A en a rg tin M xico e In o e d n sia M ro o cco Kn e ya N Ze la d ew a n C a ro tia G e re ce L ba o e nn P illip e h in s V a ietn m Pnm aa a B zil ra S va lo kia C ch R u lic ze ep b P la d o n Hna u g ry P C ina R h Ja a m ica S love ia n L xe b u u m o rg C ru yp s Th ila d a n C ile h Sa p in Isra el A ustria N rw y o a Cnd aaa G rm n e ay M la a ysia A stra u lia U ite S te n d ta s In ia d Ita ly N th rla d e e ns S ee wdn S ga o in p re Trin a a d Tob g id d n ao D nm rk e a P g ortu al S itzerla d w n B iu elg m Fin n la d Ire n la d Fra ce n S th K re ou o a
S lovenia N etherlands N Zealand ew U nited S tates S itzerland w
Density
Density
A e lg ria
S u iaA b a d ra ia
B n la e a g d sh
Ne ig ria
K w it u a
P kista a n
Penetration
Penetration
Density
E yp g t
Penetration
O a mn
P ru e
In o e d n sia
Ira n
V tn m ie a
Dots indicate density

U ruguay ES l alvador B razil S erbia M ontenegro Thailand C olom bia C osta R ica N ay orw H ungary M alaysia K enya P anam a A rgentina P oland Latvia Tunisia Finland Trinidad and Tobago Lebanon Luxem bourg S lovakia M orocco B ulgaria Japan Jordan C yprus C zech R epublic Iceland R ussia S eden w Ireland Italy C roatia V enezuela B elgium U kraine D enm ark P ortugal Tiw an Israel Jam aica S outh A frica France S pain S outh K orea A ustralia A ustria U nited K ingdom G erm any C anada
P illip e h in s
S Ln ri a ka
E ao cu d r
D m ica o in n
T rke u y
R mn o a ia
Bars indicates Indias position

Countries
UE A
U ga ru u y
S rb M n n g e ia o te e ro
M xico e
L un ith a ia
G e re ce
C staR o ica
Tn u isia
L tvia a
E S lva o l a dr
R ssia u
Jo a rd n
C lo b o m ia
Kn e ya
B lg ria u a
A e tin rg n a
Ice n la d
P C in R h a
Pn m aa a
V n zu la ee e
U in kra e
B zil ra
M ro o cco
Lbnn eao
Countries
Countries
CHART 1
Insurance Density is measured as ratio of premium to total population
Left hand vertical Scale indicates Penetration where r.h.s. indicates density.
Insurance Penetration is measured as ratio (in Per Cent) of premium to GDP
Insurance Penetration and Density 2006 -All Countries
Life Insurance Penetration and Density 2006 -All Countries
Non-Life Insurance Penetration and Density 2006 -All Countries
11
0 250 500 750
2500 3000 D n ity es 3500 4000 4500 5000 5500 6000 6500 7000
C ile h
C a ro tia
S va lo kia
Hna u g ry
Ta n h ila d
P la d o n
C chR p b ze e u lic
L xe b u u m o rg
C ru yp s
N rw y o a
In ia d
Ja a m ica
M la a ysia
N wZ a n e e la d
Sa p in
Isra l e
S ve ia lo n
A stria u
S g p re in a o
G rm n e ay
A stra u lia
Cn d aaa
Ita ly
T id da d rin a n
S ee wdn
Dn a e m rk
U ite S te n d ta s
P rtu a o gl
F la d in n
B lg m e iu
Source: Swiss Re, Sigma

1000 1250 D s en ity 1500
N th rla d e e ns
Ire n la d
Hn Kn og og
Ja a pn
F n ra ce
S itze n w rla d
S u K re o th o a
Ja a pn Hn Kn og og Tiw n a Su A o th frica U ited K g o n in d m
T a iw n
Su A o th frica
U ite K g o n d in d m
500
250
500
750
1000
1500
2000
1750
2000
2250
2500
2750
1000
1250
1500
1750
2000
2250
2500
D s en ity
2750
3000
3250
3500
3750
4000
4250
4500
4750
5000
5250
5500
Of the 5373 life insurance offices in India, 549 are located in metro areas, 1347 in urban areas and 2159 are operating in semi-urban areas. Remaining 1318 are in areas other than the above. The above classification is based on the HRA classification of the Ministry of Finance. LIC has 233 offices in the metro cities, 499 in the urban areas and 797 in the semi-urban areas. i) World Insurance Scenario
underwriting discipline and absence of major catastrophes helped improving the profits of general insurance business in 2006. As some of the Asian economies like Hong Kong, Singapore, Taiwan and South Korea are being reclassified as industrialized countries, the premium share of industrialized countries increased to 92.0 per cent in 2006 from 87.0 per cent in 2005. The share of emerging markets in the total world premium was 8.0 per cent in 2006. The insurance penetration in a country depends on its level of economic activity, risk awareness among the people and the deepening of the financial system. It is therefore desirable to assess Indias position vis--vis other countries with respect to insurance penetration and density. This has been shown in Chart 1. The global outlook for 2007 suggests a mixed picture. While healthy growth is expected in life insurance with strong development of savings and pension products, the non-life insurance premiums are likely to stagnate. The outlook for profits remains robust with life sector making further progress on profitability. The combined ratios for non-life insurance are expected to deteriorate due to sluggish premium growth thereby affecting profitability. ii) Indian Insurance Industry With large population and untapped market, insurance is a big opportunity in India. The insurance business (measured in the context of first year premium) registered an impressive growth of 94.96 per cent in 2006-07, surpassing the growth of 47.94 per cent achieved in 2005-06. This has resulted in increasing insurance penetration in the country. Insurance penetration or premium volume as a ratio of GDP, for the year 2006 stood at 4.10 per cent for life insurance and 0.60 per cent for non-life insurance. The level of penetration, particularly in life insurance, tends to rise as income levels increase. India, with its huge middle class households, has exhibited growth potential for the insurance industry. Saturation of markets in many developed economies has made the Indian market even more attractive for global insurance majors. The insurance market in India has witnessed dynamic changes including presence of a number of insurers in both life and non-life segment. Most of the private insurance companies are joint ventures with recognized foreign players across the globe. Consumer
Worldwide insurance premium amounted to US $ 3723 billion in 2006 comprising of US $ 2209 billion in life and US $ 1514 billion in general insurance business. At this level the premium has increased by 5.0 per cent in real terms in 2006 as compared to 2.5 per cent in 2005. The growth in life insurance premium was about 7.7 per cent which is the highest since 2000. It may be interesting to note that in most of the countries the growth in life insurance premium was faster than growth in the economic activity. Booming stock markets favouring unit linked products, regulatory changes and tax incentives helped in increasing demand for life insurance. With increasing aging population and governments moving from public to private pension schemes, the demand for life insurance products has also increased. In emerging markets, the growth in life insurance tripled to 21.1 per cent from 7.5 per cent in 2005. Strong economic growth and catch-up dynamics had positive impact on the growth trend. The profitability of life business continued to improve in many countries as costs were cut, guaranteed interest rates were reduced and profit participations was adjusted to reflect the low interest rate environment. All these improvements have reflected in the increased level of life insurers risk capital. The global non-life business grew by 1.5 per cent in 2006 recovering from previous years stagnation. The global growth performance in non-life business varied between industrialized countries and emerging markets. While industrialized countries had shown a small growth of 0.6 per cent, the emerging markets exhibited a robust growth of 11.0 per cent in the non-life insurance business. This growth was higher than 7 per cent recorded in 2005. In emerging markets, strong economic developments and introduction of mandatory cover in areas such as motor, third party liability and health were key drivers of growth. However, there was a downward pressure on premium rates in non-catastrophe lines of business. Strong
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awareness has improved. Competition has brought more products and improved the customer service. It has a positive impact on the economy in terms of income generation and employment opportunities in the sector. I) Life Insurance
period of premium payment and several other requirements including NAV computation methodology. With the ULIP guidelines in place, there has been an enhanced up front transparency on the charges and associated risks. Fundwise Net Asset Values (NAVs) and portfolio allocations are disclosed on a regular basis. One of the most significant outcomes of the enhanced competition has been the reduction in the rates for pure protection plans. Over the last seven years, the rates have been revised downwards, and are significantly lower than those prevailing prior to opening up of the sector. The life insurance market has become competitive to the benefit of the policyholders. Simultaneously, industry has been constantly evolving and improving upon its underwriting and risk management abilities. The reduction of term rates has simultaneously facilitated increase in the level of sum assured for policies. This higher level of protection implies that customers are more conscious of the need for risk mitigation and greater security particularly for their homes and childs future. However, given the level of sum assured in the developed countries and other emerging economies, there is a further scope to tap the need for additional cover even amongst the insured population. Life insurance companies have also been quick to recognize the huge need for structured retirement plans and have leveraged their abilities for long-term fund management towards building this segment. Pension is recognized as a necessity and presents an opportunity for growth in the country, and forms a significant part of portfolio of life insurers. More recently, private life insurers with their expertise in long-term mortality and morbidity introduced annuities. The growth in group insurance business has also been impressive. The superannuation and gratuity business has grown on the strength of professional fund-management and a host of value-added services. Given such scope for innovation, the life insurance sector is expected to maintain the growth momentum of new premium in future. New Policies New policies underwritten by the industry were 461.52 lakh as against 354.62 lakh during 2005-06 showing an increase of 30.14 per cent. While the private insurers exhibited a growth of 104.64 per cent, (previous year 73.37 per cent), LIC showed a growth of 21.01 per cent as against 31.75 per cent in 2005-06.
The total capital of the life insurers at end March 2007 stood at Rs.8124.41 crore. The addition to the capital during 2006-07 was Rs.2232.36 crore and the entire capital was brought in by the private insurers. The domestic and the foreign joint venture partners added Rs.1777.96 crore and Rs.454.40 crore respectively.
TABLE 4 PAID UP CAPITAL : LIFE INSURERS (Rs.Crore) INSURER LIC PRIVATE SECTOR TOTAL 2005-06 5.00 5887.05 5892.05 2006-07 5.00 8119.41 8124.41
There has been no infusion of capital in the case of LIC which stood at Rs.5 crore. Innovations in Products Growth in insurance industry has been spurred by product innovation, active sales and distribution channels coupled with targeted advertising and marketing campaigns by the insurers. Innovations have come not only in the form of benefits attached to the products, but also in delivery mechanisms which have emanated from various marketing tie-ups both within the realm of financial services and outside. All these have taken life insurance closer to the customer as well as making it more relevant. The insurance companies are increasingly tapping the semi-urban and rural areas to take across the message of protection of life through insurance cover. The insurers have also introduced special products aimed at the rural markets. Introduction of unit-linked insurance plans (ULIPs) has been, possibly, the single-largest innovation in the field of life insurance in India. The design of the product addresses and overcomes several concerns that customers have had in the past like liquidity, flexibility and transparency. ULIPs are differently structured products and give choices to the policyholder. The Authority prescribed guidelines for Unit Linked products, stipulating minimum level of sum assured, minimum
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TABLE 5 NO. OF NEW POLICIES ISSUED : LIFE INSURERS Insurer LIC Private Sector Total 2005-06 31590707 (31.75) 3871410 (73.37) 35462117 2006-07 38229292 (21.01) 7922274 (104.64) 46151566
premium policies respectively. As against these, private insurance companies reported growth rate of 42.96 per cent, 105.56 per cent respectively. Due to the unprecedented growth in the first year premium underwritten in 2006-07, the proportions of the first year premium and renewal premium to the total premium has witnessed a shift.
TABLE 6 PREMIUM UNDERWRITTEN BY LIFE INSURERS (Rs.Crore) Insurer LIC Private Sector Total 2005-06 13728.03 (17.75) 7526.88 (78.23) 21254.91 (33.84) 14787.84 (64.40) 2742.78 (104.46) 17530.62 (69.60) 28515.87 (38.07) 10269.66 (84.55) 38785.54 (47.94) 62276.35 (14.32) 4813.86 (122.56) 67090.21 (18.46) 90792.22 (20.85) 15083.53 (95.19) 105875.76 (27.78) 2006-07 Regular premium 29886.34 (117.70) 15472.58 (105.56) 45358.93 (113.40) Single premium 26337.21 (78.10) 3921.10 (42.96) 30258.32 (72.60) First Year premium LIC Private Sector Total 56223.56 (97.17) 19393.69 (88.84) 75617.25 (94.96) Renewal premium LIC Private Sector Total 71599.27 (14.97) 8825.05 (83.33) 80424.33 (19.87) Total premium LIC Private Sector Total 127822.84 (40.79) 28218.75 (87.08) 156041.59 (47.38)
Note: Figures in brackets indicate the growth rate (in per cent) of respective insurer.
The market share of the private insurers and LIC, in terms of policies underwritten, was 17.17 per cent and 82.83 per cent as against 10.92 per cent and 89.08 per cent respectively in 2005-06. Premium Life insurance industry recorded a premium income of Rs.156041.59 crore during 2006-07 as against Rs.105875.76 crore in the previous financial year, recording a growth of 47.38 per cent. The regular premium, single premium and renewal premium in 2006-07 and their contribution to total premium were Rs.45358.93 crore (29.07 per cent); Rs.30258.32 crore (19.39 per cent); and Rs.80424.34 crore (51.54 per cent), respectively. In 2000-01, when the industry was opened up for the private players, the life insurance premium was Rs.34,898.48 crore which comprised of Rs.6966.95 crore (19.96 per cent) of the regular premium, Rs.25191.07 crore (72.18 per cent) of renewal premium and Rs.2740.45 crore (7.86 per cent) of single premium. Life insurance industry underwrote first year premium (comprising of single premium and regular premium) of Rs.75617.25 in 2006-07 as against Rs.38785.54 crore in 200506 recording a growth of 94.96 per cent as against 47.94 per cent in 2005-06. The growth in first year premium was fuelled by increased sale of unit linked products. This trend is being observed for the last three years. It is observed that LIC is also shifting its marketing strategy in favour of unit linked products. The shift towards unit linked products can also be seen through the increase in single premium policies issued by the insurers. LIC reported growth rates of 166.65 and 9.71 per cent, in single premium individual policies and non-single
LIC Private Sector Total
Note: Figures in brackets indicate the growth (in per cent).
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PERCENTAGE CONTRIBUTION OF RESPECTIVE SEGMENT OF LIC
100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 2005-06 YEAR 2006-07
Renew al premium First Year premium Single premium Regular premium
PERCENTAGE CONTRIBUTION OF RESPECTIVE SEGMENT OF LIFE INSURERS
100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 2005-06 YEAR 2006-07 Renew al premium First Year premium Single premium Regular premium
PERCENTAGE CONTRIBUTION OF RESPECTIVE SEGMENT OF PRIVATE LIFE INSURERS
100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 2005-06 YEAR 2006-07 Renew al premium First Year premium Single premium Regular premium
CHART 2
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The size of life insurance market increased on the strength of growth in the economy and concomitant increase in per capita income. This resulted in favourable growth in total premium for both LIC (40.79 per cent) and private insurers (87.08 per cent) in 2006-07. The private insurers have improved their market share from 14.25 per cent in 2005-06 to 18.08 per cent in 2006-07 in the total premium collected in the year. Segregation of the first year premium underwritten during 2006-07 indicates that Life, Annuity, Pension and Health contributed 67.40; 2.62; 29.94 and 0.04 per cent to the premium underwritten, as against 73.57; 4.30; 22.11 and 0.02 per cent respectively in the previous year. The shift in favour of pension products is visible for the third consecutive year. Increase in the renewal premium is a good measure of the quality of the business underwritten by the insurers. It reflects increase in their persistency ratio and enables insurers to bring down overall cost of doing business. The renewal premium underwritten by the life insurance industry, during 2006-07 grew by 19.87 per cent as against 18.46 per cent in 2005-06. The private insurers and LIC reported growths of 83.33 per cent and 14.97 per cent respectively during the year.
TABLE 7 MARKET SHARE OF LIFE INSURERS Insurer LIC Private Sector Total LIC Private Sector Total LIC Private Sector Total LIC Private Sector Total LIC Private Sector Total 2005-06 64.59 35.41 100.00 84.35 15.65 100.00 73.52 26.48 100.00 92.82 7.18 100.00 85.75 14.25 100.00 (Per cent)
Segregation of first year premium revealed consolidation towards linked products, with premium underwritten at Rs.42894.71 crore in 2006-07 as against Rs.16060.67 crore in 2005-06, a growth of 167.08 per cent. The non-linked premium was Rs.32464.12. crore as against Rs.19804.33 crore in 2005-06, a growth of 63.92 per cent. Linked and non-linked business accounted for 56.92 and 43.08 per cent of total business in 2006-07 as against 44.78 and 55.22 per cent respectively in 2005-06. The shift in preference for linked products has coincided with the continued positive performance of the stock markets in the country. LIC too showed a tactical shift towards promoting linked products, with 46.31 per cent of the first year premium derived from this segment in 2006-07 while the non-linked premium contributed 53.69 per cent to the first year premium. In the case of private insurers, these proportions were 87.47 and 12.53 per cent respectively in 2006-07 as against 82.48 and 17.52 per cent in 2005-06. Response to unit linked products in the last three years reflects the preference of people to such products. LICs decision to drive its premium growth on the strength of unit linked products in line with the rest of the industry reflects its recognition of the customers choice. Expenses of the life insurers Section 40 B of the Insurance Act, 1938 provides that no insurer shall in respect of life insurance business transacted in India, spend as expenses of management in excess of the prescribed limits. Expenses of management include all commission payments and operating expenses. The Insurance Rules, 1939 further lay down the manner of computation of the prescribed limits. A major expense head for the life insurers is commission paid to the intermediaries. As against the industry average of 16.65 per cent (22.59 per cent in 2005-06), LIC incurred an expense of 16.04 per cent (25.26 per cent in 2005-06) towards commission on first year premium; for the private insurers this ratio worked out to 17.84 per cent (17.72 per cent in 2005-06). The commissions paid by LIC towards the single premium were1.56 per cent as against the average ratio of private insurers at 1.08 per cent. The industry average was 1.50 per cent. The total pay-out by the life insurance industry on account of commissions in 2006-07 stood at Rs.12283.24 crore as against Rs.8643.29 crore in 2005-06. (Table 8) It was observed that the commissions paid by the life insurance companies for procurement of fresh business
2006-07 Regular Premium 65.89 34.11 100.00 Single Premium 87.04 12.96 100.00 First Year Premium 74.35 25.65 100.00 Renewal Premium 89.03 10.97 100.00 Total Premium 81.92 18.08 100.00
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has increased compared to the previous year, pointing to increasing competition in the sector. Management expenses of private insurers have stabilized in 2006-07, except for new entrant Bharti Axa Life exceeding the limits prescribed under the Act. Thus, all the life insurance companies except Bharti Axa complied with the stipulations on expenses of management. However, in the case of Bharti Axa, the excess was within the norms for the life insurance industry. With the growth in business and stabilization of operations, four private life insurers who exceeded the prescribed limits in 2005-06, were compliant with the prescribed norms in 2006-07. In the case of LIC, the expenses of management continued to be within the allowable limits.
TABLE 8 COMMISSION EXPENSES OF LIFE INSURERS (Rs.Crore) Insurer LIC Private Sector Total 2005-06 3468.25 1333.57 4801.83 2006-07 Regular Premium 4792.32 2760.17 7552.50 Single Premium LIC Private Sector Total 162.08 29.33 191.41 First Year LIC Private Sector Total 3630.33 1362.91 4993.24 5203.75 2802.69 8006.44 Renewal LIC Private Sector Total 3469.85 180.19 3650.04 Total LIC Private Sector Total 7100.19 1543.10 8643.29 9173.58 3109.65 12283.24 3969.82 306.96 4276.79 411.42 42.51 453.94
Alternate channels of distribution like bancassurance, direct marketing, internet and telemarketing have enabled the insurers to reduce costs. While agency force remained the mainstay of most insurance companies, insurers are making efforts to explore new channels including the bancassurance route both with commercial cooperative banks and rural regional banks. Insurers have also initiated on-line sale of policies. It is pertinent to note that the reduction in marketing costs would enable insurers to provide affordable insurance to low income households. The major expense heads for the private insurers were employee expenses at 37.97 per cent (37.44 per cent in 2005-06); training expenses (including agents training and seminars) at 7.01 per cent (5.90 per cent in 2005-06); and advertisement and publicity at 8.89 per cent (10.82 in 2005-06). Employee remuneration and welfare benefits accounted for 57.53 per cent of the operating expenses of LIC in 2006-07 as against 59.57 per cent in the previous year. Compared to LIC, the private sector insurers have leaner organizational structures. The industry average worked out to 48.15 per cent as against 51.35 per cent in 2005-06.
TABLE 9 OPERATING EXPENSES OF LIFE INSURERS (Rs.Crore) INSURER LIC PRIVATE SECTOR TOTAL 2005-06 6041.56 3569.48 9611.04 2006-07 7080.86 6520.04 13600.91
Operating expenses as a per cent of gross premium underwritten for the private insurers worked out to 23.11 per cent (23.67 per cent in 2005-06), indicating stabilization of operating costs. In the case of LIC, operating expenses constituted 5.54 per cent of the gross premium underwritten in 2006-07 as against 6.65 per cent in 2005-06. The average for the life insurance companies stood at 8.72 per cent in 2006-07 as against 9.08 per cent in 2005-06. However, given that the industry is in the expansion mode and companies have sought permission to expand their office network, it is expected that the expense limits may be breached in the current year.
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Benefits Paid The life industry paid gross benefits of Rs.55768.68 crore in 2006-07 (Rs.35263.45 crore in 2005-06) constituting 35.74 per cent of the gross premium underwritten (33.31 per cent in 2005-06). The benefits paid by the private insurers showed an increase of 89.05 per cent at Rs.2470.27 crore (Rs.1306.65 crore in 2005-06), constituting 8.75 per cent of the premium underwritten (8.66 per cent in 2005-06). LIC paid benefits of Rs.53298.41 crore in 2006-07, constituting 41.70 per cent of the premium underwritten by them (Rs.33956.80 crore in 2005-06, 37.40 per cent of the total premium underwritten). The benefits paid by the life insurers net of re-insurance was Rs.55715.01 crore (Rs.35209.86 crore in 2005-06). There has been a significant increase in the benefits paid on account of surrenders/ withdrawals which stood at Rs.17532.60 crore as against Rs.4622.19 crore in 2005-06. It is expected that with the stipulation of minimum lock-in period of three years for ULIP products, surrender value as a per cent of premium underwritten would come down. Investment income As the operations of the life insurers stabilize, their investment base gets strengthened, resulting in investment income forming a larger proportion of their total income. In the case of LIC, the investment income including capital gains was higher at Rs.46800.52 crore in 2006-07 compared to Rs.40056.35 crore in 2005-06. However as a percentage of total income, it declined to 26.80 per cent in 2006-07 from 30.61 per cent in 2005-06. As against this, the share of investment income to the total income for the private life insurers increased to 8.88 per cent in 2006-07 (7.50 per cent in 2005-06). Companies have also reported an improvement in the yields on their investments. The investment income of the private insurers, inclusive of capital gains, was Rs.2747.32 crore in 2006-07 as against Rs.1222.42 crore in 2005-06. The industry is still in the process of stabilizing and despite additional contributions by way of share capital, would require time to reach the consolidation stage. Profits of life insurers Life insurance industry is capital intensive, and insurers are required to inject capital at frequent intervals to achieve growth
in premium income. Given the high rate of commissions payable in the first year, expenses towards setting up operations, training costs incurred towards developing the agency force, creating a niche for its products, achieving reasonable levels of persistency, providing for policy liabilities, and maintaining the solvency margin, make it difficult for the insurers to earn profits in the initial five to seven years of their operations. SBI Life Insurance Company was the first private company to report net profit of Rs.2.03 crore in 2005-06. It reported higher net profit of Rs.3.84 crore in 2006-07. The company has succeeded in achieving an early break-even on account of its lower cost of operations, as it has been able to leverage the network of its Indian partner the State Bank of India. However, the insurer still continues to report a deficit in the Revenue account. Shriram Life, which commenced operations in February, 2006, too reported net profit for the second successive year of operations. It reported net profit of Rs. 10.89 crore in 2006-07as against Rs.2.50 crore in 2005-06. The companys operations have, however still to take off in a significant manner (Statement 5). The new business underwritten by the insurer in 2006-07 was slightly above Rs.180 crore. All the private insurance companies reported deficit in their Policyholders Account in 2006-07, which needed injection of further capital by the shareholders (except for Sahara Life and Shriram Life). However, some of the business segments of individual insurers continued to report surplus. Other than Shriram, all the private insurers transferred funds from the Shareholders Account to the Policyholders Account to bridge the deficit in the Policyholders Account so as to meet the stipulations of the Authority for declaration of bonus in case of deficit in the Policyholders Account. The total losses of the private insurers as on 31st March, 2007 stood at Rs.5585.15 crore as against Rs.3637.41crore on 31st March, 2006, i.e., an increase of 53.56 per cent over the previous year. The continued financial support through equity injections reflected the promoters commitment towards stabilizing the respective insurers operations. During 2006-07 insurers continued to declare bonus despite reporting deficit in the
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Policyholders Account. It may be recalled that in 2003-04, recognizing the need of the new insurers to declare bonus to maintain their competitive stance in the market, the Authority had permitted declaration of bonus despite non-availability of actuarial surplus subject to compliance with the conditions imposed by the Authority. This relaxation has now been extended upto a period of seven years from commencement of operations.
TABLE 10 DIVIDENDS PAID : LIFE INSURERS (Rs.Crore) Insurer LIC Private Sector Total 2005-06 621.77 621.77 2006-07 757.81 757.81
respect of unit linked products, the re-insurance parameters may also undergo some change. (Statement-4) Analysis of Death Claims While the private life insurers booked 13139 death claims during the year 2006-07, LIC booked 602425 death claims for the same period. The percentage of claims settled by private insurers worked out to 72.69 per cent of the claims booked as against 96.94 per cent settled by LIC. The number of claims repudiated by the private insurers as a percentage of claim booked was 13.98 per cent in 2006-07, while the claims repudiated by LIC were 1.43 per cent. Claims pending with private insurers as on 31 st March 2007 stood at 13.32 per cent as against 1.63 per cent for LIC. LIC paid Rs.4289.28 crore as death claim benefits as against Rs.155.46 crore paid by the private life insurers. (Statement 56) II) Non-Life Insurance There are at present 17 general insurance companies which have been granted registration for doing non-life insurance business in the country. Of these 6 are in public sector and the rest in private sector. Of the 11 private sector companies, two have been granted license during 2007-08. As such their financial data will not be included in this years Report. A stand alone health insurance company was licensed in March 2006. Of the public sector companies, two are specialized insurance companies; one for credit insurance (ECGC) and another for Agriculture (AIC). The financial analysis of the above two is presented separately in the Annual Report. As such, the present analysis is confined to 4 public sector companies and 8 private insurance companies. The performance of the Standalone Health insurance company has been covered under a separate sub-section. Paid-up Capital During 2006-07, the general insurers have added Rs.271.86 crore to their capital. The increase in the paid up capital of the private non-life insurers through capital contributions was Rs.121.86 crore. (Domestic promoters Rs.90.64 crore and foreign joint venture partners Rs.31.22 crore.)
LIC continued to report surplus in the Policyholders Account in 2006-07. Surplus in the said account, adjusted for interim bonus and allocation of bonus to policyholders was Rs.757.8 crore as against Rs.621.77 crore in 2005-06. LIC transferred Rs.757.81 crore to the Government of India (Rs.621.77 crore in 2005-06) complying with the provisions of Section 28 of the LIC Act, 1956. Retention Ratio LIC traditionally re-insures a small component of its business. During 2006-07, Rs.41.67 crore was ceded as re-insurance premium (Rs.34.54 crore in 2005-06). Similarly, in the case of private insurers, a small component of the business was reinsured, with group business forming the major component of the re-insurance cessions. The private insurers together ceded Rs.160.05 crore (Rs.101.62 crore in 2005-06) as premium towards re-insurance. It may be interesting to view this in the context of the fact that the risks pertaining to the investments component of the unit linked insurance products continue to be borne by the policyholders and a significant component of the new business premium underwritten by the industry in 2006-07 was towards unit linked products. However, with the new Unit Linked guidelines coming in force with effect from 1st July, 2006, stipulating a minimum sum assured in
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TABLE 11 PAID UP CAPITAL : NON-LIFE INSURERS AND REINSURER* (Rs.Crore) 2005-06 Non -Life Public Sector Private Sector 500 1279 Specialized Institutions ECGC AIC Star Health Re-insurer GIC Total 430 3214 430 3486 700 200 105 800 200 105 550 1401 Total 2006-07 Insurer Public Sector Private Sector
TABLE 12 NEW POLICIES ISSUED : NON-LIFE INSURERS 2005-06 42193079 (-5.47) 8947516 (73.92) 51140595 2006-07 41241665 (-2.25) 13553524 (51.48) 54795189
Note : Figures in brackets indicate the growth (in per cent) over previous year.
The number of policies underwritten by the private insurers has increased by 51.48 per cent. However, this growth was lower than 73.92 per cent exhibited in 2005-06. Except HDFC Chubb and Cholamandalam all other private insurers have registered an increase in their number of policies underwritten. The general insurance companies have underwritten a premium of Rs.24905.47 crore in 2006-07 as against Rs.20359.72 crore in 2005-06 exhibiting a growth rate of 22.33 per cent. The four public sector insurers have underwritten a premium of Rs.16258.90 crore in 2006-07 as against Rs.14997.06 crore in 2005-06 registering a growth of 8.41 per cent.
TABLE 13 PREMIUM UNDERWRITTEN BY NON-LIFE INSURER (WITHIN INDIA) (Rs.Crore) 2005-06 Public Private Total 14997.06 (7.33) 5362.66 (52.85) 20359.72 (16.46) 2006-07 16258.90 (8.41) 8646.57 (61.27) 24905.47 (22.33)
Note: * Including specialized Institutions
The PSU insurers added Rs.50 crore. This additional capital was required either for expansion of their business or for meeting the regulatory requirement of meeting the solvency stipulation of 150 per cent. The specialized insurer ECGC has added Rs.100 crore. Policies Issued The total number of policies issued by the general insurers except specialized insurers (ECGC, GIC, AIC and Star Health) in 2006-07 was 54,795,189 as against 51,140,595 in 2005-06 registering an increase of 7.15 per cent. Of the total policies issued, 24.73 per cent were issued by private insurers and 75.27 per cent by the public insurers. There has been a decline of 2.25 per cent in the number of policies underwritten by the public insurers in 2006-07. This decline has been contributed by New India (4.42 per cent), National insurance (7.46 per cent), Oriental insurance (3.00 per cent), United India was the only public sector company which showed an increase in its policies underwritten. On the other hand, there has been an increase in the number of policies underwritten by the private insurers.
Note : Figures in brackets indicate growth in percent
The premium underwritten by eight private sector insurers in 2006-07 was Rs.8646.57 crore as against Rs.5362.66 crore in 2005-06 exhibiting a growth of
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61.27 per cent. The lower growth rate for the public insurers may be seen in the light of their high base. The general insurance industry has added Rs.4545.75 crore in premium during the year 2006-07; of which public insurers contributed Rs.1261.84 crore and the private insurers Rs.3283.91 crore. The increase in premiums was across all the public sector companies. Oriental insurance has added the highest premium of Rs. 401.41 crore followed by United India and National insurance at Rs.343.99 crore and Rs.290.75 crore respectively. New India has added Rs.225.7 crore. Except HDFC Chubb, all private insurers have added premiums to their earlier levels. During 2006-07, ICICI Lombard has maintained the rising trend with an increase in premium of Rs.1406.21 crore, and registered a growth of 88.84 per cent over the previous year. Reliance has added Rs.749.90 crore to its earlier premium level and Bajaj Allianz added Rs.514.05 crore. The private insurers are increasing their market share over the past few years. In 2006-07, the private insurers had a market share of 34.72 per cent which was much higher than 26.34 per cent in 2005-06. This shows an increase of 8.38 percentage points over the previous year. As a consequence there has been a decline in the market share of the public insurers to 65.28 per cent in 2006-07 from 73.66 per cent in the previous year. Though there has been a decline in the market share of the public sector insurance companies, the volume of premium underwritten by them has increased over the previous year implying the expansion of general insurance market. (Table 14). Among the public sector insurers New India has the largest market share at 20.14 per cent in 2006-07, lower than its market share of 23.53 per cent in the previous year. Oriental insurance and National insurance had market shares at 15.77 per cent and 15.32 per cent
respectively as against 17.32 and 17.31 per cent in the previous year.
TABLE 14 GROSS DIRECT PREMIUM INCOME IN INDIA Premium (Rs.Crore) Company National New India Oriental United Sub-Total Royal Sundaram Reliance IFFCO-Tokio Tata AIG ICICI Lombard Bajaj Allianz Cholamandalam HDFC Chubb Sub-Total Grand Total 2006-07 3814.42 5017.20 3928.52 3498.77 16258.90 598.20 912.23 1144.47 710.55 2989.07 1786.34 311.73 194.00 8646.57 Market Share (In per cent)
2005-06 2006-07 2005-06 3523.67 4791.50 3527.11 3154.78 1499706 458.64 162.33 892.72 572.70 1582.86 1272.29 220.18 200.94 5362.66 15.32 20.14 15.77 14.05 65.28 2.40 3.66 4.60 2.85 12.00 7.17 1.25 0.78 34.72 100.00 17.31 23.53 17.32 15.50 73.66 2.25 0.80 4.38 2.81 7.77 6.25 1.08 0.99 26.34 100.00
24905.47 20359.72
Among the private insurers, ICICI Lombard has the highest market share of 12.0 per cent followed by Bajaj Allianz with 7.17 per cent and IFFCO-Tokio with 4.60 per cent. HDFC Chubb has reported a negligible market share of 0.78 per cent. Reliance has registered a substantial increase in its market share from less than 1.00 per cent in 2005-06 to 3.66 per cent in 2006-07.
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TABLE 15 PREMIUM (WITHIN INDIA) UNDERWRITTEN BY NON-LIFE INSURERS - SEGMENT WISE (Rs.Crore) Segment Fire 2005-06 3775 (18.54) Marine 1284 (6.31) Motor 8733 (42.90) Health 2221 (10.91) Others 4347 (21.35) Total Premium 20360 2006-07 4132 (16.59) 1628 (6.54) 10697 (42.95) 3310 (13.29) 5139 (20.63) 24905
The premium collection in Health has doubled in 2006-07 from its level in 2005-06. Health premium contribution to the total in 2006-07 was 13.29 per cent as against 10.91 in 2005-06. Motor and Health portfolios constituted 56.24 per cent as against 53.80 per cent in 2005-06. Contribution from the Marine segment is the least at 6.54 per cent in 2006-07. Premium Underwritten Outside India The public sector general insurers also underwrote premiums outside India. They have underwritten a premium of Rs.1024.54 crore in 2006-07 as against Rs.979.38 crore in 2005-06 registering a growth of 4.61 per cent. Of the total premium underwritten by the public sector insurers 5.93 per cent accounted for premium underwritten outside India which lower than 6.13 per cent in 2005-06. The accretion in the premium underwritten outside India was a mere Rs.45.17 crore in 2006-07.
TABLE 16 GROSS DIRECT PREMIUM FROM BUSINESS OUTSIDE INDIA : NON-LIFE INSURERS (Rs.Crore) Insurer National New India Oriental United Total 2005-06 12.67 (18.00) 884.05 (-0.93) 82.66 (13.59) 979.38 2006.07 12.70 (0.24) 919.58 (4.02) 92.26 (11.61) 1024.54
Note : Figure in brackets indicate the ratio (in percent) of respective segment to the total premium.
Various segments have contributed to the increase in premium in both public and private sector insurers. The highest contribution in 2006-07 has come from the motor segment which contributed 42.95 per cent of the total premium as against 42.90 per cent in 2005-06. Fire segment constituted 16.59 per cent in the total premium underwritten in 2006-07 which was lower than that observed in the previous year (18.54 per cent).
PREMIUM UNDERWRITTEN BY NON-LIFE INSURERS SEGMENT WISE (IN PER CENT)
100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 2005-06 YEAR 2006-07 Others Health Motor Marine Fire
Note : Figures in bracket indicate the growth rate over previous year.
New India is having operations in 27 countries through a network of branches, agencies, associate companies and subsidiaries.
Of the total premium, Rs.1024.54 crore was written outside India by the four public sector insurers in 2006-07, National has underwritten a premium of Rs.12.70 crore against Rs.12.67 crore in 2005-06. There was an increase in the premium underwritten
CHART 3
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by New India to Rs.919.58 crore as against Rs.884.05 crore in 2005-06, showing a growth of 4.02 per cent.
from Rs.1090.32 crore in 2005-06 to Rs.546.17 crore in 2006-07. (Statement 28)

TABLE 18 UNDERWRITING LOSSES : NON-LIFE INSURERS (Rs.Crore) 2005-06 Public Sector Private Sector (3836.64) (49.87) 2006-07 (2451.12) (106.42)
Oriental insurance underwrote a premium of Rs.92.26 crore outside India as against Rs.82.66 crore in 2005-06 i.e., exhibiting a growth of 11.61 per cent. United India had ceased operations outside India in 2003-04. (Table 17) Premium underwritten outside India, by the company constituted 15.49 per cent of the total premium underwritten in 2006-07. Oriental has a small component of overseas business i.e., 2.29 per cent (which is at the same level as in 2005-06). In the case of National, outside India business was 0.33 per cent (as compared to 0.36 per cent in the previous year).
TABLE 17 RATIO OF OUTSIDE INDIA PREMIUM TO TOTAL PREMIUM (Per cent) Insurer National New India Oriental United 2005-06 0.36 15.58 2.29 0.00 2006-07 0.33 15.49 2.29 0.00
On the other hand the private sector insurers have registered an increase in their underwriting losses from Rs.49.87 crore in 2005-06 to Rs.106.42 crore in 2006-07. These losses constituted about 2.28 per cent of the net premium underwritten in 2006-07 as against 1.75 per cent in 2005-06. Bajaj Allianz is the only private insurer which has reported underwriting profit during 2006-07. While Royal Sundaram and Cholamandalam have reported a decline in underwriting losses, Tata AIG, IFFCO Tokio, ICICI Lombard and HDFC Chubb have reported an increase in underwriting losses. (Statement 29) Expenses of Non-Life Insurers Out of the twelve non-life insurers, the expenses of management of five insurers for 2006-07 were within the limits prescribed under section 40C of Insurance Act 1939 read with Rule 17E, as against four in 2005-06. Four private sector insurers (ICICI Lombard, IFFCO-Tokio, Reliance and Bajaj Allianz)continued to be compliant with the limits of expenses of management as in 2005-06. Other private sector insurers (Royal Sundaram, TATA AIG, Cholamandalam, HDFC and Star Health & Allied) however continued to be non-compliant with the stipulations, having reported an increase in the expenses of management. Oriental insurance company succeeded in bringing down its operating expenses so as to be compliant with the requirements of the Act and the Rules. National, Oriental and United continued to be non-compliant with the requirements. They reported a decline in the expenses of management computed as a percent of premium underwritten, as against 2005-06.
Underwriting Experience Total underwriting losses incurred by both public and private insurers during 2006-07 declined to Rs.2557.54 crore from Rs.3886.51 crore in the previous year. The public sector insurers during 2006-07 have incurred underwriting losses to the tune of Rs.2451.12 crore as against Rs.3836.64 crore in 2005-06. As a percentage of net premium, the underwriting losses have reduced to 18.83 in 2006-07 from 32.65 in 2005-06. The losses across the companies ranged between 13.72 per cent and 28.90 per cent. In 2005-06, this range was 27.12 per cent to 47.58 per cent. A notable reduction was witnessed in underwriting losses across four public sector insurers. The underwriting losses of National insurance was 19.73 per cent (41.89 in 2005-06); followed by New India at 14.38 per cent (28.98 per cent); United insurance and Oriental insurance at 30.80 (40.52 per cent); and 19.40 (28.15 per cent) per cent respectively. It may be mentioned that National has reduced its underwriting losses
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TABLE 19 OPERATING EXPENSES : NON-LIFE INSURERS (Rs.Crore) Insurer Public Sector Private Sector Total 2005-06 4016.92 1060.51 5077.43 2006-07 3606.74 1700.15 5306.89
insurance companies to report higher investment income in 2006-07. The return on investment income accrued on account of sale of investments held, redemption of securities and interest / dividend income of the securities held was high. Investment scenario in the economy was favourable during 2006-07. As a result, along with other financial sector players and intermediaries, the insurance companies too have witnessed an improvement in their financial performance. Insurers have reported higher collection on restructured accounts and returns on their mutual fund portfolios.
TABLE 21 INVESTMENT INCOME (Rs.Crore) 2005-06 Public sector 5610.63 (29.57) Private sector 269.47 (45.07) Grand Total 5880.10 2006-07 5784.23 (3.09) 415.04 (54.02) 6199.27
Note : Public sector does not include ECGC, AIC AND GIC
Expenditure towards Employee remuneration & Welfare benefits constitutes a significant component of the total operating expenses of the public insurers. While it was 81.07 per cent for United India, the highest among the non-life public sector insurers, it was 75.55 per cent, 74.06 per cent and 70.79 per cent for National, Oriental and New India respectively. As against this, the expenses towards employee costs in case of private insurers ranged between 17.03 per cent and 47.78 per cent of the operating expenses. The major expense heads for the private insurers include legal and professional charges, marketing and business development, and outsourcing expenses.
TABLE 20 COMMISSION EXPENSES (Rs.Crore) Private Sector Segment Fire Marine Motor Health Others Total 2005-06 48.12 22.77 182.00 43.66 97.70 394.28 2006-07 63.83 29.58 268.33 102.20 122.01 585.97 Public Sector 2005-06 215.58 78.29 582.33 193.21 361.98 1431.41 2006-07 223.79 84.37 568.22 249.33 364.01 1489.74
Note : Figure in brackets indicate the growth rate (in per cent) of the respective sector.
The gross investment income to the general insurers was Rs.6199.27 crore in 2006-07 as against Rs.5880.10 crore in 2005-06 recording a growth of 5.43 per cent over the previous year. Investment income of the public sector insurers has increased to Rs.5784.23 crore from Rs.5610.63 crore in 2005-06 (i.e. an increase of 3.09 per cent over the previous year. Increase in the investment income has been reported by all public sector insurers except United India which reported a decline. All private insurers have reported an increase in investment income to Rs.415.04 crore in 2006-07 from Rs.269.47 crore in 2005-06; an increase of 54.02 per cent (45.07 per cent in 2005-06). (Statement 34 & 35) Incurred Claims Ratio Total net incurred claims during 2006-07 was Rs.13041.64 crore as against Rs.12118.07 crore in 2005-06 registering a growth of 7.62 per cent over the previous year.
Marked Figure will include Cholamandalam Figures
Investment Income Higher interest rates on deposits, booming stock market and higher yield on government securities have helped the
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The public insurers in 2006-07 have incurred lower total net claims of Rs.10538.75 crore compared to Rs.10569.85 crore in 2005-06. The net incurred claims of public sector insurers as a ratio of net premium was 85.22 per cent lower than 92.44 per cent in the previous year. The incurred claim ratio of Oriental insurance was more or less at the same level of previous year. Sharp decline in this ratio was observed in the case of New India, National and United. In case of New India it declined from 88.13 per cent in 2005-06 to 80.34 per cent. For United it declined from 93.09 per cent to 90.26 per cent and for National it declined from 102.43 per cent to 86.51 per cent. (Statement 30&31)
TABLE 22 INCURRED CLAIMS RATIO Public Sector Segment Fire Marine Motor Health Others Total 2005-06 65.14 67.67 109.43 153.89 49.52 92.44 2006-07 60.81 80.50 92.25 157.79 53.93 85.22 Private Sector 2005-06 61.48 116.75 62.71 94.63 53.37 68.03 2006-07 43.92 112.57 64.28 103.42 47.11 68.02
2005-06, though individual expenses varied from 54.27 per cent (Tata AIG) to 76.30 per cent (ICICI Lombard). Except Reliance, ICICI Lombard and IFFCO-Tokio rest of private sector companies reported a lower net incurred claims ratio in 2006-07 than reported in 2005-06. In the case of the four public sector insurers, the overall net incurred claims ratio declined to 85.22 per cent from 92.4 per cent in 2005-06. The ratio varied between 90.26 per cent and 80.34 per cent. In the case of public insurers, the incurred claims ratio in respect of health business was 157.79 per cent. The incurred claims ratios for motor and marine segments were 92.25 per cent and 80.50 per cent respectively. In 2006-07 Oriental Insurance had the highest net incurred claims ratio at 98.14 per cent in the motor segment. And United Insurance had the highest claims ratio for marine at 103.36 per cent and fire at 75.21 per cent respectively. New India had the highest claims ratio in Health at 212.81 per cent. Segment-wise analysis under the private sector illustrates that the claims ratio was highest in the Marine business with 112.57 per cent (116.75) followed by health at 103.52 per cent (94.63) and motor at 64.28 per cent (62.71). In 2006-07 among the private insurers HDFC Chubb and Reliance had the highest net incurred claims ratio at 74.85 per cent and 74.62 per cent respectively for the fire segment. The highest claim ratio in the Marine segment was reported by Bajaj Allianz at 139.37 per cent followed by IFFCO Tokio at 139.13 per cent. In the health segment IFFCO Tokio held the highest claim ratio at 78.97 per cent. Net Profits Despite underwriting losses the public insurers have reported profits on account of higher investment income. The net profit earned by both public and private sector insurers during 2006-07 has increased to Rs.3137.10 crore from Rs.1473.66 crore in 2005-06, an increase of 112.87 per cent over the previous year. Although the public sector companies have incurred underwriting losses, they were comparatively profitable than the private sector companies.
In case of the private insurers, the total net incurred claims increased to Rs.2502.89 crore from Rs.1548.22 crore in 2005-06. The overall net incurred claim ratio for the private insurers remained unchanged at 68.02 per cent as in
INCU RRED CLAIM S RAT IO (IN PER CENT )
100%
53.93
47.11
80%
157.79
103.42
60%
64.28 92.25
40%
80.50
20%
112.57
60.81
0%
Pu blic Sector
43.92
Oth ers Private Sector H e alth Mo tor Ma rin e Fire
INS URER
CHART 4
National insurance recovered from its loss of Rs.106.25 crore in 2005-06 and made a profit of Rs.421.28 crore during 2006-07. This turnaround was possible mainly due to much
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lower underwriting losses and operating expenses. New India and Oriental have nearly doubled their profits to Rs.1459.95 crore and Rs.497.27 crore respectively in 2006-07. United Insurance on the other hand has registered a profit of Rs.528.86 crore. (Statement 28) All private insurers recorded profits during 2006-07. Of these, one insurer has reported net profit after recording net loss during the previous three years; two have reported profits in 2006-07 but recorded lower than the previous years profit. The total net profits of eight private insurance companies were Rs.229.74 crore as against Rs.157.52 crore reported by seven insurers in 2005-06. (Statement 29) Returns to the Shareholders The total dividend distributed by the public sector insurance companies (both life and non-life) was Rs.1339.20 crore as against Rs.887.77 crore in 2005-06. A higher growth of 50.85 per cent has been remarkable this year. All the four public sector general insurance companies which have reported net profits in 2006-07 have contributed Rs.581.39 crore against Rs. 266.00 crore in 2005-06 to the exchequer as dividends (Table 23).
TABLE 23 DIVIDENDS PAID : NON-LIFE INSURERS (Rs.Crore) Insurer 2005-06 Non -Life Public sector Private Sector 266.00 32.05 Specialized Institution ECGC 44.35 Re-insurer GIC Total 86.00 428.40 309.60 1068.63 125.00 581.39 52.64 2006-07
ECGC and GIC distributed dividends in 2005-06. ECGC declared Rs.125.00 crore and GIC at Rs.309.60 crore. Star Health and Allied Insurance Co. Ltd. Star Health was the first specialized company to receive certificate of registration to carry on general insurance business to underwrite exclusively Health, Personal Accident and Travel Insurance segments. In the year ending 31st March 2007 it had underwritten a gross direct premium of Rs.22.51 crore and incurred an underwriting loss of Rs.11.56 crore. Net loss for the year was Rs.2.59 crore. General Insurance Corporation (GIC) GIC is the sole insurer of the domestic re-insurance market, providing re-insurance to the direct general insurance companies in India. The corporations re-insurance programme has been designed to meet the objectives of optimizing the retention within the country, ensuring adequate coverage for exposure and developing adequate capacities within the domestic market. GIC receives statutory cession of 20 per cent on each and every policy issued by domestic insurers subject to certain limits and leads domestic companies treaty programmes and facultative programmes. GIC is the manager of the Third Party Motor Pool. The total gross premium written by GIC during 2006-07 was Rs.7404.17 crore as compared to Rs.4880.77 crore in 2005-06. The net earned premium during 2006-07 was Rs.5263.79 crore as against Rs.4458.84 crore in 2005-06 recording a growth of 18 per cent. The underwriting results on domestic business showed a loss of Rs.116.40 crore in 2006-07 as compared to a loss of Rs.1136.98 crore in the previous year. Net Income from investments was Rs.1232.24 crore in 2006-07 as against Rs.1097.28 crore for 2005-06. For the year under review, profit before tax stood at Rs.1789.46 as against Rs.442.94 crore in the previous year and profit after tax stood at Rs.1531.35 crore as against Rs.598.52 crore in 2005-06. Incurred claims for all classes put together declined to Rs.3622.72 crore (Rs.4573.07 crore in 2005-06). IRDA directed setting up of Indian Motor Third Party Insurance Pool by all General Insurers in India to collectively service Commercial Vehicle Third Party Insurance business. This arrangement has become effective from 1st April 2007. The
Note: * Including specialized Institutions
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share of GIC in the multilateral re-insurance arrangement shall be 15 per cent (i.e. same as the share of statutory cessions.) The balance share of pooled business will be shared by all other member insurers. GIC is the Administrator of the Pool. The Pool Administrator will be paid fees of 2.5 per cent plus service tax on the total premium of the pooled business. For this purpose GIC has set up a separate Motor Pool department with adequate manpower, hardware and software systems. In pursuance of the powers conferred by section 101A of the Insurance Act, 1938, the Authority in consultation with the Re-insurance Advisory Committee constituted under section 101B of the Act and with the approval of the Central Government specified that the percentage cessions of the sum insured on each policy to be reinsured with the Indian reinsurer shall be 15 per cent in respect of insurances attaching during the year 1st April, 2007 to 31st March, 2008 and 10 per cent in respect of insurance attaching during the year 1st April, 2008 to 31st March, 2009 without any limits on the sum insured or PML of cessions. All other terms for obligatory cessions remain unchanged. The obligatory cessions received by the GIC along-with re-insurance commission and profit commissions are placed at Annex VII. C. RESEARCH AND DEVELOPMENT DEPARTMENT While moving towards detariffed regime in the general insurance business effective 1 st January 2007, Research and Development department has guided the TAC which had already collected transaction level data in generating tabulations. The data has been cleaned and tabulations have been generated at various aggregate levels so as to guide the Authority in arriving at bench marker rates which will be helpful for the insurers in a detariffed regime. Further the aggregate tables have been put on the websites of the Authority and TAC. Along with the aggregate tables on motor, tabulations in respect of health based on the data collected from TPAs were also generated and placed on the websites of the Authority and the TAC. Realising that the existing data formats will not be conducive for the analysis purpose in a detariff regime, attempts are being made in the department to revise the data formats in consultation with the underwriters and the insurers. Though TAC is expected to collect general insurance statistics, the movement towards making it as a data warehouse has not materialized for want of clarity on the role of the TAC in view of detariffing of general insurance business.
The Research and Development Department in coordination with the Government of India has conducted a National Seminar on Construction of Services Price Index Numbers. This Seminar was attempted to draw the attention of the insurers on the important role of the services sector in the economy in general and within the services sector the insurance sector in particular. In this regard, the Department has been coordinating with the companies for supply of information to the Ministry of Industry for compiling the services price index number. Further, the department has been liaising with other departments in their data requirements. D. REVIEW i. Protection of interests of policyholders Consistent with the Mission statement, the Authority has set up two grievance cells separately for life and non-life. The grievance cell adopts a proactive approach in identifying the complaints made against the insurers. Based on the nature of the complaints if necessary, the Authority conducts targeted inspections. The Authority further instructs the insurers to put in place easy access facilities and prompt servicing mechanism. ii. Maintenance of solvency margins of Insurers Every insurer is required to maintain a Required Solvency Margin as per Section 64VA of the Insurance Act 1938. Every insurer shall maintain an excess of the value of assets over the amount of liabilities of not less than an amount prescribed by the IRDA, which is referred to as a Required Solvency Margin. The IRDA (Assets, Liabilities and Solvency Margin of Insurers) Regulations, 2000 describe in detail the method of computation of the Required Solvency Margin. In case of Life Insurers, the Required Solvency Margin is the higher of an amount of Rs.50 crore and a sum which is based on a formula given in the said Regulations. In case of general insurers, the Required Solvency Margin, shall be maximum of the following amounts: 1. fifty crore of rupees (one hundred crore of rupees in case of re-insurer); or 2. a sum equivalent to twenty per cent of net premium income; or 3. a sum equivalent to thirty per cent of net incurred claims, subject to credit for re-insurance in computing net
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Box Item 1
SOLVENCY
Solvency is having enough money to meet all pecuniary liabilities. In an insurance context, this definition gives rise to two concepts. These two relate to two extremes possibilities; liabilities paid on an immediate liquidation of the company (break-up or run-off approach). At the other end, to pay all its debts as they mature (going-concern approach). This means that a company is solvent when its solvency margin is positive. There are other ways of looking at solvency. 1. From the point of view of the management of the company, the continuation of the function and existence of the company must be secured. From the point of view of the supervisory authority, the benefits of the claimants and policyholders must be secured.
2.
The International Association of Insurance Supervisors (IAIS) defined solvency as follows: An insurance company is solvent if it is able to fulfill its obligations under all contracts, under all reasonably foreseeable circumstances (IAIS 2002). The definition was later slightly modified as the ability of an insurer to meet its obligations (liabilities) under all contracts at any time (IAIS, 2003a). In the definition it is also stated: Due to the very nature of insurance business, it is impossible to guarantee solvency with certainty. In order to come to a practical definition, it is necessary to make clear under which circumstances the appropriateness of the assets to cover claims is to be considered, e.g., is only written business (runoff basis, break-up basis) to be considered, or its future new business (going-concern basis) is also to be considered. In addition, questions regarding the volume and the nature of an insurance companys business, which time horizon is to be adopted, and what is an acceptable degree of probability of becoming insolvent should also be considered. One of the principal concerns underlying the regulation of both life and general insurance companies is the protection of policyholders. Life insurers are custodians and managers of substantial investments of individuals; and general insurance policyholders need to be confident that their insurer will be able to meet its promised liabilities in the event that claims are made under a policy. Regulatory authorities therefore seek to ensure that insurers finances are in sound condition and are being properly managed. One of the most important tools at their disposal for this purpose is the solvency requirement imposed on insurers. The insurance directives set out minimum standards which insurers must comply with as regards the adequacy of their finances. In particular, they impose common standards for the determination of the minimum required solvency margin for an insurer and set out the types of assets which can count towards that margin. In the last few years, many countries have moved from mandated solvency margin regime to risk-based capital where various risks are measured and capital is provided according to various risks. The Solvency I directives provided the regulatory authorities in member states of Europe with certain powers to intervene if the rights of policyholders were threatened because of the adverse financial position of an insurer. In
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particular, they had the power to oblige an insurance undertaking to maintain a higher margin of solvency in order to protect against further deterioration in its financial position in the near future. This higher margin was related to the financial recovery plan that the insurer was obliged to submit to the regulator. At present European countries are working towards Solvency II. The following are some of the key considerations of this: Identification of key risks to the financial position of an insurance company, viz., underwriting risk, asset risk, credit risk and operational risk; Assessment of interaction and overlap of these risks and their modeling for decision-making purposes; Requirements for insurers to disclose information to enable the regulators to assess the strength of an insurers technical provisions in more details, such as the methodologies, assumptions in determining claims, sensitivity analysis and details of the development of the claims run-off; Introduction of a more consistent approach to asset valuation and applying a more risk-based approach to account for volatility and resilience; Integration and harmonization of the approach to the treatment of reinsurance in the solvency calculations Assessment and incorporation of advanced risk reduction techniques, such as Alternate Risk Transfer, into the prudential supervision regime; and Consideration of the application of a three pillar approach to the supervision of insurance undertakings. The three pillars are Pillar 1: Financial resources to include a risk based approach to minimum capital requirements and the valuation of assets and liabilities, including assessment of liabilities at the group level. Pillar 2: Supervisory Review assessment of strength and effectiveness of risk management systems and internal controls. Pillar 3: Market Discipline Obligations for insurers to make disclosures to allow policyholders to assess key information about the financial strength of insurers.
The following table gives the international practice in this area. Table 1 - Solvency margin international practice: Australia The ideas are similar to those behind Solvency II. Liability valuation, risk categories, a factor-based prescribed method, and internal models A factor-based system. Risk categories, the minimum capital test, dynamic capital adequacy testing, and minimum continuing, capital and surplus requirements on ratings. Fair valuation and a traffic light test system.
Canada
Denmark
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Finland Netherlands Singapore Sweden Switzerland
A risk theoretical transition model and equalization reserve. Fair valuation and minimum solvency and continuity analysis. Valuation of assets and liabilities, risk categories, and two requirements in a risk-based system. Valuation of assets and liabilities, risk categories, and a simple model. Valuation of assets and liabilities, risk categories, standard model, scenario tests determining the target capital, and internal model. A twin peaks approach under pillar I, individual capital adequacy standards under pillar II. Risked-based capital model, correlation structure, and different intervention levels.
UK U.S
In India, IRDA had prescribed the solvency ratio of 150 per cent to all insurance companies. This solvency ratio is nothing but the ratio of available solvency margin to that of required solvency margin. If this ratio is more or equivalent to 150 per cent, then the insurer is considered to be solvent. The available solvency margin is the difference between the total value of assets at a specified date and amount of liabilities on that date. In working out the liability, the actuary has to consider all policies which are in the books of the insurer on the valuation date. The required solvency margin is either Rs. 50 crore or Rs. X whichever is higher. Rs. X is an amount using a formula which combines some percentage of mathematical reserves and some percentage of sums at risk. It is important to note that these percentages are prescribed by the IRDA and they vary depending upon the type of insurance product.
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premiums and net incurred claims being actual but a percentage, determined by the regulations, not exceeding fifty per cent. IRDA has set a working Solvency Margin Ratio (Ratio of Actual Solvency Margin to the Required Solvency Margin) of 1.5 for all insurers. Life Insurers All the 16 life insurers who underwrote premiums during 2006-07 have complied with the stipulated requirement of a solvency ratio of 1.5. LIC had improved the solvency ratio to 1.5 from its earlier level of 1.3. Bharti Axa which has started its business in 2006 has reported a solvency ratio of 1.96. Of the 16 life insurers, solvency ratios of 8 insurers in 2006-07 were lower than the solvency ratios reported in 2005-06. Aviva has recorded a solvency ratio of 6.3 in 2006-07, much higher than 2.8 reported in 2005-06. ING Vysya, LIC, Max Newyork, and Shriram Life had higher solvency ratios in 2006-07 than those of 2005-06. Met Life and Sahara had the same solvency ratios in 2006-07 to those of 2005-06. (Statement 50) Non-life insurers In the non-life segment, all the four public sector non-life insurers have met the stipulated solvency ratio of 1.5, including National Insurance which improved its solvency position to 1.76 as against 1.08 as on 31st March, 2006. Amongst the specialized insurance companies, ECGC which is underwriting credit business had a solvency ratio of 11.41 as against 9.39 as on 31st March, 2006. Agriculture Insurance Company has reported solvency margin of 2.05 as on 31st March, 2006 as against 2.16 as at 31st March, 2006. All of the eight non-life private insurers have met their stipulated solvency requirement. Star Health, the standalone health insurance company has reported Solvency ratio of 1.91 as at the end of the first year of operations, as at 31st March, 2007. (Statement 51) Re-insurer The national re-insurer, General Insurance Corporation, reported solvency ratio of 4.10 as at 31st March, 2007 as against 3.41 in 2006. iii. Monitoring of re-insurance Every insurer needs a comprehensive and efficient re-insurance programme in order to be able to function effectively. This is important to the solvency of the insurer. Hence the Authority
requires every insurer to secure the approval of its Board of Directors for its re-insurance programme. The Regulations also provide for the insurer to file its plans for the re-insurance programme for the next year with the Authority at least 45 days before the commencement of the next year. The insurer is further required to file the treaty slips or cover notes relating to the re-insurance arrangements with the Authority within 30 days of the commencement of the financial year. These measures highlight the importance attached to the existence of adequate and efficient re-insurance arrangements for an insurer because its solvency is assessed on a net of re-insurance basis. The Regulations require that every insurer should maintain the maximum possible retention commensurate with its financial strength and volume of business. The guiding principles in drawing up the re-insurance programme have been stated as: 1. maximize retention within the country; 2. develop adequate capacity; 3. secure the best possible protection for the re-insurance costs incurred; and 4. simplify the administration of business. The Insurance Act requires every general insurer to cede a specified percentage of its direct insurances to the National reinsurer. For many years this percentage was 20 with certain exposure limitations. However, consistent with the opening up of the market and taking note of the fact that the National reinsurer had already developed substantial strength, the percentage has been reduced to 15 per cent for the financial year 2007-2008 and it will be further reduced to 10 per cent for 2008-2009. The Regulations required the Indian Reinsurer to organize domestic pools for re-insurance surpluses in Fire, Marine Hull and other classes in consultation with all insurers. This was not found possible because of the reluctance of the newly registered insurers to accept automatic re-insurance of any nature. Even the Public Sector insurers had discontinued the Fire Re-insurance Pool and maintained only the Marine Hull re-insurance Pool. In order not to interfere with the corporate policies of insurers unduly, the Authority did not enforce the formation of pools. However, the market came together to form
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a Pool for Terrorism risks when the international re-insurance markets withdrew this cover after the September 11 terrorist strikes in New York in the year 2001. More recently, the insurers agreed to form a Pool for declined motor insurance risks which eventually was transformed into a pool for all commercial vehicles third party insurance. The Pool came into effect on 1 April 2007. The Re-insurance Regulations expressed the hope that the formation of the pools will help maintain the national retention levels as close to the level achieved for the year 1999-2000 as possible. The Regulations recognize the fact that newly registered insurers will not have the same levels of shareholders funds or business volume to enable maintenance of an equal level of retentions. The Authority has been watching the levels of retentions of insurers while reviewing their re-insurance programmes and advising the insurers to increase their retentions wherever possible. The movement in national retention levels over the last two years is as follows :
TABLE 24 NET RETAINED PREMIUM ON INDIAN BUSINESS AS PERCENTAGE OF GROSS DIRECT PREMIUM (EXCL. GIC) (Per cent) Segment Public Sector Fire Marine Cargo Marine Others Motor Engineering Aviation Other Miscellaneous TOTAL ALL CLASSES 71.41 50.13 66.10 72.31 53.05 66.36 2005 2006 Private Sector Total 2006 2007 Public Private Sector Sector Total
The Authority has been encouraging the insurers to place re-insurance with other Indian insurers as far as possible. The Indian reinsurer has also been active in providing capacity to the Indian insurers. As a result of these efforts, the re-insurance placements in India have grown without hampering access to international markets. The developments in placement are shown in the table below :
TABLE 25 RE-INSURANCE PLACED WITHIN INDIA AND OUTSIDE INDIA AS PERCENTAGE OF GROSS DIRECT PREMIUM IN INDIA (EXCL GIC) ( Per cent) Segment 2005 2006 Placed in India Placed outside India Fire Marine Cargo Marine - Others Motor Aviation Engineering Other Miscellaneous TOTAL ALL CLASSES 26.56 11.64 25.93 9.03 39.23 24.47 32.34 21.49 43.72 37.33 22.38 26.98 12.05 67.69 0.18 63.98 20.41 7.88 37.69 22.83 48.23 21.19 33.82 36.24 20.86 2006 2007 Placed Placed India 19.13 13.45 44.39 0.28 55.73 15.41 7.06
in India outside
59.72 19.49 46.68 61.00 21.92 46.80 73.71 49.87 67.32 74.16 43.74 64.27 11.86 4.74 10.92 13.49 4.69 11.15
The above table reveals that while the re-insurance placed inside India is nearly at levels prevalent in 2005-06, the re-insurance placed outside India has declined marginally. The decline is due to decline in cessions in all classes except marine cargo and motor. It is neither possible nor desirable to eliminate all re-insurances outside India. Re-insurance protection plays a very important role in safeguarding the insurers financial position in the event of catastrophic losses or in providing insurance for large risks. The profit ceded on the placement outside India represents the price of protection. The position over the latest two years has been as follows :
79.40 75.55 78.56 79.80 76.13 78.71 70.81 23.51 54.32 75.20 22.65 53.25 5.14 0.45 4.63 15.13 2.09 13.35
78.77 52.53 72.10 78.27 58.69 72.66
While some improvement in retentions is seen in aviation segment, these are offset by declines in marine cargo and engineering. As a result the overall net retention ratio in 2006-07 was at the same level prevalent in 2005-06.
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TABLE 26 RE-INSURANCE CEDED OUTSIDE INDIA ON INDIAN BUSINESS (EXCL GIC) (Rs. Crores) Segment 2005 2006 Premium ceded Fire Marine Cargo Marine Others Motor Aviation Engineering Other Miscellaneous TOTAL ALL CLASSES 2312.62 -1735.64 2097.45 646.32 395.95 43.79 426.78 147.10 993.28 93.94 366.75 15.13 255.22 192.32 Net profit ceded -1023.88 -158.52 -595.52 -7.29 74.24 -68.46 2006 2007 Premium ceded 780.10 114.50 306.84 27.64 244.91 196.67 Net profit ceded 62.66 58.84 127.71 -8.17 164.19 93.99 Insurer
TABLE 27 SHARE OF MEMBER COMPANIES IN THE INDIAN MARKET TERRORISM POOL Share (%) 24.4197 12.8617 24.4224 11.5977 12.8617 1.1254 1.6077 1.6077 0.4166 3.2474 1.6143 1.6077 1.0023 1.6077
General Insurance Corporation of India National Insurance Co. Ltd. The New India Assurance Co. Ltd. The Oriental Insurance Co. Ltd. United India Insurance Co. Ltd. Bajaj Allianz General Insurance Co. Ltd. Cholamandalam General Insurance Co. Ltd. Govt. Insurance Fund, Gujarat HDFC Chubb General Insurance Co. Ltd. ICICI Lombard General Insurance Co. Ltd. IFFCO-Tokio General Insurance Co. Ltd. Reliance General Insurance Co. Ltd. Royal Sundaram Alliance Insurance Co. Ltd. Tata-AIG General Insurance Co. Ltd.
As compared to 2005-06 premium cessions we observe that the premium cessions in 2006-07 have reduced. But the net profit ceded in 2006-07 has increased sharply. 2005-06 was particularly a bad year for re-insurers because of Mumbai Floods and other catastrophe losses which hit the Indian market. Terrorism Pool The Indian Market Terrorism Risk Insurance Pool, which started in April 2002 as an initiative by non-life insurers in India to provide capacity in the domestic market to underwrite terrorism risks, successfully completed its fifth year of operations on 31st March 2007. All the non-life insurance companies operating in India are members of the Pool and offer capacity to the Pool in specified proportions. For 2006-07, the shares of the member Companies was as under
During 2006-07, the total premium ceded to the Pool was Rs.163.50 crore and claims paid was Rs.1.31 crores. The Pools premium in the previous year was Rs.155.97 crores with claims paid being Rs.84 lakhs. In view of the good performance of the Pool, the capacity offered by the Pool was enhanced to Rs.600 crores per risk/location, effective from April 1, 2006. The Pool members also agreed for downward revision in terrorism risk premium rates, effective from April 1, 2007. The comparative chart of the existing rates and the revised rates is shown below
TABLE 28 RATING OF TERRORISM POOL
Total Sum Insured per Location (MD + LOP) (Rs.) 1 Upto Rs.500 Crs. Full rate of Existing Revised Rate Rate (per Mille) (per mille) 0.30 0.20 0.10 0.25 0.15 0.10
Industrial Risk Non-Industrial Risk Residential Risk
2 Over Rs.500 crs. First 500 crs. as per (1) above PLUS on and upto Rs.2000 crs. balance Sum Insured as under : Industrial Risk 0.25 0.20 Non-Industrial Risk 0.15 0.12 3 Over Rs.2000 Crs. First 2000 crs. as per (2) above PLUS on balance Sum Insured as under : Industrial Risk 0.20 0.15 Non-Industrial Risk 0.12 0.10
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The Pool Underwriting Committee met thrice during the year and discussed important issues like additional classes of insurance to be covered by the Pool, review of Pools financial results, terms of cover, accounting and data transfer mechanisms, re-insurance protection, etc.
iv. Monitoring of Investments of the insurers (a) Investments of the Insurance Sector The investments made by the insurers both life and general separately for public and private sector is given in the following table.
TABLE 29 INVESTMENTS OF INSURERS (Rs.Crore) INSURER 2005-06 Public Sector Private Sector Total 463771.14 23379.55 487150.69 Life 2006-07 559200.56 (20.58) 44979.24 (92.39) 604179.80 (24.02) Non-Life 2005-06 38519.52 3799.43 42318.95 2006-07 44170.75 (14.67) 6212.06 (63.50) 50382.81 (19.05) Total 2005-06 502290.66 27178.98 529469.64 2006-07 603371.31 (20.12) 51191.3 (88.35) 654562.61 (23.63)
The investments of the LIC increased by 20.58 per cent (in view of its large base) and, in the case of private insurers, the growth was 92.39 per cent. Increase in investments by public
(b) Life Insurers
sector general insurance companies was 14.67 per cent and for private sector general insurers it was 63.50 per cent.
TABLE 29 (I) TOTAL INVESTMENTS : INSTRUMENT-WISE 2004-05 Amount Percentage to Total 2005-06 Amount Percentage to Total 2006-07 Amount
(Rs.Crore)
Percentage to Total
Investments from Traditional Products Central Govt. Securities Approved Securities incl. Central Govt.Securities Infrastructure and Social Sector Investment subject to Exposure norms including Other than approved Investments Other than approved Investments Total ULIP Funds Approved Investments Other than approved Investments Total 6731.78 795.66 7527.44 89.43 10.57 100 23401.00 2487.12 25888.10 90.39 9.61 100 57586.20 9462.56 67049.80 85.89 14.11 100 201550.00 252737.00 45521.00 122667.00 47.88 60.04 10.81 29.14 238089.00 296377.00 49638.50 115247.00 51.62 64.25 10.76 24.99 275099.00 335187.00 69837.00 132106.00 51.22 62.40 13.00 24.59
26377.70 420924.00
6.27 100
26698.60 461263.00
5.79 100
30049.00 537130.00
5.59 100
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The broad pattern of investments out of premium generated by traditional products during 2006-07 remains on the pattern of the investments in 2005-06. The investments in Infrastructure and Social sector improved marginally from 10.76 per cent to 13 per cent.
(C) FUNDWISE PATTERN OF INVESTMENTS The investments made by the life insurers from different types of funds are given in the following table.
TABLE 29 (II) TOTAL INVESTMENTS : FUND-WISE (Rs.Crore) 2005-06 Life Fund Pension Fund Group Fund Unit Fund Total 397188 37264 26810 25888 487150 2006-07 465555 37063 34511 67050 604179 Growth (%) 17.21 -0.54 28.73 159.00 24.02
It may be observed that a significant shift has taken place in favour of investments of Unit Linked Funds since last year. This is further analysed in Table 30.
TABLE 29 (III) INVESTMENTS OF LIFE INSURER : FUND-WISE (Rs.Crore)
INSURER LIFE FUND PENSION AND GENERAL GROUP EXCLUDING ANNUITY FUND FUND GROUP PENSION & ANNUITY UNIT LINKED FUND TOTAL OF ALL FUNDS
2005-06 LIC PRIVATE SECTOR TOTAL
2006-07
2005-06
2006-07
2005-06
2006-07
2005-06
2006-07
2005-06
2006-07
389447.52 453440.06 36157.64 35062.29 26737.53 34445.98 7741.13 12115.24 1106.65 2001.28 72.09
11428.45 36252.24 463771.14 559200.56
65.16 14459.68 30797.56 23379.55 44979.24
397188.65 465555.30 37264.29 37063.57 26809.62 34511.13 25888.13 67049.80 487150.69 604179.80 (81.53) (77.06) (7.65) (6.13) (5.50) (5.71) (5.31) (11.1)
Note: 1) The figures are based on provisional Returns filed with IRDA. 2) Figures in brackets are percentages to the respective totals.
(d) Growth of investments of Unit Linked and Traditional Business The percentage increase of ULIP funds on year over year basis (Table 30) of investment over the last 4 years vis a vis traditional
funds indicates that the growth in investment pertaining to Unit Linked Business started from 2003-04. Till then the total investments were only out of premiums towards traditional, group and annuity businesses.
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TABLE 30 TOTAL INVESTMENTS : FUND-WISE 2003-04 FUND Life Pension & General Annuity Groups Traditional (A) Unit Linked Funds ULIP (B) TOTAL INVESTMENTS TOTAL 307308.91 9551.84 34075.47 350936.22 1688.31 168831 352624.53 2004-05 TOTAL 366219.85 12023.77 42680.85 420924.47 7527.44 7527.44 428451.91 % Increase 19.17 25.88 25.25 70.30 345.86 345.86 2005-06 TOTAL 397188.66 37264.29 26809.63 461262.59 25888.14 25888.14 487150.73 % Increase 8.46 209.92 -37.19 181.19 243.92 243.92 (Rs.Crore) 2006-07 TOTAL 465555.3 37063.57 34511.14 537130.01 67049.8 67049.80 604179.81 % Increase 17.21 -0.54 28.73 45.40 159.00 159.00
The cumulative balances of Unit Linked investments reported at Rs.1688.31 crore in 2003-04 went up significantly to Rs.25888.14 crore in 2005-06 and further to of Rs.67049 crore in 2006-07. The share of investments of Unit Linked business in the cumulative life business therefore had gone steeply from 0.47 per cent in the year 2003-04 to 11.09 per cent in 2006-07. On an incremental basis, while the growth of investments during the last 2 years shows a steady pattern in respect of investments pertaining to traditional products, there
is a steep increase in respect of investments pertaining to Unit Linked business. INVESTMENTS OF NON-LIFE INSURERS Of the total investments by general insurers, Rs.18866 crore were held in Central govt. and State govt. Securities, in infrastructure and social sector Rs.6102 crore and in investments subject to exposure norms Rs.21671 crore as on 31st March, 2007, as against Rs.16740 crore, Rs.4980 crore, Rs.17492 crore for the previous year.
TABLE 31 TOTAL INVESTMENTS OF GENERAL INSURERS : FUND-WISE (Rs.Crore) PATTERN OF INVESTMENTS TOTAL G. Sec Other approved Securities incl. G. Sec Housing and Fire Fighting Equipments Infrastructure and Social Sector 10366 14964 2647 4389 2004-05 % to Fund 28 40 7 12 41 11 100 2005-06 TOTAL 11670 16740 3107 4980 17492 4078 42319 % to Fund 28 40 7 12 41 10 100 2006-07 TOTAL 13231 18866 3742 6102 21671 3884 50382 % to Fund 26 37 7 12 43 8 100
Investment Subject to Expsoure Norms (incl. OTAI) 15410 Other than approved Investments TOTAL 4025 37411
Note : Investments of CHNHB Association and AIC of India has not been included.
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Public sector non-life companies invested Rs.16606 crore in Central Govt and State Govt Securities (37.60 per cent of their total investments), Rs.5051 crore in infrastructure and social sector (11.43 per cent of their total investments) and Rs.19323 crore in investment subject to exposure norms (43.75 per cent of their total investments) as against Rs.15151 crore (39.33 per cent ), Rs.4413 crore (11.46 per cent) and Rs.16169 crore (41.98 per cent) respectively in the previous year. Investments of the private insurers in the above sectors stood at Rs.2260 crore (36.39 per cent), Rs.1052 crore (16.93 per cent) and Rs.2349 crore (37.81 per cent) as against Rs.1590 crore (41.84 per cent), Rs.567 crores (14.92 per cent) and Rs.1323 crore (34.82 per cent) respectively as on 31st March, 2006. V) Health Insurance Liberalisation of the insurance sector as well as the increasing demand for health insurance covers, especially from the middle class, have given a fillip to the growth of health insurance in the country and today the sector is emerging as fastest growing segment in the non-life insurance industry. In 2006-07, health insurance premium stood at more than Rs.3200 crore registering an increase of 35 per cent. Over the last five years the premium has nearly doubled. Despite this, health insurance penetration in India continues to be low. There are several other challenges in the health sectorfrom the perspective of policyholder, insurers and the Authority. With a view to promoting health insurance in the country and looking for possible solutions to bring in as many people as possible into the insurance net, the IRDA has, over the last few years, gave special thrust to addressing various issues concerning health insurance. These initiatives not only develop health insurance in the country but also address the concerns of the policyholders of health insurance. The grievance redressal system set up by the Authority enables a detailed analysis of policyholder grievances and health insurance stands out as a major area of concern from the customer viewpoint. It was in this backdrop that the IRDA set up The National Health Insurance Working Group towards the end of 2003. This provided a platform for stakeholders of the health insurance industry to work together to suggest solutions to various relevant issues. Some of the Working Groups recommendations were implemented and some are under examination.
The industry has recently seen the entry of a second stand-alone health insurance company. Some more are in the offing. Given its potential, health insurance business has generated considerable interest among the existing general and life insurers. Innovations in products are taking place though there is always scope for further enlargement of the canvas. Whilst on this, mention must be made of a stand-alone policy covering HIV that has been recently introduced in the market by one of the insurers. Many other innovative covers are being devised and are likely to come into the market. To handle the plethora of issues relating to health insurance with focused attention, a separate health department was wet up in IRDA. The team in the health unit has recently been strengthened and shall be scaled up further if required. Third Party Administrators Third Party Administrator (Health Services) have grown and are further consolidating their position. Two more companies have been granted licence to act as TPAs. TPAs are on the steady path of growth by enlarging their network. People trained on ICD-10 coding have been positioned in TPAs to facilitate analysis of health insurance related data.
TABLE 32 TPA (INFRASTRUCTURE) Name of TPA
Hospitals Added in the Network Number of Offices/ branches opened Manpower including Doctors/ Professionals Added
Family Health Plan Ltd. Heritage Health Services Raksha TPA Private Ltd. TTK Healthcare Services Ltd. Paramount Health Services Medi Assist India Private Ltd. Vipul MedCorp TPA Private Ltd. MD India Healthcare Services Pvt. Ltd. Genins India Ltd.
653 254 720 719 52 1558 157
0 0 5 2 0 9 6
-100 45 57 285 20 143 55
332 519
4 0
81 20
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Increasing number of hospitals in different parts of the country has been included in the TPA network for cashless settlement of claims arising out of health insurance policies. This is a welcome indicator as it reveals that health insurance policy holders across the country are now able to get cashless treatment in hospitals. The following table gives the time taken by the TPAs in settling the claim.
TABLE 33 THIRD PARTY ADMINISTRATORS - CLAIMS DATA Claims Settled Annexure Claims Received Within one month 1840298 1406815 (76.44) Within 1-3 months 367298 (19.96) Within 3-6 months 44711 (2.43) More than 6 months 10291 (0.56) 156925 (8.53) Claims outstanding
Obligations of life insurers: (a) Rural Sector Obligations: All the sixteen life insurers, including the public sector insurer, LIC have fulfilled their obligations towards the rural sector. The number of policies underwritten by them in the rural sector as a per cent of the total policies underwritten in the year 2006-07 was as per the obligations applicable to them. LIC, in compliance with its obligations, underwrote a higher percent of policies in rural sector, than were underwritten in the year 2001-02. (b) Social Sector Obligations: Of the sixteen life insurers, fourteen have fulfilled their social sector obligations during 2006-07. The number of lives covered by them in the social sector was above the stipulated obligations. The LIC, in compliance with its social sector obligations covered a higher number of lives than was covered by it in 2001-02. Two private sector companies did not comply with their social sector obligations. The details are: Bharti Axa Life Insurance Co. Ltd. which commenced its operations in August 2006 fell short of meeting its obligations in social sector. Against a proportionate obligation of coverage of 3333 lives in about 8 months of operations, they have covered 3067 lives. The shortfall has been waived as the insurer is in first year of operations and the shortfall is negligible. Shriram Life Insurance Company Limited commenced its operation in February 2006. They are obliged to cover 7500 lives. They covered only 5952 number of lives. As the shortfall was observed for the second year in succession, a penalty of Rs.5 lakh has been imposed on the insurer. They have also been advised to cover the shortfall in the current year i.e., 2007-08. This company has submitted revised data and according to that they covered only 5952 number of lives. The company further submitted data for 2005-06 which the Authority is examining. Obligations of non-life insurers: (a) Rural Sector Obligations: All the eight private sector non-life insurers met their rural sector obligations in
Note: Figure in brackets indicates the ratio (in per cent) of claims settled to the total claims received.
It is observed from the above table that 76.44 per cent of the claims received were settled within one month. This is a marked improvement over the last years level of 64.8 per cent. Similarly, outstanding claims as percentage of total claims reduced from 9.29 per cent in 2005-06 to 8.53 per cent in 2006-07. vi) Business in the rural and social sector The Regulations framed by the Authority on the obligations of the insurers towards rural and social sectors stipulate obligations to be fulfilled by insurers on an annual basis. The regulations require insurers to underwrite business based on the year of commencement of their operations. For meeting these obligations the regulations further provide that if the operations of the insurer is less than 12 months, proportionate percentage or number of lives, as the case may be, shall be underwritten. In addition, the LIC and public sector general insurance companies are required to ensure that the quantum of insurance business in the rural and social sector underwritten by them shall not be less than what has been recorded in 2001-02 i.e. before the issue of regulations. 38
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2006-07. The gross direct premium underwritten by them in the said sector, as a percentage of total premium underwritten in 2006-07, was above the prescribed stipulations. All the four public sector insurers complied with the rural sector obligations for 2006-07. With respect to the public sector insurers, their obligations are indicated against the quantum of insurance business done by them in the accounting year ended 31st March, 2002. (b) Social Sector Obligations: All the eight private sector non-life insurers met their social sector obligations in 2006-07. The number of lives covered by them in the social sector was also higher than the regulatory stipulations. While, three public sector insurers complied with the social sector obligations for 2006-07, New India Assurance Co. Ltd. fell short of compliance towards the sector. With respect to the public sector insurers, their obligations are indicated against the quantum of insurance business done by them in the accounting year ended 31st March, 2002. In case of New India, a penalty of Rs.5 lakh has been imposed for non-compliance with its social sector obligations and was advised to fulfill the shortfall in 2007-08 and 2008-09. vii. Accounting and Actuarial Standards I. Accounting Standards Additional measures taken by the Authority to improve the transparency and disclosures in reporting in the financial statements are: 1. Prudential norms for Income Recognition, asset classification and provisioning and other related matters. Clause 7 of Part I of Schedules A and B of the IRDA (Preparation of Financial Statements and Auditors Report) Regulations 2002 require that Loans shall be measured at historical cost subject to impairment. Insurers shall assess the quality of its loan assets and shall provide for impairment. The impairment provision shall not be lower than the amount derived on the basis of guidelines prescribed from time to time by Reserve 2.
Bank of India that apply to companies and financial institutions. While insurers have already adopted the RBI guidelines in this regard as stipulated, keeping in view the specific requirements of the insurance industry, the Authority formalized the norms for income recognition, asset classification and provisioning and other related matters in respect of debt portfolio. The norms are effective financial year 2006-07. Unit Linked Disclosure norms The format of reporting under the IRDA (Preparation of Financial Statements and Auditors report of Insurance Companies) Regulations, 2002 has been modified to ensure transparency and consistency in the disclosures across the industry. The regulations require life insurance companies to file segment wise information. At the time of framing the regulations, it was not envisaged that unit linked products would gain so much popularity. As such, detailed disclosure norms were not stipulated for ULIP products in the financial statements. In order to bring standardization in the reporting, the Authority stipulated disclosure norms for the unit linked business. The reporting format requires insurance companies to segregate the unit linked revenue into (i) Non Unit Funds and (ii) Unit Funds. The additional reports form Addendum to the Form (A-RA). Reporting formats have been prescribed to capture information on the operations of various funds. Additional disclosures requirements namely, NAV, performance of the respective funds (growth per cent) for three years and since inception; and details of investments held under respective funds have been stipulated as part of the Annual Report. Other aspects requiring disclosures include related party transactions and fund-wise disclosure of appreciation and/or depreciation in value of investments. The disclosure requirements were effective from 2006-07, and have been complied with by all insurers. Such disclosures provide additional information to the policy holders who bear the risks associated with the investments made under the unit linked products.
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II (a) Appointed Actuary System One of the main areas which engage the attention of actuaries is the assessment of financial risks in the operation of the insurance companies so that the products sold by them do not contribute to huge financial risks. In this context they ensure that the solvency of the company is maintained at all points of time. The Authority introduced the system of Appointed Actuary (AA) in the year 2000. The regulatory framework lays down that no insurer can transact any life insurance business in India without an Appointed Actuary. While an AA must be a full time employee in the case of life insurers, in the case of non-life insurers, AA could be a consultant and need not necessarily be an employee of the company. Every AA has certain privileges and obligations which have been specified in the regulations. During 2003-04, the Authority notified the Qualification of Actuary Regulations, defining an Actuary for the purpose of the Insurance Act, 1938. The regulations further provide that the Authority may relax the provisions in such circumstances as it deems fit and may permit such a person to sign as an Actuary for specified purposes. The powers and duties of an Appointed Actuary are laid down by the Authority in the regulations pertaining to their appointments which include the right to attend all management and board meetings; right to participate in discussions; rendering actuarial advice to the management particularly on product design and pricing, contract wording, investments and re-insurance; ensure maintenance of required solvency margin of the insurer at all times; certifying the value of assets and liabilities of the insurer; drawing the attention of management towards such matters as may prejudice the interests of policyholders; certifying the Actuarial Report and Abstract and other returns under Section 13 of the Insurance Act, 1938; complying with Section 40-B of the Act in regard to the basis of premium; complying with Section 112 of the Act on recommendation of interim bonus/bonuses payable; making available requisite records for conducting the valuation; ensuring that the premium rates of the insurance products are fair; certifying that mathematical reserves are set taking into account the Guidance Note (GN) of the Actuarial Society of India; ensuring that the Policyholders Reasonable
Expectations (PRE) have been considered in the matter of valuation of liabilities and distribution of surplus to participating policyholders; submit actuarial advice in the interests of the insurance industry and the policyholders; and informing the Authority if the insurer has contravened the provisions of the Act. In the case of a non-life insurer, the AA is required to certify the rates for in-house non-tariff products and Incurred But Not Reported (IBNR) Reserves which are indicated under Outstanding Claims in the financial statement. The growth of the insurance industry coupled with the entry of private insurers in the last four years, has augured well for the actuarial profession. The developments in the profession signal evolution in the system of Appointed Actuaries seeking their rightful place in a corporate environment. The profession is expected to make significant contribution in terms of actuarial inputs in life and general insurance business and risk management and pensions. Peer Review While analyzing the availability of solvency in the insurance companies, one of the methods followed to ensure consistency and acceptability to the liability estimates prepared by actuaries is peer review system. In some parts of the world peer review system is vigorously followed so that both the appointed actuary and his company could draw comforts to the results derived by the valuation actuary. No doubt this will add significant comforts to the regulators also. In India, peer review system is in vogue for the past four years. The professional guidance note released by the professional body helps the actuaries in pursuing this approach more confidently. It is very important to recognize that in addition to the regulator and the profession, the policyholders interests are also protected through this mechanism. Review Committee The Authority decided to have a Review Committee to review the Statutory Report furnished to the Authority in respect of Actuarial Report and Abstract required under Section 13 of the Insurance Act, 1938. The Authority reconstituted a new Actuarial Review Committee for the year 2007, comprising:
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1. K.P. Narasimhan 2. N.M. Govardhan 3. R. Ramakrishnan 4. J. Salunkhe 5. P.A. Balasubramanian The Committee reviews the statutory returns of the insurers and examines the functions of the AA in the backdrop of the requirements of the regulations. The efforts of the Committee have enabled the Authority to understand the effectiveness of the functioning of AA system in the Industry in the context of high growth of business and introduction of innovative insurance products with varying dimension of risk for Insurers requiring appropriate risk management practices. The Committee has focused on AAs compliance to the provisions of IRDA (Asset, Liability and Solvency Margins of Insurers) Regulations 2000 and IRDA (Actuarial Report and Abstract) Regulations 2000. The Committee has reported overall improvement in the quality of Actuarial Report and Abstract and in adherence to the provisions of related regulations while observing that in the details presented there were, in some cases, issues like inadequate understanding and explanation of certain requirements such as margin for adverse deviation in the valuation assumptions, provision for expenses overrun in the initial years, reserve for likely revival of lapsed policies, inconsistency of data and reconciliation between different forms of the returns as also between Actuarial Report and Account statements, taking actuarial liability without netting of reinsurance ceded and reporting format inadequacies were noticed. The validity of the valuation results, however, was not significantly affected as a result of the inadequacies cited above. The observations of the Committee relating to Actuarial Report and Abstract are discussed with the AAs of respective insurers and deficiencies pointed out by the Committee are asked to be corrected through revised filing, wherever required. The Actuaries Act, 2006 The Government of India notified the Actuaries Act in the official gazette on 28.08.2006. As a result, the actuarial profession would get a fillip with the grant of statutory status. As per provisions of the Act, Institute of Actuaries of India is
constituted in place of existing Actuarial Society of India with the following objectives: To promote, uphold and develop the standards of professional education, training, knowledge, practice and conduct amongst Actuaries; To promote the status of the Actuarial Profession; To regulate the practice by the members of the profession of Actuary; To promote, in the public interest, knowledge and research in all maters relevant to Actuarial science and its application; and To do all such other things as may be incidental or conducive to the above objects or any of them,
II (b) Actuarial Standards The Actuarial Society of India (ASI) issues Guidance Notes (GN) (actuarial standards) to its members. The GNs issued by the ASI are aimed at protecting public interest. GNs emanating from the regulations framed by the Authority require its concurrence prior to issuance by ASI. The ASI issued the first Guidance Note (GN-I) on Appointed Actuaries and Life Insurance. The GN is a mandatory professional standard and covers the responsibilities of the Appointed Actuary towards maintaining the solvency of the insurer, meeting reasonable expectations of the policyholders, and to ensure that the new policyholders are not misled with regard to their expectations. ASI issued the GN-21 for the appointed actuaries of general insurers. GN-21 covers such aspects as nature and responsibility of appointed actuaries, considerations affecting their position, the extent of their responsibility and duties, premium rates and policy conditions for new products and existing products on sale, capital requirements, actuarial investigations, premium and claims reserving, written notes and guidance to actuaries who are directors on the boards, employees or consultants to a General insurance company. The Authority issues clarifications to the Appointed Actuaries on interpretation of the regulations framed by the Authority. viii) Crop Insurance Agriculture is also a raw material source to a large number of industries like textiles, silk, sugar, rice, flour mills, milk
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products. The Indian economy is based directly or indirectly on agriculture. It would not be wrong to say that the criticality of this sector is such that any change has a multiplier effect on the economy. Productivity of agriculture is contributed by many inputs such as soil, seeds, fertilizers, and management practices. However, weather risk is the only significant uncontrollable risk among all other production risks. A study by the Crop Insurance Cell of General Insurance Corporation of India shows that a mammoth 90 per cent of the reasons of crop failure can be attributed to various weather related deviations, be it deficiency or excess rainfall, high or low temperature, excessive wind speed or high relative humidity. Weather Insurance is an insurance product based on a weather index which provides insurance for losses arising due to vagaries of weather. These weather indices could be deficit/ excess rainfall, extreme fluctuations of temperature, relative humidity and/or a combination of above. Detailed correlation analysis is carried out to ascertain the way weather impacts yields of the crops to arrive at compensation levels. The basic idea is to estimate the percentage deviation in crop output due to adverse deviations in weather conditions. Hence, it is a financial protection based on the performance of specified index in relation to a specified trigger. The general insurance companies have experimented with several weather insurance schemes for agriculture during the last two years which are easy to administer, are designed considering locations agro-climatological properties, do not entail long term-liabilities on governments or insured, are rated based on actuarial principles and offer high level of flexibility in terms of indemnity level and coverage. Agriculture Insurance Company of India Limited underwrites two types of crop insurance products; 1. Government supported products, viz. National Agricultural Insurance Scheme (NAIS), where AIC is the Implementing Authority (IA). 2. Companys own products: The Company has been designing from time to time need based new insurance products. These products can be broadly classified as under:
9 8 7 6 5 4 3 1 2
a) Weather & Index Insurance Products: Varsha Bima, Rainfall Insurance, Coffee Insurance, Wheat Insurance & Mango Insurance. These products cover weather based perils & are operated on Area Approach basis. b) Traditional & Named Peril Insurance Products: like Potato Insurance, Bio-Fuel Tree/Plant Insurance, and Poppy Insurance. These products operate at individual farm level with losses being assessed on individual basis. The list all products is as under:
TABLE 34 BRIEF DETAILS OF CROP INSURANCE POLICIES OF AIC LTD.
S. No. Product Scope/ Coverage States No. of locations (App) Varsha Bima Coffee Insurance Deficit Rainfall 2005-06 yield + Deficit rainfall 2007-08 Adverse rainfall KTK/TN / Kerala Poppy Crop Insurance Named perils (Natural calamities +pests & diseases) Wheat Insurance Mango Insurance Biomass + temp. + rainfall Un-seasonal R/F + Maharastra & & AP Rainfall Insurance Deficit & Excess rainfall UP, Raj, M P Maha, Gujrat Potato Crop Insurance Named perils pests & diseases) Bio-Fuel Plant/ Named perils Tree Ins. (Natural calamities pests & diseases) Weather Ins. (Rabi) Available in all parts of India UP, Raj, MP Maha, Available in all parts of India 75 Maharashtra 5 100 5 Hary. & Punjab MP, Raj., UP CBN Notified locations 12 40 15 states Karnataka 140 3
temp+ frost + wind Uttar pardesh
(Natural calamities+ & WB
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The year of introduction of these products is given below : TABLE 35 LIST OF PRODUCTS INTRODUCED BY AIC LTD. S.No 1 2 Year 2004-05 2005-06 Product Varsha Bima Varsha Bima Coffee Insurance Mango Insurance Poppy Insurance Wheat Insurance Sukha Suraksha Kavach 3 2006-07 (Kharif) Potato Insurance -Kharif Potato Insurance -Rabi Rainfall Insurance Weather Insurance Bio-Fuel Insurance
micro finance organizations, other rural financial organizations and governments. By bringing about stability to a critical sector of the economy, it can have a multiplier effect thereby fuelling growth of the economy. ix) Micro-Insurance Insurance can play a positive role in meeting the financial needs of the poor, and one would need to examine the many challenges involved in offering insurance to them through micro-insurance agents with simpler types of insurance cover for property, personal accident, health and life insurance. The Authority had notified Micro-Insurance Regulations on 10th November 2005. The Micro-Insurance regulations, 2005 allow the sale of both term assurance as well as savings-linked insurance policies along with riders, on the life insurance side. Under non-life, covers include dwellings, live stock, tools & implements, personal accident covers and crop insurance. Health insurance, however, is allowed to be offered by both life and non-life insurers. Composite covers or package products can also be offered by the insurers through a tie up with the corresponding life/non-life counterparts. This has provided framework for insurers to design suitable micro-insurance products. Norms are also laid down to recognize micro-insurance agents, like Non-Government Organizations (NGO) and Self Help Groups (SHG). The relaxation of the KYC norms under Anti Money Laundering Act requirements, upto a premium of Rs.10,000/- per annum help the Micro-Insurance sector. The Advertising guidelines notified on 14th May 2007 provide for release of joint sales advertisements by the insurers and Micro-Insurance Agents. A modest beginning has been made in the first year after notification of Micro Insurance regulations. While twelve Micro-Insurance products have been filed by six life insurers, eight Micro-Insurance products have been filed by four non-life insurers till date.
Weather Insurance was launched by ICICI Lombard three years back. Till the year 2006, ICICI Lombard has executed close to 90 weather insurance deals across the country which have provided weather insurance solutions to about 2,00,000 farmers covering an area of about 2,50,000 acres. These 90 deals represent experience in wide ranging crops such as groundnut, castor, cotton, wheat, coriander, kinnu, cumin, black gram, soybean, grapes, paddy and oranges. The deals were executed across 13 states. The result of the policy for the year 2006 is as under: The product is in 8 states 150 Districts 68600 farmers
across the scheme cover. The potential for weather insurance in a monsoon dependent country like India is immense. It can act as a risk mitigation tool for farmers and give them liquidity due to quicker turnaround times for claims settlement. Some of the other entities that can benefit from it are agro-based companies,
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Box Item 2
OPERATIONAL RISKS IN THE INSURANCE INDUSTRY

Risk management is the mantra of modern business and of late the importance in operational risk management has been increasing because of increasing number of large size operational losses, increasing reliance on technology with associated risks and deregulations and globalization. Operational risk assumed prominence since episodes of Barings, Enron etc. The financial services industry which is now relying on highly sophisticated financial engineering together with technology is yet to recognize the associated risks. The Basel Committee on Banking Supervision recognized this and stated that growing use of highly automated systems has the potential to transform high frequency and low severity manual processing errors into low frequency and high severity system failures. Further, the growing use of internet in conducting business also posed risks such as fraud and security which are yet to be properly understood by the business. It is therefore important that business recognizes these areas which cause such kind of operational failures and try to mitigate them by using appropriate risk mitigating techniques. In the insurance industry, in addition to the above factors, it is important to recognize that the value of an insurance company is nothing but the present value of its future cash-flows adjusted for risks. Shareholders value can be increased by reducing the volatility of future cash-flows. In the last few years, financial institutions had developed many sophisticated techniques to manage various risks and in-spite of this volatility in earnings is still matter of concern. Many studies have shown that a major source of such volatility is not related to financial risks but the way in which the company operates. What differentiates operational risk from financial risk is the mean effect. Normally, market risk and interest rate risk are considered as zero mean rate risk. A company is equally likely to suffer or gain from market and interest rate movements. Operational losses from a few insurers can cost significant damage to the market value of the whole industry due to contagion effect. Operational risk is defined as the risk of loss resulting from inadequate or failed internal processes, people and systems or from external events. This definition includes legal risk, but excludes strategic risk, reputational risk, and systemic risk. An earlier definition distinguished between direct or indirect loss, but since indirect loss could be construed as opportunity cost which is not intended to be provided for under operational risk capital this distinction has been dropped. There are four sources through which operation risk could occur, viz., people, processes, systems and external factors. If we have to consider various types of operational risk, Basel Committee classified the term as follows: i. ii. iii. iv. v. vi. vii. Employment Practices and Workplace Safety Internal Fraud External Fraud Damage to Physical Assets Business Disruption and System Failures Execution, Delivery and Process Management Clients, Products and Business Practices
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Ever since operation risk assumed prominence, the financial institutions like banks etc. try to provide capital for covering operation risks. In this context, measurement of (or) assumes more importance. There are three methods of calculating operational risk capital in order of increasing sophistication and risk sensitivity. 1. Basic Indicator Approach: This is an elementary, top-down approach that can be followed by any company irrespective of its size or complexity. Under this approach, the operational risk capital is calculated using a proxy indicator for the entire company proposed as the average annual gross income over the previous three years. This indicator is multiplied by a parameter , which is given by an internal committee or by the regulator. This parameter is calibrated so that the operational risk capital equals 12 percent of minimum regulatory capital. Standardized Approach: This method breaks out the above calculation by business line. For each business line, the operational risk capital is calculated as x Indicator. Originally, the Committee had proposed a variety of indicators such as gross income, annual average assets, total assets under management, and annual settlement throughout, depending on the particular line of business. However, in the absence of demonstrably increased risk sensitivity, the Committee specified that average annual Gross Income over the previous three years be used for all business lines. Advanced Measurement Approach: Under this, the regulatory capital requirement will equal the risk measure generated by the banks internal operational risk measurement system using the quantitative and qualitative criteria. The use of advanced measurement approach is subject to supervisory approval.
2.
3.
Time has come for the Indian insurance industry to pay due attention to operational risk issues and address them in an adequate manner so that these risks are suitably identified at an early stage and risk mitigating measures are put in place. Compelling reasons for this are: (i) Unlike other risk factors, operational risk takes a long time to surface; In the case of credit risk or interest rate risk, the moment the interest rate changes or credit rating changes, the company assesses the impact of these changes. If there is a serious error in the policy document and a policyholder goes to court, then the operational risk factor is felt only when the court judgment is given. (ii) The contagion effect of operational risk from one insurer to another insurer needs to be recognized. If an insurer has huge operational risks, the policyholders may lose interest in its insurance products. This lack of confidence in insurance products impacts other potential buyers of insurance products from other insurance companies as they lose confidence which will have an adverse impact on the insurance business. In the days of financial convergence, customers will switch from one financial product to another. In the long run this will significantly affect the insurance companies. (iii) In a similar vein, if an insurer who has higher operational risks, transfers risks to a financial intermediary belonging to another financial system say banks / NBFCs there could be a systemic impact which will destabilize the financial system. All the above clearly endorse the importance of operational risks which are to be recognized well in advance. Companies must put in place well defined processes for each activity and these processes must be reviewed periodically.
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x) Directions, orders and regulations issued by the Authority The Authority has made mandatory for all the brokers to insert the word Insurance Broker / Brokers / Broking in the name of their company. The Authority also issued guidelines vide Circular No.: 011/IRDA/CIR/BRO/May07 dated 21st May, 2007 on documentation and procedural requirements for seeking a brokers licence. xi) Right to Information Act, 2005 During the year 2006 -2007 the Authority nominated the following Officers and Public Information Officer under the Section 19 (1) of RTI Act, 2005. Shri C R Muralidharan, Member continues to be the Appellate Authority under Section 19 of the said Act.
2. 3. 4. 5. 1.
Name of the PIO Mr Prabodh Chander Mr. K Subrahmanyam Mr. M M Siddiqui Mr. Kunnel Prem Mrs. Vedakumari
Subject related to Non-Life, Hindi, Health Insurance and Legal Actuarial Intermediaries & Inspections Life Insurance Agents Training Institute, Corporate Agency and any other residuary matters
During the year 2006 2007, 120 applications were received by the Authority. Out of them 78 applications were disposed and 42 were rejected. 7 Appeals were received by the Appellate Authority and all of them were accepted.
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PART II REVIEW OF WORKING AND OPERATIONS

i) Regulation of Insurance and reinsurance companies Madhya Pradesh and Rajasthan. It is worthwhile to mention here that the agency presence of private sector has overtaken that of LIC in states such as Gujarat, Haryana, Jammu & Kashmir, Kerala, Orissa, Punjab, Chandigarh and Delhi. (Statement 61) Corporate Agents No fresh guidelines have been issued by the Authority in the year 2006-07. Insurance Brokers During the year 2006-07, 25 broking licenses were issued, of which 24 were direct broker licenses and one composite broking license. The renewal licenses were issued to 101 brokers. The total number of licenses issued as on 30-08-2007 were 258, of which 223 are direct brokers, 30 are composite brokers and 5 are reinsurance brokers. As on August 30, 2007 there were 242 insurance brokers with valid licenses. The capital employed by brokers in 2004-05 was Rs.158.03 crore and they earned an income of Rs.258.10 crore. In 2005-06, the capital employed by them was Rs.180.27 crore and income earned was Rs.390.36 crore, showing an increase of 51 per cent in 2005-06. The brokerage commission earned by Brokers in the year 2005-06 was about Rs. 355 crore showing an increase of 50 per cent over the preceding year. It will be of interest to note that broking companies are seeking licenses in smaller towns like Bharuch, Surat, Baroda, Rajkot, Thrissur, Indore, Ahmedgarh, Nanded, Udaipur, Varanasi etc. In addition, many have expanded their branch networks, thereby making services available in large number of B and C category towns. Channel-wise New Business Performance Individual Business: In order to spread the message of insurance to the remote corners of the country, the Authority has enlarged the scope The Authority, in order to discharge the functions specified in Section 14 of the Insurance Regulatory and Development Authority (IRDA) Act, 1999 has notified the regulations given in the Annex II. The regulatory framework broadly covers such aspects as entry level requirements including those pertaining to minimum paid-up capital, fit and proper management, file and use requirements, and filing of regular returns to the Authority , to carry out its statutory functions to regulate, promote and ensure orderly growth of insurance and re-insurance business. During the year 2006-07 the following regulation was notified: 1. IRDA (Reinsurance Cession) (Notification) Regulations, 2007 ii) Intermediaries associated with the insurance business Insurance Agents A critical element of insurance sector reforms is the development of resources having the right skills and expertise in each segment of the industry so as to provide quality intermediation to market participants. The number of agents with LIC as at 31st March 2007 was 11,03,047 while the private sector had 8,90,152 agents. However, while the net increase in number of agents of LIC was 5 per cent, the private sector numbers increased by 140 per cent in the year 2006-07. The agency network has spread over all the states; however, the number of agents per 1000 population has varied across the states. At the national level, only 2 agents serve 1000 people. Chandigarh has 20 as against the national average of 2. The density of agents in states such as Goa, Kerala and Delhi is way ahead of the national average while in the north eastern states other than Assam it is far below the national average. The presence of agents is well below the national average in the four populous states of Uttar Pradesh, Bihar,
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of distribution from earlier single channel system of tied agencies to multiple channel set-up comprising of corporate agents including bancassurance, brokers and referral providers. The initiative appears to have borne fruit looking at the fact that within a few years of coming into existence, the new channels have contributed around 12.5 per cent of new business premium procured in the year 2006-07. The new channels have thus added value in terms of expanding the
market. The private insurers have particularly taken advantage of the new channels as evident from the 34 per cent share of premium mobilized through new channels during the year, as against a mere 3 per cent mobilized by LIC. It is pertinent to mention that corporate agencies which include bancassurance have contributed over three-fourths of the business mobilized through all the new channels.
TABLE 36 INDIVIDUAL NEW BUSINESS PREMIUM OF LIFE INSURERS FOR 2006-07 CHANNEL-WISE Life Insurer Individual Agents Corporate Agents Banks Private LIC# Industry Total 65.80 97.28 88.62 16.58 1.24 5.46 Others* 8.41 0.90 2.96 1.05 0.34 0.54 6.77 0.24. 2.04 1.39 0.00 0.38 100.00 100.00 100.00 Brokers Referrals Direct Selling
(Per cent) Total New Business
* Any entity other than banks but licensed as a corporate agent. # Does not include its overseas new business premium of Rs.18.92 crore.
Though business acquired through direct marketing appears insignificant at present, it would be interesting to watch how this channel catches up in future. The tied agency channel
continues to largely hold its ground with a share of 87.5 per cent of the total new business premium.
NEW BUSINESS PREMIUM OF LIFE INSURER FOR 2006-07---CHANNEL-WISE
100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Private Total LIC Life Insurer Industry Total
Brokers Corporate Agents Others Corporate Agents Banks Individual Agents Direct Selling Referral
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Group Business:
group premium is sold under the direct mode in the year 2006-07. The group business constitutes 19.88 per cent of the total new business secured in the sector.
Because of complexity in group products, insurers, by and large, prefer to sell them directly. Over 97 per cent of the
TABLE 37 GROUP NEW BUSINESS PREMIUM OF LIFE INSURERS FOR 2006-07 CHANNEL-WISE Life Insurer Individual Agents Corporate Agents Banks Private LIC Industry Total 0.23 _ 0.04 13.36 _ 2.34 Others* 0.13 _ 0.02 1.27 _ 0.22 0.06 _ 0.01 84.96 100.00 97.37 100.00 100.00 100.00 Brokers Referrals Direct Selling
(Per cent) Total New Business
* Any entity other than banks but licensed as a corporate agent.
In the case of LIC the entire group business was handled directly by itself. In the case of private life insurers 85 per cent of the group business was handled directly. 13 per cent of the group business is handled through bank assurance by the private insurers. Surveyors and Loss Assessors The Government of India appointed a committee to look into the suitability of forming an institute for surveyors and loss assessors similar to those of the Chartered Accountants, Cost and Works Accountants and Company Secretaries. As a follow up of the recommendations of the Committee, IRDA constituted an ad hoc Committee of Surveyors and Loss Assessors to set in motion the establishment of the Institute. The Institute has been incorporated under Section 25 of the Companies Act 1956 under the name Indian Institute of Insurance Surveyors and Loss Assessors with the registered office at Hyderabad. The Memorandum of Understanding and Articles were drawn up with the approval of the Regional Director, Department of Company Affairs, Chennai. The IRDA called for applications for membership to the Institute. 4340 members were found to be eligible to contest / vote for the elections to the first Council of the Institute. The election process was completed and the results were declared on 11 th September, 2007. With the nominations from the Government and the Authority, the new Council will be constituted.
The Authority issues licenses to surveyors and loss assessors in terms of Section 64UM of the Insurance Act, 1938. An individual, a company or a firm wanting to act as surveyors and loss assessors has to make an application to the Authority in the prescribed format for the purpose. The Insurance Surveyors and Loss Assessors (Licensing, Professional Requirements and Code of Conduct) Regulations, 2000 lay down the process of application for procurement of license. During the last financial year, the Authority has enrolled 792 applicants as Trainee surveyors and issued 238 fresh licenses to trainee surveyors on completion of practical training and passing of the requisite examinations. The Authority also received 1672 requests for renewal of licenses during 2006-07 out of which 1624 have been issued/renewed licenses on fulfillment of all the Regulatory requirements. Further, for the first half of 2007-08, 894 requests for renewals have been received out of which 801 requests have been processed and issued renewed licenses. iii) Litigations, appeals and court pronouncements IRDA has a dedicated legal department to provide in-house legal assistance, legal opinions, interpretation of Statutes and to attend to all litigation matters. The Authority has been impleaded either as the main party or proforma party, in regard
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to litigations on diverse matters filed before various courts. The court cases pertain mainly to settlement of claims by insurers, non-renewal of insurance policies, renewal of license of insurance agents, classification and categorization of surveyors and loss assessors, loading of motor insurance premium, non-implementation of awards of Ombudsman, etc. The Authority, while defending the cases on merit, keeping in view the provisions of laws and regulations, seeks to highlight the philosophy behind various provisions of law and instructions issued on different issues relating to the supervision and conduct of insurance business. Some of the important decisions that have a bearing on the working of the insurance companies and the regulatory framework are mentioned below: W.P. No. 81/2007 in the High Court of Kerala at Ernakulam Kasarogode Taluk Bus Owners Association & Others Vs. IRDA The petitioners have challenged the decision of the IRDA relating to fixation of tariff in respect of motor vehicles for third party insurance. The Honble High Court after having noted that the tariff has since been slashed during the pendency of the writ petition observed that there is no lack of jurisdiction or lack of authority for IRDA in the matter of fixation of tariff and refused to entertain the said writ petition. The Court noted that IRDA has demonstrated that it has considered all relevant material and also afforded an opportunity of hearing to the petitioner before fixation of the rates. The Court also observed that Sec. 146 of the Motor Vehicles Act, 1988 that seeks compulsory insurance to third party does not give the petitioner any added advantage to stand against any decision of the Authority on the question of tariff. M.A.T. No. 25/2007 in the Honble High Court of Kolkata Federation of West Bengal Truck Operators Assn Vs. IRDA & Ors. A Division Bench of the Honble High Court of Kolkata refused to grant any stay of the operations of IRDA circular relating to
fixation of premium for motor vehicles to cover insurance of third party liability. Dismissing the application for interim stay and upholding the order of the Single Judge for refusal of stay, the Honble Division Bench in its order dated 04.01.2007 observed as under: After hearing the learned advocates for the parties and after going through the aforesaid materials, we are of the view that in this type of a writ application where amount of premium for insurance is involved, court should be slow to interfere at the interim stage thereby staying operation of the order unless error apparent on the face of record or want of authority on the part of the respondents is manifest. The Honble High Court has further observed that: Moreover, enhancement is for an amount of Rs.4,000/- and odd for a year which comes to Rs.300/- and odd a month. In such a situation, we are of the view that at this stage, no interim order should be passed restraining the respondents from realizing the enhanced amount before decision on merit. W.P. No. 282/2007 in the Honble Supreme Court of India General Ins. Council & Ors vs. State of AP & Ors. The Honble Supreme Court vide its order dated 09.07.2007 has directed all State Governments and Union Territories to instruct the concerned police officers on the need to comply with the requirement of Sec. 158(6) of the MV Act, 1988 keeping in view the requirement in Rule 159 and Form 54 of the Central Motor Vehicles Rules. The Honble Supreme Court was of the view that since this is a mandatory requirement under the statute, there is no justifiable reason as to why the requirement is not being followed. It also directed that periodical check shall be done by the Inspector General of Police concerned to ensure that the requirements are being complied with and in case of non-compliance, appropriate action should be initiated against the erring officials. Pursuant to the aforesaid directions of the Supreme Court, the Authority has issued letters to DGPs of all States & CPs
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of all Union Territories on the need to comply with the aforesaid directions of the Honble Supreme Court. W.P. No. 18367/2006 in the High Court of Delhi Rajinder Gupta Vs. New India Assurance Co. Ltd. The petitioner challenged circular dated 09.06.06 of the insurance company whereby the company decided not to grant any commission on commercial vehicles of all ages (passenger and goods vehicles) except tractors. The Honble High Court vide its order dated 11.12.2006 was of the view that there is no illegality in the decision taken by the respondent insurance company nor is there any procedural unreasonableness to interfere with the decision of the insurance company. Hence, the writ petition was dismissed. Order of the Honble National Consumer Disputes Redressal Commission in M.A. No. 102/2007 Malana Power Company Ltd. Vs. Oriental Ins. Co. Ltd. & ors In the aforesaid matter, the insurance company refused to furnish a copy of the survey report to the complainant stating that it is a private and confidential document to be used by insurer only. The Honble Commission was of the view that such refusal on the face of it was unjustified and against the provisions of IRDA (Protection of Policyholders Interests) Regulations, 2002 and hence deplorable. The Honble Commission sent a copy of its order to the Authority for appropriate action. Accordingly, the Authority vide its circular no. 028/IRDA/Legal/Cir/Aug-07 dated 13.08.2007 has directed all non-life insurers to ensure that a copy of surveyors report is sent to the insured when the insured approaches them. W.P. No. 550/2006 in the High Court of Bombay, Nagpur Bench Prashant Manohar Elkunchwar Vs. IRDA The petitioner was a licensed surveyor empanelled with New India Assurance Co. Ltd. The company stopped giving him any work since he does not have the categorization from IRDA. IRDA contended that the petitioner had not applied for categorization before 31.03.2001 i.e. the last date for such
categorization. The petitioner also did not apply for categorization even during the extended period upto 31.03.2002. The Honble High Court dismissed the writ petition after observing that the petitioner has applied much after the date notified by the Authority and that no fault can be found with the Authority in the circumstances. iv) International Cooperation in Insurance International Association of Insurance Supervisors (IAIS) The International Association of Insurance Supervisors (IAIS) was established in 1994 to promote cooperation among insurance supervisors and other financial sector supervisors. Over the years, the membership has grown and insurance supervisors from over 180 jurisdictions became members and over 100 organisations and individuals representing professional associations, insurance and reinsurance companies, international financial institutions, consultants and other professionals became observers. This involvement reflects the increasing global nature of insurance markets and the need for consistent supervisory standards and practices. In addition, it recognizes the important contribution that strong supervisory regimes leads to financial stability. The IAIS provides an effective forum for standard-setting and implementation activities by providing opportunities to both practitioners and policy makers to share their expertise, experience and understanding. The IAISs activities are undertaken with active guidance of its Executive Committee, which comprises of 15 voting members elected from different regions of the globe and the Chair of the Budget Committee who is an ex-officio non-voting member. This is complemented by the Technical Committee, the Implementation Committee and the Budget Committee, supported by their working parties. The day-to-day business and affairs of the IAIS are taken care of by its Secretariat, located at the Bank for International Settlements in Basel, Switzerland. The IAIS develops principles, standards and guidance for effective insurance supervisory regimes. In doing so it helps to establish and maintain fair and efficient insurance markets for the benefit and protection of policyholders. The IAIS also
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Box Item 3
FINANCIAL SECTOR ASSESSMENT PROGRAM

The financial crises in Mexico, Russia and East Asia in the 1990s brought to the forefront the significance of the stability of financial sector for the overall macro-economic soundness. As part of the process, the International Monetary Fund and the World Bank initiated a Financial Sector Assessment Program (FSAP) to evaluate the financial sector soundness and stability of the member countries. The broad objectives of the assessment are (i) crisis prevention & mitigation; and (ii) fostering financial sector development. The participation by member countries in FSAP is voluntary. Initially, twelve countries were included as part of the pilot project and India was one of the countries which participated in the exercise in 1999. Thereafter, the Government and the Reserve Bank of India (RBI) jointly undertook a comprehensive self-assessment of international financial standards and codes covering inter alia, insurance regulation under the aegis of the Standing Committee on International Standards and Codes, which culminated in the publication of a Synthesis Report in 2002. An updated review of the same was published in 2005. The IMF and World Bank had also undertaken independent assessments of financial standards and codes for India since 2000 as part of Report on Observance of Standards and Codes (ROSC). Drawing upon the experience gained during the FSAP and through the internal assessment of standards and codes as also recognising the relevance and usefulness of the analytical details contained in the Handbook on Financial Sector Assessment jointly brought out by the World Bank and the International Monetary Fund, in September 2005, the Government of India decided, in consultation with the Reserve Bank of India, to undertake a comprehensive selfassessment of the financial sector. To carry out the self-assessment, a Committee on Financial Sector Assessment (CFSA) (Chairman: Dr.Rakesh Mohan, Co-Chairman: Dr.D.Subbarao) has been constituted in September 2006. The exercise is being conducted in coordination with major financial regulators and experts drawn from the financial sector and would be subject to a peer review by international experts. For the purpose of the assessment, the system is viewed as comprising three pillars that make up the major policy and operational components that are necessary to support orderly financial development and sustained financial stability, viz., Pillar I - Macro prudential Surveillance and Financial Stability Analysis; Pillar II Development Issues and Pillar III - Assessment and Status of Implementation of International Financial Standards and Codes developed by various international bodies and standard-setting organizations. Based on the reports of assessment of Pillars I and III, and after an objective assessment of the extant position by independent experts, the gaps (institutional, infrastructure as well as legal) and the steps necessary for further development of the financial sector are evolved under Pillar II. The recommendations arising out of the analysis are expected to provide a roadmap for further improvements in the financial sector. To assist in the process of assessment, the CFSA has constituted four Advisory Panels respectively for the assessment of Financial Stability and Stress Testing, Financial Regulation and Supervision, Institutions and Market Structure and Transparency Standards. The Advisory Panels will prepare separate Reports covering each of the above aspects. The Advisory Panels comprise of non-official experts with domain knowledge in respective areas and officials with similar expertise represented as Special Invitees. The panels are being supported by Technical Groups which comprise of officials drawn from various fields including RBI, SEBI and IRDA.
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Under the auspices of the CFSA, IRDA has set up two independent technical groups to assess stability and standards pertaining to the regulation and supervision of the insurance sector, viz., 1. Technical Group on Macro-prudential Surveillance Financial System Stability and Stress Testing; and 2. Technical Group on Status & Implementation of Financial Standards & Codes (IAIS Insurance Core Principles). The technical groups comprise of eminent persons drawn from the insurance industry, experts in the field of insurance and representatives of the Authority. The first technical group is addressing country-specific issues relating to (i) financial stability perspective; (ii) structural indicators; (iii) financial soundness indicators; (iv) stress testing; and assessment of insurance supervision. It covers industry wide issues including (i) competition and concentration - interest rate spread and prices of financial services; intermediary concentration ratios (market share of 3 or 5 of the largest institutions); financial market concentration ratios (market share of the largest financial instruments, as percentage of total financial assets; (ii) efficiency - interest rate spreads and intermediation costs (as percentage of total assets); and (iii) liquidity - ratio of value traded to market capitalization and average bid-ask spread. While addressing the micro level company issues factors such as capital adequacy; reinsurance and actuarial issues; management soundness; earnings and profitability; liquidity; and sensitivity to market risk are being factored. The second technical group set up by IRDA has taken up the assessment of the IAIS Core Principles on insurance supervision, which utilizes diagnostic tools to assist in improving supervision globally, and can act as a roadmap for the reforms agenda in this sector. The reports of the two Technical Groups would be provided to the respective Advisory Panels under the auspices of the CFSA.
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prepares issue papers that provide background on specific areas of interest to insurance supervisors. The IAIS collaborates closely with other international financial institutions and international associations of supervisors or regulators and assists in shaping financial systems globally. In particular the IAIS is one of the constituting bodies of the Joint Forum and participates in all of its working groups. It is also represented on the Financial Stability Forum. The IAIS provides input to the International Accounting Standards Board (IASB) for its work on the international financial reporting standards most relevant to insurers, and is a member of the IASBs Standards Advisory Council as well as an official observer of its Insurance Working Group and Financial Instruments Working Group. It also has observer status on the Financial Action Task Force, which combats money laundering and terrorist financing. The Authority is represented by its Chairman on its Executive Committee and by Members on the various Committees of IAIS looking into insurance contracts, accounting aspects, insurance laws, reinsurance, financial conglomerates, solvency, frauds, etc. Joint Forum Working Group on Conglomerate Principles The Joint Forum, which was formed in the early 1990s comprising of the three international bodies on regulation of financial sector, viz., BIS, IAIS and IOSCO, has been entrusted with the task of evolving policy papers on conglomerate supervision with particular reference, to capital requirements, risk management, fit and proper criteria, information sharing with supervisors, intra group transactions and exposures etc. Initially, this was meant for the use of G7 and European Union countries. The Joint Forum recently constituted a Working Group with a mandate to take stock of the implementation of the principles laid down in the papers of the Joint Forum by its member countries and by other jurisdictions. The Forum is keen to understand the approach of various jurisdictions across the globe on conglomerate supervision. There is also a felt need to compile comprehensive information on the actual policies in various countries on conglomerate supervision and cross border supervision issues for future work. In order to meet the objectives of the Forum, the Working Group has
been constituted with the existing member countries plus three non-Member jurisdictions, one each from Asia, Africa and Latin America to understand the approach in the adoption of the underlying ideas and principles of Joint Forum on conglomerates by various countries in the world. The Indian Sub-Continent is represented by the Member (F&I) of the Authority on the Joint Forum Working Group on Conglomerate Principles at Basel, Switzerland. v) Public Grievances
While framing the regulations for the insurers, the Authority keeps in mind the primary objective of protecting the interests of and secure fair treatment to policyholders. Consistent with this, the Authority has set up grievances redressal cell in IRDA and tries to ensure speedy redressal of the complaints received from the policyholders of life and non-life insurance products. Policyholders who have complaints against insurers are required to first approach the Grievance / Customer Complaints Cell of the concerned insurer. If they do not receive a response from insurer(s) within a reasonable period of time or are dissatisfied with the response of the company, they may approach the Grievance Cell of the IRDA. Some of the complainants insist on the Authority to resolve the dispute. While the Authority facilitates taking up the grievance with the Insurer for prompt resolution, it also reiterates that it does not have the power of adjudication and aggrieved parties are properly advised to approach the available quasi-judicial or judicial channels, i.e., the Insurance Ombudsmen, Consumer fora or the Civil courts in case they are not satisfied with the decision of the Insurer. The list of Insurance Ombudsmen along with their contact details are available on IRDA website under the heading Ombudsmen. Non-Life Insurers As on 31st March 2006, there were 565 complaints pending with the general insurance companies for resolution. During 2006-07, 1618 complaints were received of which 1108 pertains to public sector companies and the remaining were to the private sector companies. Of the total grievances of 2183, 71 per cent of the grievances were resolved in the current year. While public sector companies resolved 80 per cent of the complaints, private sector insurers resolved 69 per cent.
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As on 31st March 2007, 623 grievances were pending for resolution with the insurers; of which 517 are with public sector companies and the remaining with the private sector. Of the total pending grievances 33.86 per cent are policy related
issues , 45.59 per cent to non settlement / delay in settlement of claims, 15.89 per cent to repudiation / partial settlement of claim and the remaining for other reasons.
TABLE 38 STATUS OF GRIEVANCES NON- LIFE INSURERS INSURER PENDING AS ON 31/3/06 REPORTED DURING TOT.NO.OF COMP RESOLVED 1/4/06 TO 31/3/07 1141 (68.81) Private 15 510 525 419 (79.81) TOTAL 565 1618 2183 1560 (71.46) Note: Figures in brackets are percentages to the respective totals (i) Policy related issues 623 211 284 99 (15.89) 29 (4.65) 106 57 32 12 5 PENDING AS ON 31/3/07 517 (i) 154 Break up of pending grievance according to nature (ii) 252 (iii) 87 (iv) 24
APR06-MAR-07 AS ON 31/3/07 Public 550 1108 1658
(33.86) (45.59)
(ii) Non settlement / Delay in settlement of claim (iii) Repudiation / Partial settlement of claim (iv) Other Reasons
966 grievances were reported to IRDA during the first half of the current financial year. Of these 543 were towards public sector non-life insurance companies and the remaining 423 were for the private sector companies. Public sector
companies resolved 291 grievances and private insurers resolved 340 grievances. As on 30th September 2007, 958 complaints are pending with the insurers.
TABLE 39 STATUS OF GRIEVANCES NON LIFE INSURERS (HALF YEAR ENDED SEPTEMBER, 2007) Insurer Pending as on 31
st
Reported during Apr-07 to Sep-07
Total No.of Complaints as on 30.9.07
Resolved 1.4.07 to 30.9.07
Pending as on 30.9.07
March 2007
Public Sector Private Sector Total
517 106 623
543 423 966
1060 529 1589
291 340 631
769 189 958
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vi) Insurance Associations and Insurance Councils Life Insurance Council Life Insurance Council is a body set up under section 64 C of the Insurance Act 1938. All registered life insurers are members and are represented by CEOs. There are two nominees from the IRDA, one of whom is the Chairman of the Council. The Secretary General functions as the chief executive of the Council. During the Financial Year 2006-07 the Council met five (5) times. The Council has formed several standing sub-committees. In addition as and when needed specific areas of work are taken up. Working groups are constituted. The sub-committees follow committee-based approach for ensuring wider participation. Brief outline of work in 2006-07 The Administration & HR sub-committee met once to ensure the Secretariats transparent and orderly functioning. A set of rules and internal procedures were laid down in this regard. A Statistical Data sub-committee was formed to address the important task of identifying the nature and extent of industry statistics that may be published by the Council. This sub-committee met twice during the year and finalised a data-set for 2006-07. The Secretariat has taken up further work on details to be published periodically as approved by the sub-committee and Council. The Sub-committee of CFOs met four times during the year for formulating issues relating to taxation in general and Service Tax in particular for discussions with the Government. The industrys submissions were also sent through IRDA. Distribution is important to the development of life insurance. The main channel is the large individual agency-force which is growing fast. In order to discuss emerging issues in training and examination of agents and related matters the Council formed the Intermediary Education sub-committee which met three times during the year. Several discussions were held with the Insurance Institute of India and the IRDA. A
representation on duration of training and examinations was sent to IRDA for their consideration. Through this subcommittee the Council actively contributed to the revision of syllabus for mandatory agency training. The syllabus included a chapter on ULIPs. With a view to creating the right kind of awareness and to ensuring regular dissemination of information about the sector, the Council formed a sub-committee on Insurance Awareness. This sub-committee will work in coordination with the IRDA in all areas of creating awareness across the country. During the year this sub-committee met and drafted a plan of action which was approved by the Council. Some steps are already under implementation. The Councils website too has been modified to reflect the importance given to this area. The Underwriters sub-committee which met four times during the year, worked on an assignment to modify the existing Declined Lives Database, with a view to reducing response time. This database is maintained by TAC which completed a web-based prototype. Members have started using information from the database. As approved by the Council a database is now in place at the Councils office, of agents whose services were terminated for reasons other than non-performance. A proposal to set up an institution to conduct continuous study of mortality and morbidity data and publish information vital to the insuring public and the well-being of the life insurance sector, has been under discussion with the Institute of Actuaries of India (IAOI) for some time. It is expected that the Mortality & Morbidity Research Institute will become a reality in 2007-08. During the year the Council coordinated with the efforts of IRDA in bringing out a full set of guidelines relating to Anti-Money-Laundering measures and KYC norms in the life insurance sector. To make a beginning in its role as a self-regulatory organisation the Council has been discussing a
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voluntary code for members in the context of severe competition. During the year the Council adopted a code of best practice for members and approved implementation thereof. Further, an additional code of conduct for ULIP products has also been introduced. In the months following introduction, matters requiring attention of the Council were brought up. These were resolved effectively with display of maturity and understanding on all sides. Council participated in a major market-survey by IIEF, on domestic savings in general and life insurance in particular across the country. Collected data has been installed in the insurers computer systems. It is expected to be of use to the industry in planning. The costs were shared by insurers.
a) b) c) d) e)
To bring about required amendments to the Motor Vehicles Act; To ensure prompt intimation from Police authorities on T.P. Claims, To adopt measures to reduce theft of vehicles and ensure proper identification, For exchange of data base on stolen vehicles; For reduction in the number of uninsured vehicles.
The Council is addressing issues pertaining to coverages, portability and policies for identified segments of the society in order to ensure growth in the Health Insurance sector. The Council encouraged the underwriters of non-life insurance companies to set-up Underwriter forums to enhance camaraderie and rapport amongst the Underwriters with broad objectives of enhancing Customer Service Standards, maintain market discipline and pursue growth of business on ethical principles. The Council is taking steps to facilitate further detariffing by having a common minimum Indian Market Wordings (IMW) for Fire, Engineering and Motor classes of business. It has also developed a code of best practices and corporate governance guidelines for non-life insurers. The Council is also putting in place system of sharing of information and data amongst companies on large losses. With a view to ushering in the best global practices in the Indian Non-life Insurance Sector, the Council has already entered into Memorandum of Co-operation (MoC) with the General Insurance Association of Japan and the Association of British Insurers, U.K. Similar MoCs are under way with Insurance Bureau of Canada, Property and Casualty Insurers Association of America and German Insurance Association. vii) Functioning of Ombudsmen The information on the complaints handled by the Ombudsmen during 2006-07 is given in Table 41. During 2006-07, 10187 complaints were lodged with the Ombudsmen against the insurers both life and non-life. Of these, 5433 were against life insurers and remaining were against the non-life insurers. As on April 1, 2006, there were 1929 complaints pending with
General Insurance Council During the year 2006-07, the General Insurance Council had sixteen meetings and undertook the following tasks: 1. Facilitation of tariff free regime of prices from 1.1.2007; 2. Formation of the Motor T.P. Pool; 3. Suggested changes needed in the Regulatory and Legislative framework such as the Insurance Act, 1938, IRDA Act, 1999, Motor Vehicles Act and Carriage by Road Bill; 4. Taxation issues of the Non-life Insurance Sector; 5. Undertaking publicity campaign for bringing about greater consumer awareness on the benefits of detariffing. 6. Submission of recommendations to IRDA for reviewing the guidelines on Anti-Money Laundering Act with reference to non-life insurance sector; 7. Strategy for campaign against uninsured vehicles following meeting with Ministry of Surface Transport; The Council is focusing on issues pertaining to two major classes of general insurance business i.e. Motor Insurance and Health Insurance. On the Motor Insurance, the Council has made progress in liaising with various authorities:
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the Ombudsmen for disposal. Of these, 588 complaints were pending against the life insurers and the remaining were against the non-life insurers. Taking together (those pending for disposal as on April 1, 2006 and received during 2006-07) the total number of complaints with the Ombudsman were 12116 at the end March 2007. Of these, 6021 were against life insurers and 6095 were against non-life insurers. Of the
total complaints (12116) the Ombudsmen have disposed of 10169 complaints during 2006-07. Of the disposed complaints, 5418 were in the case of life insurers and 4751 were against the non-life insurers. As such, complaints outstanding with the Ombudsmen for disposal as on April 1, 2007 were 1947; of which 603 were in the case of life insurers and 1344 were against non-life insurers.
TABLE 41 DISPOSAL OF COMPLAINTS BY OMBUDSMAN: 2006-07

No. of complaints disposed off by way of Particulars Complaints as on 31-3-06 From 1.04.06 to 31.03.07 Total Disposed Recommendation Awards Withdrawal/ Non Dismissal Not Complaints
Settlement Acceptance
Entertainable Outstanding
Life
Public Private Total
529 59 588
4735 698 5433
5264 757 6021
4773 645 5418 *(89.99)
118 12 130 *(2.40) 193 15 208 *(4.38) 338 *(3.32)
561 91 652 *(12.03) 1112 103 1215 *(25.57) 1867 *(18.36)
1205 146 1351 *(24.94) 694 96 790 *(16.63) 2141 *(21.05)
105 8 113 *(2.09) 136 21 157 *(3.30) 270 *(2.66)
337 67 404 *(7.46) 618 90 708
2447 321 2768 *(51.09) 1467 205 1672
491 112 603 *(10.01) 1147 197 1344 *(22.05) 1947 *(16.07)
Non-Life
Public Private Total
1246 95 1341
4121 633 4754
5367 728 6095
4220 531 4751 *(77.95)
*(14.90) *(35.19) 1112 4440
Combined
1929
10187
12116
10169 *(83.93)
*(10.94) *(43.66)
Note :
AIC,ECGC are included in the public Sector * represents percentages to the respective complaints disposed
The disposal rates of complaints against LIC and private insurers were 90.98 per cent and 85.20 per cent respectively. In the case of non-life, there were 5367 complaints relating to the public insurers of which 4220 were disposed during the year (disposal rate 78.63 per cent). Of the 728 complaints against private insurers 531 were disposed of during the year (disposal rate 72.94 per cent). Around 51 per cent of the complaints in the case of life and 35 per cent in the case of non-life were treated as not entertainable by the Ombudsmen. Of the total complaints disposed, the Ombudsmen have given awards for 1867 and dismissed 1112 cases. The Ombudsmen
recommended to the companies 338 cases for settlement at their end. viii) Committees Committee on Health Insurance for Senior Citizens The Authority is seized of the issues relating to health insurance for senior citizens of the country as they are more vulnerable and therefore fall in a higher risk category. Senior citizens across the country have voiced their grievances about the matters relating to policy issuance and claims servicing of
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health insurance policies. The Authority has also received representations relating to entry barriers for the aged, refusal of renewals, imposition of harsh terms without justification, sharp increases in policy rates, delay in claims servicing etc. In order to cater to the needs of the senior citizens in a holistic way, the Authority has appointed a Committee on Health Insurance for Senior Citizens with Shri K.S. Sastry as Chairman of the Committee. The Committee had representations from industry, consumer forums, insurers and TPAs. The committee is expected to submit the report shortly. Committee on Grievance Redressal System The Grievance Cell of the IRDA advised the complainants to first approach the insurers with their grievances and in case they are not satisfied with the disposal, they may approach the Grievance Cell of the IRDA. After a review, the Authority felt that the grievance redressal system of the insurers needs to be made more effective. In order to review the existing grievance redressal system, the Authority set up a Committee under the Chairmanship of Shri Vepa Kamesam, Managing director, IIRM. The Committee submitted its report in January 2007. Some recommendations of the Committee are: i. There should be an agreed definition of Grievance/ Complaint. ii. A certain minimum requirements related to grievance redressal: (a) Every company shall have a Board approved redressal policy. (b) (c) There shall be a designated Grievance Officer. The Grievance Redressal policy shall outline a procedure for registration and redressal: iii. Minimum software requirements for the grievance redressal system. iv. Grievance Redressal should be made an essential part of Corporate Governance.
v.
Insurers themselves should work out a code of commitment for grievance redressal.
The recommendations of the Committee are being processed. Insurance Advisory Committee The Advisory Committee met on 9th July 2007 and discussed the life insurers views on issues relating to pre -licensing training and examination. The life insurers felt that the mandatory 100 hours of training requirement for pre-licensing examination may be reduced to 50 hours in the case of insurance agents and to 75 hours in the case of insurance composite agents. The Advisory Committee approved the suggestions. The Authority ratified the Advisory Committees recommendation on 27th August 2007 and necessary Gazette Notification was issued on 9th October 2007. (ix) Review of advisory functions performed by the Authority The rapid growth of insurance, especially in the life segment has brought to the fore a number of issues concerning the agency structure which is a vital link between the insured and the insurer. In order to spread the message of insurance to the far corners of the country, the Authority had enlarged the scope of the intermediaries structure from the traditional tied individual agents to the corporate agent, micro-insurance agent, the Bancassurance mode and the referral system. The Authority feels that there is a need for a study to be undertaken to ascertain the manner in which these channels have been functioning, their efficacy, their cost effectiveness, their weaknesses and make recommendations on the changes to be made to make them effective, professional and accountable and serve the interests of the insured and facilitate provision of services all over the country in a cost effective manner even for the low priced insurances. The Chairman vide Circular No. IRDA/Life/Dist. Channel/037/ 2007-08 dated 21st September, 2007 has constituted a committee chaired by former LIC Chairman, Mr. N.M. Govardhan to undertake the above study.
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PART III STATUTORY FUNCTIONS OF THE AUTHORITY

a) Issue to the applicant a certificate of registration, renew, modify, withdraw, suspend or cancel such registration Insurer: During 2006-07, Bharati Axa Life Insurance Company was granted licence for operations in India. During August and September of 2007, the Authority has granted license to three insurers namely Appollo DKV Insurance Co. Ltd., Future
S. No. 1. 2. 3. Name of the Insurance Company Star Health & Allied Insurance Co. Ltd Agriculture Insurance Corporation of India Ltd. Reliance General Insurance Co. Ltd
Generali Insurance company Limited and Future Generali India Life Insurance Company Limited. The Authority has also cleared R1 applications of IDBI Life Insurance Company Limited, Universal Sompo General Insurance Company Limited and Shriram General Insurance Company Limited during the year. The Certificate of Registration issued to all the existing life and non-life insurance companies have been renewed in terms of Section 3A of the Insurance Act, 1938 and penalty was imposed on the following insurers for the reasons mentioned therein:
Brief particular of the violation committed For late submission of the renewal of registration application For late submission of the renewal of registration application For late submission of the renewal of registration application
Amount of Penalty Rs. 5000/Rs.5,55,833/Rs.1,62,331/-
Non-Life Department has acted as nodal department for levy of penalty for the following insurers for the reasons mentioned
against their names:
Statement showing the penalty charged from the various insurers from 01-04-06 to 30-09-07 S. No. 1. 2. 3. 4. 5. Name of the Insurance Company Bajaj Allianz Life Insurance Co. Ltd. United India Insurance Co. Ltd. Bajaj Allianz General Insurance Co. Ltd. Reliance General Insurance Co. Ltd. IFFCO Tokio General Insurance Co. Ltd. Amount of Penalty Rs. 5,00,000/Rs. 5,00,000/Rs. 5,00,000/Rs. 5,00,000/Rs. 5,00,000/Brief particular of the violation committed Penalty U/S 102(b) of the Insurance Act, 1938 for opening of offices without prior permission of the Authority. Lower charging of premium for Pravasiya Bhartiya Bima Yojana Violation of IRDA Advertisement Regulations Violating provisions of Section 102 of the Insurance Act, 1938 Penalty for engaging a non-licensed entity as intermediary.
Broker: Inspections were conducted on 11 broking companies during 2006-07. One license was suspended, one license was cancelled and four voluntary surrender of license were accepted. During inspection, it was observed that some of the Broking Companies have exceeded the limits set in the Regulation 20 by procuring business from a single client. These companies were issued directions to comply with the Regulation 20 of
IRDA (Insurance Brokers) Regulations, 2002 by end of the financial year 2007-08. The license of a Broking Company was suspended due to irregularities found in reinsurance placements. Another investigation of one of the Broking Company revealed gross violations of Insurance Broker Regulations which resulted in cancellation of the license.
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The inspections also revealed in some cases that payments were made to introducers and canvassers in contravention of code of conduct 3(b) of Regulation 20 of IRDA (Insurance Brokers) Regulations, 2002, resulting in cancellation of broker license for violation in one case and issue of directions in other cases. TPAs: The Authority has issued TPA (Health Services) licence to (1) Dedicated Healthcare Services (India) Private Limited, (2) Grand Healthcare Services India Private Limited, under the provisions of TPA Health Regulations, 2001, during the year 2006-07. Licence of M/s Vipul MedCorp TPA Private Limited has been renewed during the year 2006-07 b) Protection of the interests of the policyholders in matters concerning assigning of policy, nomination by Policy holders, insurable interest, settlement of insurance claim, surrender value of policy and other terms and conditions of contracts of insurance In line with the Mission statement, the Authority accords utmost priority to the interests of policyholders. While the Life Grievance cell plays a facilitative role in resolving the grievances by taking it up with the insurers, a proactive approach is also adopted by analyzing the cause/source of the complaints to identify system deficiencies and procedural slackness. Targeted Inspections have been conducted based on the findings. Inputs are given to the inspection team for examination during the comprehensive inspection visits. It is ensured that the insurers put in place adequate infrastructure, easy customer access facilities and prompt servicing mechanism before approval is accorded for expansion of new offices. The efforts of the Grievance Cell for non-life set up in the Authority have resulted in greater awareness among the policyholders. Regulation 5 of IRDA (Protection of Policyholders Interests) requires every insurer to have an effective grievance redressal system. The Authority has insisted that this requirement must be incorporated in the policy documents of the products filed by the Authority for its approval.
c) Specifying requisite qualifications, code of conduct and practical training for intermediaries or insurance intermediaries and agents The Authority has prescribed qualifications and training for agents as per Regulations 4 and 5 of the IRDA (Licensing of Insurance Agents) Regulations 2002. Similarly in case of Corporate Agents, Regulation 4 of IRDA (Licensing of Corporate Agents) Regulations 2002 prescribes minimum qualifications for the corporate insurance executive/specified person. The agent, corporate executive and the specified persons shall also not suffer from any of the disqualifications specified under Section 42D of the Insurance Act, 1938. The Authority has issued guidelines for offline agents training institutes in the October 2004 and for online agents training institutes in May 2005. The guidelines provide for a minimum training period, coverage of training, maintenance of attendance record of the trainees, appointment of one qualified faculty for each stream to solve the online queries of the trainees, maintenance of database by the web administrator, barring of marketing fee/consultancy fee payment for getting the trainees, etc. The accreditation for offline institutes will be for three years and the accreditation for online training institutes will be for one year. As IRDA has approved reduction in the number of training hours for pre-licensing of agents, the Insurance Institute of India, Mumbai has prescribed the syllabus in view of the above changes. The examination starting online from 12th November 2007 and offline examination from 18th November 2007 will follow the prescribed changes of Insurance Institute of India. The Authority also prescribed technical checks to be compiled with by the online training institutes. In addition to that IRDA issued a Circular on 23rd June 2006 stating that (i) Opening of more than one Login (multiple Login) on same computer as well as Login by same user ID/Password on different machines at the same time is not permissible and (ii) that the training institutes must have only one domain to launch the IRDA accredited online training for Life and General Insurance. Use of more than one domain is not permissible.
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d) Specifying the code of conduct for surveyors and loss assessors The code of conduct regarding the professional and ethical requirements for conduct of their professional work is specified in Chapter VI of the IRDA Regulations for Surveyors and Loss Assessors, 2000. They should strive for objectively in professional and business judgment while behaving ethically and with integrity in their professional pursuit acting impartially and complying with due diligence, care and skill with regard to technical and professional standards expected to them. The Government of India and the Authority have established the Indian Institute of Insurance Surveyors and Loss Assessors in order to promote self-regulation and professionalism amongst the surveyors. The Institute, at present, has a limited mandate, to establish the necessary infrastructure, to inculcate professionalism and discipline disseminate information relating to the profession of surveyors and loss assessors amongst its members. e) Promoting efficiency in the conduct of insurance business When the tariffs were withdrawn with effect from 1st January 2007, there was apprehension that the statutory motor third party cover would be denied to the policyholders. The Authority has been taking cognizance of complaints received regarding denial of third party cover and has resolved the complaints by taking up with the concerned insurers. The initiatives taken by the Authority in regulating the third party motor premium have been upheld by several High Courts. The Authoritys directives to the general insurers to participate in motor third party pooling arrangement for commercial vehicles segment has resulted in availability of third party cover for the policyholders as well as an increase in initiative from the insurers to give such covers. The Pool has been set up with state of the art hardware and software. The Authority has stressed the need for collection and collation of qualitative data by the insurers especially in the area of motor insurance. The Authority has also been taking initiatives in leading the life insurance council and the general insurance council towards becoming self regulatory organizations.
The Micro-insurance regulations put in place by the Authority have resulted in the mainstream general insurance companies submitting micro-insurance products to the Authority for approval. This augurs well for the low-income population as they can get the existing insurance products at affordable premium. The Authority has constituted a Committee to look into issues relating to Health Insurance for of Senior Citizens in procuring health insurance. A circular was issued on 28th December 2006 to all life insurers advising them that the decision for closure/relocation of their places of business should be after due consideration of all the factors including the possible inconveniences to its clientele. It is essential that such a decision is appropriately appraised to the Board for information with the reasons therefor, since the proposal for opening the branches/offices were initially approved by the Board. Adequate notice of a minimum of 2 months on the proposed relocation/closure should be given to policyholders serviced by that branch along with the alternate arrangements being made to service them. In the specific context of hardships in complying with the Know Your Customer (KYC) requirement by small value policyholders as per Anti Money Laundering Guidelines and with possible implication for the spread of insurance into rural and low-income domains, especially the micro insurance sector, the Authority, has vide circular dated 2nd March 2007 decided to provide exemption up to a total Annual Premium of Rs.10000/-on all the life insurance policies held by a single individual from the requirement of recent photograph and proof of residence. Consequent to circulation of misleading sales literature among the public by some of the life insurers representatives projecting high returns on unit linked products, the Authority has come out with a press release on 2nd March 2007 cautioning members of the public not to be carried away by such projections and to take an informed decision based on proper disclosure of projected returns as per guidelines of the Life Insurance Council. Advertisement guidelines were issued on 14th May 2007 reinforcing the existing regulations on Advertisements with a view to protect the interests of the insuring public, enhance
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their level of confidence on the nature of sales material that is made available to them and ultimately to encourage fair business practices. Rural/Social sector obligations have been benchmarked based on micro insurance parameters for minimum/maximum cover and also micro insurance agents have been permitted to issue joint sale advertisements A circular dated 11th May 2007 was issued clarifying certain key issues concerning policyholders to ensure protection of their interests and to remove inconsistencies in implementation of ULIP guidelines across the industry. (f) Promoting and regulating professional organizations connected with insurance and reinsurance business: The Institute of Insurance and Risk Management (IIRM) is a joint venture of IRDA and the Government of Andhra Pradesh. During the year 2006-07 it has been granted affiliation by the Chartered Institute of Insurance (CII), London. This is in addition to the earlier accreditation accorded by the CII to the International Post Graduate Diploma in Insurance conducted by IIRM. Efforts are on to obtain accreditation from some Universities in the United States to the IIRM Courses. A Distance Learning Wing has been opened in IIRM to provide opportunities to students wishing to pursue the diploma in the distance mode. Diploma obtained from this mode also has received accreditation from the CII, London. The plans for opening of the International School of Actuarial Sciences in the year 2007-2008 have fructified with the inauguration of the International School of Actuarial Sciences in August 2007. During the year, IIRM has conducted short term programmes on topics pertaining to Insurance and Risk Management for several banks and others. A seminar on Grievance Redressal in Insurance Sector was conducted jointly with IRDA. IIRM has been allotted 5 acres of land free of cost by the Government of Andhra Pradesh. g) Levying fees and other charges for carrying out the purposes of the Act The Authority in terms of powers vested by section 3 of the Insurance Act levies both registration and renewal fees from the insurers and various intermediaries associated with the
insurance business. However, registration fee is charged at the time of granting of registration certificate and not thereafter. The renewal of registration fees for insurer stand at 10 per cent of 1 per cent of the Gross Direct Business Written in India or Rs. 50,000 (Fifty thousand only) subject to maximum of Rs. 5 crores. In case of re-insurer the fee is chargeable based on the facultative business written by the re-insurer in India. This follows amendment of regulation 20 of IRDA (Registration of India Insurance Companies) Regulations, 2000 w.e.f. February, 2003. h) Calling for information from, undertaking inspection of, conducting enquiries and investigations including audit of the insurers, intermediaries, insurance intermediaries and other organizations connected with the insurance business Sec 14 (2) (h) of the IRDA Act 1999 and Sec 110 C of the Insurance Act 1938 empowers the Authority to conduct Inspections and Investigations to ensure that there are no breaches / non compliance with the applicable Act / Regulations. Accordingly, the Authority has been conducting targeted inspections of insurers and intermediaries based on complaints/ information received. Inspections of insurance companies would, in general cover assessment of the financial position of an insurer, compliance with solvency requirements, besides the companys adherence to accepted principles of market conduct, corporate governance and internal control, etc. These inspections could be either annually or at such periodicity as may become necessary. The Authority would endeavor to gradually move towards meeting the above objectives of comprehensive inspections. The detailed coverage of 32 insurance companies operating in India periodically requires strengthening of the human resources with the Authority. While steps have been initiated in this regard, the Authority has in the mean time carried out focused inspections of certain portfolios of Insurance companies. The inspections were also conducted consistent with the contemporary regulatory initiatives such as detariffing, AML guidelines etc to ensure that there are no breaches and the transition is smooth. With the above limited objective in view, the inspection department undertook the following types of targeted / focused inspections from January, 2007.
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1.
Underwriting Inspections: The general insurance industry was deregulated in a phased manner from rates prescribed by Tariff Advisory Committee with effect from 1st January 2007. The focus in the first phase of inspections was on the processes and internal controls put in place by insurers on underwriting. Inspecting teams, assessed the efficacy of the overall systems evolved by the companies in the de-tariff regime, the internal controls put in place etc. Based on the findings modifications of the file and use guidelines were issued to facilitate smooth change to the new approach.
b.
Comprehensive inspection of Brokers: The Authority has recently taken up comprehensive inspection of Insurance Brokers covering all aspects. Market Conduct Inspection of Life Insurance Companies: The Authority has recently commenced full scale market conduct inspection of life insurance companies.
5.
The Reports submitted by the inspection department are being followed up by the respective departments for necessary action at their end. i) Control and regulation of rates, advantages, terms and conditions that may be offered by the insurers in respect of general insurance business not so controlled and regulated by the Tariff Advisory Committee under Section 64 U of the Insurance Act 1938 (4 of 1938)
2.
AML Guidelines: The Government of India has introduced the Prevention of Money Laundering Act in 2002. The Act has come into force from 1st July 2005. Accordingly, the Authority has issued AML guidelines on 31st March 2006 to all Insurance companies and has advised strict implementation of the same to cover new business and existing policies (to a limited extent). The inspecting teams conducted inspection of all life insurance companies to check compliance with AML guidelines issued by the Authority. Although, there was significant level of awareness of the new requirement and compliance with AML guidelines by the life insurance companies, certain deficiencies were noticed which are being addressed.
The Authoritys directed on 4th December 2006 for de-tariffing of all classes of general insurance business except third party motor insurance with effect from 1.1.2007. The Authority has also prescribed a schedule of premium rates applicable to Third Party insurance, which is mandatory. The general insurers would be charging third party premium rates as per this schedule. The pool came into operation from 1st January 2007 and would be administered through the General Insurance Corporation. j) Specifying the form and manner in which books of accounts shall be maintained and statements of accounts shall be rendered by Insurers and other Insurance Intermediaries.
3.
Rural and Social Sector obligations of Insurers: The inspecting teams conducted inspection of the four public sector non-life insurers to check compliance with regard to regulations on Rural and Social Sector obligations. Inaccuracy in compilation of data at the operational level and processing deficiencies has been observed.
4. a.
Inspection of Brokers : Compliance of Regulation 20: The broking companies who have been promoted by some of the major business houses were inspected to check the compliance with regulation 20 of the Broker Regulations, which stipulates a cap on the maximum business from a single client. Non-compliances are being taken up for rectification.
The Authority issued regulations for preparation of financial statements and Auditors Report of insurance companies in the year 2000. Incorporating various classifications issued on the same from time to time, the regulations were modified in March, 2002. The Authority had taken the following measures to improve the transparency and disclosures in reporting the financial statements. (i) Prudential norms for Income Recognition, asset classification and provisioning and other related matters: While insurers have already adopted the RBI guidelines in this regard as stipulated, keeping in view the specific requirements of the insurance industry, the
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Authority formalized the norms for income recognition, asset classification and provisioning and other related matters in respect of debt portfolio. The norms are effective financial year 2006-07. (ii) Unit Linked Disclosure norms : The format of reporting under the IRDA (Preparation of Financial Statements and Auditors report of Insurance Companies) Regulations, 2002 has been modified to ensure transparency and consistency in the disclosures across the industry. The regulations require life insurance companies to file segment wise information. The reporting format requires insurance companies to segregate the unit linked revenue into (i) NonUnit Funds and (ii) Unit Fund. The additional reports form Addendum to the Form A-RA). Formats of reporting through the schedules have also been prescribed to capture information on the operations of the various funds. The disclosure requirements were effective from 2006-07, and have been complied with by all insurers. k) Regulating investment of funds by insurance companies The Authority closely monitors timely submission of returns by the insurers including e-submission. The returns provide useful data on the quantum of investments of the sector by way of various instruments and the direction of investments. The Authority had set up a Working Group to examine the various aspects of investment regulations in the light of scrutiny and the overall developments in the financial sector. l) Regulating maintenance of margin of solvency
m) Adjudication of disputes between Insurers and Intermediaries or Insurance Intermediaries IRDA does not carryout any adjudication in case of disputes between insurers and intermediaries or insurance intermediaries. Insurers were advised to approach the available quasi-judicial or judicial channels like Insurance Ombudsmen. In case of any disputes between insurers and intermediaries the Authority seeks clarifications from the concerned. n) Supervising the functioning of the Tariff Advisory Committee In December 2006, it was decided that the rates, terms, conditions and regulations applicable to Fire, Engineering, Motor, Workmens Compensation and other tariff classes of business shall be withdrawn effective from 1st January 2007. Accordingly the Authority, by virtue of power vested under section 14(2)(i) of the IRDA Act, 1999 notified that the Tariff general regulations (other than those relating to rating) terms, conditions, clauses, warranties, policy and endorsement wordings applicable to the above mentioned classes of business as well as Marine Hull business shall continued to be followed until further orders. The rates of premium may be varied subject to compliance with the Guidelines on File and Use of General Insurance products notified on 28th September 2006. Insurers were also advised to maintain proper underwriting standards after the tariffs are withdrawn. The TAC maintains a Web enabled declined lives database for exclusive use of life insurers. This database has incorporated the suggestions of Life Council and enlarged its scope of use. Further TAC is maintaining a database on motor insurance statistics collected from the general insurers and health insurance statistics collected from the TPAs. Aggregate tables of these statistics were put on the Website. o) Specifying the percentage of the premium income of the insurer to finance schemes for promoting and regulating professional organizations referred to in clause (f) The Authority has not prescribed any percentage of the premium income of the insurer to finance schemes for
Every insurer is required to maintain a required Solvency Margin as per the Section 64 VA of the Insurance Act 1938. Every insurer shall maintain an excess of the value of assets over the liabilities. This excess prescribed by the IRDA, is referred to as Required Solvency Margin. The IRDA (Assets, Liabilities and Solvency Margin of Insurers) Regulations, 2000 describe in detail the method of computation of the Required Solvency Margin. This ratio was monitored on annual basis. Considering the importance of monitoring this ratio on a continuous basis, the Authority has now asked the insurers to submit quarterly returns on solvency margins.
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Box Item 4
EFFECT OF DETARIFFING ON NON-LIFE INSURANCE SECTOR

1. Detariffing has been the eagerly awaited reform in the general insurance industry ever since the Malhotra Committee recommended gradual removal of tariffs in the non-life insurance sector. Since then, tariffs on quite a few portfolios such as Marine Cargo, Personal Accident, and Bankers Indemnity were withdrawn in the 1990s. The detariffing of Marine Cargo business in 1994 especially left in its wake certain valuable lessons on the pitfalls that a general insurance market could face when tariffs are withdrawn without proper regulatory guidance. 2. With the entry of private players in the non-life sector, there was a clamour for free pricing from the intermediaries and the insurance companies. The Authority went about the imminent process of detariffing with a sense of urgency coupled with caution with a view to ensuring that the transition to a tariff free regime was smooth. The thrust was to make the Insurers responsible for their action, and towards this end to put in place certain internal capabilities, procedures and controls. In other words, the emphasis was on more effective self regulatory and corporate governance norms. The most important concern of the Authority was to ensure that the insurers equip themselves adequately and set up the systems to do technically sound underwriting and to cope with competition in the absence of tariffs. The Authority issued a road-map in September 2005 for ushering in a tariff free regime, followed by series of discussions to ascertain the pulse of the insurance industrys state of preparedness. The following core areas were identified as the barometers of the insurance companies state of preparedness. Existence of a broad corporate underwriting philosophy for each line of business; Identification of the responsibilities of the Board of Directors and the Senior Management of the company; Accountability not only to the Regulator, but the policyholders as well by way of disclosures and transparency; Identification of Reporting Channels and putting them in place to ensure that the Board gets timely and accurate information; Board approved philosophy for Reinsurance programme. Existence of a strong internal audit machinery to ensure that the underwriting remained on a technically sound footing. Role of Appointed Actuary, Moderator and Compliance Officer of the company for designing and proper pricing of products. Establishing an IT system capable of capturing data on every policy, endorsement, claim and risk factors for rating of products. The Authoritys circular on File & Use guidelines specified that the report to the Board should cover the following points: i) The underwriting philosophy and the underwriting profit expectation; ii) Whether each product should be self-supporting or cross subsidy will be acceptable; iii) If the insurer will write any business on a planned underwriting loss, how will the loss be funded; iv) The margins to be built into the rates to cover acquisition costs, promotional expenses, expenses of management, catastrophic reserve and profit. Whether credit will be taken for investment income in rating;
3.
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v) The list of products that will be class rated, individually rated or rated by reference to reinsurance support; vi) The delegation of authority for quoting rates and terms and for underwriting to various levels of management; vii) The Appointed Actuary or Chief Financial Officer or other senior officer not having business development responsibility who will act as moderator of very thin rates; viii) Involvement of the Appointed Actuary in the review of statistics to determine rates, terms and conditions of cover for class-rated risks; ix) Setting up of the Internal Technical Audit machinery to ensure quality in underwriting and compliance with corporate underwriting policy; and x) The procedure for reporting to the Board on the performance of the management in underwriting the business. 4. The detariffing exercise has two components (stages). The first component is the withdrawal of tariff premium rates. The second component is permitting changes in the existing policy coverage wordings, terms and conditions. When the tariffs were withdrawn in the Fire, Engineering and Workmens Compensation businesses with effect from 1st January, 2007, the Authority took the further step of moderating the reduction in rates so that the fall was not too steep in comparison to the tariff premiums keeping in view the incurred claims ratio at the tariff rates. The Inspection Team of the Authority had conducted countrywide inspections of all the non-life insurers and identified areas requiring the Authoritys intervention. As was expected there were initial teething problems in the market, but this step of moderating the reduction in rates proved to be a blessing to keep the overall market in a balanced state. 5. The Authority however took the decision of regulating the rates relating to Motor Third Party business in exercise of its powers under Section 14 (2) (i) of the IRDA Act 1999. The main reasons for this decision were i) this class of insurance being mandatory under the Motor Vehicles Act and ii) the unviability of this class of business resulting in complaints of unavailability of statutory cover to the policyholders. The creation of Motor Insurance Pool for underwriting third party business for commercial vehicles also seem to have gone well with the insurers as the business seems to have soared with the collective participation. 6. The above proved useful in controlling the first stage of the transition. The next stage in the transition is to remove all price restraints again in a well regulated manner. The Authority may not put any restraints when reviewing the filed rates unless they appear untenable. 7. However as freedom comes with responsibility, the Authority will continue to monitor the self regulatory measures and corporate governance norms of the company. The Authority has asked the insurers to strengthen the corporate governance controls as a simultaneous measure to the further freeing of rate controls. The most important control being the reinforcement of the control of the Board of Directors on the companys underwriting policy. The insurers have been advised to put before their Boards a detailed statement of underwriting policy taking note of the developments so far and the concerns of the Authority expressed from time to time. A clear statement of the operating ratio that the insurer will work on has been sought along with the procedures and controls being put in place to ensure compliance with the underwriting policy. The Authority has specified the minimum extent of reporting that the management should place before their Boards on a periodical basis to enable the Board to discharge its corporate responsibility of overseeing the underwriting health of the insurer. 8. To remove the subsisting price controls what is required of the insurers is a demonstration of a satisfactory level of preparedness on the barometers mentioned in para 2. This entails -
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A clearly defined manual of delegation of underwriting authority to different levels of management or specific persons based on skills and responsibilities; Establishing detailed underwriting manuals and distributing it to persons concerned the rating and risk inspection procedures; Ensuring the ability of the Compliance Officer, Moderator and Appointed Actuary to discharge their responsibilities; Establishing a good IT system with capability for rating support, analysis of experience, review of underwriting and management support; Establishing an efficient internal technical audit department.
The insurers were also advised to submit proposals for changes in terms and conditions of cover and policy wordings which were to be allowed after 31st March 2008.
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promoting and regulating professional organizations referred to in clause (f). p) Specifying the percentage of life insurance business and general insurance business to be undertaken by the Insurers in the rural and social sector The rural obligations in respect of life and non-life insurers were indicated as a per cent of number of policies underwritten and the gross premium underwritten respectively. The social Sector obligations were indicated as the specified no. of lives to be underwritten in the said sector based on the year of operation of the respective life or non-life insurer. Obligations of life insurers: (a) Rural Sector Obligations: All the sixteen life insurers, including the public sector insurer, LIC have fulfilled their obligations towards the rural sector. The number of policies underwritten by them in the rural sector as a per cent of the total policies underwritten in the year 2006-07 was as per the obligations applicable to them. LIC, in compliance with its obligations, underwrote a higher percent of policies in rural sector, than were underwritten in the year 2001-02. (b) Social Sector Obligations: Of the sixteen life insurers, fourteen have fulfilled their social sector obligations during 2006-07. The number of lives covered by them in the social sector was above the stipulated obligations. The LIC, in compliance with its social sector obligations covered a higher number of lives than was covered by it in 2001-02. In case of two private sector companies which were noncompliant with their social sector obligations, the position is as under: Bharti Axa Life Insurance Co. Ltd. which commenced its operations in August 2006 is compliant with the rural sector obligations but fell short of meeting its obligations in social sector. Against a proportionate obligation of coverage of 3333 lives in about 8 months of operations, they have covered 3067
lives. The shortfall has been waived as the insurer is in first year of operations and the shortfall is negligible. Shriram Life Insurance Company Limited commenced its operation in February 2006. As the shortfall was observed for the second year in succession, a penalty of Rs.5 lakh has been imposed on the insurer. They have also been advised to cover the shortfall in the current year i.e., 2007-08. This company has submitted revised data and the Authority is examining the same. Obligations of non-life insurers: (a) Rural Sector Obligations: All the eight private sector non-life insurers met their rural sector obligations in 2006-07. The gross direct premium underwritten by them in the said sector, as a percentage of total premium underwritten in 2006-07, was above the prescribed stipulations. All the four public sector insurers complied with the rural sector obligations for 2006-07. With respect to the public sector insurers, their obligations are indicated against the quantum of insurance business done by them in the accounting year ended 31st March, 2002. Social Sector Obligations: All the eight private sector non-life insurers met their social sector obligations in 2006-07. The number of lives covered by them in the social sector was also higher than the regulatory stipulations. While, three public sector insurers complied with the social sector obligations for the year 2006-07, New India Assurance Co. Ltd. fell short of compliance towards the sector. With respect to the public sector insurers, their obligations are indicated against the quantum of insurance business done by them in the accounting year ended 31st March, 2002. In case of New India, a penalty of Rs.5 lakh has been imposed for non-compliance with its social sector obligations and it has been advised to fulfill the shortfall in 2007-08 and 2008-09. q) Exercising such other powers as may be prescribed The Authority had no occasion to exercise any powers under this function.
(b)
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PART IV ORGANISATIONAL MATTERS

i) Organization Sri C. S. Rao continues to be the Chairman of the Authority as do whole-time Members, Shri C R Muralidharan and Shri K K Srinivasan. Sri G. Prabhakara joined the Authority as Member (Life) on 15th December, 2006. Before joining the Authority he was Zonal Manager, Life Insurance Corporation of India and brings with him long experience in the field of life insurance. Dr. R. Kannan also joined as Member (Actuary) of the Authority on 18th December, 2006 prior to which he had served the Reserve Bank of India and SBI Life Insurance at very senior levels. He brings rich experience to the Authority in the area of actuarial science. Sri Vijay Mahajan, MD, BASIX continues to be part-time Member of IRDA. During the year Smt. Ela R. Bhatt, Founder of Self Employed Womens Association has joined as part-time Member with effect from 27th February, 2007. Dr. Sanjiv Misra, Secretary, Department of Expenditure, Ministry of Finance joined with effect from 2nd March, 2007 as a part-time Member in place of Sri Ashok Chawla representing Ministry of Finance, Government of India. Sri Sunil Talati replaced Sri T.N. Manoharan as part-time Member representing Institute of Chartered Accountants of India. ii) Meetings of the Authority During the period from April, 2006 to March, 2007 and May, 2007 to September, 2007 four and two meetings of the Authority have been held respectively. iii) Human Resources As an integral part of the growth of the Authority, development of human resources skills has been given due importance so as to perform its role more skillfully, efficiently and effectively. A new Inspection Wing has been setup by the Authority to inspect the various licensed insurance entities. To strengthen the inspection aspect, few officers have been borrowed both from life insurance and general insurance companies. In addition, augmentation to the existing resources is underway through the normal process of open recruitment. The International Association of Insurance Supervisors (IAIS), established in 1994 has representatives from some 100 insurance supervisory authorities. IRDA is one of its members and is represented in its Executive committee, Technical committee, Insurance Accounting committee, Reinsurance committee and few others. It was formed to promote cooperation among insurance supervisory authorities, set international standards for insurance supervision and Regulation, provide training to members and co-ordinate work with regulators in other financial sectors and international financial institutions. IRDA Chairman and Members participate in its meetings regularly and the Authority is enriched by way of exchange of ideas and regulatory approaches amongst its members through their participation. The Authority jointly with Andhra Pradesh Government set up an Institute of Insurance and risk Management (IIRM) at Hyderabad in 2002. IIRM aims to serve the learning and development needs of emerging markets in the context of their contemporary challenges. IIRM is overseen by a Board of Directors headed by Chairman of the Authority. It continues to cater to the needs of the industry by way of providing diversified range of courses, including Post Graduate Diploma in General Insurance, Life Insurance and Risk management. The IIRM courses are accredited by Chartered Insurance Institute, London. The International School for Actuarial Science (ISAS) has started functioning under the aegis of IIRM to enhance the availability of qualified skills resources to the insurance industry. iv) Promotion of Official Language A separate Hindi Section at IRDA ensures implementation of the constitutional provisions of Official Language Act and the Official Language Policy of the Government of India in promoting use of Hindi in Official Work. The Authority is encouraging the use of Hindi in its official work. IRDA has also chalked out a year long programme for promoting use of Hindi in its day to day work. Under this programme a word per day is sent on intranet to all its employees. Online translation cum guidance facility is also provided to all
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employees for implementation of Official Language Policy in letter and spirit. During the year under review, General Orders Notifications / Regulations / Administrative etc., were issued bilingually as required under section 3 (3) of the Official Languages Act, 1963. Hindi Week was celebrated by organizing Hindi competitions in Hindi essay writing etc. The monthly IRDA journal is not only in bilingual but also publishes some original articles on insurance in Hindi. v) Status of Information Technology in IRDA The Authority has taken consistent efforts in improving its IT Systems towards improved efficiency in its working environment. Some of the steps taken during this year are as follows: Messaging System Reliability and accuracy of information are essential for effective regulatory/monitoring environment. Towards this end, the Authoritys messaging system was totally revamped and a new messaging system has been implemented under the domain irda.gov.in. The newly implemented anywhere-access messaging system has been made functional in a secured environment with 24X 7 availability and support. An E-mail gateway server with Antivirus / Spam filers has also been implemented in order to access the mails. Few training sessions were conducted to make the staff familiar with the new messaging environment. Networking and other IT Infrastructures: Strengthening and upgrading the present infrastructure is essential for an efficient working environment. Authoritys IT systems are regularly upgraded. Additional desktops along with TFT monitors were procured for the new staff who have joined the Authority. The newly formed inspection team has been equipped with high-end light-weight laptops which will be handy during their inspections. IRDAS Website: Authority has been taking regular steps to bring transparency in its functioning by placing the information to the extent possible in public domain. Regular changes are being made in the website to cater to the needs of the various stake holders
of Insurance Industry. On-line Grievances Management System is being implemented in a phased manner. Connectivity between TAC & IRDA As a part of Authoritys effort in making the TAC as the Central Data Repository for Insurance data, dedicated 2Mbps data connectivity between TAC, Mumbai and IRDA was established as advised by the Standing Committee on Information Technology. Authority also established IP Sec 3 Des 128 Bit encryption for the transfer of data between the two offices under a secured environment. Using this facility, the databases / information available at TAC data servers have been made accessible to the Research Department on an ongoing basis. Development of Web Enabled Applications & Central Database: Development of web enabled applications is essential goal for e-governance. Therefore, all the applications are developed and implemented under web enabled environment. Efforts have been made to facilitate insurers/intermediaries to file the returns on-line and all the online applications implemented so far have been successful. Authority plans to implement more such applications in future. Creation of comprehensive database on the subjects dealt by the various departments of the Authority is essential to monitor the growing insurance sector. Authority is taking continuous efforts to achieve this objective. vi) Accounts The Accounts of the Authority for 2006-07 have been audited by the Comptroller and Auditor General of India (C&AG). Pursuant to the provisions of Section 17 of IRDA Act, 1999, the Audited accounts along with the Audit Report have been forwarded to the Government of India to be placed in both the Houses of Parliament. A copy of the accounts for 2006-07 together with Audit Certificate from C&AG is placed at Annexure X. vii) ISO 2000 Registration Once again the Authority has again been certified by AQA International for a further period of three years. The Authority
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has established a quality management system as compliance to internal quality system standard ISO 9001-2000. viii) IRDA Journal The IRDA Journal has completed almost five years of existence and during this period, it evolved as a strong medium of communication to all concerned. The Journal helps researchers, insurers and analysts for conducting meaningful studies about the industry and the changes occurring therein. The reporting of the statistics on a monthly basis as well as at quarterly intervals - have been well-received by the industry and the media. It has been the endeavour of the Authority to ensure that the topics selected for the Journal are contemporary in nature so that readers can get the best information about the happenings in the market. This attempt of IRDA has been well-appreciated by all the readers. Some very pertinent topics that have been highlighted in the Journal during the year are: Customer Grievances and Redressal; Liability Insurance; Simplicity of Contract Wordings; Catastrophe Insurance; Risk Management
for Insurers; Solvency and Reserving; Insurance Education and Awareness; Monitoring and Supervision in Insurance; Reinsurance; Insurance Legislation etc. ix) Acknowledgements The Authority would like to place on record its appreciation and sincere thanks to the Members of the Insurance Advisory Committee, the Reinsurance Advisory Committee, Insurance Division (Ministry of Finance), all insurers and intermediaries for their invaluable guidance and co-operation in its proper functioning and to the compact team of officers and employees of the Authority for efficient discharge of their duties. The Authority expresses its deep appreciation for the contributions made so far by Shri CNS Shastri in designing and implementing various policy initiatives taken by the Authority so far and hopes to continue to benefit from his guidance and advice. The Authority also records its special thanks to the members of the public, the press, all the professional bodies and international agencies connected with the insurance profession for their valuable contribution from time to time.
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Statements 06-07 (Final) 74 ....
STATEMENTS AND ANNEX
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STATEMENT 1
FINANCIAL SAVING OF THE HOUSEHOLD SECTOR (GROSS)

(Per cent) Item 2006-07# (1) 100.0 (18.4) 8.6 (1.6) 55.7 (10.2) 55.6 0.1 0.0 0.0 6.3 (1.2) 1.4 0.1 0.0 0.0 4.8 5.2 (1.0) 0.2 4.9 15.0 (2.8) 14.6 0.2 0.2 9.2 (1.7) 2005-06P (2) 100.0 (16.7) 8.7 (1.5) 47.1 (7.9) 46.2 1.0 0.0 0.0 4.9 (0.8) 1.3 0.1 -0.1 0.0 3.6 14.6 (2.4) 2.4 12.2 14.0 (2.3) 13.4 0.3 0.3 10.5 (1.8) 2004-05P (3) 100.0 (13.9) 8.5 (1.2) 37.2 (5.2) 36.5 0.8 0.0 0.0 1.1 (0.2) 1.4 0.1 -0.7 0.0 0.4 24.5 (3.4) 4.9 19.6 15.7 (2.2) 15.1 0.3 0.2 13.0 (1.8) 2003-04 (4) 100.0 (13.8) 11.2 (1.5) 38.3 (5.3) 37.4 1.0 0.0 0.0 0.1 0.0 1.1 0.0 -2.3 0.0 1.2 23.0 (3.2) 7.5 15.5 13.7 (1.9) 13.0 0.3 0.5 13.6 (1.9) 2002-03 (5) 100.0 (13.1) 8.9 (1.2) 40.9 (5.4) 35.5 2.7 2.8 -0.1 1.7 (0.2) 0.8 0.0 -0.5 0.1 1.3 17.4 (2.3) 2.5 14.9 16.1 (2.1) 15.5 0.3 0.4 15.0 (2.0)
Financial Saving (Gross)
a) Currency
b) Deposits i) With banks ii) With non-banking companies iii) With co-operative banks and societies iv) Trade debt (net) c) Shares and debentures i) ii) iii) iv) v) Private corporate business Banking Units of Unit Trust of India Bonds of public sector undertakings Mutual fund (other than UTI)
d) Claims on government i) Investment in government securities ii) Investment in small savings, etc e) Insurance funds i) Life insurance funds ii) Postal insurance iii) State insurance f) Provident and pension funds
P : Provisional. # : Preliminary estimates. Source : The Reserve Bank of India Annual Report 2006-07 Notes : 1. Figures in brackets are percentage at GDP at current market prices. 2. Components may not add up to the totals due to rounding off.
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STATEMENT 2
INTERNATIONAL COMPARISON OF INSURANCE PENETRATION*

Continent/Country Total North America United States Canada Latin America and Caribbean Bahamas Barbados Trinidad and Tobago Chile Jamaica Panama Honduras Argentina Colombia Venezuela Dominican Republic Brazil Costa Rica Uruguay El Salvador Mexico Ecuador Peru Guatemala Europe United Kingdom Switzerland Netherlands Ireland Finland France Belgium Sweden Denmark Germany Italy Spain Austria Portugal Slovenia Cyprus Norway Malta Czech Republic Luxembourg Slovakia Iceland Poland Russia Croatia Hungary Yugoslavia Greece Bulgaria 9.17 9.36 7.02 2.47 N/A N/A 7.85 3.93 5.00 3.07 N/A 2.68 2.51 2.55 2.05 2.98 1.87 N/A 2.28 1.86 1.68 1.31 1.09 7.89 12.60 11.75 10.10 8.97 8.77 9.52 9.62 6.96 8.07 6.97 7.60 5.63 5.95 7.85 5.61 4.39 5.20 5.61 4.15 3.64 3.61 3.01 3.07 2.83 3.20 2.83 N/A 2.10 1.92 2004** Life 4.12 4.22 2.97 1.01 N/A N/A 5.77 2.55 1.88 1.12 N/A 0.88 0.69 0.08 0.18 1.36 0.15 N/A 0.68 0.79 0.20 0.59 0.17 4.68 8.92 6.73 5.43 5.74 6.89 6.38 6.73 4.56 5.15 3.11 4.86 2.38 2.63 4.66 1.65 2.31 3.14 2.84 1.63 1.43 1.46 0.29 1.17 0.61 0.76 1.15 N/A 0.93 0.26 Non-Life 5.05 5.14 4.05 1.46 N/A N/A 2.08 1.38 3.11 1.96 N/A 1.80 1.82 2.47 1.86 1.63 1.72 N/A 1.60 1.06 1.48 0.72 0.92 3.20 3.68 5.02 4.67 3.23 1.88 3.14 2.89 2.39 2.92 3.86 2.74 3.25 3.32 3.19 3.96 2.08 2.06 2.78 2.53 2.21 2.15 2.72 1.90 2.21 2.44 1.67 N/A 1.17 1.65 Total 8.97 9.15 6.97 2.35 N/A N/A 7.63 3.60 4.82 2.80 N/A 2.52 2.23 2.47 1.62 3.01 1.88 1.86 2.08 1.66 1.70 1.28 1.02 7.78 12.45 11.19 9.79 8.56 9.18 10.21 11.15 7.82 8.07 6.79 7.59 5.36 6.17 9.07 5.65 4.23 5.30 5.89 3.98 3.76 3.66 2.84 3.16 2.27 3.25 3.08 N/A 2.17 2.55 2005** Life 4.05 4.14 3.05 0.93 N/A N/A 5.61 2.24 1.82 1.00 N/A 0.76 0.62 0.07 0.21 1.33 0.15 0.31 0.61 0.68 0.22 0.70 0.17 4.69 8.90 6.20 5.12 5.65 7.33 7.08 8.36 5.32 5.19 3.06 4.86 2.27 2.88 6.20 1.69 2.08 3.28 3.15 1.53 1.52 1.36 0.30 1.31 0.12 0.84 1.37 N/A 1.03 0.32 Non-Life 4.92 5.01 3.92 1.42 N/A N/A 2.02 1.36 3.01 1.81 N/A 1.76 1.61 2.40 1.41 1.68 1.73 1.55 1.46 0.98 1.47 0.59 0.85 3.10 3.55 4.99 4.67 2.90 1.85 3.13 2.79 2.50 2.89 3.73 2.73 3.09 3.28 2.87 3.96 2.15 2.02 2.74 2.45 2.24 2.30 2.54 1.84 2.15 2.41 1.71 N/A 1.13 2.23 Total 8.70 8.80 7.00 2.40 N/A N/A 7.60 3.30 4.80 2.70 N/A 2.60 2.40 2.70 1.60 2.80 1.90 1.73 2.10 1.80 1.60 1.20 N/A 8.30 16.50 11.00 9.40 10.40 9.10 11.00 9.20 7.60 8.50 6.70 7.20 5.40 6.10 9.00 5.80 4.30 4.60 N/A 3.80 3.90 3.40 2.60 3.50 2.30 3.30 3.40 N/A 1.80 2.60 2006** Life 3.90 4.00 3.10 1.00 N/A N/A 5.60 2.00 1.80 1.00 N/A 0.80 0.70 0.10 0.20 1.30 0.10 0.30 0.60 0.80 0.20 0.50 N/A 5.30 13.10 6.20 5.10 7.90 7.20 7.90 6.50 5.20 5.60 3.10 4.70 2.30 2.80 6.10 1.80 1.90 2.80 N/A 1.50 1.80 1.30 0.30 1.70 0.10 0.90 1.70 N/A 0.90 0.30 Non-Life 4.70 4.80 3.90 1.40 N/A N/A 2.00 1.30 3.00 1.80 N/A 1.80 1.70 2.60 1.40 1.60 1.70 1.43 1.50 1.00 1.30 0.60 N/A 3.00 3.40 4.90 4.30 2.50 1.90 3.10 2.70 2.40 2.80 3.60 2.50 3.10 3.30 2.90 4.00 2.30 1.70 N/A 2.30 2.10 2.10 2.30 1.80 2.30 2.50 1.70 N/A 0.80 2.20 Contd... 78
Continent/Country Total Ukraine Turkey Romania Serbia Montenegro Latvia Lithuania Asia South Korea Japan Taiwan Hong Kong Israel Malaysia Singapore Thailand India Lebanon PR China Bahrain Jordan Phillipines UAE Sri Lanka Indonesia Oman Vietnam Iran Kuwait Pakistan Saudia Arabia Bangladesh Africa South Africa Mauritius Zimbabwe Morocco Kenya Ivory Coast Tunisia Nigeria Egypt Algeria Oceania Australia New Zealand World 4.82 1.54 1.51 2.20 N/A 1.48 7.37 9.52 10.51 14.13 9.27 6.16 5.40 7.50 3.52 3.17 3.06 3.26 N/A 2.67 1.49 1.65 1.37 1.31 1.28 2.02 1.15 0.93 0.71 0.48 0.57 4.89 14.38 4.61 N/A 2.70 2.81 N/A 2.01 0.94 0.79 0.58 7.65 8.02 5.74 7.99
2004** Life 0.05 0.29 0.35 0.16 N/A 0.38 5.58 6.75 8.26 11.06 7.88 2.76 3.52 6.02 1.94 2.53 0.95 2.21 N/A 0.31 0.91 0.28 0.60 0.63 0.18 1.35 0.09 0.22 0.28 0.02 0.37 3.41 11.43 2.78 N/A 0.64 0.82 N/A 0.16 0.17 0.27 0.03 3.75 4.17 1.32 4.55 Non-Life 4.77 1.25 1.15 2.04 N/A 1.10 1.79 2.77 2.25 3.07 1.39 3.40 1.88 1.48 1.58 0.65 2.10 1.05 N/A 2.36 0.59 1.37 0.77 0.68 1.10 0.68 1.06 0.70 0.43 0.46 0.20 1.48 2.95 1.83 N/A 2.06 1.99 N/A 1.86 0.76 0.52 0.55 3.90 3.85 4.42 3.43 Total 3.02 1.55 1.53 2.23 N/A 1.47 6.83 10.25 10.54 14.11 9.93 5.96 5.42 7.47 3.61 3.14 3.15 2.70 N/A 2.59 1.48 1.53 1.46 1.52 1.14 1.62 1.23 0.79 0.67 0.46 0.61 4.80 13.87 4.36 N/A 2.87 2.56 N/A 2.07 0.70 0.85 0.56 6.38 6.60 5.20 7.52
2005** Life 0.08 0.25 0.32 0.19 N/A 0.41 5.16 7.27 8.32 11.17 8.63 2.75 3.60 6.00 1.99 2.53 0.95 1.78 N/A 0.27 0.91 0.28 0.62 0.82 0.17 0.97 0.08 0.15 0.27 0.01 0.42 3.33 10.84 2.62 N/A 0.71 0.78 N/A 0.17 0.09 0.34 0.03 3.16 3.51 0.81 4.34 Non-Life 2.95 1.30 1.21 2.04 N/A 1.07 1.67 2.98 2.22 2.93 1.29 3.21 1.82 1.48 1.62 0.61 2.19 0.92 N/A 2.32 0.57 1.25 0.84 0.70 0.97 0.65 1.15 0.64 0.40 0.45 0.20 1.47 3.03 1.74 N/A 2.16 1.78 N/A 1.90 0.62 0.52 0.53 3.22 3.09 4.39 3.18 Total 2.80 1.60 1.70 1.80 2.00 1.80 6.60 11.10 10.50 14.50 10.50 5.50 4.90 6.50 3.50 4.80 3.00 2.70 N/A 2.40 1.50 1.70 1.60 1.30 1.00 1.50 1.30 0.70 0.80 0.50 0.60 4.80 16.00 N/A N/A 2.90 2.50 N/A 2.00 0.60 0.80 0.50 6.70 7.00 5.30 7.50
2006** Life 0.10 0.20 0.30 0.20 0.20 0.60 5.00 7.90 8.30 11.60 9.20 2.60 3.20 5.40 1.90 4.10 0.90 1.70 N/A 0.30 0.90 0.30 0.60 0.80 0.10 0.90 0.10 0.10 0.30 0.00 0.40 3.40 13.00 N/A N/A 0.80 0.80 N/A 0.20 0.10 0.30 0.00 3.40 3.80 0.80 4.50 Non-Life 2.70 1.40 1.40 1.60 1.80 1.20 1.60 3.20 2.20 2.90 1.20 2.90 1.70 1.10 1.60 0.60 2.00 1.00 N/A 2.20 0.50 1.40 0.90 0.60 0.90 0.70 1.20 0.50 0.50 0.50 0.20 1.40 3.00 N/A N/A 2.10 1.70 N/A 1.80 0.50 0.50 0.50 3.30 3.20 4.50 3.00
Source : Swiss Re, Sigma volumes 3/2004, 2/2005, 5/2006 and 4/2007 * Insurance penetration is measured as ratio (in Per Cent) of premium to GDP ** Data relates to Calender years
79
STATEMENT 3
INTERNATIONAL COMPARISON OF INSURANCE DENSITY*

Continent/Country Total North America United States Canada Latin America and caribbean Bahamas Barbados Trinidad and Tobago Chile Jamaica Panama Honduras Argentina Colombia Venezuela Dominican Republic Brazil Costa Rica Uruguay El Salvador Mexico Ecuador Peru Guatemala Europe United Kingdom Switzerland Netherlands Ireland Finland France Belgium Sweden Denmark Germany Italy Spain Austria Portugal Slovenia Cyprus Norway Malta Czech Republic Luxembourg Slovakia Iceland Poland Russia Croatia Hungary Yugoslavia 3601.1 3755.1 2188.7 90.9 N/A N/A 659.3 253.1 161.6 139.3 N/A 105.1 51.9 101.1 41.3 101.1 85.7 N/A 52.7 117.8 37.1 32.1 23.0 1427.9 4508.4 5716.4 3599.6 4091.2 3134.1 3207.9 3275.6 2690.0 3620.4 2286.6 2217.9 1355.2 2159.7 1293.5 919.6 861.5 2842.2 728.6 430.5 2562.9 276.0 1310.2 192.7 114.4 247.9 287.3 N/A 2004** Life 1617.2 1692.5 926.1 37.2 N/A N/A 484.5 164.5 60.8 50.6 N/A 34.5 14.3 3.1 3.7 45.9 6.8 N/A 15.8 50.2 4.5 14.5 3.5 848.1 3190.4 3275.1 1936.5 2617.4 2461.0 2150.2 2291.2 1764.3 2310.5 1021.3 1417.2 571.9 955.3 768.1 270.0 453.3 1714.4 368.2 168.6 1007.1 111.8 126.9 73.3 24.8 58.7 117.3 N/A Non-Life 1984.0 2062.6 1262.6 53.7 N/A N/A 174.8 88.6 100.7 88.7 N/A 70.6 37.6 98.0 37.6 55.2 78.8 N/A 36.9 67.6 32.6 17.5 19.5 579.8 1318.0 2441.2 1663.1 1473.8 673.1 1057.7 984.4 925.7 1309.9 1265.3 800.7 783.3 1204.4 525.4 649.5 408.2 1127.8 360.4 261.9 1555.8 164.2 1183.3 119.4 89.6 189.2 170.0 N/A Total 3735.1 3875.2 2449.0 105.7 N/A N/A 810.2 281.5 179.4 133.0 N/A 118.0 60.3 125.3 52.5 128.9 80.3 92.3 50.8 121.3 41.0 34.8 25.5 1513.8 4599.0 5558.4 3739.7 4177.0 3389.3 3568.5 3985.6 3092.1 3876.2 2310.5 2263.9 1454.5 2342.8 1628.0 978.1 840.7 3302.3 813.8 477.8 2756.3 314.7 1438.1 245.1 122.8 274.7 334.1 N/A 2005** Life 1686.3 1753.2 1071.9 42.0 N/A N/A 595.4 174.9 67.6 47.2 N/A 35.4 16.8 3.6 6.7 56.8 6.4 15.5 15.0 49.9 5.4 18.9 4.1 911.8 3287.1 3078.1 1954.2 2759.7 2707.8 2474.6 2988.7 2105.2 2489.9 1042.1 1449.8 615.8 1095.1 1113.7 292.6 412.6 2043.1 435.4 183.6 1112.5 116.8 153.9 101.9 6.3 70.9 148.2 N/A Non-Life 2048.8 2122.0 1377.1 63.8 N/A N/A 214.8 106.6 111.8 85.8 N/A 82.7 43.6 121.7 45.7 72.1 73.9 76.8 35.8 71.4 35.7 15.9 21.3 601.9 1311.9 2480.3 1785.5 1417.4 681.4 1093.9 996.9 986.8 1386.3 1268.4 814.1 838.7 1247.7 514.4 685.5 428.1 1259.2 378.5 294.2 1643.8 197.9 1284.1 143.2 116.5 203.9 185.9 N/A Total 3804.0 3923.7 2708.3 126.7 N/A N/A 958.2 285.7 185.7 144.3 N/A 143.9 69.1 179.5 55.4 160.9 96.2 96.4 55.1 139.1 45.9 38.1 N/A 1745.7 6466.7 5561.9 3828.8 5564.7 3681.2 4075.4 3442.5 3226.2 4271.4 2436.8 2302.2 1514.6 2396.7 1663.8 1100.9 906.6 3229.0 N/A 519.6 3366.3 336.9 1360.0 310.3 150.9 307.9 376.2 N/A 2006** Life 1731.8 1789.5 1204.1 51.3 N/A N/A 704.1 176.0 69.9 51.2 N/A 43.8 20.5 6.0 7.4 72.5 7.7 16.6 16.5 62.9 6.4 17.1 N/A 1119.6 5139.6 3111.8 2071.6 4203.8 2903.1 2922.5 2427.7 2214.6 2840.8 1136.1 1492.8 651.0 1104.6 1131.5 345.0 408.6 2016.0 N/A 204.1 1548.4 130.3 148.2 150.5 4.0 81.8 192.3 N/A Non-Life 2072.2 2134.2 1504.3 75.4 N/A N/A 254.1 109.7 115.8 93.1 N/A 100.1 48.7 173.6 47.9 88.4 88.6 79.8 38.6 76.2 39.5 21.1 N/A 626.0 1327.1 2450.1 1757.3 1360.9 778.0 1152.9 1014.8 1011.6 1430.6 1300.7 809.5 863.7 1292.1 532.3 755.9 498.0 1213.0 N/A 315.5 1817.9 206.5 1211.9 159.8 146.9 226.1 183.9 N/A Contd... 80
Continent/Country Total Greece Bulgaria Ukraine Turkey Romania Serbia Montenegro Latvia Lithuania Asia South Korea Japan Taiwan Hong Kong Israel Malaysia Singapore Thailand India Lebanon PR China Bahrain Jordan Phillipines UAE Sri Lanka Indonesia Oman Vietnam Iran Kuwait Pakistan Saudia Arabia Bangladesh Africa South Africa Mauritius Zimbabwe Morocco Kenya Ivory Coast Tunisia Nigeria Egypt Algeria Oceania Australia New Zealand World 402.1 59.4 60.9 64.5 48.2 44.7 N/A 95.7 194.3 1419.3 3874.8 1909.0 2217.2 1043.4 256.5 1849.3 92.1 19.7 126.7 40.2 N/A 52.1 15.6 350.2 14.1 15.5 103.1 11.0 27.9 161.2 3.7 51.4 2.3 43.4 686.5 220.8 N/A 44.9 12.6 N/A 55.3 4.0 8.9 14.8 1736.9 2471.4 1382.2 511.5
2004** Life 177.9 8.2 0.6 12.0 11.3 3.2 N/A 24.6 147.2 1006.8 3044.0 1494.6 1884.3 467.4 167.3 1483.9 50.8 15.7 39.6 27.3 N/A 6.0 9.4 59.7 6.2 7.5 14.2 7.3 2.3 39.1 1.5 2.1 1.5 30.3 545.5 133.1 N/A 10.6 3.7 N/A 4.3 0.7 3.1 0.8 851.0 1285.1 318.0 291.5 Non-Life 224.1 51.2 60.3 52.6 36.9 41.5 N/A 71.1 47.1 412.5 830.8 414.4 332.9 576.0 89.3 365.5 41.4 4.0 87.2 12.9 N/A 46.2 6.1 290.6 7.9 8.1 88.9 3.7 25.7 122.2 2.2 49.3 0.8 13.1 141.0 87.7 N/A 34.3 8.9 N/A 51.0 3.3 5.8 14.0 885.9 1186.3 1064.2 220.0 Total 446.7 87.9 53.1 78.6 69.5 48.7 N/A 109.6 197.9 1706.1 3746.7 2145.5 2544.9 1104.5 283.3 1983.4 99.0 22.7 185.6 46.3 N/A 54.2 17.2 414.2 16.3 19.4 113.7 10.1 35.1 185.5 4.6 57.1 2.5 44.2 714.6 226.5 N/A 47.0 14.6 N/A 58.7 4.3 10.3 17.4 1789.3 2569.9 1408.5 518.5
2005** Life 213.1 11.1 1.3 12.7 14.6 4.2 N/A 30.4 149.6 1210.6 2956.3 1699.1 2213.2 510.2 188.0 1591.4 54.6 18.3 56.3 30.5 N/A 5.7 10.6 74.7 6.9 10.5 17.3 6.1 2.2 35.7 1.9 0.7 1.7 30.7 558.3 136.1 N/A 11.7 4.5 N/A 4.8 0.5 4.0 0.9 885.0 1366.7 219.7 299.5 Non-Life 233.6 76.8 51.7 65.9 54.9 44.5 N/A 79.3 48.3 495.5 790.4 446.4 331.7 594.4 95.3 392.0 44.4 4.4 129.3 15.8 N/A 48.6 6.7 339.5 9.4 8.9 96.3 4.1 33.0 149.8 2.8 56.4 0.8 13.5 156.2 90.4 N/A 35.3 10.2 N/A 53.9 3.7 6.2 16.5 904.3 1203.2 1188.8 219.0 Total 489.3 100.9 59.6 89.2 94.5 77.1 156.9 154.0 205.0 2071.3 3589.6 2250.2 2787.6 1132.5 292.2 1957.7 110.1 38.4 181.5 53.5 N/A 59.5 20.7 585.4 21.3 21.5 133.7 11.0 40.1 227.2 5.9 63.1 2.6 53.6 855.8 N/A N/A 52.4 16.8 N/A 59.2 5.3 11.2 18.7 1787.3 2580.8 1370.9 554.8
2006** Life 256.7 13.2 1.9 13.1 18.7 7.7 12.4 48.1 154.6 1480.0 2829.3 1800.0 2456.0 532.6 189.2 1616.5 60.0 33.2 57.9 34.1 N/A 6.2 13.1 89.8 8.5 12.5 14.3 6.1 2.6 40.9 2.3 0.8 1.8 38.3 695.6 N/A N/A 14.7 5.3 N/A 5.3 0.8 4.7 1.2 896.3 1389.0 215.0 330.6 Non-Life 232.6 87.7 57.6 76.1 75.7 69.4 144.6 105.8 50.4 591.2 760.4 450.3 331.6 599.9 103.0 341.2 50.0 5.2 123.6 19.4 N/A 53.2 7.6 495.6 12.8 9.0 119.4 4.9 37.4 186.3 3.6 62.4 0.8 15.3 160.2 N/A N/A 37.8 11.6 N/A 53.9 4.5 6.5 17.6 891.0 1191.9 1155.9 224.2
Source: Swiss Re, Sigma volumes 3/2004, 2/2005, 5/2006 and 4/2007 * Insurance density is measured as ratio (in Per Cent) of premium to total population ** Data relates to Calender years
81
POLICY HOLDERS ACCOUNT : ALL LIFE INSURERS

(Rs lakh) MNYL 2006-07 150028 (1486) 78813 (841) 100466 (414) 22421 (200) 531000 (926) 313358 (536) 2005-06 BSLI 2005-06 125566 (2184) 791299 (1617) 426105 (684) 70720 (318) 42538 (251) 12782284 9079222 (4167) (3454) 109 151 4057240 767174 (145943) (110232) (658) 3092 16 75800 47 23067 590854 28339 72500 610 (5851) 40571 7379 117714 (1107) 2364517 123986 13601 1006 75781 744729 488398 55514 31501 1062908 242299 62177 339 155772 255 90623 153 42646 560 83446 24077 671979 467452 50463 (4) 28507 (41) 7394339 6926623 226253 (1411) 72750 20947 5051 3 3034 0 5328646 139571 3392711 29724 17454 3 4483 4 152476 (1192) 206073 101450 40042 28238 2139621 1740546 79025 52150 5110 74593 8337 82385 (100) 47650 4254 38605 (212) 52942 7891 3 75552 13152 3279 1 20797 202701 69854 20 26699 261752 358324 13788 5645 13601 3461 759 1006 75781 75781 62177 62177 339 255 153 12 560 6 19433 313 12411 10141 248 339 255 127 14 75781 62177 339 255 153 499 55 560 6709 1177 5645 83278 65348 12 19123 155761 240244 6182 640 6822 271 242 467080 12233 396775 4036 358 268 9417 30353 6913 21083 916907 708086 41167 709492 604156 20976 20993 57674 12033 39849 95555 59739 17442476 13214688 321662 208176 165368 90856 136389 9877 42904 161 50 18867 39 12624 96011 134128 2330 14504 2327 13970 99 7419 123 6516 131 32922 964403 52551 152296 1226 73 10494 37229 1433 11593 126 (602) (76) (152) (9) (100) 7252 9724 574812 94668 107302 731 2902 10855 329704 34187 48681 410 3547864 610719 (153943) 15895 10434 (4119) 1014 6897 9449 (150) 21590 7028 1974 (460) 842 3852 331 (47) 2260 1390 7499 (3034) (2562) 731 937 (140) 3014 11533 37146 (10550) (10366) 2111 1066 (53) 285587 (3324) 156991 (2296) 2006-07 2005-06 2006-07 2005-06 2006-07 2005-06 ICICI PRU ING VYSYA L.I.C.
STATEMENT 4
Particulars
2006-07
HDFC STD LIFE 2006-07 2005-06
RELIANCE LIFE $ 2006-07 2005-06
BAJAJ ALLIANZ LIFE 2006-07 2005-06
176617 (3101)
15771 22877 (5541) (13550) (63) 1610 7019 164557 15964 24393 214 22852 51370 58 0 311 13447 33932 9 5 256 (75)
Premiums earned net (a) Premium @ (b) Reinsurance ceded (c) Reinsurance accepted Income from Investments (a) Interest, Dividends & RentGross (b) Profit on sale/redemption of investments (c) (Loss on sale/ redemption of investments) (d) Transfer/Gain on revaluation/change in fair value (e) Amortization of Premium/ Discount on Investments (f) Appropriation/Expropriation Adjustment Account Other Income Transfer from Shareholders Account 8880 8395 (2314) 17660 38054 54231 (13857) 17386 20293 23161 (6271) 105135 4019 3878 (1069) (592) 2012 481 (83) 2380
2991 15473
TOTAL (A)
211473
Commission 20138 Operating Expenses related to Insurance Business 40261 Provision for doubtful debts Bad debts written off Provision for Tax 237 Provisions (other than taxation) (a) For diminution in the value of investments (Net) (b) Others
82
15227074 11411965 13602 1006
TOTAL (B)
60635
Benefits Paid (Net) 12484 Interim Bonuses Paid Change in valuation of liability in respect of life policies (a) Gross* 139681 (b) Amount ceded in Reinsurance (1326) (c) Amount accepted in Reinsurance (d) Transfer to Linked Fund
TOTAL (C)
150838
SURPLUS/ (DEFICIT) (D) = (A)-(B)-(C) Prior Period Items Balance at the beginning of the year Transfer from Linked Fund (Lapsed Policies)
Surplus available for appropriations
APPROPRIATIONS Transfer to Shareholders Account Transfer to Other Reserves (Reserve for lapsed unit linked policies unlikely to be revived) Balance being funds for future appropriations-Policyholders Balance being funds for future appropriations-Shareholders Balance transferred to Balance Sheet
TOTAL (D)
19433
6822
Note : * represents mathematical reserves after allocation of bonus # Insurer commenced operations during 2005-06 ! Insurer commenced operations during 2006-07 Figures in brackets represents negative values $ formerly known as AMP Sanmar
POLICY HOLDERS ACCOUNT : ALL LIFE INSURERS

(Rs lakh) SBI-LIFE 2005-06 107532 (223) 5760 5124 (76) 2266 908 69 2279 14916 137412 17886 42749 417 272 5 87 10317 25498 668 1542 379 1121 3604 2462 84684 6550 3791 18580 1032 358 659 15095 53996 10505 23197 165 201 4050 16157 30603 1 8658 5 1054 16 922 137 73 8467 797 87 4559 125030 6969 18996 180 189 107 274 310 8020 24031 5912 13408 19124 35702 73 13755 29078 27 118941 78574 161511 106966 70 11799 24 4998 441 10434 379 7608 6158 10336 (2779) (1776) 3514 2000 (446) 7415 7664 6400 (63) 1040 3735 1506 (12) 7036 1656 252 643 98 4733 554 (239) 3442 1916 576 (17) 7421 266 130 (1) (4) 87 42 1 3 1 (0) (5) 4184055 3608296 931814 663843 (189550) (163552) (112125) 176974 (806) (929) 3092 109848 141756 228030 126385 9314 20737302 15126483 56 8607 27 1227548 1360091 41298 0 471765 12233 (5851) 26145 8243 90754 (111) 50803 98885 6501 (4848) 820 1653 143 1146 363 1653 (4848) (4702) 147 6453 7924 1327 1678 1471 (4702) 7924 1678 351 39 244 (30079) (29835) (7724) (7724) 622 1733 4 29 (49) (12) 583 26 1707 4 29 (74) (12) (0) (0) 424 (29835) (7724) 622 1733 4 29 (49) 25 (12) (0) (4967) (7724) 265 7104 1254 (22111) 80201 58882 99234 62541 42240 13797 (3601) 1834 (5957) 42217 52159 29716 75738 622 46864 1733 12081 12468 38962 (96) 28188 (102) 40236 (74) 13361 (161) 68796 (177) 17317 4197 8209 4738 2077 597 7092 27 1755 5 45193 (89) 32239 19427 55173 43171 33867 20407 61052 36087 2215 157 1232 (1) 2942 4331 4 1500 22 502 (0) 1739 2263 29 6153 176 1169 11120 12465 (37) (12) 27 (12) 27 624 1017 8690 863548 961105 21012 5 399971 4036 5110 3107085 2254787 5571501 3520986 139627 29746 9083534 7961790 (3483) (3017) 2743293 1292341 624 17534472 12801847 (0) 95744 (6939) 820 89625 81205 12450 19218 14 (23263) 89625 69848 1834 (10284) 424 61822 63293 1203 8517 55 (11245) 61823 97151 (2018) 62185 (1115) 136718 (1123) 88019 (1305) 49271 (439) 20599 (194) 114723 (717) 60027 (334) 5100 (1) 2766 (0) 18417 (14) 1033 (1) 778 15603007 10587174 (2) (20172) (13616) 109 151 2006-07 2005-06 2006-07 2005-06 2006-07 2005-06 2006-07 2006-07 2005-06 KOTAK MAHINDRA 2006-07 2005-06 TATA-AIG LIFE 2006-07 2005-06 MET-LIFE AVIVA SAHARA SHRI RAM BHARTI AXA 2005-06 2006-07 TOTAL
Particulars
2006-07 Premiums earned net (a) Premium @ 292849 (b) Reinsurance ceded (505) (c) Reinsurance accepted Income from Investments (a) Interest, Dividends & Rent Gross 12603 (b) Profit on sale/redemption of investments 8928 (c) (Loss on sale/redemption of investments) (1894) (d) Transfer/Gain on revaluation/change in fair value 2330 (e) Amortization of Premium/Discount on Investments (f) Appropriation/Expropriation Adjustment Account Other Income 173 Transfer from Shareholders Account 4375
TOTAL (A)
318858
Commission 20281 Operating Expenses related to Insurance Business 31555 Provision for doubtful debts Bad debts written off Provision for Tax 228 Provisions (other than taxation) (a) For diminution in the value of investments (Net) (b) Others
83
TOTAL (B)
52064
Benefits Paid (Net) 14006 Interim Bonuses Paid Change in valuation of liability in respect of life policies (a) Gross* 253083 (b) Amount ceded in Reinsurance (296) (c) Amount accepted in Reinsurance (d) Transfer to Linked Fund
TOTAL (C)
266794
SURPLUS/(DEFICIT) (D) =(A)-(B)-(C)
Prior Period Items Balance at the beginning of the year Transfer from Linked Fund (Lapsed Policies)
Surplus available for appropriations
APPROPRIATIONS Transfer to Shareholders Account Transfer to Other Reserves (Reserve for lapsed unit linked policies unlikely to be revived) Balance being funds for future appropriations-Policyholders Balance being funds for future appropriations-Shareholders Balance transferred to Balance Sheet
TOTAL (D)
Note : Figures in brackets represents negative values * represents mathematical reserves after allocation of bonus # Insurer commenced operations during 2005-06 ! Insurer commenced operations during 2006-07 $ formerly known as AMP Sanmar
SHARE HOLDERS ACCOUNT : ALL LIFE INSURERS

PARTICULARS 2006-07 Amounts transferred from the Policy holders Account (Technical Account) Income From Investments: (a) Interest, Dividends & 1571 Rent Gross (b) Profit on sale/redemption of investments 83 (c) (Loss on sale/ redemption of investments) (8) (d) Transfer/gain on revaluation/ Change in Fair value (e) Amortisation of Premium/ Discount on Investments (107) Other Income TOTAL (A) 1538 1073 2671 1658 1083 1092 1585 995 1268 1385 1131 640 1338 834 2731 1136 BSLI 2005-06 ICICI PRU 2006-07 2005-06 ING VYSYA 2006-07 2005-06 L.I.C. 2006-07 2005-06 HDFC STD LIFE 2006-07 2005-06 MNYL 2006-07 2005-06 RELIANCE LIFE 2006-07 2005-06 BAJAJ ALLIANZ LIFE 2006-07 2005-06
3461
759
75781 62177
12
313
36 (16)
1007 (359)
369 (16)
79 (29)
36 (25) (4)
1142 (125) (239)
80 (69) (66) (89) 37 1278
270 (22)
90 (0)
388 (165)
133 (20)
238 (198)
72 (139)
(156) 23 936 6779 2792 1 1133 5 1108 77362 63172
(24) 8 2030
32 407 1831
45 0 781
(58)
(189)
1503
758
3084
1069
Expenses other than those directly related to the insurance business 39 29 146 Bad debts written off Provisions (Other than taxation) (a) For diminution in the value of investments (Net) (b) Provision for doubtful debts (c) Others Contribution to Policyholders Account 15473 7019 75800 TOTAL (B) Profit/ (Loss) before tax Provision for Taxation Profit / (Loss) after tax Prior Period Items A P P R O P R I AT I O N S 15512 7049 75946
59
21
883
14
83
183
459
271
92
104
531
67
23067 23125
18867 18888
12624 13506 14
14504 14586
13970 14153
7419 7878
6516 6787
32922 33013
10494 10598
9724
10855
10254 10923 (7170) (9854) (7170) (9854)
(13974) (6113) (69167) (20333) (17754) (12398) 4276 1545 3 2 (13974) (6113) (64891) (18788) (17757) (12400)
77362 63158 (12556) (12875) (6047) 77362 63158 (12556) (12875) (6047)
(6006) (31511) (9840) (6006) (31511) (9840)
(a) Balance at the beginning of the year (30486) (24373) (95279) (68570) (34956) (22555) (b)Interim dividends paid during the year (c)Proposed final dividend (d)Dividend distribution on tax (e)Transfer to reserves/ other accounts (7922) Profit carried to the BalanceSheet
(31657) (18782) (39234) (33228) (22200) (12360) (20431) (10577)
75781 62177 1581 981
(44459)
(30486)
(160170)
(95279)
(52713)
(34956)
(0)
(44213)
(31657)
(45281)
(39234)
(53710)
(22200)
(27601)
(20431)
84
STATEMENT 5 (Rs. lakh)

SBI-LIFE 2006-07 2005-06 KOTAK MAHINDRA 2006-07 2005-06 TATA-AIG LIFE 2006-07 2005-06 MET-LIFE 2006-07 2005-06 AVIVA 2006-07 2005-06 SAHARA 2006-07 2005-06 SHRIRAM 2006-07 2005-06 BHARTI AXA 2006-07 TOTAL 2006-07 2005-06
143 3074 1950 964 656
1471 1783
351 1194 800 626
39 1831
26 809 788 813
25 1001 347 565
81245 24183
63319 15207
1836 (103)
2855 (2)
160 (408)
25 (39)
0 (6)
767 (30)
106
30
70 (5)
36 (0)
261 (22)
62 (164)
79
14
25 (9)
5744 (1462) (239)
4605 (522) (66) (326) 67 82284
176
63 1 1028 0 711 12 1117 2 363
19 428 109917
4807
4802
860
643
3248
2283
1082
719
1935
870
580
49
40
24
51
66
195
162
26
580
28
114
156
1897
2575
4375 4423 384 1 383
4559 4599 203 1 202
11799 11823 (10964) 83 (11047)
4998 5002 (4360) 83 (4442)
10434 10484 (7236) (7236)
7608 7674 (5391) (5391)
2279 2279
8658 8658
14916 15111
15095 15256
1054 1079 (51) (51)
922 1503 (791) 7 (784) 28 1089 139 950 114 250 32 218
8467 8623 (8043) (8043)
228030 126385 229927 128960 (120010) (46676) 4502 1670 (115960) (45242) (1834)
(1197) (7940) (13175) (14387) (1197) (7940) (13175) (14387) (1834)
(3349)
(3550)
(15634)
(11099)
(23331) (17940) (15348) (5574) (33325) (18939)
(365229) (247547) 75781 62177
1581
(6941)
(2966)
(3349)
(26681)
(15541)
(30567) (23331) (16545) (15348) (46501) (33325)
(51)
(784)
950
218
(8043)
(558551) (349860)
85
BALANCE SHEET : ALL LIFE INSURERS (AS AT 31ST MARCH)

BSLI 2007 SOURCES OF FUNDS SHAREHOLDERS FUNDS SHARE CAPITAL ADVANCE AGAINST SHARE CAPITAL SHARE APPLICATION MONEY PENDING ALLOTMENT EMPLOYEES STOCK OPTION OUTSTANDING RESERVES AND SURPLUS CREDIT/[DEBIT] FAIR VALUE CHANGE ACCOUNT Sub-Total BORROWINGS POLICYHOLDERS FUNDS: CREDIT/[DEBIT] FAIR VALUE CHANGE ACCOUNT REVALUATION RESERVEINVESTMENT PROPERTY POLICY LIABILITIES INSURANCE RESERVES PROVISION FOR LINKED LIABILITIES Sub-Total DEFERRED TAX LIABILITY FUNDS FOR FUTURE APPROPRIATIONS TOTAL APPLICATION OF FUNDS INVESTMENTS Shareholders Policyholders ASSETS HELD TO COVER LINKED LIABILITIES LOANS FIXED ASSETS INCIDENTAL EXPENSES PENDING CAPITALISATION DEFERRED TAX ASSET CURRENT ASSETS Cash and Bank Balances Advances and Other Assets Sub-Total (A) CURRENT LIABILITIES Provisions Sub-Total (B) NET CURRENT ASSETS(C) =(A B) MISCELLANEOUS EXPENDITURE (to the extent not written off or adjusted) DEBIT BALANCE IN PROFIT & LOSS ACCOUNT (Shareholders Account) Debit Balance in Policyholders A/c TOTAL 443351 283841 1729260 956849 179432 108994 62595699 53139035 544195 299909 231794 131299 172069 63460 676319 354299 Note: Figure in brackets represents negative values 2006 ICICI PRU 2007 2006 2007 ING VYSYA 2006 2007 L.I.C. 2006 HDFC STD 2007 2006 2007 MNYL 2006 RELIANCE LIFE 2007 2006 BAJAJ ALLIANZ LIFE 2007 2006
67150
46000
131230 118500
69000
49000
500
500
80071 2874
61927
73243
55743
66400
33100
15037
15023
194 75938 3 67153 1 46001 2910 210273
524 1803 120827 4 69004 41 2 49002 111
28781
17200
659
659 731
800 347 74390
570 8 56321 14 66414 190 33290 1
55016 1 70054
34953 7 49984
29281
17700
83604
63317
6 11769 364420 376195 3 443351
3 7720
10150
12467
1120 48429 60839 110388
1073 6205110 6522245 30478 52480868 44960307 280675 284328 28331 3599764 1351731 59882 62566418 53118612 2724
912 173915 285168 459995 595 544195
2096 114880 119361 236337 255 299909 91250 65460 156709 695 231794 56628 17796 74424 554 131299
36 13500 92119 105655
102 6568 23500 30169
154 67129 518684 585968 20297
130 40430 256932 297492 6823 354299
3163 176562 112248
230114 1307627 699963 237837 3 283841 1497502 21485 1729260 824678 11344 956849
179432
108994
62595699
53139035
172069
63460
676319
27444 10141 364420 816 5688
18170 7199
15672 44847 234211 125146
24787 45909 60839 102 4018
16704 27945 16640 27265 51111283 45278642 28331 3603060 1231528 42 6308152 5512438 4690 140356 126214
15297 177829 285168 126 7361
13809 116950 119361 294 6013
27097 91936 65460 9011
14083 57399 17796 6839
14640 14212 92119 123 5736
9864 6826 23500 188 1445
65365 90508 518684 186 5357
27809 47661 256932 34 3646
230114 1325232 707885 202 404 142 3904 21944 6105 6900 2624 24590 11211 35800 59349 1631 60980 (25180)
18381 5802 24183 30899 2902 33800 (9618)
8269 3777 12046 16071 2209 18281 (6235)
48238 23593 71831 100611 6493 107103 (35272)
8128 6945 15074 23283 726 24009 (8935)
8664 1329807 1280202 6291 2101767 1824126 14955 3431574 3104328 17386 456585 574273 563 1570086 1556483 17949 (2994) 2026671 1404902 2130756 973572
33636 19620 53255 38747 308 39055 14200
28796 9901 38697 26586 287 26873 11824
3969 15164 19132 26431 189 26620 (7488)
2212 8226 10438 14676 185 14861 (4423)
14672 5621 20292 28567 197 28764 (8471)
5101 1799 6900 7390 72 7462 (562)
41980 8545 50525 80930 977 81908 (31383)
29585 7629 37214 38905 524 39429 (2215)
498
371
44460
30486
160170
95279
52713
34956
44214
31658
45281
39234
53710
22199
27601
20431
86
STATEMENT 6 (Rs. lakh)

SBI-LIFE 2007 2006 2007 KOTAK MAHINDRA 2006 2007 TATA-AIG LIFE 2006 MET-LIFE 2007 2006 AVIVA 2007 2006 SAHARA 2007 2006 SHRIRAM 2007 2006 BHARTI AXA 2007 2006 TOTAL 2007 2006
50000
42500
33035
24437
54700
44700
53000 9100
23500 9000
75820
45870
15675
15662
12500
12500
15000 3800
110 868
812361 11974 3800 194 162362
589073 9000 868 524 53600 8719 661783 815 6543917
1168 (936) 49064 704 43204 5204 38238 5204 29641 48 62148 820 48 32548 704 88 15763 22 15683 39 13707
218 0 12718 (7) 18793
54700
44700
75820
45870
978
7715 998405 861 6215855
(2079) 241359 174954 414234
3146 139128 24398 166671
5 40232 363 126454 167055 1303
1505 28151 (4849) 75652 100458 157 130255
436 100105 87227 187768 10798 253266
1152 61239 37449 99840 4345 148885 21905 37152 59057 244 122270 52139 11463 7424 18887 3701 131861 135562 2290 213672 1537 65406 66943 1707 114520
3 2817 4769 7589 33 23385 1585 1827 3412 29 19125 1196 11003 12199 18 27 27 81 543 624
3163 53474819 45572388 281038 279479 6868044 2939883 66842919 55335668 18 57743 27941
463298
209875
206596
25923
12745
19416
978
67899945 56026207
59152 222713 174954 3789
44075 136133 24398 2885
8538 40269 127747 232 2428
6570 29752 75798 72 1836
23747 112057 86813 465 3567
16771 67174 37308 147 4116
21961 24049 36896 50 1704
9583 11731 7424 7 2108
26249 5460 132557 2383
18458 1542 67111 1232
13301 2987 4769 681
12926 1823 1539 801
13630 923 11003 559
12603 338
11544 81 543
396371 282912 52184567 45915582 6890261 2829025\ 6310656 5513567 215652 172450 658 6900 2626 1421411 1902266 3323677 825644 1563249 2388894 934783
265 2
1069
349 658
16151 14739 30890 31015 150 31165 (276)
9768 11950 21718 22587 95 22683 (965)
12486 4442 16928 15517 710 16227 701
5710 3432 9142 8189 267 8457 685
8270 11246 19516 23405 62 23466 (3950)
7266 8309 15575 15473 62 15536 39
4154 4701 8855 17373 495 17869 (9014)
2090 2793 4882 6350 319 6669 (1786)
15183 5405 20588 19058 1007 20065 523
7762 1418 9180 15871 458 16329 (7149)
289 779 1068 827 6 833 235
354 734 1088 412 1 413 674
1489 2846 4335 4395 206 4601 (266)
903 300 1202 1586 92 1678 (476)
139 1790 1930 3749 43 3792 (1863)
140 371 511 540 540 (29)
1556972 2233003 3789975 901392 1584557 2485949 1304026
498 2966 463298 3349 209875 26681 206596 15541 130256 30567 253266 23331 148885 16545 30079 122270 15348 7724 52139 213672 114520 23385 19125 46501 33325 1412 1360 74 25923 12 12745 19416 978 8043 560862 30153
371 366497 7736
67899945 56026207
87
STATEMENT 7
LIFE INSURANCE CORPORATION OF INDIA : CAPITAL REDEMPTION AND ANNUITY CERTAIN BUSINESS ( NON PARTICIPATING) POLICY HOLDERS ACCOUNT
(Rs. Lakh)
2006-07 Premiums earned (Net) Profit/ Loss on sale/redemption of Investments Change in Policy Liabilities Others Interest, Dividend & Rent (Gross) TOTAL (A) Claims Incurred (Net) Commission Operating Expenses related to Insurance Business Others- Amortizations,Write offs and Provisions Foreign Taxes TOTAL (B) Operating Profit/(Loss) C= (A - B) APPROPRIATIONS Transfer to Shareholders Account Transfer to Catastrophe Reserve Transfer to Other Reserves TOTAL (C ) (218) 608 (218) 1344 (20) (1805) 0 871 390 497 26 70 15
2005-06 1266 (27) (1793) 1 722 169 433 22 60
515 (346)
(346)
88
STATEMENT 8
LIFE INSURANCE CORPORATION OF INDIA : CAPITAL REDEMPTION AND ANNUITY CERTAIN BUSINESS ( NON PARTICIPATING) SHARES HOLDERS ACCOUNT
(Rs. Lakh) 2006-07 OPERATING PROFIT/(LOSS) (a) (b) (C) Fire Insurance Marine Insurance Miscellaneous Insurance 2005-06
(218)
(346)
INCOME FROM INVESTMENTS (a) (b) Interest, Dividend & Rent Gross Profit on sale of investments Less: Loss on sale of investments
OTHER INCOME TOTAL (A) PROVISIONS (Other than taxation) (a) (b) (C) For diminution in the value of investments For doubtful debts Others (218) (346)
OTHER EXPENSES (a) (b) (c) Expenses other than those related to Insurance Business Bad debts written off Others
TOTAL (B) Profit Before Tax Provision for Taxation Profit after Tax APPROPRIATIONS (a) (b) (c) (d) (e) (f) (g) Interim dividends paid during the year Proposed final dividend Dividend distribution tax Transfer to any Reserves or Other Accounts Transfer to General Reserve Balance of profit/ loss brought forward from last year Balance carried forward to Balance Sheet (218) (346) (218) (346)
(218)
(346)
89
STATEMENT 9
LIFE INSURANCE CORPORATION OF INDIA CAPITAL REDEMPTION AND ANNUITY CERTAIN BUSINESS ( NON PARTICIPATING) BALANCE SHEET (As on 31st March)
(Rs. Lakh) 2007 SOURCES OF FUNDS Share Capital Policy Liabilities Reserves and Surplus Fair value change account Borrowings TOTAL APPLICATION OF FUNDS Investments Loans Fixed Assets Current Assets Cash and Bank Balances Advances and Other Assets Total Current Assets (A) Current Liabilities Provisions Total Current Liabilities (B) Net Current Assets (C) = (A - B) Miscelleneous Expenditure (to the extent not written off) Debit balance in Profit and Loss A/c TOTAL 14040 12453 68 829 427 2000 4 893 897 68 1566 860 2427 427 13211 10453 14040 12453 13997 36 7 12411 36 7 2006
90
STATEMENT 10
Policy Holders Account : Public Sector Non-Life Insurers

(Rs. Lakh)
NEW INDIA 2006-07 Fire Marine 94184 11040 10514 115738 56006 7933 1423 29733 39089 7178 822 29628 37628 (1315) 424 10853 6230 302125 364361 60151 11525 291525 363201 15939 15584 204362 235886 9962 23094 453908 592741 100588 23494 415985 540066 40568 19769 292158 352495 3247 54155 67916 7935 3008 47083 58027 3083 1832 35362 40277 3243 41522 23090 (1032) 29 30 (67) (8) (71) 2 1496 3410 56864 71313 9564 3626 56750 69940 3303 1963 37883 43148 4586 2115 41550 (61) 29385 16438 342890 453511 83088 16860 312151 412099 34153 15944 218980 269077 33763 Misc Total Fire Marine Misc Total Fire Marine Misc Total Fire Marine Misc Total 2005-06 2006-07 2005-06 ORIENTAL
PARTICULARS
Premiums earned (Net)
13632 188189 235584 48251 (131) 34124 17244 259062 317828 8531 174854 206474 706 10666 10340
Profit/ Loss on sale/redemption of Investments
Others
Interest, Dividend & Rent Gross
TOTAL (A)
Claims Incurred (Net)
Commission
Operating Expenses related to 28432 36 30 92436 12896 413736 519068 98630 1 99 129 139 2 373 514 11 183 230 606 230 3596 4432 106 5231 81596 115259 30556 5899 94234 130689 11340 5255 63 58828 1221 75423 1391 14160 143 36361 6189 66 64727 1292 85076 1500 15491 251538 303390
91
23302 10199 40172 73673 1957 5016 (3371) 23302 10199 40172 73673 1957 5016 (3371) 23302 10199 40172 73673 1957 5016 (3371)
Insurance Business
Others- Amortizations,Write offs & Provisions
Foreign Taxes
TOTAL (B)
18478 419356 536464 26070 21326 275265 322661
Operating Profit/(Loss) from
Fire/Marine/Miscellaneous 3602 14498 (1558) 16893 29834 5161 1753 7524 14438
Business C= (A - B)
APPROPRIATIONS 3602 14498 (1558) 16893 29834 5161 1753 7524 14438
Transfer to Shareholders Account
Transfer to Catastrophe Reserve
Transfer to Other Reserves 3602 14498 (1558) 16893 29834 5161 1753 7524 14438 Contd...
TOTAL (C )
Figures in brackets indicate negative amounts
Policy Holders Account : Public Sector Non-Life Insurers

(Rs. Lakh)
NATIONAL Total 276757 35727 11876 228715 276317 41867 10531 184926 237324 40808 10656 167969 219433 1236669 1143433 Fire 2005-06 Marine Misc Total Fire Total Fire Misc Total 2006-07 Marine Misc 2005-06 Marine TOTAL 2006-07 2005-06 UNITED
PARTICULARS
Fire
2006-07 Marine Misc
33836
10235 232685
Profit/Loss on sale/redemption of Investments 38774 36403 14926 298061 354862 8560 249815 283033 501 12231 14055 (1073) (358) 8207 6776 (1401) 31486 10886 171834 214206 18079 49069 14329 262597 325995 49663 41374 2896 1437 32632 36965 3568 1888 38446 43902 3932 1808 37827 75 75 (1) (13) 64 50 (10) 365 56 412 43567 44069 3252 1613 36639 41505 3634 1923 39161 44718 4933 2268 47458 54659 -
3892
1402
203249 214355 43 355 193470 172683
Others
3654
1317
TOTAL (A)
41383
12955 307863 362200 41875
15097 253310 318070 1633430 1530826 7268 178930 204277 1053875 1056985 220 7579 6398 67232 68421
Claims Incurred (Net) 566 13510 11405 1323
20645
10085 208692 239422 24658
Commission
(2672)
Operating Expenses related to 66065 80547 13145 3369 71747 88261 18041 5161 66243 89445 20988 4913 71765 97666 360674 401692
92
6203 12433 333793 385379 48785 6205 27 3 29 331 175 3567 4073 15864 249851 314500 13393 24622 2722 2493 (35732) (30517) 283 (1535) 12746 11495 13393 24622 2722 2493 (35732) (30517) 283 (1535) 12746 11495 13393 24622 2722 2493 (35732) (30517) 283 (1535) 12746 11495
Insurance Business
11076
3406
Others- Amortizations, 422 38089 194 4059 4675 11898 129 10636 514 12594 262333 313015 1493808 1538249
Write offs & Provisions
Foreign Taxes
TOTAL (B) Operating Profit/(Loss) from
29050
14058 294470 337578 39153
Fire/Marine/Miscellaneous 11574 2503 (9022) 5055 139622 (7423)
Business C= (A - B)
12332
(1103)
APPROPRIATIONS 11574 2503 (9022) 5055 139622 (7423)
Transfer to Shareholders Account 12332
(1103)
Transfer to Other Reserves 11574 2503 (9022) 5055 139622 (7423)
TOTAL (C )
12332
(1103)
STATEMENT 11
Share Holders Account : Public Sector Non-Life Insurers

(Rs. Lakh)
NEW INDIA 2006-07 2005-06 2006-07 2005-06 2006-07 2005-06 2006-07 2005-06 2006-07 2005-06 ORIENTAL NATIONAL UNITED TOTAL
PARTICULARS
OPERATING PROFIT/(LOSS) (a) Fire Insurance (b) Marine Insurance (c) Miscellaneous Insurance 23302 10199 40172 73673 1957 5016 (3371) 3602 14498 (1558) 16893 29834 5161 1753 7524 14438 12332 (1103) 13393 24622 2722 2493 (35732) (30517) 283 (1535) 12746 11495 11574 2503 (9022) 5055 50415 6003 83204 139623
21414 11765 (40601) (7422)
INCOME FROM INVESTMENTS (a) Interest, Dividend & Rent Gross (b) Profit on sale of investments Less : Loss on sale of investments 42086 44265 (74) 36424 43909 (6) 15732 16874 (21) 12169 17207 9702 10334 10602 11918 (14) 21206 21600 18547 23278 (9)
88726 93073 (95)
77742 96312 (29)
1509 161459
3864 87793
653 63071
671 44485
1332 45991
1095 (6917)
(299) 54001
393 47264
3196 324523
6023 172626
93
(76) 66 161393 15398 145995 85557 13919 71638 62964 13237 49727 2236 108 11066 33419 5028 28392 (546) 2 226 4 467 181 1027 408 45583 3455 42128 29200 4963 111832 13000 1823 56815 10000 1700 38027 5000 701 22690 8361 1421 32345
OTHER INCOME TOTAL (A) PROVISIONS (Other than taxation) (a) For diminution in the value of investments (b) For doubtful debts (c) Others 321 (313) 135 108 172 2502 12 (437) 305 (216) 10527 283 (751) (49) (3029) 729 -
23 569 -
(19) 789 -
(396) (231) 440
(3156) 12218 2785
OTHER EXPENSES (a) Expenses other than those related to Insurance Business (b) Bad debts written off (c) Others
151 1196 (953) (5964) 4661 (10625)
64 1312 1967 52034 (852) 52886
50 1170 1990 45274 2751 42523
245 2 2489 2549 321974 31238 290736
201 4 2287 14339 158286 26359 131927
TOTAL (B)
Profit Before Tax Provision for Taxation Profit after Tax
APPROPRIATIONS
(10625)
10577 1798 40511
8600 1206 32717
58139 9881 222716
26600 3731 101597
(a) Interim dividends paid during the year (b) Proposed final dividend (c) Dividend distribution tax (d) Transfer to any Reserves or Other Accounts Transfer to General Reserve Balance of Profit / Loss B/f from last year Balance C/f to Balance Sheet
STATEMENT 12 (Rs. Lakh)

NEW INDIA 2006-07 20000 582016 1094835 1221127 583314 670703 592101 681624 403248 495752 2673499 460803 192579 154552 133348 101002 260991 225740 1168934 20000 10000 10000 10000 10000 15000 10000 55000 50000 942097 3069206 2005-06 2006-07 2005-06 2006-07 2005-06 2006-07 2005-06 2006-07 2005-06 ORIENTAL NATIONAL UNITED TOTAL
Balance Sheet : Public Sector Non-Life Insurers (As on 31st March)
SOURCES OF FUNDS
Share Capital
Reserves & Surplus
Fair Value Change Account
Borrowings
Deferred Tax Liability 1696851 1701930 785894 835255 735449 792626 679239 731492 3897432 4061304
TOTAL
APPLICATION OF FUNDS 2107007 74545 13265 4056 6175 12106 7364 8460 6000 78652 41083 43269 41721 45913 6758 2066526 1086973 1126268 1063780 1094224 1059930 58675 9841 222 1080409 62982 7067 5317689 216025 36468 4278 5367427 230815 34391 6175
Investments
Loans
94
316227 224597 540824 760479 287128 1047606 1000628 611418 287154 199543 713474 411875 354576 174972 529548 528983 257041 176507 223012 108542 73831 305971 148499 102676 103139 145448 248587 460523 170119 630641 97149 136601 233750 447829 152357 600186 84974 114276 199250 472747 175932 648679 89048 116631 205680 471023 153623 624646 652840 592863 1245703 2105624 832721 2938344 594844 550076 1144920 1986902 768105 2755008 (506782) (471645) (354377) (353040) (382054) (366436) (449429) (418966) (1692642) (1610088) 4761 10116 4851 10298 6002 12168 15614 32583 1696851 1701930 785894 835255 735449 792626 679239 731492 3897432 4061304
Fixed Assets
Deferred Tax Assets
CURRENT ASSETS
Cash & Bank Balance
Advances and Other Assets
Sub-Total (A)
CURRENT LIABILITIES
Provisions
Sub-Total (B)
Net Current Assets (C)= (A-B)
Misc. Expenditure (to the extent not
written off or adjusted)
Profit & Loss Account (Debit Balance)
TOTAL
STATEMENT 13
Policy Holders Account : Private Sector Non-Life Insurers

(Rs. lakh) ROYAL SUNDARAM Fire 2920 5 3 179 3105 542 (1642) 318 10998 13640 10481 4903 (230) 1775 (97) (619) (6968) 619 19213 20374 16166 5009 3727 (124) 1270 387 1224 1881 194 (335) 1740 706 31987 33916 26028 325 2943 7921 5260 (2289) 900 31651 35657 26354 10863 2970 75 1976 2230 1337 1377 265 5002 77683 46828 (772) 28452 (487) 74021 3663 3 3 (84) (5) 201 2 58 66 70 188 36 683 908 112 6644 91517 55563 (7864) 34625 (100) 82223 9294 823 29614 33358 24944 9382 2674 71797 83853 Marine Misc. 2006-07 2005-06 Fire Marine Misc. 2006-07 2005-06 58637 382 705 2893 62616 40999 (6222) 20864 293 55934 6682 BAJAJ ALLIANZ
PARTICULARS
Others
TOTAL (A)
Commission
95
1881 194 (335) 1740 325 1881 194 (335) 1740 325
Operating Expenses related to Insurance Business 2324
Premium Deficiency
TOTAL (B)
Operating Profit/(Loss) C= (A - B)
APPROPRIATIONS 7921 (2289) 3663 9294 6682
Transfer to Other Reserves 7921 (2289) 3663 9294 6682 Contd...
TOTAL (C )
Note : Figures in brackets indicates negative amounts

(Rs. lakh) TATA AIG Fire 1489 15 14 176 1695 3327 35625 40647 30835 2665 654 22809 195 1753 2124 1794 194 24 994 4 45 63 101 5 5 1212 26128 414 5864 28 252 295 385 78 9 398 485 3099 33576 38165 28556 2394 621 21412 24426 5397 53 Marine Misc. 2006-07 2005-06 Fire Marine Misc. 2006-07 2005-06 RELIANCE
PARTICULARS
Others
TOTAL (A)
Claims Incurred (Net) (2778) 1386 16379 19355 15113 1218 (127) 1961 (944) (2102) (3916) (26) 319
635
2552
17524
20711
16015
1786
581
14951 (4001) 16555
17318 (7943) 18092
3444 (1395) 2724
Commission
Premium Deficiency (554) 3812 35864 39121 29026 (912) 874 27506 27468 4773
96
2249 (485) (239) 1525 1809 2249 (485) (239) 1525 1809 2249 (485) (239) 1525 1809
TOTAL (B)
3577
(220)
(4697)
(1340)
1091
APPROPRIATIONS 3577 (220) (4697) (1340) 1091
Transfer to Other Reserves 3577 (220) (4697) (1340) 1091 Contd...
TOTAL (C )

(Rs. lakh) IFFCO TOKIO Fire 5481 13 7 380 5874 2592 (5624) 2289 50 2177 3697 (3175) 1593 2115 (19345) 6555 47448 56180 56180 73 7385 2528 (1204) 109608 (3889) 112210 2292 56180 1804 12975 20473 15289 6939 43 1428 (4152) (4011) (9339) (1193) 2565 4222 33045 39859 24407 2474 1156 3380 49042 58295 36835 7458 1324 105719 77754 (8516) 40370 334 2699 3412 2180 324 69 4945 7 3 (8) (2) (123) (133) 5337 114502 81384 11 92 116 54 160 34 2439 2633 3035 46244 54760 34598 6982 1224 98459 106665 52768 3189 (49) 2076 57983 38925 (19048) (12573) 49873 29827 Marine Misc. 2006-07 2005-06 Fire Marine Misc. 2006-07 2005-06 ICICI LOMBARD
PARTICULARS
Others
TOTAL (A)
Commission
97
3697 (3175) 1593 2115 (19345) 3697 (3175) 1593 2115 (19345)
Premium Deficiency
TOTAL (B)
APPROPRIATIONS 7385 (1204) (3889) 2292 1804
Transfer to Other Reserves 7385 (1204) (3889) 2292 1804 Contd...
TOTAL (C )

(Rs. lakh) CHOLAMANDALAM Fire Marine Misc. 2006-07 2005-06 3180 12 9 327 3528 894 (1229) (301) (585) (2115) (2172) (234) (12) 730 484 892 5291 7077 6893 118 75 7810 8003 776 9383 13687 9580 201 101 14382 14684 14622 7973 780 64 524 915 659 23 6 727 756 720 1 2 11 45 21 (1) (144) (125) 55 (57) 22632 2 18 32 36 1 0 23 24 12 4557 709 8839 12728 8840 157 96 13776 14029 13835 367983 227575 4181 863 12071 Fire Marine Misc. 2006-07 2005-06 2006-07 2005-06 HDFC CHUBB TOTAL
PARTICULARS
Others
TOTAL (A)
395115 244690 250289 154822 (41679) (28312)
Commission
Operating Expenses related to 2073 24 1738 1790 (506) (532) 752 (854) 164 1282 9915 12934 10434 37 156 (55) 24 14689 (308) 14882 (198) 14521 101 667 5209 7949 5713 153 93 6149 6395 5767 170401 105779 (76) 343 378935 232632 16180 12059
Insurance Business
Premium Deficiency
98
1790 (506) (532) 752 (854) 164 (55) (308) (198) 101 16180 12059 1790 (506) (532) 752 (854) 164 (55) (308) (198) 101 16180 12059
TOTAL (B)
APPROPRIATIONS
Transfer to Other Reserves
TOTAL (C )
STATEMENT 14
Share Holders Account : Private Sector Non-Life Insurers

(Rs Lakh)
PARTICULARS
ROYAL BAJAJ TATA AIG RELIANCE IFFCO TOKIO ICICI-LOMBARD CHOLAMANDALAM HDFC GENERAL TOTAL SUNDARAM ALLIANZ 2006-07 2005-06 2006-07 2005-06 2006-07 2005-06 2006-07 2005-06 2006-07 2005-06 2006-07 2005-06 2006-07 2005-06 2006-07 2005-06 2006-07 2005-06 OPERATING PROFIT/(LOSS) 7921 (2289) 3663 4691 (586) 2577 2249 (485) (239) 2808 (367) (632) 3577 (220) (4697) 793 (397) 694 3697 (3175) 1593 4600 7385 (1278) (1204) (2222) (3889) 4813 (1204) (1806) 1790 (506) (532) (70) (345) (440) 164 (55) (308) (66) (19) 187 28663 (7739) (4744) 18723 (4419) (2245)
(a) Fire Insurance (b) Marine Insurance (c ) Miscellaneous Insurance
1881 194 (335)
1153 (224) (604)
INCOME FROM INVESTMENTS 2051 326 (46) 295 11920 86 244 2449 1379 1 2128 27 4322 (250) (36) 584 8376 (197) 23 3137 (234) 73 3053 (98) 20 8065 (40) 0 5488 (5) (153) 331 (152) 561 981 166 1526 260 1149 255 1070 428 918 118 2109 72 1316 33 3918 1933 1468 2256 605 21 573 36 662 21 602 10 12904 3089 7675 2909 (341) (315) 298 508 32130 22836
668 35
(1) 2 1030
(a) Interest, Dividend & Rent Gross 963 (b) Profit on sale of investments 29 Less : Loss on sale of investments (0) Other Income 1 TOTAL (A) 2733 Provisions (Other than taxation) (a) For diminution in the value of investments (b)For doubtful debts (c)Others 43 (209) 239
43 (209)
239
99
217 175 (2) 127 20 21 76 39 53 18 217 11703 4166 7537 8183 3026 5156 3305 1148 2157 2687 1326 1360 224 61 162 2107 671 1437 193 (168) 366 20 21 76 4246 1533 2713 39 2410 948 1462 53 8012 1176 6836 4384 880 150 880 123 615 342 12036 19573 12036 6879 (277) 1880 (1638) (277) 5078 5240 3641 5077 2979 4662 2520 2979 5320 6816
OTHER EXPENSES 35 81 81 452 494
(a) Expenses other than those related to Insurance Business (b) Bad debts written off (c) Others -preliminary & pre-operative,amortizations
15
8 35 5453 422 5031 1379 130 1249 (250) 62 (312) 81 250 50 200 81 480 39 441 294 31836 8863 22973
18 751 22085 6646 15438
TOTAL (B)
15
15
Profit Before Tax Provision for Taxation Profit After Tax
2718 600 2119
1015 151 863
A P P R O P R I AT I O N S 2325 326 4384 880 764 342 2325 880 450
(a) Interim dividends paid during the year (b) Proposed final dividend (c) Dividend distribution tax (d) Transfer to any Reserves or Deferred Tax of last year (e) catastrophe Reserve Balance of profit/ loss B/f from last year (1875) (2738)
2940 5320
(1571) (323)
(1259) (1571)
(3210) (3010)
(3651) (3210)
18479 35424
6695 18478
Balance C/f to Balance Sheet 244
(1875)
Note :Figures in brackets indicates negative amounts
STATEMENT 15 (Rs. Lakh)

BAJAJ ALLIANZ 2007 11013 29328 1 3 15000 44 41157 27674 24542 20225 26038 15719 29674 27990 93029 41678 14119 14196 6 12706 12491 240504 173933 204 16 816 967 162 680 98 442 (1241) 4386 (77) 6 2 15702 1880 15633 5078 7674 5990 45700 12792 100459 (237) 204 11005 22500 19500 10307 10200 22000 22000 33571 24500 14196 14196 2006 2007 2006 2007 2006 2007 2006 2007 2006 2007 2006 2007 2006 2007 2006 TATA AIG RELIANCE IFFCO-TOKIO ICICI-LOMBARD CHOLAMANDALAM HDFC GENERAL TOTAL
Balance Sheet : Private Sector Non-Life Insurers (As on 31st March)
SOURCES OF FUNDS
ROYAL
SUNDARAM
2007
2006
Share Capital
14000
14000
12491 12474 140078 127875 39562 6477 19
Reserves & Surplus
244
Fair Value Change Account
Borrowings
Others
Deferred Tax Liability
TOTAL
14244
14004
APPLICATION OF FUNDS 75802 52834 1 4978 1001 536 77 85 9 160 737 1232 561 3530 2953 2485 2889 341 1643 1608 8694 4730 1148 802 1458 909 43204 63315 21934 47381 36305 171047 90646 25435 21598 17814 18682 554333 344821 0 25224 2555 1 15712 1843
Investments
46466
36650 130041
Loans
100
22404 11183 33587 70169 58280 78655 47911 39300 47568 9756 37844 23351 19565 29759 3568 30836 59932 40811 24560 19735 17809 6188 29096 26461 16590 13557 7317 3192 40422 37530 16651 11309 9938 5502 2108 12466 9578 9810 5281 3619 1815 1084 27956 27951 34790 79642 114432 20677 124701 27513 77674 48190 202375 10779 57193 67972 83094 39137 122231 (54258) 277 41157 27674 24542 20225 26038 15719 29674 27990 93029 41678
Fixed Assets
1463
1307
Deferred Tax Asset
CURRENT ASSETS 3062 3963 7025 10362 9450 19812 1330 2210 3540 7485 5830 13315 2310 2622 4932 7723 6821 1541 102778 59462 1980 131514 103292 3521 234293 62755 6393 306906 201589 7538 257357 561598 14543 13930 564263 358187
Cash and Bank Balances
5161
3348
Advances and Other Assets
4827
3634
Sub-Total (A)
9988
6982
CURRENT LIABILITIES
22486
17206
Provisions
21186
15604
Sub-Total (B)
43673
32809 128449
NET CURRENT (12787) (9775) (9612) (10410) (329970) (195432) 35 99 35 99
ASSETS (C) = (A - B)
(33685) (25827) (94862) (52194) (31322) (25743) (40251) (6564) (19510) (10660) (87943)
Misc. Expenditure
(to the extent not written
off or adjusted) 323 14119 1571 14196 3010 3210 3333 6933 12706 12491 255510 173977
Profit & Loss Account
(Debit Balance)
1875
TOTAL
14244
14004
STATEMENT 16
GENERAL INSURANCE CORPORATION (GIC) POLICY HOLDER ACCOUNT

(Rs. Lakh) 2006-07 Fire Premiums earned (Net) Profit/ Loss on sale/redemption of Investments Others Interest, Dividend & Rent Gross TOTAL (A) Claims Incurred (Net) Commission Operating Expenses related to Insurance Business Foreign Taxes TOTAL (B) Operating Profit/(Loss) C = (A - B) APPROPRIATIONS Transfer to Shareholders Account Transfer to Catastrophe Reserve Transfer to Other Reserves TOTAL (C) 6047 (8132) 117405 90 115410 14039 3940 (34470) 43 (16448) 6047 (8132) 117405 90 115410 14039 3940 (34470) 43 (16448) 165275 6047 44775 (8132) 323972 117405 73 90 534094 135793 115410 14039 39507 396741 3940 (34470) 93 572133 43 (16448) 1646 13528 171323 105171 58681 1423 (546) 5060 36643 34497 10014 263 (1199) 50105 441377 222532 98317 3124 (0) 7 163 71 0 1 (98) 68700 (38) 12247 30 5401 82 42008 (0) 6 74 59661 145412 10737 Marine 28112 4016 Misc 352705 39765 Life 151 5 Total 2005-06 Fire Marine Misc Life Total
526380 127344 54523 10279
33484 284925 131 445884 4533 35256 50067
649505 149832 362271 167012 4811 92767 41505 1521
43447 362270 136 555686 31877 332615 7387 243 61379 2746 48 457307 22 110293 23 4533
Note : Figures in brackets indicate negative values
101
STATEMENT 17
GENERAL INSURANCE CORPORATION (GIC) SHARE HOLDERS ACCOUNT

(Rs. Lakh) PARTICULARS OPERATING PROFIT/(LOSS) (a) Fire Insurance (b) Marine Insurance (c) Miscellaneous Insurance (d) Life Insurance INCOME FROM INVESTMENTS (a) Interest, Dividend & Rent Gross (b) Profit on sale of investments Less: Loss on sale of investments 5694 183036 458 46302 34529 27403 33868 28424 6047 (8132) 117405 90 115410 14039 3940 (34470) 43 (16448) 2006-07 2005-06
OTHER INCOME TOTAL (A) PROVISIONS (Other than taxation) (a) For diminution in the value of investments (b) For doubtful debts (c) Others OTHER EXPENSES (a) Expenses other than those related Insurance business (b) Bad debts written off (c) Others TOTAL (B) Profit before Tax Provision for Taxation Profit after Tax APPROPRIATIONS (a) Interim dividends paid during the year (b) Proposed final dividend (c) Dividend distribution tax (d) Transfer to any Reserves or other Accounts (e) Transfer to General Reserve (f) Balance of Profit / Loss B/f from last year (g)Balance c/f to Balance Sheet
1793 (1339) 3636
374 (4750) 6384
4090 178946 25811 153134
2008 44294 (15558) 59852
30960 5262 116910 2 5
8600 1206 50050 6 2
102
STATEMENT 18
GENERAL INSURANCE CORPORATION (GIC) BALANCE SHEET (as on 31 st MARCH)

(Rs. Lakh) SOURCES OF FUNDS 2007 2006
Share Capital Reserves & Surplus Fair Value Change Account Borrowings Deferred Tax Liability TOTAL APPLICATION OF FUNDS Investments Loans Fixed Assets Deferred Tax Asset CURRENT ASSETS Cash & Bank Balance Advances and Other Assets Sub-Total (A) CURRENT LIABILITIES Provisions Sub-Total (B) Net Current Assets (C)= (A-B) Misc. Expenditure (to the extent not written off or adjusted) Profit & Loss Account (Debit Balance) TOTAL
43000 549826 982843
43000 432913 1031161
1575668
1507074
2290511 74910 4369 6179
2138083 75323 4276 16989
180375 296054 476429 872919 403811 1276730 (800301)
187645 220088 407732 872167 263162 1135329 (727597)
1575668
1507074
103
STATEMENT 19
POLICY HOLDERS ACCOUNT : EXPORT CREDIT GUARANTEE CORPORATION OF INDIA LTD (ECGC)
(Rs. Lakh) PARTICULARS Premiums earned (Net) Profit/ Loss on sale/redemption of Investments Others Interest, Dividend & Rent Gross TOTAL (A) Claims Incurred (Net) Commission* Operating Expenses related to Insurance Business Others- Amortizations,Write offs & Provisions Foreign Taxes TOTAL (B) Operating Profit/(Loss) from Fire/Marine/Miscellaneous Business C= (A - B) APPROPRIATIONS Transfer to Shareholders Account Transfer to Catastrophe Reserve Transfer to Other Reserves TOTAL (C ) Note : Figures in brackets indicate negative values * 2005-06 figures are revised 44887 27718 44887 27718 44887 27718 26089 36265 2006-07 59444 0 78 11454 70976 18711 (17) 7396 2005-06 54305 0 67 9611 63983 24964 (7) 11308
104
STATEMENT 20
SHAREHOLDERS ACCOUNT : EXPORT CREDIT GUARANTEE CORPORATION OF INDIA LTD (ECGC)

(Rs. Lakh) PARTICULARS OPERATING PROFIT/(LOSS) (a) Fire Insurance (b) Marine Insurance (c) Miscellaneous Insurance* INCOME FROM INVESTMENTS (a) Interest, Dividend & Rent Gross* (b) Profit on sale of investments Less: Loss on sale of investments 126 55174 417 34285 10161 0 6149 0 44887 44887 27718 27718 2006-07 2005-06
OTHER INCOME* TOTAL (A) PROVISIONS (Other than taxation) (a) For diminution in the value of investments (b) For doubtful debts (c) Others OTHER EXPENSES (a) Expenses other than those related to Insurance Business (b) Bad debts written off (c) Others TOTAL (B) Profit Before Tax Provision for Taxation Prior Period Adjustments Profit after Tax APPROPRIATIONS (a) Interim dividends paid during the year (b) Proposed final dividend (c) Dividend distribution tax (d) Transfer to any Reserves or Other Accounts Transfer to General Reserve Balance of Profit / Loss B/f from last year Balance C/f to Balance Sheet Note : Figures in brackets indicate negative values * 2005-06 figures are revised
28
28 55174 18908 (704) 36970 2500 10000 1403 23067 2 2 34257 12294 (100) 22176 1000 3435 482 17259 2 2
105
STATEMENT 21
BALANCE SHEET : EXPORT CREDIT GUARANTEE CORPORATION OF INDIA LTD (ECGC) (As on 31st March)
(Rs. Lakh) SOURCES OF FUNDS Share Capital Reserves & Surplus Fair Value Change Account Borrowings Deferred Tax Liability TOTAL APPLICATION OF FUNDS Investments Loans Fixed Assets CURRENT ASSETS Cash & Bank Balance Advances and Other Assets Sub-Total (A) CURRENT LIABILITIES Provisions Sub-Total (B) Net Current Assets (C)= (A-B) Deferred Tax Assets Misc. Expenditure (to the extent not written off or adjusted) Profit & Loss Account (Debit Balance) TOTAL 142914 109847 278382 10406 288788 115880 48540 164420 124368 1780 248671 10171 258842 116470 45121 161591 97251 1906 12094 4672 4672 402 5616 142914 109847 2007 80000 62914 2006 70000 39847
106
STATEMENT 22
POLICY HOLDERS ACCOUNT : AGRICULTURE INSURANCE COMPANY OF INDIA LTD (AIC)*

(Rs. Lakh) PARTICULARS Premiums earned (Net) Profit/ Loss on sale/redemption of Investments Others Interest, Dividend & Rent Gross TOTAL (A) Claims Incurred (Net) Commission Operating Expenses related to Insurance Business Others- Amortizations,Write offs & Provisions Foreign Taxes TOTAL (B) Operating Profit/(Loss) from Fire/ Marine/Miscellaneous Business C= (A - B) APPROPRIATIONS Transfer to Shareholders Account Transfer to Catastrophe Reserve Transfer to Other Reserves TOTAL (C ) Note : 1. Figures in brackets indicate negative values 2. For recognition of premium, the period is considered as June-May 3. * Acccounts as approved by Board and pending CAG audit. 6232 6567 6232 6567 6232 6567 56309 53236 6661 62541 55075 (0) 1023 211 4711 59803 51873 (24) 1217 169 2006-07 55876 4 2005-06 55092 -
107
STATEMENT 23
SHAREHOLDERS ACCOUNT : AGRICULTURE INSURANCE COMPANY OF INDIA LTD (AIC)

(Rs. Lakh) PARTICULARS OPERATING PROFIT/(LOSS) (a) Fire Insurance (b) Marine Insurance (c) Miscellaneous Insurance INCOME FROM INVESTMENTS (a) Interest, Dividend & Rent Gross (b) Profit on sale of investments Less: Loss on sale of investments 44 9127 56 8793 2849 2 2020 150 6232 6232 6567 6567 2006-07 2005-06
OTHER INCOME TOTAL (A) PROVISIONS (Other than taxation) (a) For diminution in the value of investments (b) For doubtful debts (c) Others OTHER EXPENSES (a) Expenses other than those related to Insurance Business (b) Bad debts written off (c) Others TOTAL (B) Profit Before Tax Provision for Taxation Profit after Tax APPROPRIATIONS (a) Interim dividends paid during the year (b) Proposed final dividend (c) Dividend distribution tax (d) Transfer to any Reserves or Other Accounts Transfer to General Reserve Balance of Profit / Loss B/f from last year Balance C/f to Balance Sheet Note : Figures in brackets indicate negative values
19 490 4 91 604 8523 3625 4898
73 91 358 522 8271 3091 5181
4898
5181
108
STATEMENT 24
BALANCE SHEET : AGRICULTURE INSURANCE COMPANY OF INDIA LTD (AIC) (As on 31st March)
(Rs. Lakh) SOURCES OF FUNDS Share Capital Reserves & Surplus Fair Value Change Account Borrowings TOTAL APPLICATION OF FUNDS Investments Loans Fixed Assets Deferred Tax Assets CURRENT ASSETS Cash & Bank Balance Advances and Other Assets Sub-Total (A) CURRENT LIABILITIES Provisions Sub-Total (B) Net Current Assets (C)= (A-B) Misc. Expenditure (to the extent not written off or adjusted) Profit & Loss Account (Debit Balance) TOTAL Note : Figures in brackets indicate negative values 38783 33718 74537 15957 90494 91997 29642 121639 (31145) 81252 13882 95135 95080 28643 123723 (28588) 69308 146 475 61813 34 459 38783 33718 2007 20000 18540 243 2006 19909 13642 167
109
STATEMENT 25
NET RETENTIONS OF THE NON-LIFE INDIAN MARKET (INCL GIC) 2006-07

(Per Cent)
Department Fire Marine Cargo Marine Hull Miscellaneous Engineering Motor Aviation Total
Net Retentions 65.72% 77.10% 18.30% 89.63% 72.89% 96.15% 21.93% 83.41%
110
STATEMENT 26
GROSS DIRECT PREMIUM INCOME IN INDIA

(Rs. Lakh) Marine 2006-07 20489 32102 34783 26395 113769 1844 1785 12826 7015 15524 7125 2656 241 49015 162784 28180 172 1700 9716 13832 370278 5433 84387 8571 114255 45444 53661 5235 15803 207894 873338 4788 27309 23982 4613 44890 37808 7189 4408 66497 15826 3860 1027 115136 331001 1074 45551 2652 6718 861 5184 3719 22465 9769 2111 455 49619 222075 1829 30339 23309 9612 5055 100229 699388 665444 215865 172456 336177 8185 22581 20440 18629 63248 34266 7143 3190 177681 513858 20397 123318 113816 46525 35926 87204 32511 173939 149536 44854 35972 85269 80003 80791 29978 203473 217450 76529 59157 98618 88601 17343 198658 184641 47957 41402 65085 60587 381442 501720 392852 349877 2005-06 2006-07 2005-06 2006-07 2005-06 2006-07 2005-06 Motor Health Others TOTAL 2006-07 2005-06 352367 479150 352711 315478 309982 1625890 1499706 6496 6871 15338 13153 50959 23226 5689 2983 124715 59820 91223 114447 71055 298907 178634 31173 19400 864657 45864 16233 89272 57270 158286 127229 22018 20094 536266 434697 2490547 2035972
Fire 2005-06 48394 83963 54689 64548 251594 9174 4776 26329 11627 30847 35140 7283 681 125859 377453
Company
2006-07
NATIONAL
49252
NEW INDIA
90998
ORIENTAL
54007
UNITED
66434
Sub-Total
260691
ROYAL SUNDARAM
9839
111
128409 1069666
RELIANCE
14588
IFFCO-TOKIO
29102
TATAAIG
13695
ICICI LOMBARD
39383
BAJAJ ALLIANZ
37031
CHOLAMANDALAM
7798
HDFC CHUBB
1110
Sub-Total
152547
Grand Total
413238
STATEMENT 27
NET PREMIUM INCOME (Earned)

(Rs. Lakh) Marine 2006-07 10235 16438 15944 10531 53148 823 621 3035 3099 1224 2674 709 96 12280 65428 62920 9896 50 11830 214476 793750 546 5195 2196 49254 33623 4208 11988 127112 676184 1164 55105 22253 2484 22888 17073 2974 30593 10639 884 500 58751 190470 1928 34613 20505 4656 427 14918 1791 3017 747 3037 2732 13873 7089 1103 301 31726 148605 1101 20673 15672 5487 2844 53024 579274 549072 131720 116879 268487 3454 3476 6975 7714 12761 11904 2760 1445 50490 318977 10656 94441 90437 32981 26127 57504 13632 132846 116683 32371 25408 53763 46098 51405 16860 198559 187407 30612 33536 113719 91208 11876 153428 154546 35756 31808 43501 42361 276757 453511 269077 237324 2005-06 2006-07 2005-06 2006-07 2005-06 2006-07 2005-06 Motor Health Others TOTAL 2006-07 2005-06 276317 412099 235584 219433 231073 1236669 1143433 2987 1075 4761 5182 11999 8330 1537 1338 37209 33358 24426 54760 38165 106665 83853 12728 14029 367983 24944 5397 34598 28556 52768 58637 8840 13835 227575 268282 1604652 1371009
Fire 2005-06 35727 83088 33763 40808 193386 2340 1357 4368 1085 3480 7399 1444 158 21632 215018
Company
2006-07
NATIONAL
33836
NEW INDIA
94184
ORIENTAL
34153
UNITED
41867
Sub-Total
204040
ROYAL SUNDARAM
2920
112
RELIANCE
2394
IFFCO TOKIO
5481
TATAAIG
1489
ICICI LOMBARD
6982
BAJAJ ALLIANZ
9382
CHOLAMANDALAM
3180
HDFC CHUBB
157
Sub-Total
31986
Grand Total
236027
STATEMENT 28
UNDERWRITING EXPERIENCE AND PROFITS OF PUBLIC SECTOR COMPANIES

(Rs.lakh) NEW INDIA 2006-07 475177 364361 76.68% 154348 32.48% 38.76% 29.65% 38.16% 32.20% 38.14% 38.04% 168317 85385 95416 91952 102316 96222 104063 46.75% 83.64% 81.91% 82.57% 83.85% 105.49% 84.68% 91.78% 363201 235886 206474 239422 283033 214206 204277 434265 287973 250047 285536 268300 252953 222585 2005-06 2006-07 2005-06 2006-07 2005-06 2006-07 2005-06 2006-07 2005-06 1301640 1175197 1053875 1056985 80.97% 427906 32.87% 89.94% 470113 40.00% ORIENTAL NATIONAL UNITED TOTAL
1.
NET PREMIUM
2.
Incurred Claims (Net)
3.
COMMISSION, EXPENSES OF
MANAGEMENT
4. 21666 4.56% 5.10% 6.56% 5.78% 3.07% -2.99% 22166 18897 14463 8780 (8017)
INCREASE IN RESERVE 15629 6.18% 3152 1.42% 64971 4.99% 31763 2.70%
FOR UNEXPIRED RISK
113
(65198) -14.38% 225507 208294 116010 111751 105480 -28.98% -19.40% -28.15% -19.73% (119419) (52194) (66306) (54617) (109032) -41.89% 100976 1084 161393 85557 62964 (3318) (853) (12026) 33419 (5280) 45583 2092 (5964) 15398 145995 71638 13919 13236.91 49727 5027 28392 3455 42128 4661 (10625)
5.
UNDERWRITING (73104) (88907) -30.80% -40.52% 131426 140042 (245112) (383664) -19.82% -33.55% 578423 561063
PROFIT/LOSS (1- 2- 3- 4)
6.
GROSS INVESTMENT INCOME
7.
OTHER INCOME (6288) 52034 (5860) 45274 (11337) 321974 (19112) 158286
LESS OTHER OUTGO
8.
PROFIT BEFORE TAX (5 + 6 +7)
9.
INCOME TAX DEDUCTED (852) 52886 2751 42523 31238 290736 26358 131928
AT SOURCE AND
PROVISION FOR TAX
10. NET PROFIT AFTER TAX (8 - 9)
Note: Figures in brackets indicates negative amounts
STATEMENT 29
UNDERWRITING EXPERIENCE AND PROFITS OF PRIVATE SECTOR COMPANIES

(Rs.lakh)
BAJAJ ALLIANZ LOMBARD CHUBB TATA AIG RELIANCE IFFCO-TOKIO ICICICHOLAMANDALAM HDFC TOTAL
ROYAL
SUNDARAM
2006-07 2005-06 2006-07 2005-06 2006-07 2005-06 2006-07 2005-06 2006-07 2005-06 2006-07 2005-06 2006-07 2005-06 2006-07 2005-06 2006-07 2005-06 69869 40999 20711 16015 17318 3444 39859 24407 81384 38925 7077 6893 8003 41582 33677 50431 5554 58057 47830 145077 73387 15926 9856 13311 14365 467316 284226 7973 250289 154822
1. 55563
NET PREMIUM
38955
29689 103976
2.
CLAIMS INCURRED
20374
16166
(NET) 26676 15341 18122 12593 10169 1350 16287 11250 30826 17255 5834 3541
52.30% 54.45% 53.44% 58.68% 49.81% 47.56% 34.34% 62.01% 68.66% 51.03% 56.10% 53.04% 44.43% 69.94% 60.12% 55.50% 53.56% 54.47% 6879 6547 128337 77740
3.
COMMISSION,
13543
9862
EXPENSES OF
34.77% 33.22% 25.66% 21.96% 43.58% 37.39% 20.16% 24.31% 28.05% 23.52% 21.25% 23.51% 36.63% 35.93% 51.68% 45.58% 27.46% 27.35%
MANAGEMENT 20123 8.22% 15.20% 51.57% 2.82% 11232 3418 5121 26006 157 3297 13232 38413 20619 3198 1016 (718) -5.39% 530 99333 56651 3.69% 21.26% 19.93%
4.
INCREASE IN
5597
4745
RESERVE FOR
14.37% 15.98% 19.35% 16.08%
5.68% 27.67% 26.48% 28.10% 20.08% 10.31%
UNEXPIRED RISK 1615 1.93% 8890 5204 3797 3012 3195 1503 5708 3583 3.92% -1.75% -0.18% -12.53% 11.17% -2.53% -3.06% 2297 (669) (52) (3062) 603 (1387) (1059) (5545) (3412) (183) (1594) -1.43% -18.04% 8892 1574 1300 (853) (685) (10642) -6.77% -4.95% 1463 1344 (4987) -2.89% -2.19% 41504 26947
114
13590 1198 682 177 (273) 91 1 (76) (115) (32.74) 11703 8183 3305 2687 224 2107 4246 2410 8012 4166 3026 1148 1326 61 671 1533 948 1176 7537 5157 2157 1361 163 1436 2713 1462 6836
5.
UNDERWRITING
(559)
(1084)
PROFIT/LOSS(1-2-3-4) -1.67%
-4.35%
-5.20% -6.47%
6.
GROSS INVESTMENT
3287
2109
INCOME (27) (12) 44 (359) (179) 975 123
7.
OTHER INCOME
(11)
(10)
LESS OTHER OUTGO 5453 1379 (250) 250 480 31837 22083
8.
PROFIT BEFORE
2718
1015
TAX (5+6+7) 422 130 62 50 39 8863 6645
9.
INCOME TAX
600
151
DEDUCTED AT
SOURCE AND
PROVISION FOR TAX
10. NET PROFIT 5031 1249 (312) 200 441 22974 15438
AFTER TAX (8-9)
2119
864
Note: Figures in Brackets indicates negative amounts
STATEMENT 30
INCURRED CLAIMS RATIO-PUBLIC SECTOR

Claims Incurred (Net) 2006-07 (Rs.Lakh) 56006 15939 20645 31486 124076 42785 534371 207837 144806 1053875 1056985 60.81 80.50 92.25 10886 90049 52787 10085 133293 47010 28390 239422 283033 61.01 15584 130377 42895 31091 235886 206474 46.67 97.75 98.14 132.51 57.83 87.66 6230 180653 65146 56327 364361 363201 59.46 37.90 90.98 212.81 49.53 80.34 (Per cent) 88.13 87.64 2005-06 Fire Marine Motor Health Others 2006-07 2005-06 Fire Marine Motor Health Others 2006-07 2005-06 Incurred Claims Ratio
PARTICULARS Others
Net Earned Premium
Fire Marine
Motor
Health
(Rs. Lakh)
NEW INDIA 53763 269077 235584 43501 276757 276317 57504 268487 1236669 1143433 237324 219433
94184 16438 198559
30612 113719 453511 412099
ORIENTAL
34153 15944 132846
32371
NATIONAL
33836 10235 153428
35756
98.53 86.88 131.47 65.26 86.51 102.43 93.09 157.79 53.93 85.22 92.44
UNITED
41867 10531
94441
32981
28998 214206 204277 75.21 103.36 95.35 160.05 50.43 90.26
TOTAL
204040
53148
579274
131720
115
STATEMENT 31
INCURRED CLAIMS RATIO-PRIVATE SECTOR

Claims Incurred (Net) 2006-07 (Rs.Lakh) 3454 11904 7714 3476 6975 12761 106665 2760 1445 50490 367983 227575 14048 13824 137869 60761 14029 13835 118 75 6995 436 379 8003 7973 12728 8840 894 892 3883 703 705 7077 6893 52768 2474 1156 33463 36313 7979 81384 38925 35.43 54760 34598 2592 4222 22395 7119 3531 39859 24407 24426 5397 1786 581 9149 3410 2392 17318 3444 74.62 38165 28556 635 2552 13695 1835 1994 20711 16015 42.62 83853 58637 5009 3727 33010 8367 5451 55563 40999 33358 24944 542 619 15280 2578 1355 20374 16166 18.54 (Per cent) 75.14 73.91 46.99 39.23 61.08 64.81 2005-06 Fire Marine Motor Health Others 2006-07 2005-06 Fire Marine Motor Health Others 2006-07 2005-06 Incurred Claims Ratio
PARTICULARS Health Others
Net Earned Premium
Fire
Marine
Motor
(Rs. Lakh) 5487 10639 2974 3017 4656 30593 884 500 58751
ROYAL SUNDARAM
2920
823
20673
BAJAJ ALLIANZ
9382
2674
49254
53.39 139.37 67.02 78.64 45.79 66.26 69.92 82.35 59.83 61.69 25.85 54.27 56.08 93.63 61.33 113.01 68.82 70.90 63.80
TATA AIG
1489
3099
22888
RELIANCE
2394
621
14918
IFFCO TOKIO
5481
3035
34613
47.29 139.13 64.70 152.89 50.62 72.79 70.54 94.46 60.73 118.70 62.52 76.30 73.77
ICICI LOMBARD
6982
1224
55105
CHOLAMANDALAM
3180
709
5195
28.10 125.78 74.75 79.51 25.56 55.60 77.98 74.85 78.44 59.13 87.10 26.26 57.05 57.63 43.92 112.57 64.28 103.42 47.11 68.02 68.03
HDFC CHUBB
157
96
11830
116
TOTAL
31986
12280 214476
23787 250289 154822
STATE0MENT 32
EQUITY SHARE CAPITAL OF INSURANCE COMPANIES

(Rs. Crore) Name of the insurer Life Insurers HDFC Standard Life Insurance Co. Ltd. ICICI-Prudential Life Insurance Co. Ltd. Max New York Life Insurance Co. Ltd. Kotak Mahindra Old Mutual Life Insurance Co. Ltd. Birla Sun Life Insurance Co. Ltd. TATA-AIG Life Insurance Co. Ltd. SBI Life Insurance Co. Ltd. ING Vysya Life Insurance Co. Ltd. Metlife India Insurance Co. Pvt. Ltd. Bajaj Allianz Life Insurance Co. Ltd. Reliance Life (formely AMP Sanmar) AVIVA India Life Insurance Co. Pvt. Ltd. Sahara India Life Insurance Co. Ltd. Shriram Life Insurance Co.Ltd. Bharti AXA Life Insurance Co.Ltd. $ Sub Total (Private Sector) Life Insurance Corporation of India Total (Life) Non life insurers Royal Sundaram Alliance Insurance Co. Ltd. Reliance General Insurance Co. Ltd. Bajaj Allianz General Insurance Co. IFFCO-TOKIO General Insurance Co. TATA AIG General Insurance Co. Ltd. ICICI Lombard General Insurance Co. HDFC General Insurance Co. Cholamandalam MS General Insurance Co. Ltd. Sub Total (Private Sector) United India Insurance Co. Ltd. The New India Assurance Co. Ltd. The Oriental Insurance Co.Ltd. National Insurance Co. Ltd. Sub Total (Public Sector) Total (Non Life) Export Credit Guarantee Corporation. Agriculture Insurance Company of India. Star Health & Allied Insurance Co.Ltd. General Insurance Corporation of India GRAND TOTAL Note : $ Granted registration in 2006-07 117 140.00 102.00 110.05 220.00 195.00 245.00 125.00 141.96 1279.01 100.00 200.00 100.00 100.00 500.00 1779.01 700.00 200.00 105.00 430.00 9106.06 140.00 103.07 110.13 220.00 225.00 335.71 125.00 141.96 1400.87 150.00 200.00 100.00 100.00 550.00 1950.87 800.00 200.00 105.00 430.00 11610.28 36.40 28.63 57.20 58.50 87.10 32.50 36.91 337.24 337.24 27.28 2174.28 103.60 103.07 81.50 162.80 166.50 248.61 92.50 105.05 1063.63 150.00 200.00 100.00 100.00 550.00 1613.63 800.00 200.00 77.72 430.00 9436.00 18.73% 25.98% 17.29% 26.00% 0.00% 26.00% 26.00% 26.00% 25.95% 26.00% 26.00% 24.07% 620.00 1185.00 557.43 244.58 460.00 447.00 425.00 490.00 235.00 150.23 331.00 458.70 157.00 125.00 1.10 5887.05 5.00 5892.05 801.26 1312.30 732.43 330.35 671.50 547.00 500.00 690.00 530.00 150.37 664.00 758.20 157.00 125.00 150.00 8119.41 5.00 8124.41 126.78 340.57 190.43 85.89 174.59 142.22 130.00 179.40 137.80 39.10 197.13 32.50 33.33 1809.75 1809.75 674.48 971.73 542.00 244.46 496.91 404.78 370.00 510.60 392.20 111.27 664.00 561.07 157.00 92.50 116.67 6309.66 5.00 6314.66 22.28% 15.82% 25.95% 26.00% 26.00% 26.00% 26.00% 26.00% 26.00% 26.00% 26.00% 0.00% 26.00% 0.00% 26.00% 22.22% 22.29% 2005-06 2006-07 Foreign Promoter Indian Promoter FDI (%)
STATEMENT 33
FEE STRUCTURE FOR INSURERS AND VARIOUS INTERMEDIARIES

Sl. No. 1 Insurers / Intermediary Insurers (Life/Non life/ Reinsurance Processing Fee Registration Fee Rs. 50,000 Renewal Fee 1/10th of 1 per cent of Gross Direct Premium written in India subject to minimum of Rs. 50,000 and maximum of Rs. 5 crore Rs. 30,000 Periodicity of Renewal Every year (by 31st December)
Third Party Administrators Brokers Direct Broker
Rs. 20,000
Rs. 30,000
3 years
Rs. 20,000
A sum calculated at the rate of 0.50 per cent of remuneration erned in the preceding financial year subject to minimum of Rs.25,000 and maximum of Rs, 1,00,000 A sum calculated at the rate of 0.50 per cent of remuneration earned in the preceding financial year subject to minimum of Rs. 75,000 and maximum of Rs. 3,00,000. A sum calculated at the rate of 0.50 per cent of remuneration earned in the preceding financial year subject to minimum of Rs. 1,25,000 and maximum of Rs. 5,00,000
3 year
Reinsurance Broker
Rs. 25,000
3 years
Composite Broker
Rs. 40,000
3 years
Surveyors and Loss Assessors Individual Category
A B C
Rs.10,000 Rs. 7,500 Rs. 5,000 Rs. 25,000 Rs. 20,000 Rs. 15,000 Rs. 250 for corporate insurance executive Rs. 500 for specified person 118
Rs. 200 for every category
5 years
Corporate Category
A B C
Rs. 200 for every category
5 years
Corporate Agents
Rs. 250
3 years
STATEMENT 34 (Rs. Crore)
FUND WISE PATTERN OF INVESTMENTS OF LIFE INSURERS (AS ON 31ST MARCH)

LIFE FUND
SG & OAS (INCL C.G.SEC) EXPOSURE NORMS (INCL. OTAI) 2006 272578.68 241103.52 67616.17 48182.22 113245.21 100161.78 29443.19 2007 2006 2007 2006 2007 2006 2007 2006 2007 (OTAI) 2007 INVESTMENTS SOCIAL SECTOR SUBJECT TO APPROVED (LIFE FUND) INFRASTRUCTURE / INVESTMENT OTHER THAN TOTAL
INSURER
C.G.SEC
PUBLIC SECTOR
2007
LIC (A)
227676.79
197419.39
26286.06 453440.06 389447.52
PRIVATE SECTOR 463.82 505.97 683.64 141.95 511.43 128.97 758.38 403.04 127.20 95.80 196.16 128.91 48.42 65.25 0.00 4258.93 279308.95 245477.93 6730.27 4374.41 2220.61 62.06 0.00 24.51 73.63 65.25 34.96 81.17 90.52 29.99 28.37 34.95 0.00 1456.23 222.71 128.91 80.09 38.15 303.16 196.16 99.45 75.93 148.63 95.80 48.30 34.34 91.09 192.59 89.62 47.61 36.94 29.66 3164.35 256.68 127.20 104.65 43.87 90.56 755.25 403.04 245.35 141.91 507.22 1107.23 780.18 400.19 264.96 600.07 500.76 178.15 37.60 33.84 99.64 51.24 26.80 29.55 0.00 1910.49 255.03 180.53 77.87 59.99 113.12 98.02 863.21 511.43 202.70 121.50 88.00 91.37 193.40 141.95 74.40 41.97 105.73 68.72 20.86 3.41 8.97 168.15 72.45 32.91 24.88 53.29 0.00 9.63 13.86 2.00 605.42 973.67 683.64 308.39 226.11 550.47 404.34 108.00 708.82 505.97 238.93 130.90 214.40 57.03 62.01 725.61 463.82 250.86 213.28 407.27 233.43 25.01 14.82 29.80 67.37 7.25 4.69 1.98 167.70 30.94 17.69 6.00 49.01 4.94 2.71 7.59 7.59 420.09 1383.73 1162.15 1832.53 373.53 1153.91 446.01 2107.48 1507.82 451.89 288.02 595.20 392.42 158.77 145.53 116.24 12115.24 910.53 693.90 1314.09 252.64 724.30 338.54 1545.91 723.10 208.67 163.98 371.73 218.29 145.69 129.75 0.00 7741.13 26706.15 465555.30 397188.65
HDFC STD LIFE
464.02
MNYL
695.95
ICICI PRU
973.67
BSLI
193.40
TATA AIG
863.21
KOTAK LIFE
200.29
119
SBI LIFE
931.78
BAJAJ ALLIANZ
616.95
METLIFE
256.68
RELIANCE LIFE $
123.05
ING VYSYA
287.39
AVIVA
222.71
SAHARA LIFE
47.11
SHRIRAM LIFE
73.63
BHARATHI AXA
37.66
TOTAL (B)
5987.52
TOTAL (A+B)
233664.31
201678.32
69836.78 49638.45 116409.57 102072.27 30048.61
Note:
Contd...
1) CG - SEC - Central Governmnt Securities
2) OTAI - Other than Approved Investments
3) OAS - Other Approved Securities
4) SG - State Government Securities
5) The figures filed with IRDA are based on provisional Returns in the case of LIC of India
6) $ Formerly known as AMP Sanmar

(Rs. Crore)
PENSION AND GENERAL ANNUITY FUND

CG - SEC CG - SEC
2006 2007 2006 2007 2006 2007 2006
INSURER
SG & OAS INCL. EXPOSURE NORMS
INVESTMENT SUBJECT TO
TOTAL (PENSION FUND)
PUBLIC SECTOR
2007
LIC (A) 0.00
18711.51
18987.86
28590.93
28881.26
6471.35
7276.38
35062.29
36157.64
PRIVATE SECTOR 215.39 14.79 184.53 0.15 72.93 9.12 90.86 18.12 0.36 50.38 37.85 0.00 0.32 0.00 0.00 694.79 19682.65 0.00 0.00 1012.17 29603.10 0.37 0.00 47.24 37.85 0.00 0.32 0.00 0.00 723.18 29604.44 0.00 50.38 0.35 0.36 25.71 18.12 328.27 117.26 434.20 3.50 0.08 0.00 56.76 0.00 0.08 0.00 0.00 989.11 7460.47 13.10 11.12 12.10 83.61 72.93 47.22 0.09 0.15 0.01 0.00 23.69 9.56 160.49 0.00 0.08 39.21 37.11 0.00 0.00 0.00 0.00 383.46 7659.84 286.44 184.53 253.29 60.02 19.76 14.79 2.27 1.06 207.21 215.39 179.61 52.24 386.82 22.03 539.73 0.10 130.83 25.20 762.47 29.21 0.43 0.00 104.01 0.00 0.45 0.00 0.00 2001.28 37063.57 267.63 15.85 244.55 0.16 96.62 20.68 277.75 18.12 0.44 89.58 74.96 0.00 0.32 0.00 0.00 1106.65 37264.29 Contd...
HDFC STD LIFE
161.26
MNYL
19.76
ICICI PRU
286.44
BSLI
0.09
TATAAIG
83.61
120
KOTAK LIFE
11.10
SBI LIFE
239.99
BAJAJ ALLIANZ
25.06
METLIFE
0.35
RELIANCE LIFE $
0.00
ING VYSYA
43.18
AVIVA
0.00
SAHARA LIFE
0.32
SHRIRAM LIFE
0.00
BHARATHI AXA
0.00
TOTAL (B)
871.16
TOTAL (A+B)
19582.67

(Rs. Crore)
GROUP EXCLUDING GROUP PENSION AND ANNUITY FUND

CG - SEC CG - SEC 2006 16665.46 26222.84 21231.45 8223.14 5506.08 34445.98 2007 2006 2007 2006 2007 2006 26737.53 EXPOSURE NORMS SG & OAS INCL. INVESTMENT SUBJECT TO TOTAL (GROUP FUND)
INSURER
PUBLIC SECTOR
2007
LIC (A)
21807.89
PRIVATE SECTOR 0.00 3.76 0.00 0.00 40.69 3.52 0.00 8.00 5.76 0.00 0.00 0.76 0.06 0.00 0.00 62.55 16728.01 0.00 0.02 52.37 26275.21 0.77 3.05 0.00 0.00 1.54 0.06 0.00 0.00 63.33 21294.78 0.00 0.00 11.84 5.76 21.50 8.00 2.05 0.53 0.00 0.00 2.38 0.00 0.00 0.00 12.79 8235.93 0.00 0.00 0.00 11.44 3.52 5.42 0.00 40.69 0.00 0.00 0.48 0.00 5.82 0.53 0.00 0.00 0.77 0.00 0.00 0.00 8.77 5514.85 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 3.74 3.76 2.40 1.16 0.00 0.00 0.00 0.00 0.00 6.14 0.00 0.00 0.00 16.86 0.00 23.55 12.37 0.00 0.00 5.44 0.77 0.00 0.02 65.16 34511.13 0.00 4.92 0.00 0.00 40.69 4.00 0.00 13.82 6.29 0.00 0.00 2.32 0.06 0.00 0.00 72.09 26809.62 Contd...
HDFC STD LIFE
0.00
MNYL
3.74
ICICI PRU
0.00
BSLI
0.00
TATAAIG
0.00
121
KOTAK LIFE
9.40
SBI LIFE
0.00
BAJAJ ALLIANZ
15.67
METLIFE
11.84
RELIANCE LIFE $
0.00
ING VYSYA
0.00
AVIVA
3.05
SAHARA LIFE
0.24
SHRIRAM LIFE
0.00
BHARATHI AXA
0.02
TOTAL (B)
43.96
TOTAL (A+B)
21851.85

(Rs. Crore)
UNIT LINKED FUND

OTAI (UNIT LINKED FUND) 2006 10269.86 6065.41 1158.59 36252.24 11428.45 559200.56 2007 2006 2007 2006 2007 2006 463771.14 (ALL FUNDS) TOTAL TOTAL
INSURER
APPROVED INVESTMENTS
PUBLIC SECTOR
2007
LIC (A)
30186.83
PRIVATE SECTOR 1396.26 142.33 5270.23 1862.92 325.79 750.35 193.27 2325.67 50.52 93.25 214.12 490.87 15.57 0.00 0.00 13131.15 23401.01 2.73 1.39 0.83 3397.15 9462.56 104.09 96.89 31.56 41.27 0.21 0.00 0.00 1328.53 2487.12 117.11 6.09 53.36 0.00 765.82 243.65 324.84 18.06 1645.75 4770.60 294.84 916.81 556.82 1177.21 38.53 84.78 4.50 30797.56 67049.80 75.80 10.26 1296.80 148.61 34.95 851.78 191.70 235.13 3377.93 2098.05 360.74 760.61 211.33 2569.32 50.52 99.34 245.68 532.15 15.79 0.00 0.00 14459.68 25888.13 1121.56 656.63 11926.47 5926.86 113.77 28.85 649.60 171.18 278.65 21.86 3205.13 1418.13 4975.68 1839.92 14298.73 3751.57 2136.52 1784.88 4515.70 6331.18 759.54 1204.84 1256.03 1575.06 198.53 230.31 120.75 44979.24 604179.80 2596.29 885.85 7485.50 2350.85 1222.35 1123.82 2034.98 3324.36 265.92 352.90 692.36 752.76 161.86 129.75 0.00 23379.55 487150.69
HDFC STD LIFE
2926.48
MNYL
535.83
ICICI PRU
10804.91
BSLI
3186.23
TATAAIG
703.17
122
KOTAK LIFE
1221.00
SBI LIFE
1320.91
BAJAJ ALLIANZ
4004.78
METLIFE
241.48
RELIANCE LIFE $
799.70
ING VYSYA
459.93
AVIVA
1073.12
SAHARA LIFE
35.80
SHRIRAM LIFE
83.39
BHARATHI AXA
3.68
TOTAL (B)
27400.41
TOTAL (A+B)
57587.24
STATEMENT 35
PATTERN OF INVESTMENTS OF NON- LIFE INSURERS (AS ON 31ST MARCH 2007)

(Rs.Crore) SG & OAS (INCL. C.G. SEC) (INCL. OTAI) 2006 2788.83 4819.62 1983.17 2790.64 2545.53 16606.43 200.79 174.04 284.56 314.22 439.14 617.42 31.49 133.27 75.42 2260.44 18866.87 16740.17 3742.06 3106.88 1589.67 551.27 320.05 67.53 75.42 15.04 15.24 25.30 1051.76 6102.33 131.25 133.27 25.54 25.59 40.47 24.80 9.84 40.67 25.73 566.88 381.59 164.13 64.15 400.14 135.52 294.35 97.17 73.75 160.97 87.33 238.03 37.02 40.71 74.16 59.81 102.93 721.92 688.42 27.38 57.11 70.27 2348.59 4979.95 21671.55 16.44 70.43 1322.82 17491.93 245.11 73.85 40.50 114.90 76.93 259.66 147.40 59.64 44.74 129.92 110.40 138.68 78.63 244.71 94.48 341.83 377.33 74.51 54.07 15.36 96.06 30.49 282.22 98.98 15150.50 3190.80 2786.84 5050.57 4413.07 19322.96 16169.11 2213.95 279.97 279.95 689.70 527.16 2625.00 2227.62 413.48 3685.23 53.31 5.17 0.00 8.83 39.96 68.02 0.00 9.51 14.26 199.07 3884.30 5.44 16.37 148.06 4078.54 2855.58 433.89 391.94 730.03 684.55 3336.92 2720.33 806.98 1942.02 524.05 486.32 836.83 719.87 2035.99 1536.89 401.62 409.97 733.83 591.65 3930.48 35.04 13.81 0.00 2.87 25.81 48.71 4165.65 906.26 616.78 1279.13 1206.33 4004.34 3414.77 477.70 611.31 4467.47 3973.30 1046.63 1011.85 1514.88 1275.16 7320.71 6269.50 1585.45 1583.72 14349.68 11009.35 5380.04 7291.49 6140.19 44170.75 633.15 502.29 732.97 528.34 1419.20 1870.10 93.51 254.37 178.14 6212.06 50382.81 215.98 186.82 3799.43 42318.95 2007 2006 2007 2006 2007 2006 2007 2006 2007 2006 2007 (OTAI) 2006 12529.81 9403.53 4685.10 6652.41 5248.68 38519.52 219.34 381.16 607.25 433.04 797.26 958.58 LOANS TO HOUSING & FFE INFASTRUCTURE E & SOCIAL SECTOR INVESTMENT SUBJECT TO EXPOSURE NORMS OTHER THAN APPROVED INVESTMENTS TOTAL INVESTMENTS
NAME OF THE INSURER
C.G. SEC
2007
GIC
2996.84
NEW INDIA
3349.40
2825.93
NATIONAL
1399.82
1345.88
UNITED
1653.16
1653.75
ORIENTAL 74.51 132.32 245.11 198.27 294.35 210.34
1928.93
1692.39
PUBLIC SECTOR (A)
11328.16
10306.79
RELIANCE
190.69
ROYAL SUNDARAM
134.22
123
IFFCO TOKYO
284.56
TATA AIG GENERAL
314.22
BAJAJ ALLIANZ
374.69
ICICI LOMBARD
374.77
STAR HEALTH
31.49
CHOLAMANDALAM
131.25
HDFC GENERAL
67.53
PRIVATE SECTOR (B)
1903.42
1363.58
TOTAL (A+B)
13231.57
11670.37
Note: 1. Investments of Agriculatural Insurance Corporation of India, ECGC and CHNHB Association have not been included 2. The figures filed by National Insurance Company are based on Provisional Returns
3. 4. 5. 6.
CG-SEC - Central Government Securities OAS - Other Approved Securities SG - State Government Securities FEE - Fire Fighting Equipment
STATEMENT 36
STATUS OF GRIEVANCES - LIFE INSURERS (2006-07)

Sl. No. Insurer Reported during the year 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 AVIVA BAJAJ ALLIANZ BSLI HDFC STD LIFE ICICI PRU ING VYSYA KOTAK LIFE LIC MNYL MET LIFE RELIANCE LIFE SAHARA LIFE SBI LIFE SHRIRAM LIFE TATAAIG TOTAL 43 145 29 31 84 12 23 354 22 6 10 1 68 1 32 861 Resolved during the year 33 125 27 30 71 9 17 157 15 3 4 1 45 1 24 562 Pending as on 31st March, 2007 10 20 2 1 13 3 6 197 7 3 6 0 23 0 8 299
124
STATEMENT 37
STATUS OF GRIEVANCES NON-LIFE INSURERS (2006-07)

Sl.NO INSURER AS ON MARCH, 06 REPORTED DURING THE YEAR RESOLVED DURING THE YEAR (i) 1 2 3 4 5 6 7 8 9 10 11 12 13 14 ORIENTAL NEW INDIA UNITED NATIONAL ECGC BAJAJ ALLIANZ TATAAIG ROYAL SUNDARAM IFFCO TOKIO RELIANCE CHOLAMANDALAM ICICI LOMBARD HDFC GENERAL AIC TOTAL (i) (ii) (iii) (iv) POLICY RELATED ISSUES NON SETTLEMENT / DELAY IN SETTLEMENT OF CLAIM REPUDIATION / PARTIAL SETTLEMENT OF CLAIM OTHER REASONS 38 148 196 168 0 2 9 0 0 0 0 4 0 0 565 164 336 286 322 1 75 85 54 28 13 13 228 13 0 1618 181 295 347 318 1 72 60 45 20 6 10 195 10 0 1560 21 189 135 172 0 5 34 9 8 7 3 37 3 0 623 10 69 36 39 0 0 30 2 1 3 2 17 2 0 211 AS ON MARCH, 07 BREAK UP ACCORDING TO NATURE OF GRIEVANCE* (ii) 8 78 67 99 0 2 2 3 5 3 1 15 1 0 284 (iii) 0 38 23 26 0 1 2 4 1 0 0 4 0 0 99 (iv) 3 4 9 8 0 2 0 0 1 1 0 1 0 0 29
125
STATEMENT 38
STATUS OF GRIEVANCES NON-LIFE INSURERS (HALF YEAR ENDED SEPTEMBER, 2007)

As on 31st March, 2006 (i) 21 189 135 172 0 5 34 9 8 7 3 37 3 0 623 966 631 0 0 7 6 4 0 958 192 154 75 9 7 5 38 23 22 32 18 22 7 8 2 43 3 0 344 34 31 12 3 63 62 35 31 48 39 14 9 2 2 4 8 9 2 19 1 0 416 8 5 3 3 0 172 101 243 55 138 122 36 221 61 108 39 38 0 3 2 4 6 4 1 10 0 0 153 113 94 208 73 88 42 128 55 94 46 35 4 9 5 13 12 0 0 0 1 1 1 0 3 0 0 45 (ii) (iii) (iv) Reported during the period Resolved during the period As on 30st Sept., 2007 Break up of
SI. No.
Insurer
ORIENTAL
NEW INDIA
UNITED
NATIONAL
ECGC
BAJAJ ALLIANZ
TATAAIG
ROYAL SUNDARAM
126
IFFCO TOKIO
10
RELIANCE
11
CHOLAMANDALAM
12
ICICI LOMBARD
13
HDFC GENERAL
14
AIC
TOTAL
(i)
Policy Related Issues (Non Renewal/Cancellation/Non Insurance/Other Issues Related to Policy)
(ii)
Non Settlement / Delay in Settlement of Claim
(iii)
Repudiation/Partial Settlement of Claim
(iv)
Other Reasons
STATEMENT 39
THIRD PARTY ADMINISTRATORS - CLAIMS DATA : 2006-07

Sl.No. Name No.of Claims Received 431725 351055 241994 157204 150102 104704 88276 65358 64044 63067 38123 31461 13245 11552 10291 8805 7069 1513 597 86 23 4 Nill Nill Nill Nill 1840298 Within 1 month 309977 (71.80) 302777 (86.25) 217575 (89.91) 88771 (56.47) 145724 (97.08) 68111 (65.05) 73692 (83.48) 52923 (80.97) 33905 (52.94) 49098 (77.85) 15736 (41.28) 14010 (44.53) 6439 (48.61) 8410 (72.80) 6324 (61.45) 6617 (75.15) 5145 (72.78) 1050 (69.40) 490 (82.08) 15 (17.44) 23 (100.00) 3 (75.00) 1406815 (76.44) No.of Claims Settled Within Within 3-6 1-3 months months 64759 (15.00) 7272 (2.07) 23299 (9.63) 36300 (23.09) 139071 (92.65) 19838 (18.95) 10438 (11.82) 8809 (13.48) 13587 (21.22) 1248 (1.98) 16268 (42.67) 14508 (46.11) 4571 (34.51) 2410 (20.86) 3071 (29.84) 121 (1.37) 1394 (19.72) 310 (20.49) 7 (1.17) 17 (19.77) Nill Nill 367298 (19.96) Nill 163 (0.05) 5948 (2.46) 5223 (3.32) 6653 (4.43) 8557 (8.17) 4099 (4.64) 755 (1.16) 3968 (6.20) 217 (0.34) 3423 (8.98) 4219 (13.41) 862 (6.51) 276 (2.39) 93 (0.90) 19 (0.22) 198 (2.80) 30 (1.98) Nill 8 (9.30) Nill Nill 44711 (2.43) More than 6 months Nill 33 (0.01) 2508 (1.04) 1312 (0.83) Nill 2585 (2.47) 47 (0.05) 84 (0.13) 1889 (2.95) Nill 796 (2.09) 796 (2.53) 80 (0.60) 27 (0.23) Nill 39 (0.44) 88 (1.24) 6 (0.40) Nill 1 (1.16) Nill Nill 10291 (0.56)
1.
Family Health Plan Ltd.
2. Paramount Health Services Pvt. Ltd. 3. TTK Healthcare Services Limited 4. Medi Assist India Private Limited 5. E Meditek Solutions Limited 6. Genins India Limited
7. Raksha TPA Private Limited 8. Medicare TPA Services (I) Pvt. Ltd 9. Med Save Health Care Limited 10. MD India Healthcare Services (P) Ltd. 11. Vipul Medcrop Private Limited 12. Heritage Health Services
13. Bhaichand Amoluk Ins. Services Pvt. Ltd. 14. Alankit Healthcare 15. Parekh Health Management
16. Park Mediclaim Consultants Pvt. Ltd 17. 18. Good Health Plan Limited Universal Mediaid Services Limited
19. Dedicated Healthcare Services (India) Pvt Ltd 20. East West Assist Private Limited
21. Anyuta Medinet Healthcare Private limited 22. Safeway Mediclaim Services 23. 24. 25. 26. Anmol Medicare Limited Focus Healthcare Pvt. Ltd Dawn Services Private Limited Grand Healthcare India Private Limited TOTAL
Note: Figures in brackets indicate the ratio (in Per Cent) of claims to the total claims recived.
127
STATEMENT 40
PERFORMANCE OF OMBUDSMEN AT DIFFERENT CENTRES
Complaints Disposal for the year ending 31st March, 2007 (Life insurance Combined)
Total off by way of 1 182 517 340 533 694 342 211 567 172 980 925 558 6021 130 652 1351 113 2 89 23 12 1 130 546 197 379 20 33 123 101 80 536 893 873 506 13 24 107 144 127 646 873 368 16 38 74 426 554 546 103 39 46 188 88 100 8 17 232 138 812 4 199 10 2 215 22 86 107 15 184 1 45 45 55 541 687 676 11 687 215 188 554 144 893 873 506 5418 19 373 73 22 487 373 114 487 40 123 37 200 92 48 60 200 34 44 5 36 19 13 24 47 52 21 320 4 40 30 217 14 58 32 411 515 500 15 515 2 60 2 2 72 4 15 22 55 64 156 111 43 2 156 23 3 46 19 1 66 2 3 4 5 6 Total 7 8 9 Total 7 8 9 Total 26 2 140 46 7 127 23 13 28 87 52 52 603 Disposal Oustanding No. of complaints disposed Duration wise Duration wise
Ombudsman
O/S as
Received
Centre
on
during
31.3.2006
the year
Ahmedabad
23
159
Bhopal
513
Bhubaneshwar
151
189
Chandigarh
61
472
Chennai
12
682
Delhi
147
195
Guwahati
34
177
128
404 2768 5418 4422 6 7 8 9 Above 1 year 3 months to 1 year Within 3 months Not Entertainable
Hyderabad
11
556
Kochi
166
Kolkata
64
916
Lucknow
29
896
Mumbai
46
512
TOTAL
588
5433
1 Recommendations
2 Awards
3 Withdrawal/Settlement
4 Non-acceptance
5 Dismissal
STATEMENT 41

Total off by way of 1 490 135 291 518 575 733 222 379 232 1049 296 1176 6096 6 7 8 9 Above 1 year 3 months to 1 year Within 3 months Not Entertainable 208 1215 791 157 41 271 223 72 2 234 20 212 63 295 843 69 116 79 79 486 829 502 295 460 44 2 52 98 196 154 1 87 51 44 161 344 299 45 42 268 370 89 65 6 12 172 45 127 59 13 448 2 155 17 73 125 51 423 33 79 311 95 37 2 33 396 563 478 85 563 423 172 344 196 829 295 843 4752 166 95 161 18 440 178 262 440 76 12 93 42 35 32 90 1 143 610 6 59 5 17 87 10 21 56 87 25 11 27 4 25 63 130 130 130 5 80 2 190 8 4 130 190 608 27 126 43 187 74 430 171 250 9 430 56 4 99 2 3 4 5 6 Total 7 8 9 Total 7 8 9 Total 60 5 204 78 12 310 50 35 36 220 1 333 126 1344 Disposal Oustanding No. of complaints disposed Duration wise Duration wise
Complaints Disposal for the year ending 31st March, 2007: Non-life Insurance
Ombudsman
O/S as
Received
Centre
on
during
31.3.2006
the year
Ahmedabad
123
367
Bhopal
130
Bhubaneshwar
181
110
Chandigarh
126
392
Chennai
18
557
Delhi
386
347
Guwahati
53
169
Hyderabad
21
358
129
Kochi
14
218
Kolkata
214
835
Lucknow
292
Mumbai
196
980
TOTAL
1341
4755
708 1673 4752 2755 1549
1 Recommendations
2 Awards
4 Non-acceptance
5 Dismissal
STATEMENT 42
Complaints Disposal for the year ending 31st March, 2007 (Life & Non-life insurance Combined)
Total off by way of 1 672 651 631 1051 1269 1075 433 946 404 2029 1221 1734
12116 338 1867 2141 270 1112
Ombudsman Disposal 5 0 4 0 0 2 73 6 0 0 101 0 84 3 0 76 205 340 281 118 587 898 845 53 59 500 0 828
7175
O/S as Oustanding 9 11 0 116 0 0 418 0 0 0 74 0 508

2361
Received
No. of complaints disposed
Duration wise
Duration wise
Centre 2 141 25 99 185 140 354 104 103 57 149 150 360 246 758 202 2 89 0 0 58 360 133 227 17 135 53 638 55 165 82 88 937 1250 1154 96 1250 638 360 898 340 1722 1168 13
632
on 3 65 84 128 468 234 40 927 551 376 927 0 54 287 102 69 287 59 120 17 129 61 48 56 137 53 1349
10168
during 4 242 57 473 643 628 15 643 7 0 140 4 2 262 12 0 8 170 0 164
930
31.3.2006 6 138 586 282 293 586 79 7 0 0 145 0 0 46 0 0 0 0 0 220

825
the year Total 7 8 Total 7 8 9
Total 86 7 344 124 19 437 73 48 64 307 53
Ahmedabad 0 6 0 1 6 192 1 0 89 0 43
146
526
Bhopal
642
Bhubaneshwar
332
299
Chandigarh
187
864
Chennai
30
1239
Delhi
533
542
Guwahati
87
346
130
159 1022 1722 1148 260 1168 1168 613 1349
4440 10168
Hyderabad
32
914
Kochi
20
384
Kolkata
278
1751
Lucknow
33
1188
Mumbai
242
1492
1
192
385
1947
TOTAL 6 7 8 9 Above 1 year 3 months to 1 year Within 3 months Not Entertainable
1929
10187
1 Recommendations
2 Awards
4 Non-acceptance
5 Dismissal
STATEMENT 43
First Year (including single premium) Life Insurance Premium

(Rs. Crore) INSURER LIC 2000-01 9700.98 2001-02 19588.77 (101.93) ING VYSYA HDFC STD LIFE BSLI ICICI PRU KOTAK LIFE TATAAIG* SBI LIFE BAJAJ ALLIANZ MNYL MET LIFE RELIANCE LIFE AVIVA SAHARA SHRIRAM LIFE BHARTI AXA PRIVATE SECTOR 0.002 0.32 5.97 0.16 6.45 4.19 32.78 28.11 113.33 7.58 21.14 14.69 7.14 38.80 0.48 0.28 268.51 (4061.70) 2002-03 15976.76 (-18.44) 17.66 129.31 129.57 364.11 35.21 59.77 71.88 63.39 67.31 7.70 6.32 13.47 965.69 (259.65) 2003-04 17347.62 (8.58) 72.10 209.33 449.86 750.84 125.51 181.59 207.05 179.55 137.28 23.41 27.21 76.96 2440.71 (152.74) 2004-05 20653.06 (19.05) 282.42 486.15 621.31 1584.34 373.99 297.55 484.85 857.45 233.63 57.52 91.33 192.29 1.74 5564.57 (127.99) 2005-06 28515.87 (38.07) 283.98 1042.65 678.12 2602.50 396.06 464.53 827.82 2716.77 471.36 148.53 193.56 407.12 26.34 10.33 10269.67 (84.55) 2006-07 56223.56 (97.17) 467.66 1648.85 882.72 5162.13 614.94 644.82 2563.84 4269.80 912.11 340.44 932.11 721.35 43.00 182.16 7.78 19393.69 (88.84)
TOTAL
9707.40
19857.28 (104.56)
16942.45 (-14.68)
19788.32 (16.80)
26217.64 (32.49)
38785.54 (47.94)
75617.26 (94.96)
Note: 1) *Figures revised for the year 2002-03 and includes the Group business. 2) Figures in the bracket represent the growth over the previous year in percent. 3) represents business not started. 4) 1 Crore = 10 Million
131
STATEMENT 44
TOTAL LIFE INSURANCE PREMIUM

(Rs. Crore) INSURER LIC 2000-01 34892.02 2001-02 49821.91 (42.79) ING VYSYA HDFC STD LIFE BSLI ICICI PRU KOTAK LIFE TATAAIG* SBI LIFE BAJAJ ALLIANZ MNYL MET LIFE RELIANCE LIFE AVIVA SAHARA SHRIRAM LIFE BHARTI AXA PRIVATE SECTOR 0.002 0.32 5.97 0.16 6.45 4.19 33.46 28.26 116.38 7.58 21.14 14.69 7.14 38.95 0.48 0.28 272.55 (4124.31) TOTAL 34898.47 50094.46 (43.54) 2002-03 54628.49 (9.65) 21.16 148.83 143.92 417.62 40.32 81.21 72.39 69.17 96.59 7.91 6.47 13.47 1119.06 (310.59) 55747.55 (11.28) 2003-04 63533.43 (16.30) 88.51 297.76 537.54 989.28 150.72 253.53 225.67 220.80 215.25 28.73 31.06 81.50 3120.33 (178.83) 66653.75 (19.56) 2004-05 75127.29 (18.25) 338.86 686.63 915.47 2363.82 466.16 497.04 601.18 1001.68 413.43 81.53 106.55 253.42 1.74 7727.51 (147.65) 82854.80 (24.31) 2005-06 2006-07
90792.22 127822.84 (20.85) 425.38 1569.91 1259.68 4261.05 621.85 880.19 1075.32 3133.58 788.13 205.99 224.21 600.27 27.66 10.33 15083.54 (95.19) (40.79) 707.20 2855.87 1776.71 7912.99 971.51 1367.18 2928.49 5310.00 1500.28 492.71 1004.66 1147.23 51.00 185.15 7.78 28218.75 (87.08)
105875.76 156041.59 (27.78) (47.38)
Note: 1) *Figures revised for the year 2002-03 and includes the Group business. 2) Figures in the bracket represent the growth over the previous year in percent. 3) represents business not started. 4) 1 Crore = 10 Million
132
STATEMENT 45
GROSS DIRECT PREMIUM OF NON-LIFE INSURANCE (WITHIN & OUTSIDE INDIA)

(Rs. Crore) INSURER NATIONAL NEW INDIA ORIENTAL UNITED PUBLIC SECTOR 2000-01 2227.73 3493.05 2247.10 2524.00 10491.88 2001-02 2439.41 4198.06 2498.64 2781.48 11917.59 (13.59) ROYAL SUNDARAM RELIANCE IFFCO-TOKIO TATAAIG ICICI LOMBARD BAJAJ ALLIANZ CHOLAMANDALAM HDFC GENERAL PRIVATE SECTOR 0.24 1.07 5.83 7.14 71.13 77.46 70.51 78.46 28.13 141.96 467.65 (6453.98) TOTAL 10499.02 12385.24 (17.97) ECGC STAR HEALTH AIC 338.52 2002-03 2869.87 4812.79 2868.15 2969.63 13520.44 (13.45) 184.44 185.68 213.33 233.93 211.66 296.48 14.79 9.49 1349.80 (188.64) 14870.25 (20.06) 374.78 2003-04 3399.97 4921.47 2899.74 3063.47 14284.65 (5.65) 257.76 161.06 322.24 343.52 486.73 476.53 97.05 112.95 2257.83 (67.27) 16542.49 (11.25) 445.48 369.21 2004-05 3810.65 5103.16 3090.55 2944.46 14948.82 (4.65) 330.70 161.68 496.64 448.24 873.86 851.62 169.25 175.63 3507.62 (55.35) 18456.45 (11.57) 515.55 549.72 2005-06 3536.34 5675.54 3609.77 3154.78 15976.44 (6.87) 458.64 162.33 892.72 572.70 1582.86 1272.29 220.18 200.94 5362.66 (52.89) 21339.10 (15.62) 577.33 555.83 2006-07 3827.12 5936.78 4020.78 3498.77 17283.45 (8.18) 598.20 912.23 1144.47 710.55 2989.07 1786.34 311.73 194.00 8646.57 (61.24) 25930.02 (21.51) 617.66 22.51 564.67
Note: 1) represents business not started. 2) Figures in the bracket represent the growth over the previous year in percent. 3) 1 Crore = 10 Million
133
STATEMENT 46
INDIVIDUAL BUSINESS (WITHIN INDIA) Business in force (Number of policies)

(In 000) Non-Linked Business
Life Business Inforce as Deletions** at 31-03-07 at 01-04-06 Additions* Deletions** at 31-03-07 at 31-03-07 Inforce as Inforce as Inforce as Business Business Business Business General Annuity and Pension Health Linked Total Business
INSURER
Business
Inforce as
Inforce as Inforce as at 31-03-07 at 31-03-07
at 01-04-2006
Additions*
Bajaj AZ Life 162 41 109 198 426 108 13104 164 38 22 89 129 7 9 0 14000 1 194164 53 42 0 0 0 3186 567 22 411 64 14 3 0 0 0 209 123 6 0 112 1 0 713 8 0 1 0 0 2 3 0 0 0 202 189419 2923 176 190 48 253 31 6 0 38 2909 8 1 6 77 22 0 0 0 3193 165 734 50 5 2 53 36 752 73 4 3 74 34 234 0 0 0 0 24 51 0 0 0 0 0 0 0 93 0 0 0 0 0 0 72 0 0 0 165 49 189 0 0 0 0 0
395
196
80
511
2458 326 438 713 520 2407 169 20240 351 95 189 499 195 20 54 5 28678
3653 803 587 1249 2249 4408 847 431484 2122 397 494 1657 1709 118 179 7 451963
Reliance Life
77
AVIVA Life
34
Birla Sun Life
159
HDFC Std Life
590
ICICI Pru Life
473
134
315 44 37 148 243 26 42 1
ING Vysya Life
193
LIC
179564
22959
Max NY Life
562
Met Life
106
Kotak OM Life
108
SBI Life
352
TATA AIG Life
453
Sahara Life
22
Shriram Life
21
Bharti AXA Life
TOTAL
183109
25056
Note:
* Includes New policies issued, Old policies reinstated/revived.
** Includes Policy terminations by death, maturity,lapse,surrenders or cancellatons.
Source of Data : Actuarial Report and Abstract as on 31-03-2007 of the life insurers.
STATEMENT 47
INDIVIDUAL BUSINESS (WITHIN INDIA) Business in force (Sum Assured)

(Rs. Crore) Non-Linked Business
General Annuity and Pension Business Inforce as Deletions** at 31-03-07 01-04-06 Additions* Deletions** at 31-03-07 at 31-03-07 Inforce as Inforce as Inforce as Business Business Business Business Health Linked Total Business
INSURER
Life
Business
Inforce as
Inforce as Inforce as at 31-03-07 at 31-03-07
at 01-04-06
Additions*
Bajaj AZ Life 1118 4 673 992 1925 865 122551 2724 1211 716 948 2193 77 153 4 138782 1513876 65 1380 568 8 0 0 68425 12428 486 9155 249 89 48 1 0 0 25825 7159 262 7 5018 16 2 24525 167 9 19 3 9 7 58 1 0 0 2693 1397468 63912 25460 2345 5036 0 0 0 0 87027 157 15 260 331 475 8 0 0 91557 15403 1560 83 85 1559 14253 1478 105 98 1485 0 4043 0 0 0 0 0 0 3233 0 0 0 72770 5113 0 0 0 0 0 415 0 0 0 0 0 3339 0 0 0 0 0 6201 14282 30297 21487 56319 4804 106381 14906 6706 9268 10734 8504 392 1164 175 356437
10619
4562
2627
12554
288
20
68
239
64816
95793 15116 15120 41869 55144 98306 16605 3325164 69757 19198 25556 31616 42046 1699 4230 312 3857530
Reliance Life 218
1767
2691
AVIVA Life
201
Birla Sun Life
3933
1853
HDFC Std Life
11801
3444
ICICI Pru Life
13438
3890
135
356 68
ING Vysya Life
4393
1508
LIC
1280159
239860
Max NY Life
19191
8057
Met Life
4491
1737
Kotak OM Life
6083
1792
SBI Life
7254
2849
TATA AIG Life
10303
4318
Sahara Life
289
Shriram Life
443
1090
Bharti AXA Life
TOTAL
1374364
278294
Note:
* Includes New policies issued, Old policies reinstated/revived , bonus additions.
** Includes Policy terminations by death, maturity,lapse,surrenders or cancellatons.
Source of Data : Actuarial Report and Abstract as on 31-03-2007 of the life insurers.
STATEMENT 48
INDIVIDUAL BUSINESS (WITHIN INDIA) Forfeiture/Lapse Policies in Respect of Non-Linked Business*

INSURER Number of Lapsed Policies (in 000) BAJAJ ALLIANZ RELIANCE LIFE AVIVA BSLI HDFC STD LIFE ICICI PRU ING VYSYA LIC MNYL MET LIFE KOTAK LIFE SBI LIFE TATA AIG SAHARA SHRIRAM LIFE BHARTI AXA LIFE TOTAL
* Includes Health Business, if any. Lapse definition: For the purpose of actuarial valuation of policy liabilities. A policy is treated as lapsed if the premium is not paid within days of grace, as allowed, by most of the Life Insurers except those mentioned below. A policy is treated as lapsed if the premium is not paid within 60 days from the due date of premium by ING Vysya Life Insurance A policy is treated as lapsed if the premium is not paid within 6 months from the due date of premium by LIC of India and SBI Life Insurance. A policy is treated as lapsed if the premium is not paid within 45 days from the due date of premium by Met Life India Insurance and Tata AIG Life Insurance. Source of Data : Actuarial Report and Abstract as on 31-03-2007 of the life insurers.
Sum Assured for Lapsed Policies (Rs. Crore) 2364 692 3 597 787 2461 788 63206 2666 1157 546 773 3042 78 139 0 79300
77 47 24 8 29 180 45 7773 163 37 21 85 151 7 9 0 8657
136
STATEMENT 49
SOLVENCY RATIO OF LIFE INSURERS (2006-2007)

INSURER Solvency Ratio 2006-07 BAJAJ ALLIANZ RELIANCE LIFE BSLI AVIVA HDFC STD LIFE ICICI PRU ING VYSYA LIC MNYL METLIFE KOTAK LIFE SBI LIFE TATA AIG SAHARA SHRIRAM LIFE BHARTI AXA
Note : Source of the data - Actuarial Report and Abstract as on 31-03-2007 Solvency Ratio is defined as the ratio of Available Solvecy Margin to the Required Solvency Margin.
2005-06 2.8 2.0 2.0 2.8 2.9 1.6 2.3 1.3 2.0 1.7 1.8 2.9 2.7 2.7 2.2 -
2.45 1.62 1.80 6.31 2.05 1.53 2.87 1.50 2.08 1.73 1.64 1.78 2.59 2.68 2.74 1.96
137
STATEMENT 50
Solvency Ratios of Non-Life Insurers*

INSURER PRIVATE BAJAJ ALLIANZ CHOLAMANDALAM HDFC CHUBB ICICI LOMBARD IFFCO TOKIO RELIANCE ROYAL SUNDARAM TATAAIG PUBLIC NEW INDIA UNITED ORIENTAL NATIONAL SPECIALIZED INSURER ECGC STAR HEALTH AIC GIC Note: * Including the specialized Insurers 11.41 1.91 2.05 4.10 9.39 2.16 3.41 3.57 3.00 2.17 1.76 3.09 2.23 1.97 1.08 1.56 2.63 1.69 2.08 1.70 1.95 1.64 1.85 1.22 2.51 1.78 1.29 1.95 3.04 1.66 1.68 2006-07 2005-06
138
STATEMENT 51
INDIVIDUAL BUSINESS (WITHIN INDIA)* Details Foreiture/Lapse Policies in respect of Non-Linked Business
2004-05 INSURER Number of policies (in 000) Bajaj AZ Life Reliance Life AVIVA Life Birla Sun Life HDFC Std Life ICICI Pru Life ING Vysya Life LIC Max NY Life Met Life Kotak OM Life SBI Life TATA AIG Life Sahara Life Shriram Life Bharti AXA Life TOTAL 65.946 28.616 7.481 5.35 37.715 52.473 38.656 10211.09 78.217 13.068 18.225 14.885 68.844 0.002 NA NA 10640.568 Sum Assured (Rs. Crore) 750.72 522.935 27.77 320.487 620.285 1013.638 523.5999 65006.572 1581.146 286.367 358.789 180.7408 1141.157 0.01 NA NA 72334.217 17.58 18.6 5.26 40.55 136.54 40.73 9568.88 104.02 31.12 27.07 31.52 92.49 5.24 0 NA 10119.6 2005-06 Number of policies (in 000) Sum Assured (Rs. Crore) 2417.74 259.8 48.99 359.97 793.56 1377.46 855.4 61640 2657.78 1008.37 520.55 459.43 1615.67 61.83 0 NA 74076.55 2006-07 Number of policies (in 000) 77.42 47.13 24.19 7.818 29.32 179.97 45.04 7773 163.09 36.867 21.31 85.294 150.934 6.74 8.976 0 8657.099 Sum Assured (Rs. Crore) 2364.27 691.9 3.2305 596.618 787.29 2460.897 788.136 63206.4577 2666.276 1157.447 546.372 772.886 3041.638 77.713 139.298 0 79300.4292 2005-06 2006-2007 Lapse Ratio (Based on number of Policies) (in per cent) 20 28 65 4 7 29 20 5 22 37 25 9 21 32 0 NA 17 35 57 4 4 26 17 4 25 34 17 19 26 21 24 0
* Includes Health Business, if any. A policy is treated as lapsed if the premium is not paid within a period ranging from 15 to 60 days. Lapse Ratio during the year = Lapses (including forfeitures) during the year/Arithmetic Mean of the business inforce at the beginning and at the end of the year Source of Data : Actuarial Report and Abstract as on 31-03-2005/31-03-2006/31-03-2007 of the life insurers.
139
STATEMENT 52
INDIVIDUAL NEW BUSINESS PERFORMANCE OF LIFE INSURERS FOR 2006-07 CHANNEL WISE
(Premium in Rs crore) Corporate Agents Banks Policies 297095 2078933 5700 426584 522982 1959575 229189 165002 552505 119406 450683 41396 565389 96077 408707 78727 (0.99) 400.43 (0.90) 1284785 1825.89 (2.79) (2.96) 180450 (0.47) 259177 (0.56) 178.19 (1.05) 153.44 (0.34) 331.63 (0.54) 691933 (8.74) 24000 (0.06) 715933 (1.55) 1147.53 (6.77) 108.98 (0.24) 1256.51 (2.04) 139077 (1.76) 139077 (0.30) 235.33 (1.39) Premium Policies Premium Policies Premium Policies Premium Policies Premium Policies Others* Business Premium 690.25 4207.18 7.76 742.88 1372.85 4383.49 443.26 546.37 906.19 313.72 801.09 42.16 1764.25 181.17 541.96 7919223 16944.58 - 38208575 44673.25 235.33 46127798 61617.83 (0.38) Brokers Referrals Direct Selling Total Individual New (Policies in nos.)
Life Insurer
Individual Agents
Policies
Premium
Aviva**
Bajaj Allianz
Bharti Axa
Birla Sunlife
HDFC Std
ICICI Pru**
ING Vysya
Kotak Mahindra
140
951678 (12.02) 475241 (1.24) 3363.17 (5.46) 553.87 (1.24) 2809.30 (16.58) 989994 1425.46 (12.50) (8.41) 294791 (0.77)
Max NewYork
MetLife
Reliance Life
Sahara**
SBI Life
Shriram
Tata AIG
127525 (42.92) 1396784 (67.19) 2908 (51.02) 363602 (85.24) 268980 (51.43) 1138571 (58.10) 205342 (89.60) 97273 (58.95) 352389 (63.78) 63220 (52.95) 423722 (94.02) 31687 (76.55) 326229 (57.70) 69173 (72.00) 200409 (49.03)
204.02 (29.56) 3236.28 (76.92) 3.93 (50.57) 431.22 (58.05) 706.62 (51.47) 2795.02 (63.76) 361.07 (81.46) 297.22 (54.40) 670.12 (73.95) 158.76 (50.61) 741.62 (92.58) 28.82 (68.35) 1127.37 (63.90) 134.38 (74.17) 252.32 (46.56)
24066 (8.10) 101039 (4.86) 48653 (11.41) 215109 (41.13) 127703 (6.52) 9166 (4.00) 14179 (8.59) 16442 (2.98) 26335 (22.06) 182 (0.04) 223706 (39.57) 145098 (35.50)
86.76 (12.57) 153.44 (3.65) 247.80 (33.36) 565.39 (41.18) 639.99 (14.60) 43.98 (9.92) 107.97 (19.76) 41.33 (4.56) 85.40 (27.22) 0.26 (0.03) 614.68 (34.84) 222.31 (41.02)
13457 (4.53) 451785 (21.73) 217 (3.81) 8084 (1.90) 22249 (4.25) 202316 (10.32) 5436 (2.37) 39084 (23.69) 164198 (29.72) 8943 (7.49) 13510 (3.00) 9708 (23.45) 13580 (2.40) 37427 (9.16)
0.65 (0.09) 559.50 (13.30) 0.64 (8.29) 50.67 (6.82) 57.39 (4.18) 401.23 (9.15) 7.90 (1.78) 86.85 (15.90) 167.86 (18.52) 11.92 (3.80) 19.64 (2.45) 13.34 (31.65) 15.48 (0.88) 32.39 (5.98)
9365 (3.15) 18225 (0.88) 4753 (1.11) 3860 (0.74) 12819 (0.65) 116 (0.05) 8128 (4.93) 3482 (0.63) 4558 (1.01) 1207 (0.21) 9 (0.01) 12205 (2.99)
24.49 (3.55) 31.82 (0.76) 10.13 (1.36) 10.11 (0.74) 34.18 (0.78) 0.26 (0.06) 28.81 (5.27) 7.08 (0.78) 6.81 (0.85) 3.41 (0.19) 0.01 (0.01) 21.08 (3.89)
122324 (41.17) 110936 (5.34) 2095 (36.75) 1160 (0.27) 400396 (20.43) 9129 (3.98) 1293 (0.78) 3368 (0.61) 12691 (10.63) 145 (0.03) 1 (0.002) 2 (0.0004) 26755 (27.85) 1638 (0.40)
373.71 (54.14) 224.50 (5.34) 3.18 (41.01) 2.68 (0.36) 398.55 (9.09) 30.05 (6.78) 4.66 (0.85) 7.16 (0.79) 52.84 (16.84) 0.19 (0.02) 0.0004 (0.001) 0.09 (0.01) 46.67 (25.76) 3.23 (0.60)
358 (0.12) 164 (0.01) 480 (8.42) 332 (0.08) 12784 (2.44) 77770 (3.97) 5045 (3.06) 12626 (2.29) 8217 (6.88) 8566 (1.90) 665 (0.12) 140 (0.15) 11930 (2.92)
0.63 (0.09) 1.64 (0.04) 0.01 (0.12) 0.38 (0.05) 33.34 (2.43) 114.52 (2.61) 20.87 (3.82) 12.64 (1.39) 4.80 (1.53) 32.56 (4.06) 3.22 (0.18) 0.11 (0.06) 10.62 (1.96)
Private Total
5067814 (63.99)
11148.77 (65.80)
LIC#
37234093 43456.53 (97.45) (97.28)
Industry Total
42301907 54605.30 (91.71) (88.62)
1426919 (3.09)
Note: Figures in brackets show percentage to total new business of each insurer procured through the respective channel *Any entity other than banks but licensed as a corporate agent. # Does not include its overseas new busines premium of Rs.18.92 crore. **It has been confirmed by the respective insurers that the no. of policies have been taken net of all cancellations including freelooks during the financial year.
STATEMENT 53 (Premium in Rs crore)

Corporate Agents Banks Lives covered covered covered covered covered covered Premium Schemes Lives Premium Schemes Lives Premium Schemes Lives Premium Schemes Lives Premium Schemes Lives Others* Premium Brokers Referrals Direct Selling Total Group New Business
GROUP NEW BUSINESS PERFORMANCE OF LIFE INSURERS FOR 2006-07 CHANNEL-WISE

(Schemes and lives in nos.)
Insurer
Individual Agents
Schemes
Lives
Premium Schemes
covered
Aviva**
95 479950 283 847038 3 162 3067
31.09 62.60 0.01 66866 139.84
Bajaj Allianz
Bharti Axa
Birla Sunlife
HDFC Std
165 302505 276.00 423 438420 778.65 44 83034 201 417082 165 103795 204 424724 24.40 68.57 5.91 26.72 234 348910 131.02 4 103251 0.84 312 1552521 799.59 1 200 0.0018 89 551534 102.86
ICICI Pru**
ING Vysya
141
275 (25.84) 1479025 326.98 8 (13.36) (0.34) 275 467838 1479025 326.98 8 467838 (8.17) 3.17 (0.13) 3.17 261 (10.94) 261 492044 (8.60) 492044 31.01 (1.27) 31.01 2 (0.08) 2 62913 (1.10) 62913
Kotak Mahindra Max NewYork MetLife
Reliance Life
Sahara**
SBI Life
Shriram
Tata AIG
14 5146 4.18 2597 (14.74) (1.07) (13.45) (0.54) 1 44 0.25 2 667 (2.27) (0.05) (1.02) (4.55) (0.80) 7 3809 0.30 (3.43) (0.90) (1.12) 6 3804 0.12 (2.56) (1.09) (0.09) 272 1475673 (87.18) (95.05) 1 200 0.0018 (100.00) (100.00) (100.00) 0.78 1 88 20 14381 (22.47) (2.61) (0.76) (1.12) (0.02)
1.50 (0.06) 1.50 1790 (75.05) (100.00) 3193693 (55.81) 20717 14164320 (100.00) 22507 17358013 2079.80 (84.96) 11531.39 (100.00) 13611.19 2385
1.77 356623 1.63 5 (5.69) (74.30) (5.25) (5.26) 2.33 8 (9.56) (18.18) 79 (39.30) 4 7964 0.71 78 (1.96) (1.88) (2.64) (38.24) 73 (31.20) 4 103251 0.84 (100.00) (100.00) (100.00) 322.81 (40.37) 0.07 18 (0.07) (20.22)
8627 0.52 (1.80) (1.66) 1925 0.09 (2.32) (0.37) 197151 15.98 (47.27) (23.31) 188429 7.19 (44.37) (26.91) 91307 5.73 (26.17) (4.37) 4605 1.50 (0.83) (1.46)
2 (2.11) -
62913 (13.11) -
1.50 (4.84) -
74 (77.89) 283 (100.00) 3 (100.00) 162 (100.00) 165 (100.00) 423 (100.00) 33 (75.00) 122 (60.70) 165 (100.00) 115 (56.37) 155 (66.24) 40 (12.82) 50 (56.18)
44044 (9.18) 847038 (100.00) 3067 (100.00) 66866 (100.00) 302505 (100.00) 438420 (100.00) 80398 (96.83) 219931 (52.73) 103795 (100.00) 224522 (52.86) 253799 (72.74) 76848 (4.95) 532460 (96.54)
21.49 (69.12) 62.60 (100.00) 0.01 (100.00) 139.84 (100.00) 276.00 (100.00) 778.65 (100.00) 21.73 (89.05) 52.59 (76.69) 5.91 (100.00) 18.52 (69.33) 125.17 (95.54) 476.78 (59.63) 100.51 (97.72)
Private Total
49
27384
5.63
5722897 2448.10 20717 14164320 11531.39 23102 19887217 13979.49
(2.05)
(0.48)
(0.23)
(11.53)
LIC
Industry Total
49
27384
5.63
(0.21)
(0.14)
(0.04)
(1.19)
(7.44)
(2.34)
(0.03)
(2.35)
(0.02)
(1.13)
(2.47) (0.22)
(0.01)
(0.32)
(0.01)
(97.42)
(87.28)
(97.37)
Note: Figures in brackets show percentage to total * Any entity other than banks but licensed as a corporate agent. **It has been confirmed by the respective insurers that the no. of schemes have been taken net of all cancellations including freelooks during the financial year.
STATEMENT 54
STATE WISE SPREAD OF NO. OF INDIVIDUAL AGENTS INSURER WISE AS AT 31ST MARCH, 2007
Insurers HDFC Std Pru Vysya Mahindra NewYork Life Life Life AIG Total (State wise) 5734 1826 716 1611 339 3956 2447 225 732 1286 2922 8598 4576 10558 354 1518 5816 3449 873 4895 11725 365 10605 1608 4403 14839 922 9227 846 1106 734 1213 327 285 3220 998 1225 25032 1980 4107 4597 2158 2 1 482 1000 363 10 2322 1 8941 2072 804 1159 145 17107 1875 451 612 3111 11193 3201 788 801 3389 5377 6055 2837 6297 435 5213 4806 4865 11240 4017 169 264 34 2048 2613 272 32 2 660 107 634 262 319 32 1438 62 742 288 17 6 605 86 89 831 875 2266 1553 2335 95 4 1931 683 1347 6 2471 3 3959 616 1628 709 295 2372 88 613 23098 1337 4854 3749 759 7397 550 1508 405 121 130 2 1 488 116 328 149 6 1153 1111 152 1 163 1084 7 5976 158 17 3182 1557 1262 841 194 2032 255 161 976 582 2787 162 2745 16 1839 120 2517 13 1338 37 5208 312 1150 175 253 1568 334 118 1723 2 4 6 25325 31157 7906 1672 64282 18808 3731 6752 19899 43298 60649 40461 14159 6988 855 1417 2835 9748 178 2652 8113 561 77344 100314 383 38215 58983 17725 3379 53800 16724 8290 6506 24387 67749 49478 45954 85171 124471 2121 599 38457 46279 39699 1535 58178 939 1446 603 291 663 33377 18953 51071 612 81331 1446 177658 389 63540 90140 25631 5051 118082 35532 12021 13258 44286 111047 110127 86415 209642 1446 2724 291 1262 71834 65232 90770 2147 139509 2385 ICICI ING Kotak Max Met Reliance Sahara SBI Shriram Tata Private LIC Industry
State /
Aviva
Bajaj
Bharti
Birla
Union
Allianz
Axa Sunlife
Territory
Andhra
1900
18165
183
3856
Pradesh
Arunachal
Pradesh
Assam
767
9970
1921
Bihar
1051
13505
2892
Chattisgarh
237
2705
641
Goa
84
316
274
Gujarat
1755
10241
20
3026
Haryana
1424
3088
1314
Himachal
11
1590
142
Pradesh
Jammu &
91
2921
Kashmir
Jharkhand
657
7561
1396
Karnataka
1057
9564
71
2883
Kerala
1603
14254
1814
Madhya
1144
13720
2386
Pradesh
Maharashtra
3332
14336
297
6986
Manipur
Meghalaya
65
370
457
Mizoram
Nagaland
593
Orissa
1261
14148
125
1257
Punjab
1159
9872
27
2677
Rajasthan
801
7882
3092
Sikkim
59
205
Tamil Nadu
1698
11038
99
3296
Tripura
157
741
STATE WISE SPREAD OF NO. OF INDIVIDUAL AGENTS INSURER WISE AS AT 31ST MARCH, 2007
Insurers HDFC Std (State wise) 8077 527 3758 15980 1198 1168 770 1516 3399 249 1386 4542 1051 421 304 159 145 22 13 5146 14966 485 53415 103163 26286 2232 1000 1433 562 12802 2790 1376 841 97522 132832 230354 20112 156578 485 Pru Vysya Mahindra NewYork Life Life Life AIG Total ICICI ING Kotak Max Met Reliance Sahara SBI Shriram Tata Private LIC Industry
State /
Aviva
Bajaj
Bharti
Birla
Union
Allianz
Axa Sunlife
Territory
Uttar Pradesh 3074
29849
133
7067
UttraKhand
70
1679
755
West Bengal
2301
13592
188
3368
Andaman &
Nicobar 4316 79109 234460 33944 24484 25044 20848 95622 452 2 9797 17207 2278 3920 2417 1259 3536 367 595 3 25356 19 10384 2835 974 537 420 162 1677 25 160 1522 2275 13 28105 9251 12 49257 1281 8683 2 125 35450 2 1188 890152 1103047 17934 2 137 84707 2 2469 1993199
Islands
Chandigarh
193
25
721
Dadra &
Nagrahaveli
Daman &
11
Diu
Delhi
3056
4412
123
3496
143
Lakshadweep
Puducherry
43
431
318
Total
29052 216191
1266
56490
STATEMENT 55
DETAILS OF NO. OF INDIVIDUAL AGENTS OF LIFE INSURERS

Insurer As on 1st April, 2006 Aviva Bajaj Allianz Bharti Axa Birla Sunlife HDFC Std ICICI Pru ING Vysya Kotak Mahindra Max NewYork MetLife Reliance Life Sahara SBI Life Shriram Tata AIG Private Total LIC Industry Total 10974 109141 0 17738 34887 72383 18683 12523 15275 9985 19956 78 8128 5759 35336 370846 1052993 1423839 20708 141303 1354 41422 53470 199453 25936 17259 18803 14562 82531 9719 18343 4625 17134 666622 197963 864585 2630 34253 88 2670 9248 37376 10675 5298 9034 3699 6865 0 1115 0 24365 147316 147909 295225 Additions Deletions As on 31st March 2007 29052 216191 1266 56490 79109 234460 33944 24484 25044 20848 95622 9797 25356 10384 28105 890152 1103047 1993199
144
STATEMENT 56
INDIVIDUAL DEATH CLAIMS

(Benefit Amount in Rs crore) Total Claims No. of Benefit 577 2679 45.65 9.60 Benefit Amount No. of Benefit Benefit Amount No. of Benefit Benefit Amount No. of Benefit Benefit Amount <3 mths 3 - < 6 6 - <1 yr mths > 1 yr Total Claims paid Claims repudiated Claims pending at end of year Break up of claims pending duration wise (Policies)
Life Insurer Benefit Amount 7.75 39.09
Claims pending at start of year
Claims intimated / booked
No. of Policies 497
Benefit Amount
No. of Benefit
Aviva
80
1.85
Bajaj Allianz
335
6.56
2344
Bharti Axa
Birla Sunlife 21.59 29.74 6.45 7.83 29.11 7.44 4.36 0.32 14.94 1.30 17.66 206.99 4404.03 4611.02 611999 627032 15033 1279 21.99 243.78 4589.42 4833.20 81 1.30 1280 16.47 44 0.38 303 4.41 221 8.55 1946 38.74 440 10.33 569 7.32 3465 32.36 1572 25.08
12
2.18
565
19.42
577
21.60
HDFC Std
202
3.49
1370
ICICI Pru 507 341
111
2.62
3354
ING Vysya
62
0.87
145
185 294 37 81
Kotak Mahindra
99
2.50
Max NewYork
540
9.63
1406
MetLife
36
1.12
Reliance Life
0.05
Sahara
0.06
SBI Life
165
1.53
1115
Shriram
0.00
Tata AIG
236
4.33
1043
Private Total
1894
36.80
13139
LIC
9574
185.39
602425
Industry Total
11468
222.19
615564
418 (72.44) 1929 (72.00) 456 (79.03) 1046 (66.54) 3102 (89.52) 319 (56.06) 233 (52.95) 1325 (68.09) 103 (46.61) 262 (86.47) 19 (43.18) 921 (71.95) 12 (14.81) 783 (61.22) 10928 (72.69) 593250 (96.94) 604178 (96.36)
6.56 (68.33) 31.18 (68.31) 14.84 (68.70) 13.76 (54.88) 24.30 (75.09) 4.29 (58.61) 6.38 (61.76) 23.33 (60.23) 3.21 (37.57) 3.58 (81.25) 0.20 (52.63) 11.13 (67.58) 0.14 (10.77) 12.55 (57.07) 155.46 (63.77) 4289.28 (93.46) 4444.74 (91.96)
53 (9.19) 483 (18.03) 111 (19.24) 284 (18.07) 212 (6.12) 79 (13.88) 62 (14.09) 263 (13.51) 48 (21.72) 27 (8.91) 4 (9.09) 172 (13.44) 1 (1.23) 303 (23.69) 2102 (13.98) 8767 (1.43) 10869 (1.73)
0.92 (9.58) 9.96 (21.83) 4.51 (20.87) 5.76 (22.97) 4.04 (12.48) 0.20 (2.73) 1.40 (13.55) 6.28 (16.21) 2.15 (25.17) 0.48 (10.84) 0.02 (5.26) 2.09 (12.69) 0.02 (1.54) 5.85 (26.60) 43.68 (17.92) 94.71 (2.06) 138.39 (2.86)
106 (18.37) 267 (9.97) 10 (1.73) 242 (15.39) 151 (4.36) 171 (30.05) 145 (32.95) 358 (18.40) 70 (31.67) 14 (4.62) 21 (47.73) 187 (14.61) 68 (83.95) 193 (15.09) 2003 (13.32) 9982 (1.63) 11985 (1.91)
2.12 57 (22.08) (53.77) 4.50 217 (9.87) (81.27) 2.25 2 (10.44) (20.00) 5.55 242 (22.15)(100.00) 4.02 101 (12.42) (66.89) 2.83 109 (38.66) (63.74) 2.55 62 (24.69) (42.76) 9.13 190 (23.57) (53.07) 3.19 39 (37.25) (55.71) 0.35 13 (7.91) (92.86) 0.16 14 (42.11) (66.67) 3.25 143 (19.73) (76.47) 1.14 8 (87.69) (11.76) 3.59 153 (16.33) (79.27) 44.64 1350 (18.31) (67.40) 205.43 3179 (4.48) (31.85) 250.07 4529 (5.17) (37.79)
11 (10.38) 18 (6.74) 2 (20.00) 19 (12.58) 45 (26.32) 24 (16.55) 109 (30.45) 16 (22.86) 3 (14.29) 17 (9.09) 36 (52.94) 11 (5.70) 311 (15.53) 2795 (28.00) 3106 (25.92)
16 (15.09) 10 (3.75) 1 (10.00) 14 (9.27) 16 (9.36) 21 (14.48) 41 (11.45) 8 (11.43) 1 (7.14) 4 (19.05) 11 (5.88) 24 (35.29) 3 (1.55) 170 (8.49) 2375 (23.79) 2545 (21.23)
22 106 (20.75) 22 267 (8.24) 5 10 (50.00) 242 17 151 (11.26) 1 171 (0.58) 38 145 (26.21) 18 358 (5.03) 7 70 (10.00) 14 21 16 187 (8.56) 68 26 193 (13.47) 172 2003 (8.59) 1633 9982 (16.36) 1805 11985 (15.06)
Note : Figures in brackets show percentage of the respective totals.
STATEMENT 57
NO. OF LIFE INSURANCE OFFICES AS ON END MARCH*

Insurer Aviva Bajaj Allianz Bharti Axa Birla Sunlife HDFC Std ICICI Pru ING Vysya Kotak Mahindra Max NewYork MetLife Reliance Life Sahara SBI Life Shriram Tata AIG Private Total LIC Industry Total 2001 1 2 6 1 3 13 2186 2199 2002 3 7 19 4 14 4 9 15 3 17 5 6 116 2190 2306 2003 12 33 29 18 29 18 28 23 8 35 10 13 254 2191 2445 2004 22 49 41 26 69 26 39 33 16 48 2 19 26 416 2196 2612 2005 50 153 53 90 109 38 43 64 35 80 18 31 40 804 2197 3001 2006 110 567 1 97 150 175 68 46 84 43 157 18 46 11 72 1645 2220 3865 2007 140 877 16 148 448 583 183 75 118 53 159 33 138 12 89 3072 2301 5373
* Offices opened after seeking approval of the Authority Note: 1) Data as furnished by the insurers 2) Nos show the cumulative count 3) Office as defined under Section 64VC of the Insurance Act, 1938.
146
STATEMENT 58
DISTRIBUTION OF OFFICES OF LIFE INSURERS AS ON 31st MARCH, 2007*

Insurer Aviva Bajaj Allianz Bharti Axa Birla Sunlife HDFC Std ICICI Pru ING Vysya Kotak Mahindra Max NewYork MetLife Reliance Life Sahara SBI Life Shriram Tata AIG Private total LIC Industry total Metro 13 30 5 27 34 77 14 18 25 14 19 4 14 2 20 316 233 549 Urban 55 124 11 60 84 140 63 36 49 25 54 24 68 9 46 848 499 1347 Semi-urban 61 375 60 251 305 91 19 38 13 80 5 43 1 20 1362 797 2159 Others 11 348 1 79 61 15 2 6 1 6 13 3 546 772 1318 Company Total 140 877 16 148 448 583 183 75 118 53 159 33 138 12 89 3072 2301 5373
* Offices opened after seeking approval of the Authority. Note : 1) Data collected from life insurers through a special return. 2) Based on the HRA classification of places done by the Ministry of Finance.
Metro: Urban: Semi-urban: Others:
Delhi, Mumbai, Chennai and Kolkata. A, B-1 and B-2 class cities of the HRA classification. C class cities of the HRA classification. Places not listed in the HRA classification.
147
STATEMENT 59
GEOGRAPHICAL DISTRIBUTION OF OFFICES*

Bajaj Allianz (Private) 69 1 25 41 8 1 55 17 11 13 30 48 79 55 76 3 1 34 50 45 3 46 2 80 11 55 1 14 3 877 16 148 448 1 8 8 1 1 28 1 583 1 1 3 1 3 2 183 6 75 1 1 12 1 7 43 5 15 57 3 45 11 1 3 1 4 6 1 5 1 1 8 118 1 10 1 29 2 1 37 1 26 5 5 6 1 3 3 53 31 11 5 1 159 1 2 1 1 3 5 8 1 14 23 24 1 20 33 18 4 10 7 5 2 1 32 3 1 2 1 1 5 4 1 3 1 10 1 1 1 33 1 4 6 21 27 58 28 75 5 11 2 14 4 17 7 2 22 2 1 5 14 1 7 4 7 1 13 11 11 2 2 1 138 1 1 2 12 1 1 5 10 7 4 27 61 9 32 48 1 21 21 1 3 2 2 6 8 9 2 16 18 2 1 6 6 9 2 1 4 6 8 1 15 2 3 8 6 3 8 4 1 89 68 195 276 146 348 8 1 1 95 181 136 7 228 6 262 23 173 12 1 1 91 10 3072 41 154 95 130 291 4 1 1 4 62 69 120 1 193 4 240 36 154 1 9 67 3 2301 109 349 371 276 639 4 9 2 5 157 250 256 8 421 10 502 59 327 1 21 1 1 158 13 5373 1 1 10 4 7 2 1 11 7 41 8 1 11 1 23 12 4 3 42 9 15 2 2 50 15 3 4 35 1 1 1 1 10 5 1 1 3 3 20 4 7 1 1 1 1 10 4 1 5 1 3 1 2 26 1 1 1 9 2 1 1 1 3 1 2 1 13 2 5 4 1 7 4 1 1 5 5 4 2 1 6 2 269 1 63 80 33 10 218 82 22 25 198 2 56 68 35 14 157 44 27 20 467 3 119 148 68 24 375 126 49 45 (Industry) Bharti Axa Birla Sunlife HDFC Std ICICI Pru ING Vysya Kotak Max Mahindra NewYork Met Life Reliance Sahara Life SBI Life Shriram Tata AIG State Total LIC State Total
State / Union Territory
Aviva
Andhra Pradesh Arunachal Pradesh Assam Bihar Chattisgarh Goa Gujarat Haryana Himachal Pradesh Jammu & Kashmir
6 4 2 1 1 11 8 1
Jharkhand Karnataka Kerala
3 8 12
Madhya Pradesh Maharashtra Manipur
7 12
148
Meghalaya Mizoram Nagaland Orissa Punjab Rajasthan
1 6 7 6
Sikkim Tamil Nadu Tripura
1 10 1
Uttar Pradesh UttraKhand West Bengal
15 1 10
Andaman & Nicobar Islands Chandigarh Dadra & Nagrahaveli
Daman & Diu Delhi Lakshadweep Puducherry
4 1
Company Total
140
* Offices opened after seeking approval of the Authority Note: 1) Data as furnished by the insurers 2) Office as defined under Section 64VC of the Insurance Act, 1938
STATEMENT 60
INDIVIDUAL NEW BUSINESS UNDERWRITTEN STATEWISE

Bharti Axa Mahindra Premium policies 1.50 0.003 0.004 0.003 0.06 0.24 0.004 0.43 0.01 0.003 1.65 0.33 0.11 0.001 0.44 0.37 0.84 58876 3153 17301 30224 16.55 54.13 5.91 18.76 17745 17.96 13318 14.48 20450 15667 1862 30890 132 34196 2377 23191 12128 7.10 4109 9.22 40.96 3.78 0.97 5.81 65.93 1701 1.83 41109 1109 2.17 882 1.78 1160 5386 0.04 2 0.02 499 0.73 2.37 80.97 73.90 121090 366.78 53921 118.90 1033 1649 9514 2.73 103.01 131166 351.15 4.01 92.32 145499 362.56 22.45 98042 201.92 51622 393.63 163547 306.24 590271 837.95 24303 14.66 28875 39.25 44189 99.64 8071 14976 24 14 8 4565 6209 7687 6 33040 28 11285 2871 6156 18886 13.15 28989 120.15 111905 405.71 12639 31.53 10.74 0.04 0.02 0.01 8.16 13.87 11.82 0.01 72.05 0.01 15.92 4.09 39543 31.09 21589 89.39 98095 262.36 33857 65.92 7780 3.55 3656 8.64 27151 57.83 181 0.31 306 4894 7380 3226 33.16 27102 5888 3642 8167 3725 13.21 11171 2043 4.57 12443 28.63 1716 3.55 0.73 15.68 24.61 11.66 95.47 20.50 11.53 27.04 11.65 41.18 2538 6.40 4824 12.14 3580 6.17 8505 21.38 11729 30.98 14570 29.31 6029 10.04 7157 20.95 82237 707 1526 7509 15911 6908 8533 76158 19 396 7559 40539 10651 30028 2375 30202 1501 48468 22834 31.83 36316 108.74 153136 382.56 15125 28.24 30826 101.62 51278 2146 5.26 2166 10.46 4789 21.67 889 2.08 200 0.73 2652 4.79 102.49 136.38 0.80 6.03 2886 2.94 5850 10.99 6201 13.37 875 0.90 1736 2.15 11363 13.51 5174 10.30 18463 33.94 997 1.41 26797 20.43 1 1994 317 2.57 10982 33.10 23117 11.43 15129 11.75 0.02 0.28 7.15 67.27 18.02 1.99 45.22 1.99 56.46 9549 23.92 25 147.29 16395 1520 1931 1657 50.20 11184 210 9204 11.04 3675 9.50 16830 41.54 994 1.28 2594 6.80 12885 11.26 101 0.08 0.021 6.56 1.56 19.64 55.52 59.66 0.03 44.88 1.39 4.27 3.53 26.28 2.92 24535 20.94 34903 71.02 88449 210.06 43512 87.06 4109 13.02 32852 35.51 10928 31.69 policies policies policies policies policies policies policies 78429 96.10 5199 3714 987 9.37 6.05 5.43 44145 94.64 14681 26.36 2501 3353 4.40 7.66 29198 54.57 28873 83.49 5545 1161 8.43 56493 99.32 6.21 7967 11.70 16998 30.49 10417 14.96 3713 61280 103.28 46533 78.75 5.10 12271 22.56 No. of Premium No. of Premium No. of Premium No. of Premium No. of Premium No. of Premium No. of Premium No. of Premium policies 322.82 1.95 118.49 241.90 23.37 0.11 255.22 96.58 10.61 44.09 129.79 228.56 386.00 64.87 539.62 0.62 9.80 14.56 1.61 225.48 142.07 162.29 13.95 376.11 10.60 396.32 5.84 315.50 542 294 474 2 558 137 1354 1 4 345 4 96 36 2 4 1 1227 NewYork Life Birla Sunlife HDFC Std ICICI Pru* ING Vysya Kotak Max MetLife Reliance
Aviva*
Bajaj
Allianz
No. of
Premium
No. of Premium No. of
policies
policies
Andhra Pradesh
22679
36.11 155219
Arunachal Pradesh
34
0.10
550
Assam
3668
7.92
57833
Bihar
5246
10.23 159667
Chattisgarh
810
1.49
12460
Goa
1629
5.08
3815
Gujarat
14761
31.79 122457
Haryana
16348
33.55
48446
Himachal Pradesh
616
0.80
5133
Jammu & Kashmir
3246
4.71
19952
Jharkhand
4236
8.31
74152
149
Karnataka
11527
33.48 107543
Kerala
9793
30.22 155085
Madhya Pradesh
7144
13.06
33320
Maharashtra
31615
88.25 221392
Manipur
50
0.17
244
Meghalaya
110
0.23
3328
Mizoram
22
0.05
1309
Nagaland
125
0.24
752
Orissa
6095
12.90 129505
Punjab
43115
81.92
56267
Rajasthan
14649
15.69
83155
Sikkim
318
1.19
2920
Tamil Nadu
19531
58.97 216865
Tripura
826
1.17
5532
Uttar Pradesh
18497
43.54 200943
UttraKhand
980
1.73
2957
West Bengal
22568
57.66 169884

Bharti Axa Mahindra Premium policies 1.74 0.002 7.76 426584 742.88 522982 1372.85 1959575 4383.49 229189 443.26 165002 546.37 552505 791 0.60 1 0.03 594 0.58 85 70 0.001 0.05 906.19 35885 33.20 38172 148.39 163577 432.22 11462 19.13 42108 135.37 51132 127.79 14366 119406 162 0.07 32 0.04 31.77 313.72 5360 7.19 1 0.09 1476 1.82 2507 7.82 1861 3.76 59 0.01 policies policies policies policies policies policies policies No. of Premium No. of Premium No. of Premium No. of Premium No. of Premium No. of Premium No. of Premium No. of Premium policies 0.68 2.04 0.22 0.33 58.89 0.05 6.23 4207.18 5700 5 615 NewYork Life Birla Sunlife HDFC Std ICICI Pru* ING Vysya Kotak Max MetLife Reliance
Aviva*
Bajaj
Allianz
No. of
Premium
No. of Premium No. of
policies
policies
Andaman &
0.03
378
Nicobar Islands 4975 10.62 1812 10438 18.76 2.83 450683 801.09
Chandigarh
3364
7.86
893
Dadra & Nagrahaveli
28
0.05
127
Daman & Diu
47
0.08
204
Delhi
33162 101.01
23838
Lakshadweep
1 0.0009
30
Puducherry
246
0.66
2777
Company Total
297095
690.25
2078933
*It has been confirmed by the respective insurers that the no. of policies have been taken net of all cancellations including freelooks during the financial year.
# Does not include its overseas new busines premium of Rs.18.92 crore.
150

(Premium in Rs crore) SBI Life (Private) No. of policies 51496 15190 22219 20954 565 34266 11722 3109 1585 13071 24310 37588 34572 54814 793 1057 16 379 39047 18356 26063 192 76543 316 30525 3039 29251 100.26 9.06 79.40 0.46 267.11 0.73 23623 69.07 53.68 49.37 102.92 0.35 0.01 16164 5667 24920 30533 12800 63636 1.37 1.82 17.39 6.92 23.61 35.04 13.30 83.41 170.01 3321 6.11 64096 122.07 107.41 2665 5.16 2618 1.22 168.73 1436 2.63 28878 35.74 463493 205266 1374052 6998 8821 1366 3361 272138 350467 276630 6331 703657 10858 605592 30599 513634 87.92 4958 7.57 27546 35.65 442885 39.22 5652 10.46 147802 4.74 53493 112.51 273.68 1001.90 1373.04 389.96 2886.77 3.44 23.95 14.64 4.32 486.39 876.31 515.55 22.39 1536.78 19.22 1229.63 62.43 982.14 11.71 23008 53.04 45.74 6396 7.64 228594 461.05 105.39 23767 29.57 553967 1281.11 1845845 636185 309163 170388 757356 2797491 1574917 1801623 4108629 33893 13840 6950 20571 1076835 589717 1836161 17213 3124128 116811 4415855 476805 3317660 2.64 19838 58.24 100828 66.80 412 1.39 52695 124.04 858191 886.85 136.34 55.60 5569 6.41 265717 406.30 1750177 13.74 12985 14.59 141954 246.12 798775 724.13 943 2.60 10835 14.07 11778 940729 143.98 60074 110.34 16502 18.00 626591 1200.25 3963914 3949.80 4590505 policies policies policies policies policies 5150.05 16.67 970.26 1795.18 910886 120666 2212.61 2399812 1094.86 757.56 383.42 722.19 864779 332171 223881 905158 2701.95 3240376 2540.33 2038410 1956.98 2006889 4302.98 5482681 49.92 21.40 36.34 41.08 40891 22661 8316 23932 815.84 1348973 1464.17 2722.06 29.34 940184 2112791 23544 4077.78 3827785 121.86 127669 4692.78 5021447 549.11 507404 2734.41 3831294 1010.89 194.58 3493.73 1555.91 810.59 495.92 995.87 3703.85 3913.36 2346.94 7189.75 53.36 45.35 50.98 45.41 1302.23 2340.48 3237.61 51.73 5614.57 141.07 5922.41 611.54 3716.55 Premium No. of Premium No. of Premium No. of Premium No. of Premium No. of Premium (Industry) Shriram Tata AIG State Total LIC # State Total
State / Union
Sahara*
Territory
No. of
Premium
policies
Andhra Pradesh -
1677
2.10
Arunachal Pradesh
Assam
795
0.51
Bihar
6504
6.49
1388.87 2015894
Chattisgarh -
510
0.64
Goa
Gujarat
3025
2.41
Haryana -
362
0.35
Himachal Pradesh
Jammu & Kashmir
151
-
Jharkhand
751
1.14
Karnataka
452
0.67
Kerala
Madhya Pradesh
2179
2.08
Maharashtra
895
1.11
Manipur
Meghalaya
Mizoram
Nagaland
Orissa
2233
1.66
Punjab
81
0.04
Rajasthan
6454
7.21
Sikkim
Tamil Nadu
109
0.16
Tripura
Uttar Pradesh
12007
12.37
UttraKhand
494
0.46
West Bengal
1604
1.38

(Premium in Rs crore) SBI Life (Private) No. of policies 198 3.95 644 4.66 30830 44.10 31474 policies policies policies policies policies 48.76 Premium No. of Premium No. of Premium No. of Premium No. of Premium No. of Premium (Industry) Shriram Tata AIG State Total LIC # State Total
State / Union
Sahara*
Territory
No. of
Premium
policies
Andaman & Nicobar
Islands 2542 65 54 9561 4.75 565389 1764.25 96077 181.17 408707 541.96 438 0.59 8320 16.32 34526 101 0.06 144 39.47 37.61 52927 68.53 488358 1215.64 1322108 0.14 467 0.62 4477 5.45 0.31 252 0.62 61 0.01 7.09 7201 10.43 30330 58.87 285673 794.75 316003 313 4944 853.61 0.64 6.07 3876.06 0.02 42846 245 55.79 61617.83 0.07
Chandigarh -
150
0.14
Dadra & Nagrahaveli
Daman & Diu
Delhi -
1114
1.24
2660.42 1810466
Lakshadweep
Puducherry
1572
Company Total
41396
42.16
7919223 16944.58 38208575 44673.25 46127798
152
*It has been confirmed by the respective insurers that the no. of policies have been taken net of all cancellations including freelooks during the financial year.
# Does not include its overseas new busines premium of Rs.18.92 crore.
ANNEX I
INSURANCE COMPANIES OPERATING IN INDIA

LIFE INSURERS
Public Sector 1. Life Insurance Corporation of India (LIC) 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. Private Players Bajaj Allianz Life Insurance Co. Ltd. Birla Sun Life Insurance Co. Ltd. (BSLI) HDFC Standard Life Insurance Co. Ltd. (HDFC STD LIFE) ICICI Prudential Life Insurance Co. Ltd. (ICICI PRU) ING Vysya Life Insurance Co. Ltd. (ING VYSYA) Max New York Life Insurance Co. Ltd. (MNYL) MetLife India Insurance Co. Pvt. Ltd. (METLIFE) Kotak Mahindra Old Mutual Life Insurance Co. Ltd. SBI Life Insurance Co. Ltd. (SBI LIFE) TATA AIG Life Insurance Co. Ltd. (TATA AIG) Reliance Life Insurance Company Ltd. Aviva Life Insurance Co. Pvt. Ltd. (AVIVA) Sahara India Life Insurance Co. Ltd. (SAHARA LIFE) Shriram Life Insurance Co. Ltd (SHRIRAM LIFE) Bharti AXA Life Insurance Co. Ltd. (BHARTI AXA) Future Generali India Life Insurance Co. Ltd. (FUTURE GENERALI INDIA LIFE)
NON-LIFE INSURERS
Public Sector 1. 2. 3. 4. 5. 6. New India Assurance Co. Ltd. (NEW INDIA) National Insurance Co. Ltd. (NATIONAL) The Oriental Insurance Co. Ltd. (ORIENTAL) United India Insurance Co. Ltd. (UNITED) Export Credit Guarantee Corporation Ltd. (ECGC) Agriculture Insurance Company of India Ltd. (AIC) 6. 7. 8. 9. 10. 11. 1. 2. 3. 4. 5. Private Players Bajaj Allianz General Insurance Co. Ltd. (BAJAJ ALLIANZ) ICICI Lombard General Insurance Co. Ltd. (ICICI LOMBARD) IFFCO Tokio General Insurance Co. Ltd. (IFFCO TOKIO) Reliance General Insurance Co. Ltd. (RELIANCE) Royal Sundaram Alliance Insurance Co. Ltd. (ROYAL SUNDARAM) TATA AIG General Insurance Co. Ltd. (TATA AIG) Cholamandalam MS General Insurance Co. Ltd. (CHOLAMANDALAM) HDFC General Insurance Co. Ltd. (HDFC CHUBB) Star Health and Allied Insurance Company Limited (STAR HEALTH) Apollo DKV Insurance Co. Ltd. (APOLLO DKV) Future Generali India Insurance Co. Ltd. (FUTURE GENERALI INDIA) RE INSURER: General Insurance Corporation of India (GIC)
153
153 (ANNEXURE)
ANNEX II
REGULATIONS FRAMED UNDER THE IRDA ACT, 1999

Sl.No. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 Notification IRDA (Member of Insurance Advisory Committee) IRDA Appointment of Insurance Advisory Committee Regulations, 2000 IRDA (The Insurance Advisory Committee) (Meeting) Regulations, 2000 IRDA (Appointed Actuary ) Regulations, 2000 IRDA (Actuarial Report and Abstract) Regulations, 2000 IRDA (Licensing of Insurance Agents) Regulations, 2000 IRDA (Assets, Liabilities and Solvency Margin of Insurers) Regulations, 2000 IRDA (General Insurance-Reinsurance) Regulations, 2000 IRDA (Registration of Indian Insurance Companies) Regulations, 2000 IRDA (Insurance Advertisements and Disclosure) Regulations, 2000 IRDA (Obligations of Insurers to Rural Social Sectors) Regulations, 2000 IRDA (Meetings) Regulations, 2000 IRDA (Investment) Regulations, 2000 IRDA (Conditions of Service of Officers and other Employees) Regulations, 2000 IRDA (Insurance Surveyors and Loss Assessors ( Licensing, Professional Requirements and Code of Conduct)) Regulations, 2000 IRDA (Life Insurance - Reinsurance) Regulations, 2000 IRDA (Investment) (Amendment) Regulations, 2001 IRDA (Third Party Administrators - Health Services) Regulations, 2001 IRDA (Re-Insurance Advisory Committee) Regulations, 2001 IRDA (Investments) (Amendment) Regulations, 2002 IRDA (Preparation of Financial Statements and Auditors Report of Insurance Companies) IRDA (Protection of Policyholders Interests) Regulations, 2002 IRDA (Insurance Brokers) Regulations, 2002 IRDA (Obligations of Insurers to Rural and Social Sectors) Regulations, 2002 IRDA (Licensing of Corporate Agents) Regulations, 2002 IRDA (Licensing of Insurance Agents) (Amendment) Regulations, 2002 IRDA (Protection of Policyholders Interests) (Amendment) Regulations, 2002 IRDA (Manner of Receipt of Premium) Regulations, 2002 IRDA (Distribution of Surplus) Regulations, 2002 IRDA (Registration of Indian Insurance Companies) (Amendment) Regulations, 2003 IRDA (Investment) (Amendment) Regulations, 2004 IRDA (Qualification of Actuary) Regulations, 2004 IRDA (Obligations of Insurers to Rural / Social Sectors) (Amendment) Regulations, 2004 IRDA (Insurance Advisory Committee) Regulations, 2005 IRDA (Micro-Insurance) Regulations, 2005 IRDA (Maternity Leave) Regulations, 2005 IRDA (Obligations of Insurers to Rural or Social Sector) (Amendment) Regulations, 2005 IRDA (Reinsurance Cession) (Notification) Regulations, 2007 Regulations, 2002
154
154 (ANNEXURE)
ANNEX III (a)
APPOINTED ACTUARIES OF LIFE INSURERS (as on 31st March, 2007)

Bajaj Allianz Life Insurance Co. Ltd. Reliance Life Insurance Co. Ltd. Aviva Life Insurance Co. India Pvt. Ltd. Birla Sun Life Insurance Co. Ltd. HDFC Standard Life Insurance Co. Ltd. ICICI Prudential Life Insurance Co. Ltd. ING Vysya Life Insurance Co. Ltd. Life Insurance Corporation of India Max New York Life Insurance Co. Ltd. MetLife India Insurance Co. Pvt. Ltd. Kotak Mahindra Old Mutual Life Insurance Ltd. Sahara India Life Insurance Co. Ltd. SBI Life Insurance Co. Ltd. Tata AIG Life Insurance Co. Ltd. Shriram Life Insurance Co. Ltd. Bharti AXA Life Insurance Co. Ltd. * Mr. Anil Kumar Singh was appointed with effect from 01st July, 2007 Mr. Andrew Wakeling* Ms. Pournima Gupte Mr. Chandan Khasnobis Mr. Fabien Jeudy Mr. N. D. Taket Mr. Azim Mithani Ms. Hemamalini Ramakrishnan Mr. G. N. Agarwal Mr. John Charles Poole Mr. K. P. Sarma Mr. A Venkatasubramanian Mr. K. K. Dharni Mr. I. Sambasiva Rao Mr. Heerak Basu Mr. N S Sastry Mr. G L N Sarma
155
155 (ANNEXURE)
ANNEX III (b)
APPOINTED ACTUARIES OF NON-LIFE INSURERS (as on 31st March, 2007)

Agriculture Insurance Co. of India Ltd. Bajaj Allianz General Insurance Co. Ltd. Cholamandalam MS General Insurance Co. Ltd. General Insurance Corporation of India (Life Re-Insurance Department) General Insurance Corporation of India (Non-Life Re-Insurance Department) HDFC Chubb General Insurance Co. Ltd. ICICI Lombard General Insurance Co. Ltd. IFFCO Tokio General Insurance Co. Ltd. National Insurance Co. Ltd. The New India Assurance Co. Ltd. Reliance General Insurance Co. Ltd. Royal Sundaram Alliance Insurance Co. Ltd. TATA AIG General Insurance Co. Ltd. The Oriental Insurance Co. Ltd. United India Insurance Co. Ltd. Star Health and Allied Insurance Co. Ltd. Mr. S. Chidambaram Ms. Asha J Joshi Mr. M. Venkatesan Mr. T. Bhargava
Mr. D. K. Pandit
Mr. N. Lakshmanan Mr. Liyaquat Khan Mr. A. P. Peethambaran Mr. B. Chatterjee Mr. A. R. Prabhu Mr. N. G. Pai Mr. O. Lakshminarayana Mr. K. Hanumantha Rao Mr. P. C. Gupta Mr. S. Krishnan Mr. R. Soundararajan
156
156 (ANNEXURE)
ANNEX IV (a)
INDIAN ASSURED LIVES MORTALITY (1994-96) (modified) ULTIMATE

Age 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 Mortality rate 0.001630 0.000960 0.000670 0.000620 0.000470 0.000420 0.000380 0.000400 0.000400 0.000400 0.000380 0.000450 0.000530 0.000650 0.000713 0.000770 0.000823 0.000873 0.000919 0.000961 0.000999 0.001033 0.001063 0.001090 0.001113 0.001132 0.001147 0.001159 0.001166 0.001170 0.001170 0.001171 0.001201 0.001246 0.001308 0.001387 0.001482 0.001593 0.001721 0.001865 0.002053 0.002247 0.002418 0.002602 0.002832 0.003110 0.003438 0.003816 0.004243 0.004719 Age 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 Mortality rate 0.005244 0.005819 0.006443 0.007116 0.007839 0.008611 0.009433 0.010294 0.011025 0.011951 0.013073 0.014391 0.015904 0.017612 0.019516 0.021615 0.022724 0.025617 0.028823 0.032372 0.036294 0.040623 0.045392 0.050639 0.056404 0.062728 0.069655 0.077231 0.085502 0.094519 0.104331 0.114992 0.126553 0.139067 0.151077 0.162298 0.174149 0.186638 0.199775 0.213560 0.227995 0.243072 0.258782 0.275109 0.292031 0.309522 0.327549 0.346073 0.365052 0.384436
157
157 (ANNEXURE)
ANNEX IV (b)
MORTALITY RATES OF ANNUITANTS IN LIC OF INDIA LIC A (96-98) ULTIMATE

Age 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 Mortality rate 0.000919 0.000961 0.000999 0.001033 0.001063 0.001090 0.001113 0.001132 0.001147 0.001159 0.001166 0.001170 0.001170 0.001171 0.001201 0.001246 0.001308 0.001387 0.001482 0.001593 0.001721 0.001865 0.002053 0.002247 0.002418 0.002602 0.002832 0.003110 0.003438 0.003816 0.004243 0.004719 0.005386 0.006058 0.006730 0.007401 0.008069 0.008710 0.009397 0.010130 0.010907 0.011721 0.011750 0.012120 0.012833 Life Expectation 57.45 56.50 55.56 54.61 53.67 52.72 51.78 50.84 49.89 48.95 48.01 47.06 46.12 45.17 44.22 43.28 42.33 41.38 40.44 39.50 38.56 37.63 36.70 35.77 34.85 33.93 33.02 32.11 31.21 30.32 29.43 28.56 27.69 26.84 26.00 25.17 24.35 23.55 22.75 21.96 21.18 20.41 19.64 18.87 18.10 Age 65 66 67 68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 100 101 102 103 104 105 106 107 108 109 110 Mortality rate 0.013889 0.015286 0.017026 0.019109 0.021534 0.024301 0.027410 0.030862 0.034656 0.038793 0.043272 0.048093 0.053257 0.058763 0.064611 0.070802 0.077335 0.084210 0.091428 0.098988 0.106891 0.115136 0.123723 0.132652 0.141924 0.151539 0.161495 0.171794 0.182436 0.193419 0.204746 0.216414 0.228425 0.240778 0.253473 0.266511 0.279892 0.293614 0.307679 0.322087 0.336836 0.351928 0.367363 0.383139 0.399258 0.415720 Life Expectation 17.33 16.56 15.81 15.08 14.36 13.67 12.99 12.35 11.72 11.13 10.56 10.01 9.49 9.00 8.53 8.08 7.66 7.26 6.88 6.52 6.19 5.87 5.56 5.28 5.01 4.76 4.52 4.29 4.07 3.87 3.68 3.50 3.33 3.17 3.01 2.86 2.72 2.59 2.46 2.33 2.19 2.05 1.89 1.70 1.45 1.08
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ANNEX V
LIFE INSURANCE PRODUCTS CLEARED DURING THE FINANCIAL YEAR 2006-07

Sl. No. 1. Life Insurer BAJAJ ALLIANZ LIFE Name of the Product /Riders Bajaj Allianz Samraksha Bajaj Allianz New Unit Gain Super Bajaj Allianz Capital Unit Gain Bajaj Allianz New Unit Gain Easy Pension Plus - SP Bajaj Allianz Unit Gain Guarantee - SP Bajaj Allianz New Unit Gain Premier - SP Bajaj Allianz New Unit Gain Plus - SP Bajaj Allianz New Unit Gain Easy Pension Plus - RP Bajaj Allianz New Family Gain Bajaj Allianz New Unit Gain Plus Bajaj Allianz New Unit Gain Bajaj Allianz New Group Gratuity Care Bajaj Allianz New Group Superannuation Care Bajaj Allianz New Secure First Bajaj Allianz New Risk Care UL Accidental Death Benefit UL Accidental Permanent Total/Partial Disability Benefit UL Critical Illness Benefit UL Hospital Cash Benefit UL Mahila Gain Benefit Reliance Connect 2 Life Plan Reliance Group Superannuation Plan Reliance Golden Years Plan Reliance Market Return Plan Reliance Golden Years Plan - Plus Reliance Golden Years Plan - Value Reliance Group Gratuity plan Reliance Money Guarantee Plan Reliance Auto Invest Plan Home Builder Life Long Unit Linked Life Long With Profits Life Bond Unit Linked Life Bond With Profits Life Bond 5 Life Bond Plus Life Saver Unit Linked Life Saver With Profits Freedom Life Plan Group Gratuity Plan Young Achiever Unit Linked Young Achiever With Profits Pension Plus Unit Linked Pension Plus With Profits Treasure Plus Unit Linked Easy Life Plus Unit Linked Easy Life Plus With Profits Save Guard Save Guard Junior Group Superannuation Plan Life Saver Plus Grameen Suraksha Aviva Dhan Vriddhi
2.
RELIANCE LIFE
3.
AVIVA LIFE
159
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Sl. No. 4.
Life Insurer
Name of the Product /Riders
BIRLA SUN LIFE
Classic Life Premier Prime Life Single Premium Bond Prime Life Premier Life Companion Money Back Plan Life Companion Endowment Plan Birla Sun Life Group Gratuity Product Birla Sun Life Group Superannuation Product Birla Sun Life Flexi SecureLife Retirement Plan II Flexi Insurance Solutions Simply Life Supreme Life Birla Sun Life Dream Plan Birla Sun Life Childrens Dream Plan Birla Sun Life Group Gratuity Guaranteed Interest Credit Product Birla Sun Life Group Leave Encashment Guaranteed Interest Credit Product Birla Sun Life Group Superannuation Guaranteed Interest Credit Product HDFC HDFC HDFC HDFC HDFC HDFC HDFC HDFC HDFC HDFC Unit Linked Young Star Unit Linked Young Star Plus Unit Linked Young Star Suvidha Unit Linked Young Star Suvidha Plus Unit Linked Endowment Unit Linked Endowment Plus Unit Linked Endowment Suvidha Unit Linked Endowment Suvidha Plus Unit Linked Pension Unit Linked Pension plus
5.
HDFC STANDARD LIFE
6.
ICICI PRUDENTIAL LIFE
Cash Plus Diabetes Care (Critical Illness Insurance) Diabetes Care Plus (Critical Illness + Life Insurance) ICICI Pru Group Superannuation ICICI Pru Group Superannuation Platinum ICICI Pru Group Superannuation Plus Smartkid New Unit Linked Single Premium Invest Shield Cash Back Invest Shield Life -New Life Time plus Life Time Super Pension Premier Life Gold Smart Kid New UL RP ICICI Pru Group Gratuity platinum ICICI Pru Group Gratuity ICICI Pru Group Gratuity Plus Life Link Super Pension LifeTime Super Life Link Super ICICI Pru Credit Assure Hospital Care Cancer Care Plus ICICI Pru New Group Superannuation ICICI Pru New Group Superannuation Plus ICICI Pru New Group Superannuation Platinum Critical Illness Rider Accident Death and Disability Benefit Rider Waiver of Premium Rider Income Benefit Rider Diabetes Enhanced Rider 160
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Sl. No. 7.
Life Insurer
ING VYSYA LIFE
ING Vysya Life Group Decreasing Mortgage Cover Plan High Life High Life Plus ING Vysya Life Group Superannuation Plan - Defined Benefit Scheme New Freedom plan New Future perfect plan New One Life Plan ING Vysya Group Gratuity ING Life Plus LICs New Bima Gold LICs Gratuity Plus LICs Market Plus Jeevan Akshay - V LICs Jeevan Madhur LICs Money Plus LICs Child Career Plan LICs Child Future Plan LICs Premium Waiver Benefit Rider (with Auto Cover) LICs Critical Illness Benefit Rider Unit Linked Group Gratuity Plan Life Invest Plan Max Amsure Secure Returns Builder Life Maker Pension Plan Life Maker Unit Linked Investment Plan Unit Linked Group Superannuation Plan Life Maker Premium Investment Plan Met Smart Plus Met Smart Premier Met Advantage Plus Non-Par Immediate Annuity Met Smart Plus -Single Pay Met Smart Premier - Single Pay Met Group Gratuity Met Ultimate Premier Met Ultimate Plus Critical Illness Rider (Linked) Accident Death Benefit Rider (Linked) Kotak Flexi Plan Kotak Headstart Future Protect (Joint Life Plan) Kotak Headstart Future Protect (Single Life Plan) Kotak Headstart Assure Wealth (Joint Life Plan) Kotak Headstart Assure Wealth (Single Life Plan) Sukhi Jeevan Kotak Retirement Income Plan (Unit Linked) -without cover plan Kotak Retirement Income Plan (Unit Linked) - Single Premium plan Kotak Safe Investment Plan II Kotak Privileged Assurance Plan Kotak Easy Growth Plan (with 1.25 times cover) Kotak Easy Growth Plan (With 5 Times Cover) Kotak Retirement Income Plan (Unit Linked) - with cover plan Kotak Superannuation Grouplan Kotak Gratuity Grouplan - KGGP Kotak Platinum Advantage Plan
8.
LIFE INSURANCE CORPORATION OF INDIA
9.
MAX NEWYORK LIFE
10.
MET LIFE
11.
KOTAK MAHINDRA OLD MUTUAL LIFE
161
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Sl. No. 12.
Life Insurer
SBI LIFE
SBI Life Group Leavencashment cum Life Cover Scheme SBI Life Horizon II SBI Life Unit Plus II Regular SBI Life Unit Plus II Single SBI Life - Group Superannuation SBI Life Horizon II Pension SBI Life Unit Plus II Pension SBI Life Golden Gratuity SBI Life Group Immediate Annuity Navakalyan Yojana Ayushman Yojana Invest Assure Plus Sampoorn Bima Yojana Invest Assure II Invest Assure Gold TATA AIG Unit Linked Gratuity Scheme II (ULGS-II) TATA AIG Unit Linked Super Annuation scheme II - Defined Contribution (ULSS-II) Sahara Sahayog (Micro Endowment Insurance without profit plan) Sahara Ankur Sahara Sanchay - R Sahara Samriddhi Sahara Swabhimaan Sahara Premium Waiver Benefit Rider for Unit Linked Plan Sahara Accidental Death Benefit and Accidental Total and Permanent Disability Benefit Rider (for unit linked plans) Shriplus Shri Laab Shri Vivah ShriPlus (SP) Shri Vidya Immediate Annuity Plan Shri Vishram Shri Sahay Accident Shield Accident Benefit Rider (SP) Family Income Benefit Rider (SP) Wealth Confident Future Confident Bharti AXA FutureConfident II Bharti AXA Secure Confident Bharti AXA Save Confident Bharti AXA ServSuraksha Bharti AXA Invest Confident Bharti AXA Group Suraksha Critical Illness Rider Accidental Death and Disability Benefit Rider
13.
TATA AIG LIFE
14.
SAHARA INDIA LIFE
15.
SHRIRAM LIFE
16.
BHARTI AXA LIFE
162
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ANNEX VI
NON-LIFE PRODUCTS FILED BY INSURANCE COMPANIES UNDER FILE & USE PROCEDURES DURING THE FINANCIAL YEAR 2006-07
Name of the Insurer Agriculture Insurance Co. Ltd. Name of the Product Potato Crop Input Insurance Poppy Insurance-Micro Insurance Bio-Fuel Insurance Policy Wheat Insurance Wheat Insurance (Modified) Weather Insurance (Rabi Crops) Weather Based Crop Insurance Scheme Varsha Bima - Microinsurance Policy Rainfall Insurance - Microinsurance Weather Insurance (Rabi Crops)- Microinsurance Rainfall Insurance Coconut Palm and Yield Insurance Bajaj Allianz Senior Citizen Health Plan Sankat mochan Policy Packaged Products Overseas Travel Policy Health Guard F&U Product- Health Ensure Cholamandalam Home Total Policy Office Total Policy Shop Total Policy Educational Institution Hotel Package Enterprise Package ECGC GIC HDFC-CHUBB Individual post shipment guarantee Terrorism Risk Insurance Pool Business Suraksha ClassiK Machinery Loss of Profit Advance Loss of Profit Educators Policy Employment Practices Liability Insurance Information and Network Technology Errors or Omissions Liability Insurance Commercial General Liability Insurance Livestock (Sheep & Goat) Insurance New Healthwise Policy
163
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Name of the Insurer ICICI Lombard
Name of the Product Pharma guard Autoguard Secure mind policy Tax gain health insuance
IFFCO Tokio
Diamontaries Block Insurance Policy Errors & Omissions Technology Policy Dhanam Bon Voyage Nri Dhan Yatra Dhanam Vidhya Dhanam Micro Insurance Policy Fine Art Policy (Pvt Collectors Policy) Fine Art Policy (Art Dealers and Gallery Owner Policy) Pravasi Bhartiya Bima Yojana Individual Medishield Kisan Suvidha Bima Policy Weather Insurance Policy Dhanam Suraksha PNB-Housing Finance Comprehensive General Liability Policy Extended Warranty Policy
National Insurance
Parivar Mediclaim Vidyarthi Mediclaim Dhanvawntri Mediclaim SBBJ National Medikavach Star National Swasthya Bima Varishta Mediclaim for senior citizens National Swasthya Bima Allbank National Mediclaim Scheme Naini National Health Mediclaim Insurance Policy Group Personal Accident Kidzee Policy Individual & Group Mediclaim Policy DOS (Potatoes)
New India Assurance
Individual Mediclaim Policy, Group Mediclaim Policy, Janata Mediclaim, Family Floater Policy Senior Citizens Mediclaim Policy
Oriental Insurance Reliance General
Micro-Insurance -Swasthya Bima Policy Student Care Corporate Flexi Travel Home Loan Insurance Bankers Indemnity
164
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Name of the Insurer
Name of the Product Healthy Family Auto Loan Care Personal Loan Care Port Package Special Contingency Inland Travel Care Hotel and Restaurant Package
Royal Sundaram
Double Protect Insurance Health Care Insurance Health Infiniti Insurance Health Forever Insurance Medishield Insurance Income Protector Insurance Wind Energy Farmers Package
Star Health
Accident Trauma Care (Individual) Star Pravasi Bharatiya Bima Yojana STAR Care n cash insurance Star Health Registration files Package Policies Star HIV Care Insurance Mediclassic Insurance (group) (Revised) Micro Health care Insurance Policy (Revised)
TATA-AIG General
Business Guard - Shop Policy (Small Business) Business Guard - Educational Institutions Policy (Small Business) Business Guard - Office Policy (Small Business) Business Guard - Package Policy (Small Business) Business Guard - Society (Small Business) Home Secure-Householders Accident & Health-Domestic Travel Protection Policy Accident & Health-Student Guard Plus Policy Accident & Health Product-Rural Insurance-Group PA Policy Accident & Health Product-Rural Insurance-Individual PA Policy Accident & Health Product-Micro Insurance-Individual PA Policy Accident & Health Product-Micro Insurance-Group PA Policy Accident & Health Product-Injury Guard Policy Business Guard-Agri-Pump Set (Small Business Solutions) Overseas Travel Insurance - Travel Guard
United India
Omp for schengen countries Uni micro insurance
165
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ANNEX VII
OBLIGATORY CESSIONS RECEIVED BY GIC

CLASS LIMIT OF CESSION IN SUM INSURED OR PML Fire, IAR, CL Mega Risks Marine Cargo, War & SRCC Rs. 100 Crores PML per risk Rs. 100 Crores PML per risk Rs. 10 Crores sum insured per policy Reinsurance Commission 35% Lead Terms 25.00% Profit Commission 25% 20% 10% at the end of 36 months Marine Hull, War & SRCC Rs.16 Crores sum insured per vessel Net rated risks: 5% Gross rated risks: 17.5% Motor Workmens Compensation General Aviation Hull General Aviation Liability Aviation (Airlines) No limit No limit No limit No limit Rs. 120 crores sum insured per risk on hull and corresponding percentage share on other insurances Oil and Energy Rs. 15 crores sum insured per risk 5% 20% at the end of 36 months All Liability Products excluding financial liability Financial, credit & guarantee lines, mortgage insurance, special contingency policies, etc. Crop/Weather Insurance Other Miscellaneous Machinery Breakdown, Boiler Explosion and related loss of profits Rs. 10 Crores sum insured per event No limit* Rs.30 crores PML but where PML exceeds 33.3%, Rs. 90 crores sum insured on each risk, material damage and loss of profits combined Contractors All Risks, Erection All Risks, Advance Loss of Profits, DSU insurances Rs. 60 crores PML but where PML exceeds 33.3%, Rs. 180 crores sum insured on each risk material damage and loss of profits combined. 30% 25% 20% 25% 30% Nil Nil 25% Rs. 5 Crores per policy including USA/ Rs. 10 Crores per policy excluding USA Rs. 10 Crores sum insured per event 10% Nil 25% Nil 20% 20% 12.50% 12.50% Average Terms Nil Nil Nil Nil Nil
166
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ANNEX VIII
REGISTERED BROKERS (STATE-WISE)

S.No State No of Licensed Brokers as on 30-08-2007 Direct 1 2 3 4 5 6 7 8 9 10 11 12 13 Maharashtra Delhi West Bengal Tamil Nadu Andhra Pradesh Uttar Pradesh Punjab Karnataka Gujarat Kerala Rajasthan Chandigarah Madhya Pradesh Total 53 48 21 18 17 15 11 10 10 6 5 5 3 222 Composite 19 7 1 2 2 0 0 0 0 0 0 0 0 31 Reinsurance 4 1 0 0 0 0 0 0 0 0 0 0 0 5
No of licenses granted to Brokers (Calendar year wise) as on 30-08-2007

Year 2003 2004 2005 2006 2007 Total Direct 111 42 33 21 15 222 Composite 22 6 1 1 1 31 Reinsurance 4 Nil Nil Nil 1 5 Total 137 48 34 22 17 258
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ANNEX IX
CIRCULARS / ORDERS / NOTIFICATIONS ISSUED BY THE AUTHORITY 2006-07

Sl.No. 1 2 Ref. No. Date of Issue 4/19/2006 4/21/2006 Subject Tendering of Insurance Covers IRDA (Assets, Liabilities & Solvency Margin of Insurers) Regulations, 2000 - Requirements of stipulations under Section 64V (1)(i) of the Insurance Act. Third Party Insurance of Motor Vehicles - Refusal Predatory Pricing Practices on the eve of De-tariffing Investment in Innovative Perpetual Debt Instruments on Banks Tier-1 Capital and Debt Capital Instruments of Banks Upper Tier-2 Capital. Direction to ICICI Lombard for withdrawal of Loan Shield Product and discontinue the marketing of the same by its offices, agents & insurance brokers. Constitution of Committee to look into the existing grievance redressal systems in the PSUs and formulate guidelines for adoption by the insurers and suggest modifcations to the regulations for protection of policy holders interest. List of Life Insurers deemed to have not contravened the provisions of Section 40B of the Insurance Act 1938 Read with Rule 17D of The Insurance Rules 1939 IRDA (Assets, Liabilities & Solvency Margin of Insurers) Regulations, 2000 - Consideration of reserve for computation of solvency margin which is less than that created in the financial statements. Brokers - On-life Filing of Annual Returns Life Insurance Products - Guidelines for Unit Linked Life Insurance Products Addendum to On-line Agents Training Institute Guidelines. Working Group on IRDA Investment Regulations Expert Committee on Brokers and Broker Related Issues Obligations of insurers to rural and social sectors - Sixth year requirements Draft Revised File & USE Guidelines for General Insurance Products Guidelines on Anti-Money Laundering Programme for Insurers.
001/NL/GEN/APR 06 002/IRDA/F&A/Apr-06
3 4 5
003/NL/GRV/SRP-06 004/NL/GEN/APR-06 IRDA/INV/CIR/005/2006-07
4/22/2006 4/22/2006 4/28/2006
25/F&U/ICICI-Lomb/Loan Shied/06-07
4/28/2006
006/IRDA/GRV/MAY-06
5/10/2006
007/IRDA/F&A/MAY-06
5/11/2006
008/IRDA/F&A/May-06
5/17/2006
9 10 11
009/IRDA/BRO/MAY-06 010/IRDA/Actl/May-2006 011/IRDA/ATI/Jun-06 ADM/ORD/76/JUNE-06
5/26/2006 5/26/2006 6/23/2006 6/30/2006 7/19/2006 7/24/2006 8/9/2006 7/27/2006
12
012/IRDA/F&A/Jul-06 IRDA/GI/Detariff/06
13
013/IRDA/LIFE/JUL-06
168
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Sl.No. 14 15 -
Ref. No.
Date of Issue 8/16/2006 8/16/2006
Subject Notice of meetings of Constitution of Expert Committee to review the Regualtions govering the licensing of Brokers. Authorization of Sri RC Sharma, SAD in place of Sri TS Naik, DD as signatory to sign surveyors licenses on behalf of IRDA. Special Dispensation to insurers under Section 64UM (2) of the Insurance Act 1938 in view of flash floods in Surat, Gujarat. On-line Filing of Monthly New Business Statistics by Life Insurers Guidelines on Anti-Money Laundering Programme for Insurers. Guidelines on Insurance and Reinsurance of General Insurance Risks Guidelines on File and Use Requirements for General Insurance Products. Guidelines on File and Use Requirements for General Insurance Products. F&U Guidelines - Meeting with Compliance Officers Data Collection by TAC Post Detariffing Guidelines on Anti-Money Laundering Programme for Insurers. Constitution of Publicity Committee - Inclusion of Sri Prabodh Chander, Executive Director as Member Constitution of Consultative Committee under Section 110G of the Insurance Act, 1938. Guidelines on Anti-Money Laundering Programme for Insurers. Sri Jagdish Prasad Meena elected as Member of the Tariff Advisory Committee Motor Insurance Premium Rates for Third Party Liability Only Cover Limits on Payment of Commission or Brokerage on General Insurance Business. Regulation of rates, terms and conditions of general insurance business. Motor Third Party Insurance - Direction under Sec.34 of Insurance Act.
015/IRDA/SURV/AUG-06
16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32
IRDA/SURV/016/Aug-06 IRDA/F&A/018/Aug-06 019/IRDA/LIFE/SEP-06 020/NL/IRDA/06 021/IRDA/F&U/SEP-06 023/IRDA/F&U/Oct-06 024/IRDA/F&U/Oct-06 025/IRDA/R&D/Oct-06 026/IRDA/AML/Nov-06 028/IRDA/PC/NOV-06 029/IRDA/Leg/Nov-06 030/IRDA/AML/Nov-06 IRDA/TAC/031/Nov-06 032/IRDA/F&U/06-07 033/IRDA/Brok-Comm/DEC-06 034/IRDA/De-Tariff/Dec-06 035/IRDA/Motor-TP/Dec-06
8/23/2006 8/28/2006 9/26/2006 9/15/2006 9/28/2006 10/23/2006 10/30/2006 11/8/2006 11/9/2006 11/17/2006 11/15/2006 11/20/2006 11/28/2006 12/4/2006 12/4/2006 12/4/2006 12/4/2006
169
169 (ANNEXURE)
Sl.No. 33 34
Ref. No.
Date of Issue 12/8/2006 12/15/2006
Subject Actuarial Review Committee - Induction of Sri PA Balasubramanian as Member Guidelines on F&U requirements of general insurance products - Issuance of notices for renewals due in the month of January 2007. Investments in 8.13% oil marketing companies; GOI special bonds 2021 F&U Guidelines - Forms for submission to Board-Exposure Draft. Guidelines for File & Use requirements for general insurance products - Issuance of notices for renewals due in the month of January, 2007 Closure/Relocation of places of business Guidelines for opening of representative / liaison offices overseas by Indian Insurance company registered with IRDA. Motor Insurance Premium Rates for Third Party Liability Only Cover Appointed Actuarys Annual Report - Life Insurance Business. File & Use Procedure - Life Insurance Prouducts - Unique Identification Number (ID)
036/IRDA/ACTL/ARC/2006-07 037/IRDA/F&U/Dec-06
35 36 37
IRDA/INV/CIR/038/2006-07 IRDA/039/F&U/06-07 40/IRDA/F&U/Dec-06
12/20/2006 12/22/2006 12/25/2006
38 39 40 41 42
041/IRDA/BOO/Dec-06 IRDA/042/For Office/06-07 043/IRDA/De-Tariff/Jan-07 046/IRDA/ACTL/AAAR/Ver2.0 47/IRDA/ACTL/FUP/VER4.0/JAN 2007
12/28/2006 1/8/2007 1/23/2007 1/31/2007 1/31/2007
43 44 45 46 47 48 49
048/IRDA/ACTL/FUP/VER3.0/JAN-2007 049/IRDA/ACTL/FUP/VER4.0/JAN 2007 050/IRDA/Mot-TP/Feb-07 053/IRDA/Actl/ULIP G/ February-07 054/IRDA/F&A/FEB-07 055/IRDA/F&A/FEB-07 056/IRDA/ACTL/Solvency Margin/ February-07
1/31/2007 1/31/2007 2/5/2007 2/20/2007 2/20/2007 2/21/2007 2/23/2007
File & Use Procedure - Life Insurance Products Note for the Use of Apopinted Actuaries for the Preparation of Actuarial Report & Abstract for the year ended 31.3.2007. Motor Third Party Insurance Pool Money Market Instruments in Unit Linked Products Unit Linked Disclosure Norms Applicability of Revised AC-15 Reporting of Maintenance of Solvency Ratio - Quarterly basis.
50 51 52
057/IRDA/AML/MAR-07 25/IRDA/F&U058/06-07 59/IRDA/AGENCY/MAR2007
3/2/2007 3/13/2007 3/22/2007
Guidelines on Anti-Money Laundering Programme for Insurers. Filing of Premium Rates for Fire & Engineering insurances (including AIR & Petrochemical) & clearance thereof Publishing of updated details of Corporate Agents on Insurers websites.
170
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Sl.No. 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73
Ref. No.
Date of Issue 3/23/2007 3/29/2007 3/29/2007 3/29/2007 3/30/2007 4/16/2007 4/16/2007 4/16/2007 4/26/2007 4/27/2007 4/30/2007 5/14/2007 5/11/2007 5/19/2007 5/21/2007 5/21/2007 5/23/2007 5/24/2007 6/8/2007 7/4/2007 6/25/2007
Subject Constitution of Core IT Team for TAC. Motor Third Party Insurance Pool - Direction under Sec.34 of the Insurance Act, 1938 Motor Third Party Insurance Pool Solvency Margin in respect of Motor Pool Insurance Qualificaiton of the Corporate Agent. United Linked Diclosure Norms Declaration of Bonus under Sec.49 of the Insurance Act, 1938. Monthly premium data by all non-life insurers - furnishing of details in the prescribed format. Change of E-mail IDs of IRDA officials Premanent Lok Adalat for Public Utility Services at Hyderabad. Regulations on Rural and Social Sector Obligations, 2007 Guidelines on Advertisement, Promotion & Publicity of Insurance Companies and insurance intermediaries Life Insurance Products - Guidelines for Unit Linked Insurance Products Filing of products and rates and terms - Authority F&U guidelines dated 28/9/2007 Insertion of word Insurance Boker/Brokers/ Broking - in the name of the company. Insertion of word Insurance Boker/Brokers/ Broking - in the name of the company applying for a Broker License. Documentation & Procedural requirements for obtaining broker license. Furnishing of Statistics by Life Insurers Building up of database on places of business/ offices of insurers Monthly reporting of places of business/offices of insurers Amendments to File & Use Guidelines - Premium Rates of Fire, Engineering and Workmens Compensation Classes of Insurance. File & Use Procedure for Riders - General Instructions to Life Insurers
060/IRDA/R&O/Cir/Mar-07 061/IRDA/Motor-TP/Mar-07 062/IRDA/Motor-TP/Mar-07 063/IRDA/F&A/Mar-07 064/IRDA/AGENCY/MAR2007 IRDA/F&A/001/Apr-07 IRDA/F&A/002/Apr-07 IRDA/F&A/003/Apr-07 004/IRDA/IT/APR-07 IRDA/LEGAL/CIR/005/APR-07 IRDA/F&A/006/Apr-07 007/IRDA/CIR/ADV/MAY-07 008/IRDA/Actl/ULIP_G/May-2007 IRDA/010/F&U/07-08 011/IRDA/CIR/BRO/May-07 012/IRDA/NOT/BRO/MAY-07 014/IRDA/NOT/BRO/MAY-07 015/IRDA/CIR/LIFE/May-07 017/IRDA/CIR/LIFE/June-07 019/IRDA/CIR/LIFE/June-07 IRDA/20/F&U/07-08
74
021/IRDA/ACTL/FUP/ VER1.0/JULY 2007/
7/4/2007
171
171 (ANNEXURE)
S.No. 75 76
Ref. No.
Date of Issue 7/6/2007 7/9/2007
Subject Guidelines on Anti-Money Laundering Programme for Insurers Amendments to File & Use Guidelines - Premium Rates of Fire, Engineering and Workmens Compensation Classes of Insurance. Guidelines for closure of liaison office established in India by insurance companies registered outside India Provisions made in the Proposal Forms for Unit Linked Products Judgement of the Honble Supreme Court in National Insurance Co. Ltd. Vs Smt. Sobina Iakai - Period of commencement of insurance policy. Vintage Cars - Premium rates IRDA (Protection of Policyholders Interests) Regulations, 2002 - Supply of copy of survey report Imposter - Mr. J Mohapatra fradulently representing as Advisor to IRDA. Non-life insurance - further relaxation of price controls. Appointment of CEO/MD - Approval under Section 34A of Insurance Act, 1938. Life Insurance Products - File & Use Procedure Levy of Penalty under Section 105 B of the Insurance Act, 1938 - Life Insurers Levy of Penalty under Section 105 B of the Insurance Act, 1938 -General Insurers FIMMDA Reporting Platform for corporate bond transactions - Reg. Submission of RI returns under Regulations 3(12) of the IRDAs (General Insurance - Reinsurance) Regulations, 2000 Constitution of Committee to look into the issues of Distribution Channels Publishing updated details of individual agents on insurers website.
022/CIR/IRDA/AML/JUL-07 IRDA/23/F&U/07-08
77 78 79
IRDA/024/Closure-FLO/2007-08
7/17/2007
025/IRDA/Actl/F&U Procedure/LP/July-2007 7/26/2007 026/IRDA/LEGAL/CIR/JUL-07 7/25/2007
80 81 82 83 84 85 86 87 88 89 90 91
027/IRDA/MOTOR/CIR/JUL-07 028/IRDA/LEGAL/CIR/AUG-07 029/IRDA/LEGAL/CIR/AUG-07 IRDA/030/F&U/07-08 031/IRDA/CIR/COMPLIANCE/AUG-2007 032/IRDA/ACTL/FUP/VER 5.0/SEP 2007 IRDA/ORD/F&A/033/SEP-07 IRDA/ORD/F&A/034/SEP-07 INV/CIR/035/2007-08 IRDA/036/IR Returns/07-08 IRDA/Life/Dist.Channel/037/ 2007-08 38/IRDA/AGENCY/Sep 2007
7/30/2007 8/13/2007 8/13/2007 8/13/2007 8/23/2007 9/6/2007 9/10/2007 9/10/2007 9/10/2007 9/17/2007 9/21/2007 9/24/2007
172
172 (ANNEXURE)
ANNEX X
ANNUAL STATEMENT OF ACCOUNTS FOR THE YEAR ENDED MARCH 31, 2007
173
173 (ANNEXURE)
174
174 (ANNEXURE)
AUDIT CERTIFICATE
I have audited the attached Balance Sheet of Insurance Regulatory and Development Authority as at 31st March 2007 and the Income and Expenditure Account, Receipts and Payments Account. Preparation of these financial statement is the responsibility of the Authority. My responsibility is to express an opinion on these financial statements based on my audit. I have conducted my audit in accordance with applicable rules and the auditing standards generally accepted in India. These standards require that I plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatements. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. I believe that my audit provides a reasonable basis for my opinion. Based on our audit, I report that: 1. I have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purposes of our audit. Subject to observations in the Audit Report annexed herewith, I report that the Balance Sheet and the Income and expenditure Account / Receipt and Payment Account deal with by this report are properly drawn up and are in agreement with the books of accounts. In my opinion and to the best of my information and according to the explanations given to me: (i) the accounts give the information required under the earlier prescribed format of accounts: (ii) the said Balance Sheet, Income and Expenditure Account / Receipts and Payments accounts read together with the Accounting Policies and Notes thereon, and other matters mentioned in the Audit Report annexed herewith give a true and fair view. a. In so far as it relates to the Balance Sheet of the state of affairs of the Insurance Regulatory and Development Authority as at 31st March 2007 and b. In so far as it relates to the Income and Expenditure Account of the surplus for the year ended on that date.
2.
3. 4.
Place: New Delhi Date: 26.11.07
Sd/Director General of Audit Central Revenues
175
175 (ANNEXURE)
AUDITORS REPORT
AUDIT REPORT ON HE ACCOUNTS OF INSURANCE REGULATORY AND DEVELOPMENT AUTHORITY, HYDERABAD FOR THE YEAR 2006-07 Introduction The Insurance Regulatory and Development Authority (Authority) was established on 19 April 2000 under Insurance Regulatory and Development Authority Act, 1999 with its headquarters at New Delhi, which was shifted to Hyderabad in August 2002. The main function of the Authority are to protect the interest of policy holders, bring about speedy and orderly growth of the insurance industry and set, promote, monitor and enforce high standards of integrity, financial soundness, fair dealing and competence of those it regulates. The audit of the accounts of the Authority was conducted under Section 19(2) of the Comptroller and Auditor Generals (Duties, Powers and Conditions of Service) Act, 1971 read with Section 17 of the IRDA Act, 1999. During 2006-07, the Authoritys income was Rs. 82.32 crore, mainly from fees received from various insurance companies / agents on account of registration, renewal charges and income from investments etc. The receipts of the Authority are being held in bank accounts despite directions of the Ministry of Finance for keeping the funds in Public Accounts of India as non-interest bearing account. As of 31 March 2007, funds amounting to Rs. 233.78 crore were kept in interest bearing deposits with schedule banks. Comments on accounts 2 Balance Sheet The Authority stated (September 2006) that as pr the format of account notified under IRDA (Form of Annual Statement of Accounts and Records) Rule, 2001, the excess of income over expenditure was to be added to the head Surplus and Fund and any deviation in this exhibition will be a violation in the Rules made by Government of India in consultation with the CAG of India. The reply of the Authority is not tenable as the heading IRDA funds is clearly depicted on the liability side of the Balance sheet in the format of accounts and surplus fund can be transferred to this head without any change in the format of account. 2.1.2.Non provision of rent due to LIC No provision for expenditure on account of rent dues for 2006-07(Rs. 24.72 lakh), variable charges and parking charges (Rs. 2.67 lakh), telephone, electricity and water charges (Rs. 0.83 lakh) had been made resulting in understatement of expenses and understatement of Sundry Debtors by the same amount. 3 General Though this matter was pointed out during 2002-03 to 2005-06, the Authority has not credited the surplus to the IRDA fund. As a result IRDA fund was understated to the extent of Rs. 196.83 crore.
3.1 Physical verification of fixed assets Physical verification of the fixed asset had not been conducted during 2006-07. 4 Format of Accounts The Authority has not adopted the common format of accounts introduced vide Ministry of Finance, Controller General of Accounts D.O.No. CDN/MF-CGA/98-99/Pt.file/576-627 dated 3.1.2002 and further clarification issued vide O.M.No.F.N.10(1)/Misc./2005/TA/ 450-490 dated 23.7.2006. 5 Deficiencies, warranting the attention of the management which have not been included in the audit report, have been brought to the notice of the Executive Director (Admn), IRDA through a management letter issued separately for corrective and remedial action.
2.1 Liabilities 2.1.1 IRDA Fund Rs. 8.93 lakh As per Section 16 of IRDA Act, 1999, all the Government grants, fees and charges received by Authority are to be credited to IRDA fund after meeting day to day expense. The Authority had credited Rs. 8.93 lakh to the IRDA fund, which represented the value of assets transferred by Interim Regulatory Authority during the year 2000-01. The surplus funds of Rs. 196.83 crore after meeting the expenditure were kept in Surplus and Funds which should have been transferred to IRDA fund.
Place: New Delhi Date: 26.11.07

176
Sd/Director General of Audit Central Revenues
176 (ANNEXURE)
FORM - A
INSURANCE REGULATORY AND DEVELOPMENT AUTHORITY, HYDERABAD

Balance Sheet as at 31 st March 2007
FIGURES FOR THE FIGURES FOR THE CURRENT YEAR (Rs.) FIXED ASSETS [See Note 1] (Rs.) (Rs.) PREVIOUS YEAR CURRENT YEAR ASSETS FIGURES FOR THE
177 (ANNEXURE)
24,006,503 893,244 893,244 INVESTMENTS [See Note 2] 1,606,001,000 1,295,133,873 673,146,935 iv) iii) ii) Units Fixed Deposits with scheduled Bank Others CURRENT ASSETS, LOANS AND ADVANCES [See Note 3] - i) Securities of Central and State Government 2,337,834,143 (Method of Valuation - at Cost] - -Capital Work-in-Progress 9,860,168 -Net Block 14,146,334 -Less:Depreciation -Gross Block 30,220,890 17,639,842 12,581,047 -
FIGURES FOR THE
LIABILITIES
PREVIOUS YEAR
(Rs.)
GENERAL FUND
i) IRDA Fund [See Note 4]
893,244
-At beginning of the year
-Receipts in the year
893,244
-Balance at end of the year
ii) Capital Fund
-Capital Grants
-Balance at the beginning of the year
Add: Value of Fixed Assets received as grants during the year
177
1,968,280,807 981,038 15,071,029 69,100 48,892,921 12,291 32,709 8,444,945 i) ii) iii) iv) v)
iii) Surplus and Funds
857,913,846
-Balance as per last Balance Sheet
Add: Excess of Income over expenditure as per
437,220,027
Income and Expenditure Account - Annexed
Less: Excess of Expenditure Over Income as per Income Deposits Loans & Advances to Staff Amount Due from Insurance Companies & Other Other Current Assets Cash & Bank Balances a) Cash in Hand b) Cash in Transit c) Bank Balances 45,000 6,083,017 981,154 25,607,257 69,100 98,753,216
and Expenditure Account - Annexed
1,295,133,873
- Balance at the end of the year
iv) Gift and Donations
v ) Other Balances
LOANS
- i) Secured (stating the security offered for the purpose)
- ii) Unsecured
- iii) Loan from Government of India
- iv) Other Loans

Balance Sheet as at 31 st March 2007
FIGURES FOR THE FIGURES FOR THE CURRENT YEAR (Rs.) (Rs.) (Rs.) PREVIOUS YEAR CURRENT YEAR ASSETS FIGURES FOR THE
178 (ANNEXURE)
51,336 56,885,314 106,500 7,549,089 1,210,790 446,884,106 92,747 2,481,953,934 1,689,365,201 2,481,953,934
FIGURES FOR THE
LIABILITIES
PREVIOUS YEAR
(Rs.)
CURRENT LIABILITIES AND PROVISIONS [See Note 5]
51,336 47,843,910
i) SUNDRY CREDITORS: -for Capital Items -for Other Items
106,500
ii) PROVISIONS: -Provision for doubtful debts and advances -Provision for depletion in value of investment
361,040 5,900,382
iii) OTHER LIABILITIES: 1. Unspent Grants 2. Interest payable to Government/Other Loans 3. Provident, Retirement & Other Welfare Funds: (a) Provident Fund (b) Other Welfare Funds (c) Retirement Benefit Fund and Staff Benefit Fund:
178
Sd/(G.Prabhakara) Member Sd/(C. R. Muralidharan) Member
1,488,905 337,519,414 66,597
4. Others (Specify) -other Liabilites (Tax deducted at source) -Registration Renewal fee received in Advance -Soft Furnishing Recovery
1,689,365,201
Significant Accounting Policies and Notes Forming Part of Accounts - Annexure IX
Notes
1 2 3 4 5 6 7
The information relating to Fixed Assets is given in Annexure I. The information relating to Investments is given in Annexure II. The information relating to Current Assets,Loans and Advances is given in Annexure III. Details of IRDA Fund is given in Annexure IV (Fund includes grants received from Central Government, other organisations and bodies in terms of Section 16 of the Act). Details of Contingent Liabilities is given in Annexure V. All information relating to significant accounting policies and notes forming part of accounts is given in Annexure IX. All annexures to Statement of Affairs and notes/information relating to accounting policy forming part of Accounts. Sd/(R.Kannan) Member Sd/(C.S.Rao) Chairman
Sd/(K.Jagan Mohan Rao) Chief Accounts Officer
Sd/(K.K.Srinivasan) Member
FORM - B
179 (ANNEXURE)
EXPENDITURE FIGURES FOR THE CURRENT YEAR (Rs.) 1,622,480 425,000 80,000 100,000 252,995,804 13,593,968 220,241,800 290,200 67,978,541 378,762 200,876 192,348 823,243,378 558,099,779 FIGURES FOR THE PREVIOUS YEAR (Rs.) INCOME FIGURES FOR THE CURRENT YEAR (Rs.) 2,508,804 39,967,022 98,117,694 1,527,943 3,493,508 2,327,621 40,883 2,112,969 673,146,935
INSURANCE REGULATORY AND DEVELOPMENT AUTHORITY, HYDERABAD INCOME AND EXPENDITURE ACCOUNT FOR THE YEAR ENDED 31ST MARCH 2007
FIGURES FOR THE PREVIOUS YEAR (Rs.)
2,640,363 37,864,418 69,785,045 1,832,703
2,698,356 154,700 2,357,195 370,644 3,176,328 437,220,027
Payment to Chairperson and Members Payment to and Provision for members of Staff [See Note 1] Establishment Expenses [See Note 2] Rent Research & Consultation Fees Seminars,Conference, Publications, etc.[See Contra] Interest [See Note 3] Depreciation Capital Assets Written Off Loss on Write Off of Asset Provison for doubtful debts and advances Development Expenditure Promotional Epxenditure Other Expenses Fringe Benefit Tax Excess of Income Over Expendiutre for the year carried down
179
Sd/(C. R. Muralidharan) Member
Grants in Aid Received Receivable Less: Transferred to Capital Fund Registration Fees Agents Surveyors and Insurance intermediaries 1,525,845 Brokers 800,000 Third Party Administrators 80,000 Insurance Companies 50,000 Renewal Fees Insurance Companies 320,616,957 Brokers 13,782,509 Agents 321,858,450 Surveyors and Insurance intermediaries Third Party Administrators 60,000 Others Penalties,Fines etc. Seminar, Conferences and Publications etc. Income on Investments - Interest on deposits with Scheduled Banks 160,715,567 Interest on Deposits Interest on advances i) granted to members of staff for housing purposes 657,776 ii) granted to members of staff for other purposes 305,680 iii) Others Miscellaneous Income 2,790,594 823,243,378
558,099,779
Significant Accounting Policies and Notes Forming Part of Accounts - Annexure IX
Notes
The information relating to payment to and provisoin for employees is given in Annexure VI. The information relating to establishment expenses is given in Annexure VII. The information relating to interest amount is given in Anenxure VIII. All Annexures to Income and Expenditure Account and Notes/Information relating to Significant Accounting Policies form part of accounts. Sd/Sd/(K.Jagan Mohan Rao) (G.Prabhakara) Chief Accounts Officer Member
Sd/(R.Kannan) Member Sd/(C.S.Rao) Chairman
FORM - C
180 (ANNEXURE)
AMOUNT (Rs.) 2,389,738 2,513,653 2,074,945 126,478 7,957,243 SL.NO. PAYMENTS AMOUNT (Rs.) 1 2 3 4 5 6 7 8 9 35,413,833 2,675,015 10,812,225 4,774,877 68,415,925 6,214,387 29,519,015 1,960,834,143
INSURANCE REGULATORY AND DEVELOPMENT AUTHORITY, HYDERABAD RECEIPTS AND PAYMENTS ACCOUNT FOR THE YEAR ENDED MARCH 31, 2007
SL.NO.
RECEIPTS
180
By i) ii) iii) iv) 2,147,082,108 Sd/(G.Prabhakara) Member Sd/(C. R. Muralidharan) Member
4 5 6 7 8
9 10 11 12
10 11 12 13 14 15 16 17 18 19
By Research and Consultation Fees By Seminars, Conference, Publications etc. By Rent Payments By Development Expenditure By Promotional Expenditure By Payment to Chairperson and Members (i) Pay and Allowances (ii) Other Benefits (iii) Travelling Expenses By Establishment Expenses (i) Pay and Allowances (ii) Other Benefits (iii) Travelling Expenses (iv) Retirement Benefits By Office Expenses By Interest on (i) Government Loans (ii) Other Loans By Purchase of Assets By Capital Work-in-Progress By Advances to staff and others including travel advance By Investments By Repayment of Government Loans/ fees By Repayment of Other Loans By Other Expenses By Payments to IIRM By Fringe Benefit Tax By Security deposit paid 5,000,000 2,112,969 119,646
13
6,083,017 45,000 -
14
To Balance brought forward i) Cash at Bank 8,444,945 ii) Cash in hand 12,291 iii) Cheques on hand iv) Cash / Cheques in transit 32,709 To Registration Fees -Insurance Companies 50,000 -Third Party Administrators 80,000 -Insurance Brokers 700,000 -Insurance Agents -Insurance Surveyor 1,525,845 -Others To Registration Renewal Fees -Insurance Companies 424,992,099 -Third Party Administrators 60,000 -Insurance Surveyors -Insurance Agents 326,848,000 -Insurance Brokers 13,782,509 -Others To Penalties,Fines from insurers and intermediaries 2,000,000 To Seminar,Conferences etc. To Income from Investments To Sale of Investments 1,229,001,000 To Grants i) Central Government / State Govt/ Others ii) Gift and Donations To Loans To Sales of Publication etc. To Sale of Assets To interest received on - Deposits 110,019,815 - Advances - Others To Recoveries from Employees (a) Loans and Advances 21,229,074 (b) Interest on Loans and Advances 151,883 (c) Misc. Recoveries 173,816 To Other Receipts (a) Miscellaneous Income 616,778 (b) Security deposit from Contractors 15,000 (c) Security deposit received back 119,530 (d) Receipts from PFRDA 7,226,814 Balance carried forward Cash at Bank Cash in hand Cheques in hand Cash/ Cheques in Transit 2,147,082,108 Sd/(R.Kannan) Member Sd/(C.S.Rao) Chairman
Sd/(K.Jagan Mohan Rao) Chief Accounts Officer Sd/(K.K.Srinivasan) Member
ANNEXURE I
181 (ANNEXURE)
GROSS BLOCK Additions During the Year Year Off During the 31.03.2007 1.04.2006 31.03.2007 Sold/Disposed Total as on As on For the year Adjustments As at As on As on DEPRECIATION NET BLOCK 31.03.2007 31.03.2006 0 1,006,995 1,463,552 3,537,648 206,192 6,214,387 30,220,890 14,146,334 533,256 327,064 206,192 3,493,508 17,267,864 9,356,823 2,213,769 6,179,139 2,250,065 567,296 5,663,376 1,812,290 460,383 0 577,255 400,092 45,868 445,960 2,272,673 2,817,361 11,570,592 533,256 17,639,842 12,581,048 131,295 3,390,703 3,361,778 5,697,272 177,163 2,844,091 2,465,522 4,373,393 0 9,860,169
INSURANCE REGULATORY AND DEVELOPMENT AUTHORITY, HYDERABAD Schedule of Fixed Assets annexured to and forming part of Balance Sheet as on 31st March 2007
Particulars
Cost as
1.04.2006
Office Premises
(a)
Land
(b)
Building
Residential Flats
(a)
Land
(b)
Building
Vehicles
577,255
Equipments
4,656,381
181
Sd/(G.Prabhakara) Member Sd/(C. R. Muralidharan) Member
Furniture and Fixtures
4,715,587
Computers
13,730,216
Books
327,064
Total
24,006,503
Sd/(R.Kannan) Member
Sd/(C.S.Rao) Chairman
ANNEXURE II
INSURANCE REGULATORY AND DEVELOMENT AUTHORITY, HYDERABAD Attached to and Forming Part of Balance Sheet as at 31 March 2007 INVESTMENTS
31-Mar-07 Name of the Bank Date Amount Rate of Interest 6.50% Period Date of Maturity 30-Jun-08 Interest accrued but not due 6,073,459 6,073,459 6.00% 6.00% 451 454 24-Jun-08 27-Jun-08 1,279,291 1,273,039 2,552,330 8.40% 8.40% 8.35% 9.25% 11.15% 175 176 221 288 358 22-Sep-07 23-Sep-07 7-Nov-07 13-Jan-08 23-Mar-08 225,583 224,367 237,288 300,625 37,167 1,025,030 11.30% 11.30% 365 365 30-Mar-08 30-Mar-08 102,841 38,081 140,922 8.40% 8.50% 9.35% 9.30% 11.90% 11.90% 145 158 365 277 365 366 23-Aug-07 5-Sep-07 30-Mar-08 2-Jan-08 30-Mar-08 31-Mar-08 786,205 996,933 29,732,609 1,136,667 72,401 36,150 32,760,965 7.00% 3 3-Apr-07 4,526,770 4,526,770 8.15% 6.75% 7.30% 8.00% 8.00% 8.75% 8.75% 7.75% 7.75% 12 55 91 139 153 334 336 81 91 12-Apr-07 25-May-07 30-Jun-07 17-Aug-07 31-Aug-07 28-Feb-08 1-Mar-08 20-Jun-07 30-Jun-07 374,925 446,755 909,211 384,498 360,222 73,889 60,278 17,760 1,722 2,629,260 8.45% 8.40% 215 236 1-Nov-07 22-Nov-07 536,183 381,617 917,800
Andhra Bank, Hyderabad
30-Jun-05
50,000,000 50,000,000
457
Bank of India, Hyderabad
24-Jun-03 30-Jun-03
5,000,000 5,000,000 10,000,000
Bank of Maharashtra Hyderabad
22-Sep-06 23-Sep-06 7-Nov-06 13-Jan-07 23-Mar-07
5,000,000 5,000,000 7,000,000 15,000,000 12,000,000 44,000,000
Canara Bank, Hyderabad
31-Mar-07 31-Mar-07
327,636,453 121,321,313 448,957,766
ICICI Bank Hyderabad
23-Aug-06 5-Sep-06 29-Mar-06 3-Jan-07 30-Mar-07 31-Mar-07
15,000,000 20,000,000 300,000,000 50,000,000 109,514,766 109,361,611 603,876,377
Indian Overseas Bank, Hyd
2-Apr-05
30,000,000 30,000,000
ING Vysya Bank Ltd.
12-Dec-06 25-May-06 30-Jun-06 17-Aug-06 31-Aug-06 28-Feb-07 1-Mar-07 21-Mar-07 31-Mar-07
15,000,000 7,500,000 16,000,000 7,500,000 7,500,000 9,500,000 8,000,000 7,500,000 8,000,000 86,500,000
Karur Vysya Bank Ltd.
1-Nov-06 22-Nov-06
15,000,000 12,500,000 27,500,000
182
182 (ANNEXURE)
Name of the Bank Lakshmi Vilas Bank, Hyd
Date 12-Dec-06
Amount 15,000,000 15,000,000
Rate of Interest 8.05%
Period 12
Date of Maturity 12-Apr-07
Interest accrued but not due 370,308 370,308
Oriental Bank of Commerce
2-Aug-06 2-Feb-07 16-Feb-07
22,500,000 17,500,000 10,000,000 50,000,000
8.20% 9.40% 9.70%
124 308 322
2-Aug-07 2-Feb-08 16-Feb-08
1,262,867 265,028 118,556 1,646,451
Punjab National Bank
27-Dec-06 28-Dec-06
135,000,000 100,000,000 235,000,000
9.10% 9.20%
271 272
27-Dec-07 28-Dec-07
3,245,757 2,404,573 5,650,330
State Bank of India, Hyd.
19-Jun-06 17-Jul-06
15,000,000 15,000,000 30,000,000
7.50% 7.50%
80 108
19-Jun-07 17-Jul-07
912,535 820,750 1,733,285
Syndicate Bank
26-Sep-06 5-Oct-06 10-Oct-06 19-Dec-06 20-Dec-06 21-Dec-06 23-Dec-06 29-Dec-06 30-Dec-06 30-Dec-06 9-Mar-07 17-Mar-07 31-Mar-07
10,000,000 12,500,000 15,000,000 30,000,000 10,000,000 40,000,000 70,000,000 20,000,000 40,000,000 15,000,000 30,000,000 6,000,000 250,000,000 548,500,000
8.40% 7.75% 8.05% 8.55% 8.55% 8.60% 8.83% 8.90% 8.90% 8.90% 10.50% 10.10% 11.50%
179 188 193 263 264 265 267 273 274 274 344 352 366
26-Sep-07 5-Oct-07 10-Oct-07 19-Dec-07 20-Dec-07 21-Dec-07 23-Dec-07 29-Dec-07 30-Dec-07 30-Dec-07 9-Mar-08 17-Mar-08 31-Mar-08
441,437 483,581 585,874 735,855 242,859 967,371 1,703,186 460,163 910,218 341,332 201,250 25,250 79,861 7,178,237
UCO Bank
19-Apr-06 15-Jul-06
10,000,000 15,000,000 25,000,000
8.10% 8.00%
19 106
19-Apr-07 15-Jul-07
803,874 883,440 1,687,314
UTI Bank Ltd.
19-Apr-06 20-Apr-06 18-Jul-06
30,000,000 30,000,000 15,000,000 75,000,000
7.70% 7.70% 7.50%
19 20 109
19-Apr-07 20-Apr-07 18-Jul-07
2,289,234 2,282,440 817,506 5,389,180
Vijaya Bank
22-Jul-06 15-Dec-06 3-Mar-07
16,000,000 12,500,000 30,000,000 58,500,000
8.00% 8.66% 10.35%
113 259 337
22-Jul-07 15-Dec-07 2-Mar-08
916,442 322,850 250,125 1,489,417 75,771,058
Grand Total 2. Others (a) Quoted-Cost and Market value (b) Unquoted
2,337,834,143 Nil Nil

Sd/(G.Prabhakara) Member Sd/(R.Kannan) Member Sd/(K.K.Srinivasan) Member
183
183 (ANNEXURE)
ANNEXURE III
INSURANCE REGULATORY AND DEVELOPMENT AUTHORITY, HYDERABAD Attached to and forming part of balance sheet as at 31st March 2007 CURRENT ASSETS, LOANS AND ADVANCES
PARTICULARS Figures for the Current Year Rs 811,001 38,030 128,123 4,000 981,154 LOANS & ADVANCES TO STAFF - Housing Loan to Staff - Loans to Staff for other purposes - Other Advances - Festival - Interest Recoverable - Advance - others TOTAL AMOUNTS DUE FROM INSURANCE COMPANIES & OTHERS - Insurance Companies-[Indicates the amount due from State Insurance Companies] - Agents - [Indicates the amount of expired cheques in hand received from agents earlier] TOTAL OTHER CURRENT ASSETS - Expense Recoverable - Prepaid Expenses - Interest Accrued but not due - Bank deposits - Amount recoverable- others - Advances on Capital Account - [For software development] - Advance to Institute of Insurnace and Risk Management - Advance to PFRDA - Other -Advance for Travel - Advance to IRDA Superannuation Trust - Advance to Prasar Bharti TOTAL CASH AND BANK BALANCES - Cash in hand - Cheques in hand - Cash/ Cheque in transit - Balances with Scheduled Banks (a) In Current Account (b) on Deposit Account (c) on savings bank Account TOTAL - Balance with Non Scheduled Bank (a) In Current Account (b) In Deposit Account TOTAL
Sd/(K.Jagan Mohan Rao) Chief Accounts Officer Sd/(G.Prabhakara) Member Sd/(R.Kannan) Member Sd/(K.K.Srinivasan) Member
Figures for the Previous Year Rs 817,185 31,730 128,123 4,000 981,038 8,278,661 4,805,161 243,620 1,325,515 418,072 15,071,029 69,100 69,100 213,528 25,075,306 245,338 16,736,133 6,450,299 172,317 48,892,921 12,291 32,709 5,987,280 2,457,665 8,444,945 Sd/(C.S.Rao) Chairman
DEPOSITS -For Premises -with Others - MTNL - with Electricity - For Fuel
15,437,045 7,528,503 319,170 2,137,088 185,451 25,607,257 69,100 69,100 731,766 75,771,058 302,443 21,736,133 211,816 98,753,216 45,000 5,993,730 89,287 6,083,017 -
184
184 (ANNEXURE)
ANNEXURE IV
INSURANCE REGULATORY AND DEVELOPMENT AUTHORITY, HYDERABAD Attached to and forming part of balance-sheet as on 31st March 2007
PARTICULARS Figures for the Current Year Rs Figures for the Previous Year Rs -
Grant from Government of India Total
Sd/(G.Prabhakara) Member
ANNEXURE V
INSURANCE REGULATORY AND DEVELOPMENT AUTHORITY, HYDERABAD Attached to and forming part of balance-sheet as on 31st March 2007 CONTINGENT LIABILITIES
PARTICULARS Figures for the Current Year Rs Figures for the Previous Year Rs -
185
185 (ANNEXURE)
ANNEXURE VI

Attached to and forming part of Income and Expenditure Account for the year ended 31st March 2007
PAYMENTS TO AND PROVISIONS FOR EMPLOYEES

PARTICULARS Figures for the Current Year Rs i) ii) Salaries, Allowances, Wages and Bonus Contribution to Provident Fund, etc [including contribution to superannuation fund of Rs 14,05,288/-] iii) iv) v) Gratuity Staff Welfare Expenses Others -Book Grant -Leave Travel Concession -Insurance -Canteen Expenses -Monetary Award - Studies -Contribution to Group Insurance Scheme -Reimbursement of expenses incurred by Staff -Leave Salary TOTAL 994,951 776,421 776,848 1,065,381 39,967,022 682,870 446,039 842,714 1,680,684 37,864,418 4,648,498 850,059 143,776 3,259,240 1,408,716 165,909 30,711,088 Figures for the Previous Year Rs 29,378,246
186
186 (ANNEXURE)
ANNEXURE VII

ESTABLISHMENT EXPENSES
PARTICULARS Figures for the Current Year Rs 1,311,543 748,994 1,295,324 18,424 1,303,212 33,488 2,738,735 11,674,239 6,966,707 17,886,533 225,000 47,280,351 3,188,934 1,507,392 426,349 980,918 38,670 492,883 98,117,694 Figures for the Previous Year Rs 1,353,748 904,667 1,783,699 261,793 2,500 974,381 84,708 3,219,035 12,966,184 6,169,262 7,938,902 251,920 27,764,163 1,377,480 2,879,353 180,026 527,500 811,068 56,729 277,927 69,785,045
Repairs & Maintenance of Buildings & Premises House Keeping - Office Maintenance Repairs & Maintenance of Equipments Repairs and Maintenance - Others Electricity & water Exp Insurance exp Rates and Taxes Printing and Stationery Books/Journals etc. Postage, Telegraphs, Telephones, etc. Travelling and Conveyance Inland Travel - Foreign Legal and Professional charges Education/Training/R&D/Grievances Redressal Expenses Audit Fees Software Publicity & Advertisement Recruitment Expenses of Meetings of Authority & Advisory Committee & Others meeting expenses including daily allowances paid to the members of the Committee Membership and Subscription Security Services Web Portal Development Expenses Canteen Exp Car Repair and Maintenance Expenses Other Expenses TOTAL
187
187 (ANNEXURE)
ANNEXURE VIII

PARTICULARS Figures for the Current Year Rs Government Banks Others TOTAL Figures for the Previous Year Rs -
188
188 (ANNEXURE)
ANNEXURE IX
THE INSURANCE REGULATORY AND DEVELOPMENT AUTHORITY NOTES TO THE ANNUAL STATEMENT OF ACCOUNT FOR THE YEAR 2006-07
[Unless otherwise specified, all amounts are in rupees] 1. BACKGROUND INSURANCE REGULATORY AND DEVELOPMENT AUTHORITY
Accountants of India. The significant accounting policies are as follows: (a) Fixed assets and depreciation Fixed assets are stated at cost less accumulated depreciation. Depreciation on fixed assets is provided pro-rata to the period of use on reducing balance method using rates determined based on the rates specified in Schedule XIV to the Companies Act, 1956. Assets costing less than 5,000 have been depreciated 100% in the year of purchase unless the assets constitutes more than 10% of the respective block, in which case the asset is depreciated at the rates specified in the said Schedule XIV. (b) Investments Investments in the nature of fixed deposits with banks are stated at cost. (c) Revenues (i) Registration Fee (a) Received from insurer seeking for the first time, registration for carrying on any class of insurance business in India is treated as income of the year of receipt. (b) Received in advance from insurers for renewal of registration is treated as income of the year to which it relates. (ii) Licence Fee Licence fee received from insurance agents, surveyors, brokers and other insurance intermediaries is treated as income of the year of receipt. Licences issued to insurance agents, surveyors, brokers and other insurance
(The Authority) was established by an Act of Parliament Insurance Regulatory & Development Authority Act, 1999 [Act] - and was constituted on April 19, 2000 by a notification issued in the Gazette of India. The Authority was established with a view to protecting the interests of the holders of insurance policies, to regulate, promote and ensure orderly growth of the insurance industry and for matters connected therewith or incidental thereto, issue to the applicant a certificate of registration, renew, modify, withdraw, suspend or cancel registration, and levy fees and other charges for carrying out the purposes of the Act. The Authority, in terms of section 13 of the Act has been vested with the assets and liabilities of the Interim Insurance Regulatory Authority as are available on the appointed day i.e. April 19, 2000. In terms of section 16 of the Act a fund shall be constituted namely The Insurance Regulatory and Development Authority Fund [Fund]. The Fund shall constitute of all Government grants, fees and charges received by the Authority, all sums received by the Authority from such other source as may be decided upon by the Central Government and the percentage of prescribed premium income received from the insurer. The Fund shall be applied for meeting the salaries, allowances and other remuneration of the members, officers and other employees of the Authority and the other expenses of the Authority in connection with discharge of its functions and for the purposes of the Act. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The financial statements are prepared under the historical cost convention, on the accrual basis of accounting save for revenue recognition on cash basis as explained hereunder, and in accordance with the applicable standards on accounting issued by the Institute of Chartered
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intermediaries are current for those years from date of issue and subject to renewal at the end of their currency. It is not practicable to distribute the Licence fee over the years to which they relate. (iii) Grant from Ministry of Finance, Government of India Initial Grant received has been treated as income of the year in which it is received. (d) Foreign currency transactions Non-monetary foreign currency transactions are recorded at rates of exchange prevailing on the dates of the transactions. Monetary foreign currency assets and liabilities are translated into rupees at the rates of exchange prevailing on the balance sheet date. The differences in translation of foreign currency liabilities related to the acquisition of fixed assets are adjusted in the carrying value of fixed assets. Other translation differences are reflected in the Income and Expenditure Account. (e) Web Portal Development and Maintenance Expenses incurred on Web Portal Development and Maintenance is charged to the Income and Expenditure Account in the year of incurrence. (f) Retirement benefits Retirement benefits to employees comprise contribution to provident fund, gratuity fund, Superannuation fund and provision of leave encashment, which are provided in accordance with the Regulations made under the Act. Leave encashment is provided for at the current encashable salary for the entire unavailed leave balances. The Authority contributes to IRDA Employees Provident Fund and IRDA Superannuation Fund trust. The liability for gratuity is determined based on actuarial valuation, in accordance with gratuity scheme framed by the Authority.
3.
INCOME-TAX
No income tax provision has been made in view of income of the Authority being exempt under section 10 (23BBE) of the Income-tax Act, 1961.
4. REGISTRATION / RENEWAL FEES
(a) In pursuance of Authoritys decision to scale down the levy of renewal fees for registration on the insurers to 0.1% of the gross premium from 0.2% of the gross premium, retrospectively for the financial years with effect from April 01, 2001, the income for the year has been accordingly accounted for. (b) The renewal fees from some of the State Insurance agencies have not been accounted for in the absence of information of gross insurance premium.
5. DEPOSIT OF FUNDS OF THE AUTHORITY INTO PUBLIC ACCOUNT OF INDIA
The Authority, in the previous years received a letter from Ministry of Finance, Department of Economic Affairs dated July 17, 2002, July 9, 2005 and July 18, 2006 directing the Authority to deposit the moneys so far collected by the Authority in the Public Account of India as non-interest bearing account and allowing the Authority to withdraw a specified amount in the beginning of each year from the said Public Account for meeting its expenditure. The Authority based on a legal opinion obtained has requested for review of the direction received, in its view the funds raised by it from the insurers and the intermediaries do not have the character of Government Revenue and cannot form part of the Public Fund of India. The issue is still under correspondence.
6. HEADQUARTERS OF THE AUTHORITY
The Authority, in pursuance of the decision taken by the Government of India in November 2001 to shift the Headquarters of the Authority from New Delhi to Hyderabad, shifted the actuarial department in April 2002, other departments in August 2002 and the Surveyors Department in October 2005. The office of the Authority is located in Parisrama Bhavan where a portion of the third
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floor has been given to it free of rent by Andhra Pradesh Industrial Development Corporation Limited [APIDC]. The Government of Andhra Pradesh through A. P. Industrial Infrastructure Corporation Limited [APIIC] has allotted a plot of five acres land in the financial district at Nanakramguda Village, Serilingampally Mandal, RR District, Hyderabad free of cost, the legal title of which is yet to be transferred.
8. 7. OPERATING LEASES
premises at Hyderabad at free of rent but is obliged to hand over the premises on a as is where is basis to Andhra Pradesh Industrial Development Corporation Limited upon vacation. The lease payments in respect of other premises including the premise occupied at Delhi recognized in the income and expenditure account is Rs. 15,27,943/- [Previous year Rs. 18,32,703/-].
PRIOR YEAR COMPARATIVES
There are no non-cancellable lease arrangements. The lease payments are made in accordance with the lease agreements. The Authority is in occupation of portion of
Previous year figures have been regrouped, wherever considered necessary to make them comparable with the current years figures.
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ANNEX XI
ADDRESSES OF INSURERS AND OMBUDSMAN
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LIFE INSURERS
SL.NO. 1
INSURER Reliance Life Insurance Company Ltd.
PRINCIPAL OFFICER Shri P. Nandagopal
POSTAL ADDRESS 1st Floor, Midas, Sahar Plaza Complex, Next to Kohinoor Hotel, Andheri-Kurla Road, Andheri (East), Mumbai 400 059
CONTACT DETETAILS Tel : 022-30479600/30479784 Fax: 022-30479650
Aviva Life Insurance Co. Pvt. Ltd.
Shri Bert Paterson
5th Floor, JMD Regents Square Building Gurgaon Mehrauli Road Gurgaon 122 001
Tel: 0124-270 9000/01, Fax: 0124-270 9007 .
Bajaj Allianz Life Insurance Co. Ltd.
Shri Sam Ghosh
G.E. Plaza, Airport Road Yerawada Pune 411 006 Near Marol Naka, Andheri (E), Mumbai 400 059
Tel : 020-4026666 Fax : 020-4026789
Birla Sun Life Insurance Co. Ltd.
Shri Vikram Mehmi
6th Floor, Vaman Centre, Makhwana Road, Off Andheri Kurla Road Near Marol Naka, Andheri (E), Mumbai 400 059
Tel : 022 5678 3333 Fax: 022 5678 3232
HDFC Standard Life Insurance Co. Ltd.
Shri D.M. Satwalekar
2nd Floor, A Wing Trade Star Building Near Hotel Kohinoor Continental Andheri Kurla Road, Andheri (East) Mumbai 400 059
Tel : 022-67516666 Fax: 022-2822 8844
ICICI-Prudential Life Insurance Co. Ltd.
Ms. Shikha Sharma
ICICI Prulife Towers 1089, Appasaheb Marathe Marg Mumbai 400 025
Tel :022-56621996 Fax: 022-56622031
ING Vysya Life Insurance Co. Ltd.
Shri Kshitij Jain
5th Floor, ING Vysya House 22, M.G. Road Bangalore 560 001
Tel : 080-25328000 Fax: 080-25559764
Kotak Mahindra Old Mutual Life Insurance Co. Ltd.
Shri Gaurang Shah
9th Floor, Godrej Coliseum, Behind Everard Nagar, Sion (East), Mumbai 400 022
Tel : 022-6621 5999 Fax:022-6621 5757, 6621 5858
Life Insurance Corporation of India
Shri T. S. Vijayan
Yogakshema, Jeevan Bima Marg Post Box No. 19953 Mumbai 400 021
Tel 56598701;56598702 Fax: 22824386 E-Mail : [email protected]
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SL.NO. 10
INSURER
PRINCIPAL OFFICER Shri Gary R. Benett
POSTAL ADDRESS 11th Floor, DLF Square Jacaranda Marg DLF City, Phase II Gurgaon 122 002
CONTACT DETETAILS Tel : 0124-2561717 Fax: 0124-2561764
Max NewYork Life Insurance Co. Ltd.
11
MetLife India Insurance Co. Pvt. Ltd.
Shri Rajesh Relan
Brigade Seshamahal No.5, Vani Vilas Road Basavanagudi Bangalore 560 004
Tel : 080-26438638 Fax: 080-26521970 Toll Free No. 1-600-44-6969
12
Sahara India Life Insurance Co. Ltd.
Shri N.C. Sharma
Sahara India Bhavan 1, Kapoorthala Complex, Aliganj, Lucknow 226 024
Tel: 0522-2337777 Fax: 0522-2378200
13
SBI Life Insurance Co. Ltd.
Shri Uday Sankar Roy
Turner Morrison Building 2 Floor, 16, Bank Street, Fort, Mumbai 400 023
nd
Tel : 022-56392000 Fax: 022-56621471
14
Shriram Life Insurance Company Ltd.
Shri R. Duruvasan
Regd. Office : 3-6-478, 3rd Floor, Anand Estate, Liberty Road, Himayat Nagar, Hyderabad - 500029
Tel: 040-23434466-72 Fax: 040-23434488
15
TATA AIG Life Insurance Co. Ltd.
Shri Trevor Bull
Peninsula Tower Peninsula Corporate Park Ganpatrao Kadam Marg, Lower Parel, Mumbai 400 013
Tel : 022-66516000 Fax : 022-66550711
16
Bharti AXA Life Insurance Co.Ltd.
Shri Nitin Chopra
61/62, Kalpataru Synergy, Vakola, Opp. Grand Hyatt Hotel, Santacruz (E), Mumbai 400 055
Tel: 022 40306300/6301 Fax: 022 - 40306347
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NON-LIFE INSURERS
SL.NO. 1 INSURER Agriculture Insurance Co. of India Ltd. PRINCIPAL OFFICER Shri M. Parshad POSTAL ADDRESS 13th Floor, Ambadeep Bldg, 14, K.G. Marg, Connaught Place, New Delhi 110 001. CONTACT DETETAILS Tel :011-41081991-4, Fax : 011-41081995 Email: [email protected] Web-site: www.aicofindia.org
Bajaj Allianz General Insurance Co. Ltd.
Shri Kamesh Goyal
GE Plaza, 1st Floor, Airport Road, Yerawada, Pune- 411 006.
Tel : 020-6602 6666 Fax: 020-6602 6667
Cholamandalam General Insurance Co. Ltd.
Shri M. Anandan
DARE House, 2nd Floor, New No.2 (Old No.234) NSC Bose Road, CHENNAI 600 001.
Tel : 044-42166000 Fax : 044-42166001
Export Credit Guarantee Corporation Ltd
Shri Christy Fernandez
10th Floor, Express Towers, Nariman Point, Mumbai 400021.
Tel :022-56590512-515 Fax : 022-56590517 022-56590530
HDFC-CHUBB General Insurance Co. Ltd
Shri Suresh Menon
6th Floor, Leela Business Park, Andheri-Kurla Road, Andheri(East) Mumbai 400059
Tel : 022-6638 3600 Fax : 022-6638 3699
ICICI Lombard General Insurance Co. Ltd
Shri Sandeep Bakshi
Zenith House, Mahalaxmi Keshavrao Khade Marg, MUMBAI-400 034.
Tel : 022-24906999 Fax: 022-24927624
IFFCO Tokio General Insurance Co. Ltd
Shri Ajit Narain
4th & 5th Floors, IFFCO Tower, Plot No.3, Sector 29, GURGAON-122001(Haryana)
Tel : 0124-2850100 Fax: 0124-2577923-2577924
National Insurance Co.Ltd.
Shri V. Ramasaamy
3, Middleton Street, P.B. No. 9229, KOLKATA 700 071.
Tel : 033-22831705 to 9 Fax : 033-22831712
Reliance General Insurance Co. Ltd
Shri K. A. Somasekharan
570, Naigaum Cross Road, Next to Royal Industrial Estate, Wadala(West), MUMBAI 400 031
Tel.No.022-30479602 Board no:022-30479600 Fax. No.022-330479650
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SL.NO. 10
INSURER Royal Sundaram Alliance Insurance Co. Ltd
PRINCIPAL OFFICER Shri Ajay Bimbhet
POSTAL ADDRESS Sundaram Towers , 45-46, Whites Road, Royapetah CHENNAI-600 014.
CONTACT DETETAILS Tel: 044-42227373 Fax: 044-28517376 Email:[email protected] Web-site: ww.royalsundaram.com
11
Tata AIG General Insurance Co. Ltd
Shri Dalip Verma
Peninsula Corporate Park, Nicholas Piramal Tower, 9th Floor Ganpatrao Kadam Marg Lower Parel, MUMBAI 400 013
Tel : 022-66699696 Fax: 022-56546464 Email: [email protected] www.tata-aiggeneral.com
12
The New India Assurance Co. Ltd.
Shri B. Chakrabarti
New India Assurance Bldg. 87, M.G. Road, Fort, MUMBAI - 400 001
Tel: 022-22674617 - 22, Fax: 022-22652811 Email: cmd. [email protected] Web-site: www.newindia.co.in
13
The Oriental Insurance Co. Ltd.
Shri M. Ramadoss
A-25/27, Asaf Ali Road New Delhi 110 002
Tel :011-23279221-25 Direct:23265024 Fax: 23287192, 23287193, 23283971
14
United India Insurance Co. Ltd.
Shri G. Srinivasan
24, Whites Road CHENNAI 600 014.
Tel : 044-28520161 Fax : 044-28523825
15
Star Health & Allied Insurance Co. Ltd.
Shri V. Jagannathan
No.1 New Tank Street Valluvarkottam High Road Nungambakkam CHENNAI 600 034
Tel :044-28260053, Fax :044-28260062
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REINSURER
SL.NO.
INSURER
PRINCIPAL OFFICER
POSTAL ADDRESS
CONTACT DETETAILS
1.
General Insurance Corporation of India
Shri. Yogesh Lohia (W.e.f 28.05.2007)
Suraksha, 170, J Tata Road Church Gate Mumbai-400 020
Tel. No. : 022-22833046 Fax : 022- 22833209, 22841231, 2282233 Email : [email protected] Web : www.gicindia.com
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INSURANCE OMBUDSMAN
SL.NO. 1. CENTRE Ahmedabad OMBUDSMAN Mr. Amitabh POSTAL ADDRESS 2nd Floor, Ambica House, Near C.U. Shah College, 5 Navyug Colony, Ashram Road, Ahmedabad 380 014 1st Floor, 117 Zone II, Above D.M. Motors Pvt. Ltd., Maharana Pratap Nagar, Bhopal 462 011 62, Forest Park, Bhubaneswar 751 009 S.C.O. No.101-103, 2nd Floor, Batra Building, Section 17-D, Chandigarh 160 017 Fatima Akhtar Court, 4th Floor, 453 (old 312), Anna Salai,Teynampet, Chennai 600 018 2/2 A, 1st Floor, Universal Insurance Bldg. Asaf Ali RoadNew, Delhi 110 002 Jeevan Nivesh, 5th Floor, Nr. Panbazar Overbridge, S.R. Road, Guwahati 781 001 Mr. P.A. Chowdary 6-2-46, 1st Floor, Moin Court Lane Opp. Saleem Function Palace, A.C. Guards, Lakdi-ka-pul, Hyderabad 500 004. 2nd Flr., CC 27/ 2603, Pulinat Building, Opp. Cochin Shipyard, M.G. Road, Ernakulam - 682 015 CONTACT DETAILS Tel: 079-27546150, 27546139 Fax:079-27546142 E-mail: [email protected]
2.
Bhopal
Mr. N.A. Khan
Tel: 0755-2769200, 2769202, Fax:0755-2769203

E-mail: [email protected]
3.
Bhubaneswar
Mr. S.K. Dhal
Tel: 0674- 2531607 Fax:0674-2531607 Email : [email protected] Tel: 0172 - 2706468 Fax: 0172-2708274 E-mail : [email protected] Tel: 044 - 24335284 / 24333668 Fax: 044-24333664 E-mail : [email protected] Tel: 011-23237532 Fax: 011-23230858 E-mail : [email protected] Tel: 0361-2415430 Fax: 0361-2414051 E-mail : [email protected] Tel: 040-65504123 Fax:040-23376599 E-mail : [email protected]
4.
Chandigarh
Mr. K.M. Chadha
5.
Chennai
Mr. K. Sridhar
6.
Delhi
Mr. R. Beri
7.
Guwahati
8.
Hyderabad
9.
Kochi
Mr. James Muricken
Tel: 0484-2358759 Fax:0484-2359336 E-mail: [email protected] Tel: 033-22134866 Fax: 033-22134868 E-mail : [email protected] Tel: 0522-2231331 Fax:0522-2231310 E-mail: [email protected] Tel: 022-26106880 Fax: 022-26106052 Email: [email protected]
10.
Kolkata
Mr. K. Rangabhashyam North British Building, 29, N.S.Road,3rd Floor, Kolkata 700 001 Mr. M.S. Pratap Jeevan BhawanPhase-2, 6th Floor Nawal Kishore Road, HazratganjLucknow 226 001 3rd Floor, Jeevan Seva Annexe, Above MTNL,S.V. Road, Santacruz (W), Mumbai-400054
11.
Lucknow
12.
Mumbai
Mr. R.K. Vashishtha
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NOTES
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ANNUAL REPORT 2006-07

INSURANCE REGULATORY AND DEVELOPMENT AUTHORITY

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Yours faithfully, (C.S. Rao)

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PART I POLICIES AND PROGRAMMES

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* Offices opened after seeking approval of the Authority

Pen tra e tion

Dots indicate density

Bars indicates Indias position

Insurance Density is measured as ratio of premium to total population

Insurance Penetration is measured as ratio (in Per Cent) of premium to GDP

ANNUAL REPORT 2006-07

Insurance Penetration and Density 2006 -All Countries

Life Insurance Penetration and Density 2006 -All Countries

Non-Life Insurance Penetration and Density 2006 -All Countries

Source: Swiss Re, Sigma

Ja a pn Hn Kn og og Tiw n a Su A o th frica U ited K g o n in d m

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