72940561-State-Life

STATE LIFE INSURANCE

CORPORATION

Internship Report

Submitted To:

Sir Irshad

Submitted By:

Muhammad Yasir

Mi09MBA039

2009-2011

Hailey College Of Banking & Finance

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TABLE OF CONTENTS

Sr. No Description Page No.

1 ACKNOLEGEMENT 3

2 EXCETIVE SUMMARY 4

3 HISTORY OF INSURANCE 5

4 What is insurance 7

5 Terms 8

6 Classes of insurance 12

7 4i‟s of insurance 17

8 Principles 19

9 STATE LIFE INSURANCE CORPORATION 22

10 History 23

11 Function 25

12 Organizational Structure 27

13 DEPARTMENT 37

14 PRODUCTS 84

15 FINANCIAL ANALYSIS 128

16 RATIO ANALYSIS 140

17 SWOT 144

18 MY EXPERIENCE 152

19 RECOMMENDATION 158

20 CONCLUSION 159

21 BIBLIOGRAPHY 161

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ACKNOWLEDGEMENT

With the name of ALLAH the Most Beneficial and Merciful. I

completed my internship in State Life Insurance Corporation of

Pakistan. I am really pleased to have a professional learning

experience in one of leading insurance organizations of country.

In these six weeks I worked in different departments and I am

truly thankful to all officers and staff who entirely give assistance

to me. I am also grateful to my honorable teachers, Sir Irshad, Sir

Riaz Ahmed Mian and all other teachers who motivated me to

work hard and taught me techniques to learn work. The account

of acknowledgement will remain incomplete if I do not express

my sincere appreciation, indebtedness and gratitude to my

parents and siblings. They have always been a source of

encouragement for me.

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EXECUTIVE SUMMARY:

I have recently completed my internship in State Life Insurance

Corporation OF Pakistan, Western, Zone Lahore in which I got training

from its different departments. The structure, the fashion of working & the

dedication of the employees in SLIC is really commendable. State Life

Insurance Corporation OF Pakistan (SLIC) has a solid foundation since

1972 in Pakistan, and main objective is to provide its customers with safe,

secure and trustworthy service through wide range of products. In this

report I have given a very brief review of Profile of State Life Insurance

Corporation OF Pakistan, all the products provided by the SLIC and in this

regard I have tried to give all the information of SLIC. Then I have

discussed about my learning in entire internship in all departments of State

Life Insurance Corporation OF Pakistan. During my internship I worked in

Underwriting, Claims and Accounts department and I successfully

completed all the task/duties that were assigned to me. I have made it

possible to write each and every thing that I have learnt there. I have all my

practical efforts in the form of this manuscript that‟s the asset for my

prospect career.

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Then I have done a detailed Financial Analysis as well as SWOT Analysis.

Finally I have given some recommendations about State Life Insurance

Corporation OF Pakistan.

HISTORY

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OF

INSURANCE

HISTORY OF INSURANCE

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In some sense we can say that insurance appears simultaneously with the

appearance of human society. We know of two types of economies in

human societies: natural or non-monetary economies (using barter and

trade with no centralized nor standardized set of financial instruments)

and more modern monetary economies (with markets, currency, financial

instruments and so on). The former is more primitive and the insurance in

such economies entails agreements of mutual aid. If one family's house is

destroyed the neighbors‟ are committed to help rebuild. Granaries housed

another primitive form of insurance to indemnify against famines. Often

informal or formally intrinsic to local religious customs, this type of

insurance has survived to the present day in some countries where modern

money economy with its financial instruments is not widespread.

In the late 1680s, Edward Lloyd opened a coffee house that became a

popular haunt of ship owners, merchants, and ships' captains, and thereby

a reliable source of the latest shipping news. It became the meeting place

for parties wishing to insure cargoes and ships, and those willing to

underwrite such ventures. Today, Lloyd's of London remains the leading

market (note that it is an insurance market rather than a company) for

marine and other specialist types of insurance, but it operates rather

differently than the more familiar kinds of insurance. Insurance as we

know it today can be traced to the Great Fire of London, which in 1666

devoured more than 13,000 houses. The devastating effects of the fire

converted the development of insurance "from a matter of convenience into

one of urgency, a change of opinion reflected in Sir Christopher Wren's

inclusion of a site for 'the Insurance Office' in his new plan for London in

1667."A number of attempted fire insurance schemes came to nothing, but

in 1681 Nicholas Barbon, and eleven associates, established England's first

fire insurance company, the 'Insurance Office for Houses', at the back of the

Royal Exchange. Initially, 5,000 homes were insured by Barbon's Insurance

Office.

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WHAT INSURANCE IS ?

A promise of compensation for specific potential future losses in exchange

for a periodic payment. Insurance is designed to protect the financial well-

being of an individual, company or other entity in the case of unexpected

loss. Some forms of insurance are required by law, while others are

optional. Agreeing to the terms of an insurance policy creates a contract

between the insured and the insurer. In exchange for payments from the

insured (called premiums), the insurer agrees to pay the policy holder a

sum of money upon the occurrence of a specific event. In most cases, the

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

pays the rest. Examples include car insurance, health insurance, disability

insurance, life insurance, and business insurance.

The transaction involves the insured assuming a guaranteed and known

relatively small loss in the form of payment to the insurer in exchange for

the insurer's promise to compensate (indemnify) the insured in the case of

a financial (personal) loss. The insured receives a contract, called the

insurance policy, which details the conditions and circumstances under

which the insured will be financially compensated.

TERMS RELATING INSURANCE

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SUM ASSURED

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

LIMIT OF INDEMNITY

An amount payable to the insured, commencerating with his loss or

damage subject to the maximum limit agreed in advance.

INTERMIDIARY/BROKER

A person or firm who arranges a cover with the Insurer/Assurer on behalf

of the Insued/Asssured,In consideration of a commision,payable by the

Insurer/Assurer.

POLICY

Policy is a document which shows that a contract has been made between

the Insurer/Assurer and Insured/Assured. It is not called a contract in

itself.

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PROPOSAL FORM

Through Proposal Form Insured/Assured presents various type of

information to the Insurer/Assurer for obtaining a cover for risk. There is

other method adopted in the market also to present the risk such as

representation by the agent/broker or surveys in case of complex nature of

general insurance rieks.

PREMIUM

An amount paid by the insured/assured in consideration of accepting the

risk by the insurer/assurer.

Premium includes, pure premium, commission paid to the agent/broker,

administrative expenses and profit.

UNDERWRITER

Underwriter is a person working in an insurance company, who evaluate

the risk presented by the insured/assured as to whether to accept or reject

the risk and if it is accepted on what premium and terms and conditions.

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CLAIMS MANAGER

Claims manager is called the watch dog of the funds of the policy holders

being managed by the insurance company. Incase of claim he has to assess

whether the claim is payable under the terms and conditions of the policy

or not and if payable what should be the quantum of the claim.

ARBITRATOR

Arbitrator is a person who resolve dispute if arising between the

insurer/assurer and insured/assured .Its decision is final and binding

under the law.

RE-INSURANCE COMPANY

A company from where insurer/assurer seeks cover over and above the

amount which he can bear in case of claims as per resources available with

him.

CLAIM

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An occasion which on trigging the operative clause of the policy,is

notified by the insured/assured to the insurer/assurer for payment of

agreed sum assured or indemnity according to loss sustained.

ABSOLUTE LIABILITY

A legal doctrine causing one party always to be responsible for payment

of damage claims, regardless of circumstances causing the loss. This

doctrine has been applied to those using explosive or keeping dangerous

animals as pets.

ACTUARY

An insurance company mathematician, who compiles statistics of losses,

develops insurance rates calculates dividends, and evaluates the financial

standing of insurance company.

CAPTIVE INSURANCE

An insurance company operated by a main company or group of

companies, to insure its own risks. A part of self insurance plan.

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Insurance

General Insurance

Life Assurance

CASH VALUE

The saving feature associated with permanent life insurance. The result

of a initial period when premium payments exceed mortality and other

charges.

INSURABLE INTEREST

The ability to demonstrate that the insured event is capable of causing a

financialloss to the person owing the insurance. To collect from a property

insurance contract, the insurable interest must be demonstrated at the time

of the loss. In life insurance the insurable interest must exist when the

policy is begun.

CLASSES OF INSURANCE

The insurance is mainly divided in following two major classes of

business.

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GENERAL INSURANCE

General insurance or non-life insurance policies, including automobile and

homeowners policies, provide payments depending on the loss from a

particular financial event. General insurance typically comprises any

insurance that is not determined to be life insurance

General insurance means managing risk against financial loss arising due

to fire, marine or miscellaneous events as a result of contingencies, which

may or may not occur. General Insurance means to “Cover the risk of the

financial loss from any natural calamities viz. Flood, Fire, Earthquake,

Burglary, etc.. i.e. the events which are beyond the control of the owner of

the goods for the things having insurable interest with the utmost good

faith by declaring the facts about the circumstances and the products by

paying the stipulated sum , a premium and not having a motive of making

profit from the insurance contract.”

Some of the General Rules:

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1. Mis-description : The insurance policy shall be void and all the

premiums paid by insured may be forfeited by the insurance

company in the event of mis-presentation or mis-declaration and/or

non-disclosure of any material facts.

2. Reasonable care : The insured shall take all reasonable steps to

safeguard the property insured against any loss or damage. Insured

shall exercise reasonable care that only competent employees are

employed and shall take all reasonable precautions to prevent all

accidents and shall comply with all statuary or other regulations .

3. Fraud : : If any claim under the policy may be in any respect

fraudulent or if any fraudulent means or device are used by the

insured or any one acting on the insured‟s behalf to obtain any

benefit under the insurance policy, all the benefits under the

insurance policy may be forfeited.

LIFE ASSURANCE

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Life assurance is a contract between the policy holder and the insurer,

where the insurer promises to pay a designated beneficiary a sum of

money (the "benefits") upon the death of the insured person. Depending on

the contract, other events such as terminal illness or critical illness may also

trigger payment. In return, the policy holder agrees to pay a stipulated

amount (the "premium") at regular intervals or in lump sums. In some

countries, death expenses such as funerals are included in the premium;

however, in the United States the predominant form simply specifies a

lump sum to be paid on the insured's demise.

The value for the policy owner is the 'peace of mind' in knowing that the

death of the insured person or if he lives too long, or if he becomes

disabled, will not result in financial hardship.

Life policies are legal contracts and the terms of the contract describe the

limitations of the insured events. Specific exclusions are often written into

the contract to limit the liability of the insurer; common examples are

claims relating to suicide, fraud, war, riot and civil commotion.

ORIGION OF LIFE ASSURANCE

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Risk protection has been a primary goal of humans and institutions

throughout history. Protecting against risk is what insurance is all about.

Life insurance came about a little later in ancient Rome, where burial clubs

were formed to cover the funeral expenses of its members, as well as help

survivors monetarily. With Rome's fall, around 450 A.D., most of the

concepts of insurance were abandoned, but aspects of it did continue

through the Middle Ages, particularly with merchant and artisan guilds.

These provided forms of member insurance covering risks like fire, flood,

theft, disability, death, and even imprisonment.

During the feudal period, early forms of insurance ebbed with the decline

of travel and long-distance trade. But during the 14th to 16th centuries,

transportation, commerce, and insurance would again reemerge.

And similar to ancient Rome, burial societies were formed in the Buddhist

period to help families build houses, and to protect widows and children.

“However, it was after 1840 that life insurance really took off in a big way.

The trigger: reducing opposition from religious groups”.

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LIFE-BASED CONTRACTS

Life-based contracts tend to fall into two major categories:

Protection policies – designed to provide a benefit in the event of specified

event, typically a lump sum payment. A common form of this design is

term insurance.

Investment policies – where the main objective is to facilitate the growth of

capital by regular or single premiums. Common forms (in the US) are

whole life, universal life and variable life policies.

INSURANCE VS ASSURANCE

The specific uses of the terms "insurance" and "assurance" are sometimes

confused. In general, in jurisdictions where both terms are used,

"insurance" refers to providing cover for an event that might happen (fire,

theft, flood, etc.), while "assurance" is the provision of cover for an event

that is certain to happen. In the PAKISTAN both forms of coverage are

called "insurance", principally due to many companies offering both types

of policy, and rather than refer to themselves using both insurance and

assurance titles, they instead use just one.

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4 I’s of Insurance Service

The 4 I‟s refers to the different dimensions/ characteristics of any service.

Unlike pure product, services have its own characteristics and its related

problems. So the service provider needs to deal with these problems

accordingly. The service provider has to design different strategies

according the varying feature of the service. These 4 I‟s not only represent

the characteristics of different services but also the problems and

advantages attached to it.

These 4 I‟s are

INTANGIBILITY

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Insurance is a guarantee against risk and neither the risk nor the guarantee

is tangible. Hence, insurance rightly come under services, which are

intangible. Efforts have been made by the insurance companies to make

insurance tangible to some extent by including letters and forms.

INCONSISTENCY

Service quality is often inconsistent. This is because service personnel have

different capabilities , which vary in performance from day to day. This

problem of inconsistency in service quality can be reduced through

standardization, training and mechanization.

INSEPARABILITY

Services are produced and consumed simultaneously. Consumers cannot

and do not separate the deliverer of the service from the service itself.

Interaction between consumer and the service provider varies based on

whether consumer must be physically present to receive the service.

INVENTORY

No inventory can be maintained for services. Inventory carrying costs are

more subjective and lead to idle production capacity. When the service is

available but there is no demand, cost rises as, cost of paying the people

and overhead remains constant even though the people are not required to

provide services due to lack of demand. In the insurance sector however,

commission is paid to the agents on each policy that they sell. Hence, not

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much inventory cost is wasted on idle inventory. As the cost of agents is

directly proportionate to the policy sold.

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INDEMNIFICATION

LEGALLITY

INSURABILITY

PRINCIPLES OF INSURANCE

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

INSURABILITY

Risks that are insurable can be categories in following categories:

LARGE NUMBER OF SIMILAR EXPOSURE UNITS

Since insurance operates through pooling resources, the majority of

insurance policies are provided for individual members of large classes,

allowing insurers to benefit from the law of large numbers in which

predicted losses are similar to the actual losses. Exceptions include Lloyd's

of London, which is famous for insuring the life or health of actors, sports

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figures and other famous individuals. However, all exposures will have

particular differences, which may lead to different premium rates.

DEFINITE LOSS

The loss takes place at a known time, in a known place, and from a known

cause. The classic example is death of an insured person on a life insurance

policy. Fire, automobile accidents, and worker injuries may all easily meet

this criterion. Other types of losses may only be definite in theory.

Occupational disease, for instance, may involve prolonged exposure to

injurious conditions where no specific time, place or cause is identifiable.

Ideally, the time, place and cause of a loss should be clear enough that a

reasonable person, with sufficient information, could objectively verify all

three elements.

ACCIDENTAL LOSS

The event that constitutes the trigger of a claim should be fortuitous, or at

least outside the control of the beneficiary of the insurance. The loss should

be pure, in the sense that it results from an event for which there is only the

opportunity for cost. Events that contain speculative elements, such as

ordinary business risks or even purchasing a lottery ticket, are generally

not considered insurable.

LARGE LOSS

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The size of the loss must be meaningful from the perspective of the

insured. Insurance premiums need to cover both the expected cost of

losses, plus the cost of issuing and administering the policy, adjusting

losses, and supplying the capital needed to reasonably assure that the

insurer will be able to pay claims. For small losses these latter costs may be

several times the size of the expected cost of losses. There is hardly any

point in paying such costs unless the protection offered has real value to a

buyer.

AFFORDABLE PREMIUM

If the likelihood of an insured event is so high, or the cost of the event so

large, that the resulting premium is large relative to the amount of

protection offered, it is not likely that the insurance will be purchased, even

if on offer. Further, as the accounting profession formally recognizes in

financial accounting standards, the premium cannot be so large that there

is not a reasonable chance of a significant loss to the insurer. If there is no

such chance of loss, the transaction may have the form of insurance, but not

the substance.

CALCULABLE LOSS

There are two elements that must be at least estimable, if not formally

calculable: the probability of loss, and the attendant cost. Probability of loss

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

of a reasonable person in possession of a copy of the insurance policy and a

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proof of loss associated with a claim presented under that policy to make a

reasonably definite and objective evaluation of the amount of the loss

recoverable as a result of the claim

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INTODUCTION

OF

STATE LIFE

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HISTORY

The Life Insurance Business in Pakistan was nationalized during March

1972. Initially Life Insurance business of 32 Insurance Companies was

merged and placed under three Beema Units named “A”, “B” and “C”

Beema Units. However, later these Beema Units were merged and effective

November 1, 1972 the Management of the Life Insurance Business was

consolidated and entrusted to the State Life Insurance Corporation of

Pakistan.

State Life Insurance Corporation of Pakistan is headed by a Chairman and

assisted by the Executive Directors appointed by Federal Government. Up

to July 2000 the Corporation was run by Board of Directors constituted

under Life Insurance (Nationalization) Order 1972. In July 2000, under

Insurance Ordinance 2000, the Federal Government reconstituted the

Board of Directors of State Life which runs the affair of this Corporation.

The basic structure of the Corporation for Individual Life Insurance

consists of

Four Regional Offices

Twenty-Six Zonal Offices

Few Sub-Zonal Offices

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111 Sector Offices

461 Area Offices

For Group & Pension there are

Four Zonal Offices

6 Sector Offices

20 Sector Heads

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FUNCTIONS PERFORMED BY

OFFICES

Zonal Offices

The Zonal Offices deal exclusively with Sales and Marketing Underwriting

of Life Insurance Policies and the Policyholder‟s Services

Regional Offices

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Regional Offices, each headed by a Regional Chief, supervise business

activities of the Zones functioning under them.

Principal Office

The principal office, based at Karachi, is responsible for corporate activities

such as investment, real estate, actuarial, overseas operation, etc.

MAJOR ACHIEVEMENTS

The major function of the State Life Insurance Corporation of Pakistan is to

carry out Life Insurance Business; however, it is also involved in the other

related business activities such as

Investment of policyholders’ fund in Government

securities

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Stock market

Real Estate

The major achievements of State Life are as under:

1. The Corporation has reduced up to 33% in the premiums on the past

and potential Life Policies for the benefit of the Policyholders.

2. It is a profitable organization and it paid Rs.2.657 billion as dividend

to the Government of Pakistan since its inception in 1972.

3. State Life has played very vital role in the economy by providing

employment to the people of the country

i. As permanent employees

ii. As part of its marketing force

iii. Investing the huge funds in different sectors of the

economy.

4. . The Investment Portfolio of State Life as at 31.12.2009 stands at

Rs.191.445 billions.

5. Investment portfolio also includes investment in Real Estate which

stands at a

i. Book value Rs.2.538 billion as at 31.12.2009

6. Whereas

i. Fair value is Rs.21.681 billion as at 31.12.2009

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

million in 2009.

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8. The Premium income increased from Rs.0.317 billion in 1972 to

28.367 billion in 2009.

9. Similarly Investment income including rental income increased from

Rs.0.81 billion in 1972 to 274.152 billion in 2009.

10. Total statutory fund of State Life stands at Rs.199.445 billion in 2009

as against Rs.1.494 billion in 1972.

11. State Life is smoothly striving towards its objective of making life

insurance available to large section of the society by extending it to

common man.

As at December, 2009 the total number of policies in force

Under individual life 2.895 million

Under group life insurance 3.754 million

CHRONOLOGY OF EVENTS

Taking over of management of life insurance companies 19 March 1972

Establishment of state life insurance corporation 1st Nov, 1972

Reduction of premium rates on new policies 1st Nov, 1972

Reduction of premium rates on old policies 1st Jan, 1973

Establishment of UK branch 1st Jan, 1974

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Merger of units and formation of zones 1st Oct, 1975

Establishment of branch office in Dubai July 1978

Establishment of agency office in Kuwait May, 1983

Establishment of Multan zone 1st Oct, 1985

Establishment of Faisalabad zone 1st march, 1986

Establishment of Gujranwala zone 1st July 1986

Establishment of Sucker zone 1st April, 1990

Establishment of branch office in Pakistan May, 1992

CORE VALUES

MISSION:

“To remain the leading insurer in the country by extending the benefits of

insurance to all sections of society and meeting our commitments to our policy holders and the nation.”

QUALITY POLICY:

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

OBJECTIVES:

To run life insurance business on sound line.

To run life insurance business on sound line.

To provide more efficient service to the policyholders.

To maximize the return to the policyholders by economizing on expenses and increasing the yield on investment.

To make life insurance a more effective means of mobilizing national savings.

To widen the area of operation of life insurance and making it available to as large a section of the population as possible, extending it from the comparatively more affluent sections of society to the common man in towns and villages.

To use the policyholders fund in the wider interest of the community.

ORGANIZATIONAL STRUCTURE

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MANAGEMENT HIERARCHY:

CHAIRMAN

EXECUTIOVE DIRECTOR

DIVISONAL HEAD

ZONAL HEAD

DEPUTY GENERAL

MANAGER

ASST GENERAL MANAGER

MANAGER

DEPUTY MANAGER

ASST MANAGER

EXECUTIVE OFFICER

ASST SUPERINTEND

ENT

OFFICE ASST

RECORD

NAB QUASID

QUASID

SUPERINTENDENT

SENIOR OFFICE ASST

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BOARD OF DIRECTORS:

CHAIRMAN

EXECUTIVE

DIRECTOR

DIVISIONAL HEADS

REGIONAL HEADS

ZONAL HEADS

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Mr. Shahid Aziz Siddiqi from 12-06-2008 CHAIRMAN

Mr. Qamar Zaman Chaudhry DIRECTOR

Mrs. Spenta Kandawalla DIRECTOR

Mr. Aslam Faruque DIRECTOR

Mr. Amin Qasim Dada DIRECTOR

Mr. Rasheed Y. Chinoy DIRECTOR

Syed A. Wahab Mehdi DIRECTOR

Syed Hur Riahi Gardezi DIRECTOR

SECRETARY BOARD:

Mr. Akbar Ali Hussain

BOARD AUDIT COMMITTEE:

Syed Hur Riahi Gardezi CHAIRMAN

Mrs. Spenta Kandawalla MEMBER

Mr. Aslam Faruque MEMBER

Mr. Rasheed Y. Chinoy MEMBER

Syed A. Wahab Mehdi MEMBER

Mr. Sher Ali Khan SECRETARY

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AUDITORS:

PAKISTAN

M/s. Riaz Ahmed & Company,

CHARTERED ACCOUNTANTS

M/s. Avais Hyder Liaquat Nauman

CHARTERED ACCOUNTANTS

GULF COUNTRIES

M/s. Sajjad Haider & Co.,

CHARTERED ACCOUNTANTS

APPOINTED ACTUARY:

Mr. Shujaat Siddiqui

MA, FIA, FPSA,

PRINCIPAL OFFICE:

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

Telephones: 99202800-9 UAN 111-111-888

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Cable: "STATELIFE" Telex: 21079 SLIC-PK Fax: 99202820

E-mail: [email protected] Website: www.statelife.com.pk

Regions:

There are 4 regions in Pakistan headed by regional chiefs responsible for

looking after all the zones under his administration. These regions are;

Southern Region

Central Region

Multan Region

North Region

Zones:

There are 26 zones in Pakistan headed by the zonal head responsible for

procurement of business to achieve the set business target of the

organization. The basic structure of the Corporation consists of:

Four Regional Offices,

Twenty-Six Zonal Offices,

A few Sub-Zonal Offices,

111 Sector Offices,

A network of 461 Area Offices across the country for Individual Life

Insurance;

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Four Zonal Offices,

6 Sector Offices with 20 Sector Heads for Group & Pension are involved in

the Marketing of Life Insurance Plans policies and products offered by

State Life and a Principal Office.

The Zonal Offices deal exclusively with Sales and Marketing. Underwriting

of Life Insurance Policies and the Policyholder‟s Services. Regional Offices,

each headed by a Regional Chief, supervise business activities of the Zones

functioning under them. The Principal Office, based at Karachi, is

responsible for corporate activities such as investment, real estate,

actuarial, overseas operations, etc.

Karachi (Southern) Zone

Karachi (Central) Zone

Karachi (Eastern) Zone

Hyderabad Zone

Quetta Zone

Sukkur Zone

Mirpurkhas Zone Larkana Zone

Lahore Central Zone

Lahore Western Zone

Gujranwala Zone

Faisalabad Zone

Sargodha Zone

Sialkot Zone

Multan Zone

Sahiwal Zone

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RahimYar Khan Zone

Dera Ghazi Khan Zone

Bahawalpur Zone

Peshawar Zone

Rawalpindi Zone

Abbottabad Zone

Gujrat Zone

Islamabad Zone

Mirpur (AK) Zone

Swat Zone

Group and Pension:

There are 4 zonal offices of Group &Pension and under these zones there

are many sector offices;

Group and Pension Rawalpindi Zone

Group and Pension Peshawer Zone

Group and Pension Karachi Zone

Group and Pension Lahore Zone

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SLIC has following departments which performs the different

functions of SLIC. These departments are;

Audit Department

New Business Department

Agency Department

Finance & Accounting Department

Policyholder Service Department

Personal & General Service Department

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AUDIT DEPARTMENT

Audit department of state life do internal audit of transactions which occur

on daily basis. Management of any organization is responsible for ensuring

that proper accounting records are kept and its assets are safeguard. To

best discharge this responsibility instituting a system of internal control is

essential to ensure that work is properly carried out by the employees. The

organization then relay on its system for the production of reliable

management information and the financial accounts , and to prevent

ERROR,FRAUD AND LOSS OF ORGANIZATION’S ASSETS actually

internal audit is a part of internal control.

Internal Control:

Internal control may be defined as whole system of control, financial and

otherwise, established by the management in order to carry out the

business of the organization in an ordinary manner, safeguard its assets

and secure, as far as possible .the accuracy & reliability of its records. It

may be noted that the concept of internal control goes beyond financial and

accounting matters and the custody of organization assets to include

controls designed to improve operational efficiency and adherence to

organization policies.

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Objects of Internal Audit

Internal audit is an independent appraisal function established within an

organization to examine and evaluate its activities as service to the

organization. The object of internal audit is to assist member of the

organization is effective discharge of their responsibilities. To this end

internal auditing furnishing those with analyses, appraisal,

recommendations, counsel, and information concerning the activities are

viewed.

Internal auditor should:

1. Review the system to ensure compliance with those policies, plans,

procedures, laws and regulations which could have a significant

impact on operations and report, and determine whether the

organization is in compliance.

2. Review the means of safeguard assets and as appropriate verify the

existence of such assets.

3. Appraise the economy and efficiency with which resources are

employed.

4. Internal auditor should be independent of the activities they audit

Internal auditors are independent when they can carry out their work

freely and objectively.

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TYPES OF INTERNAL AUDIT:

Pre- audit:

Audit before making payment is called pre audit.

Post- audit:

Audit after making payment is called post audit. In GROUP &

PENSION mainly is pre audit is used.

External-audit:

The audit which is done through the external parties like chartered

firms. GOVT organization audit/Commercial Audit: Audit of the

Pakistani GOVT owned organization is done through the AGP

Objectives Of Internal Accounting Controls:

The system of internal accounting control is intended not only to maintain

an adequate method of processing accounting data but also to safeguard

the organization against possible financial loss due to fraud or error. The

control is designed to ensure that;

The organization receives and enters its accounting records, all the income

and revenue to which it is entitled.

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All expenditure is properly authorized.

All assets are properly recorded and safeguard.

All liabilities are properly recorded and provision is made for known

or expected losses.

The accounting records provide a reliable basis for the preparation of

accounts.

Internal Audit Role In State Life:

Accurate information is one of the essential factors in the process of

decision making both policy and management; this is as true in state life as

in any other organization. in the absence of accurate and dependable

information management/board of directors are unable to make policy and

management decisions .as the function is passed downward to the

infrastructure of state life, function of internal audit apart from the

verification of financial evaluation to pin point week areas in the system,

internal control .in state life some items are subject to pre-audit while some

are subject to post-audit.

List of payment subject to post audit:

All payment vouchers of salaries, except December, January and

changes.

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Staff overtime fortnightly.

Monthly fixed overtime to staff

Entertainment to officers for sitting late

Monthly officer‟s entertainment and newspapers

Monthly car rental to officers

Monthly tea expenses to staff

Air ticket

Air insurance

Telephone antiseptic bills

Labor charges

Office telephones

Current t monthly salary advances

Payments subject to pre-audit:

All increase in retainer ship payments will be pre audited.

All payment vouchers of recoveries on account of bank loan

association/union subscription p.f contributions, income tax at

source and insurance premium, will be pre-audited in July and

December only.

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All cases where accident benefit is payable will continue to be pre-

audited.

NEW BUSINESS DEPARTMENT

Management Hierarchy Of New Business Department”

A.G.M

MANAGER

DEPUTY MANAGER

ASSISSTANT MANAGER

STAFF

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The business of SLIC is initiated through new business department (NBD)

when insurance sales rep sells policy to any client then this department

handles all the document procedures

Mr malik nazir ahmad is the incharge of new business department. In this

department as the name shows, new contracts start between proposes and

insurance company.

Proposer is a person who applies for the insurance protection.

Main function of the NB is underwriting

The department is responsible for processing the new business

introduced by the sales force right from receiving a proposal on the

counter to mailing the policy document to the policy holder

It has various sections to perform the different task relating to the

acceptance or rejection of risks for life insurance, the proposals are

received and initially is checked in all respects

Completion of all columns and then processed by the underwriters

depending upon whether they have been introduced under the

medical or non medical scheme. The risk is assessed keeping in view

the following factors

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personal data , occupation ,physical and social features , health ,

family history of the prospect , moral hazard , source of income ,

nomination , relationship between the nominee and the prospect .

Previous life insurance history of the prospect if any, field officer‟s or

sale representative confidential report included in the proposal from,

Financial underwriting i.e. Source of income, its legality and proof,

relationship between the prospect‟s income and sum assure .in case

of field officers or sale representative‟s reports have more

importance.

After this assessment, the underwriting decision is made which may

be acceptance of a risk at ordinary rate or with loading, calling

additional evidences relating to health or financial status of the

prospect, postponing for a definite period or straight away

declination. Premium rates, installments are the checked and first

premium receipts are issued on receiving payments.

In the last, policy contract are issued under intimation to the field

force, and concerned department like commission payment, agency

administration, computer division and marketing. This in brief terms

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

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function as the underwriters are responsible for the financial health

of life institution. By accepting good risks they promote profitability

and growth, which helps in meeting the financial obligations of the

life institutions towards the policyholders, its employees and

government.

Process of dealing with new customer:

First of all sale rap motivate the customer to take policy.

Then sale rap fills proposal form for that customer.

Then sale rap takes Rs 500 as token money as underwriting fee for

customer.

Then proposal form come in new business for allotment of proposal

number where proposal number for a particular customer is allotted.

Then process of underwriting is done. If the customer fulfills the

requirements of underwriting then further process continues

otherwise request is rejected and underwriter suggests some other

alternative.

If underwriter accepts the proposal then calculation of premium is

done.

After the calculation of premium the policy number is allotted and

policy bond is issued to customer.

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Sections of New Business

1. Proposal section

2. Underwriting section

3. Calculation section

4. Policy issue section

5. Computer section

1. Proposal Section:

In proposal section policy number is allotted to a new customer‟s proposal

for future reference. All the work performed in proposal section is entered

in a register called proposal register.

First of all issue the proposal number and then record the proposal

number, serial no, age, table & term and then SR, AR, PR no and the name

of owner of policy form.

These proposal forms are attaching with balance statements with the issue

no but those policy form that have no balance statements take a side. Those

who have balance statements send it to the underwriting department.

There are some other forms which have some objections if they are clear

than recorded into the ledger to” OK” its mean ok.

2. Underwriting Section:

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Underwriting is the process through which the underwriter assesses the

risk associated with the insurance proposal. Underwriter verififies the

proposal information provided in the proposal form. If he feels that client

should have a medical check up than SLIC have its own panel of doctors to

provide medical assistance.

Types of underwriting

I. Lay underwriting

II. Final authority

I. Lay underwriting:

A junior underwriter who checks all the documents of policyholder, if the

documents are correct, then he sends to final authority.

II. Final authority:

A person who checks all the documents and decision of lay underwriter

makes final decision.

Underwriting panel:

The underwriting specialist check the case thoroughly and see his name,

NIC no, age, weight, height, nominee, name occupation and address. if

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

medical report or other tests of medical.

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If they seem that case are correct they fill the form of policy brief sheet of

bottom line which they enter the height, weight and also give the rate

about to see his occupation and they can also use some code which they

give different occupational person.

For example carpenter code is 161.if they forget the code of any

occupational person then they give code of 078.they think that 078 codes, is

best solution. They sign the form and send to doctors.Doctor’s panel:

The doctor panel head is known as CMA (CHIEF MEDICAL ADVISOR)

i.e. Dr Naeem and also authorized doctors Dr Saira who has recommended

the case by underwriters for medical reports etc.

They must check the nominee name, NIC no and his occupational stress. if

the policy holder has some disease problem then they can mark them his

case by N.D and they can also give a declaration certificate that if he die

during two years then the company cannot pay the claim. The maximum

limit of N.D case is 15, 00,000.

If the policyholder has government employee then they can give the

categories no 4 such as school teacher, doctor etc. but if they are carpenter,

bricks holder then they can give 5,6.

There are basically three categories of female.

Government job and education

Private illiterate

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Household

But the male have only one category.

If the case has 10, 00,000 then only one person sign but if they are Rs 20,

00,000 then they are Rs 30, 00,000 then three persons can check.

If the policyholder are smoker then they will allow only smoking daily 6

up to 10.but if they smoke 20 up to 25 then they are not capable to grant the

policy.

The doctors also decide & check the age and check the underwriting

requirement table e.g. if the person age is 18-40 then they have Rs 200,000

sum insured and they are non-medical case.

3. Calculation section:

In calculation section calculation of premium is done. Premium can be pay

in the following way;

Yearly

Half yearly

Quarterly

Monthly

Rate of interest and premium rate is calculated.

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

then more rates will be charged and if age is low then low rate will be

charged. Rate also depends upon the maturity period.

Different tables are used for calculating the rate of premium.

Most commonly used table is;

Table 03

Table05

Table07

Table 12

Table 18

Table 19

4. Policy issue section:

After completing the calculation, the number is allotted to policy holder .in

policy issue section; all the records are maintained in the policy register.

5. Computer section

New business department has its own computer section, which contains all

the records of policy holders. The department is computerized in

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

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

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One is raw print 7 the other is office copy. The raw print is used to check

the record of each policyholder. And the office copy is used for their

record.

“smart term program” IBM are used and they start login by “college” and

then enter the new business department and open the whole table of

proposal form no and his bio data. first they can enter table a and then

proposal no and series” that means proposal forms series and then his

name are also enter and policy no and then also enter the table and term

and then issuing date of underwriting and date of receipt and write his

date of birth ,age, mode i.e.

Yearly

Quarterly

Monthly

Similarly they can allot the no and then write “postal code” i.e.078 and then

his “address”.

So write the sum assured and enter the AIB value and the rate which they

can allot. They

Can enter the series vise “FIB NO” and they give the command of print

with the recipient “printer no 03”

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AGENCY DEPARTMENT

Management Hierarchy Of Agency Department:

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State life is one of those few organizations whose product is not over

the counter but it has to be introduced to the expected buyer through

a huge marketing.

“The marketing force, usually known as field workers, is regulated

through an important department which in insurance industry is

called agency administration department”

ASSISSTANT GENERAL

MANAGER

MANAGER

DEPUTY MANAGER

ASSISSTANT MANAGER

STAFF

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The agency administration results, trained, promote and provide

services to its field workers so as to ensure them skilled profession,

sound career, handsome income and many fringe benefits to ease

their life.

Service provided by the SLIC is tangible and therefore are not

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

them through persuasive method. Field force of SLIC is tangible and

therefore is persuasive method. Field force of SLIC plays an effective

role in selling of intangible products. In order to maintain record of

the field force agency department was established.

The head of agency department is Mr. Shakeel Ansari and executive

officer Mr. Asif mir .the main function of this department includes

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

medical facility for field force. This department is also responsible for

issuance and renewal of licenses to the field force.

State life has two levels of recruitment.

Recruitment:

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The sale representative is appointed by SO/SM .The requirement and

conditions for the appointment of SR are as follows. State life has two level

of recruitment.

Regular sales representatives:

Minimum qualification required is matric

Age at entry must not be less than 18 years.

Annual quota for SR is Rs 10000

Application for the issuance of license is necessary and is renewed

after each 3 years.

An application form, along with license fee Rs 50, attested

photocopies of documents and nomination form is submitted to the

agency department .a code number is allotted at the submission of

application to SR and he can start working as agent of the SLIC of

Pakistan.

Graduate sales representatives:

Must be graduate required

Less than 30 years of age having N.I.C.

They are paid stipend.

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Both above type of sale representative are registered under insurance

ordinance 2000 and insurance rules 2002.they are required to get their

registration renewed after every two years and submit a statement

and declaration annually as required under above referred ordinance

& rules .Their primary job is to sell life insurance policies.

Promotion:

SR is promoted, upon fulfillment of certain terms and conditions and on

achievement of business targets, to SO. Similarly SO is promoted to SM

and SM to AM.

Criteria of promotion from SR to SM:

Two year working as SR:

In case of promotion of SR to SO some one must have to achieve the

target of 312,000 in his collected business in first year and the same in

second year.

Must have at least 20 policies enforce on different lives.

Must have achieved a minimum second year persistency of 75% in

the immediate preceding year.

Must have achieved a minimum renewal persistency of 90% in the

immediate proceeding year

Criteria of promotion from SO to SM:

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Must have working of minimum 2 years as SO

In case of promotion of SO for SM someone must have to achieve the

target of 612000 of his collected business in first year and the same in

second year

Must have at least persistency of 70% in the immediate proceeding year

Must have minimum renewal persistency of 90% in the immediate

preceding year;

Must have minimum 4 productive SR

Appointment as SR SM & SO:

In response to our application to the state life insurance corporation of

Pakistan for registration as a sale representing must confirming it under

the contract with the legal status of a state life agent which means an

agent whose name appear in the register of agent maintained by the

corporation and who has valid and subsisting the contract in writing

with the corporation to act as an agent (as distinct from an employee

under state life employee service regulation 1973). The main contract

should be effective date of your registration.

Following are the basic terms and condition.

This appointment is subject to the provisions of the insurance

ordinance 2000, insurance rules 2002 and Securities and Exchange

Commission rules 2002 as amended from time to time and other

rules and regulations framed by the government and the securities

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and exchange commission of Pakistan and order and directives

issued from time to time.

Your area operation must be signed.

The contract is issued on the basis of the statement and declaration

made by you in your application for registration. You will have to appear

in person for such courses and or other tests and or interviews shall

be constructed as an admission on your part that you are not a

bona fide .Your minimum qualification for entering into agency

contract shall be matriculation and you should require completing

the foundation course of three months duration.

Your performance wills received on quarterly basis .after your

appointment if you fail to complete your quarterly quota in two

consecutive complete quarters; the corporation reserves the right to

terminate this contract.

Prize & Awards:

The field workers are motivated by giving those prizes and awards on

their monthly and yearly achievements. The height of it is an annual

convention which held at a prominent place of prestige in the country in

which all the qualities around the country share their knowledge and

experience, enjoy recreational activities and above all get benefit of

company of successful seniors. They disperse filled with thrill and

enthusiasm to go at more height to catch new stars.

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Other Benefits:

In order to run their offices company maintained furnishes offices are

provided and those who wish to open their officers, as they desire are

paid cash compensation in lieu of an office to maintain their own offices.

State life give their field workers and families a due care for which they

are covered for indoor and outdoor medical treatment, consultation

from senior doctors and for clinical investigation from reputed

pathological labs .In case of chronic diseases additional medical facilities

are given.

Their lives are also covered for heavy sum of insurance against accident

and death through variety of Group Insurance Policies. The Company

pays the premiums and for additional coverage subsidized rate of

premium is charged which is deducted from their commission.

Termination and Demotion:

Any agent of SLIC, who behave negatively, violates the rules and

regulation or indulge fraud or mal-practice, can be terminated by the

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

demoted to immediate lower rank of the field force.

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License:

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

insurance Karachi. At specific interval of time, a list of the field force is

transferred to controller of insurance Karachi for new and renewal of

license.

The list of license fee is given below:

SR (new license for IST year) = Rs 50

SR (renewal of license) = Rs 150

SR (renewal with late fee) = Rs 250

SO/SM (renewal of license) = Rs 250

SO/SM (renewal with late fee) = Rs 400

The agency department is also involved in the following matters of field

persons,

1. Medical of field persons

2. Rent

Contest arrangement (giving the prizes to those who make good

business)

Renewal of SR, SO and SM:

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Mr .Afzal Ch deal with the work of renewal of registration of field

workers

SR’s apply for renewal of his registration every year and his expiry limit

is for two year.

SO and SM apply for renewal of their registration every year and their

expiry limit is only one year.

In case if someone is delayed for the renewal, the agency manager has

authority to cancel the registration or carry his registration.

Renewal form is available from stationary department having annual

statement and declaration by an annual agent, signed by the persons

applying for renewal.

ZCC (zonal certification committee) will sign the renewal application

comprising of three members (AM, sector heads, zonal heads) and

shall [pass the renewal application.

Cash compensation for SO & SM

When any SR is promoted as SO, onetime cash compensation is made to

the SO of that SR who is promoted .this compensation is as

If his business is less than 500,000 then 6000 will be given to that

SO.

If business is greater than 500,000 and above then 10,000 will be given

to that SO.

Similarly when SO is promoted to SM, one time cash compensation to

the SM of that SO.

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If his business is above 500,000 and below 100, 00,000 than 8000 will

be given to that SM, and if business is above 10, 00,000 than 12000

will be given to the SM as one time cash compensation.

Medical facilities to SO & SM:

When any SO or SM achieve the persistency of 75% he qualifies for the

medical facilities received from SLIC.

He becomes registered from a specific registration form; registration

should be completed from 31 March.

A card is issued after registration to the field workers.

SO are given the card limits from Rs 3000 to Rs 4000.SM is given the

card limit from 3000 to 6000 rupees.

These limits should be used only in respect of medicine facility and

normal delivery.

Other surgical and other medical facilities will also to be paid to the

workers, when they need .these have no limit.

Some medical stores are in the panel of SLIC from where the field

worker can purchase the required medicine.

Likewise there are some authorize hospitals (ittefiq hospital, shalamar

hospital) from where the field workers can obtain the surgical and

other hospitalization benefit.

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FINANCIAL AND ACCOUNT

DEPARTMENT

This department maintains the record of all the cash transactions. It

prepares payroll for the regular employees and disburses the amount. It

also takes care of the fringe benefit such as medical facilities provided to

the office staff. Commission that is paid to sales representatives, sales

officers and sales managers are also calculated and paid through this

department.

To keep the corporation on financial track balance sheets and income

statement also prepared on annually, monthly and weekly basis. The

principal office sends annual budget to the department and department

is responsible for proper utilization of cash disbursements. The

department also send budget forecast for new budget proposal.

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Payment on behalf of the other zones and preparation of bank

reconciliation statements are also function of this department.

This department consists of following section:

Commission

Salary

Disbursement

Loan

Cash counter

COMMISSION:

Commission department facilitates the field force by offering

commission and due bonuses .the department is directed to calculate

and analyze the earning of last year, providing advances and loans to

field force and offer other fringe benefits to motivates the field force.

Commission is only give to commission based persons who are SM, SO

AND SR.

Commission is calculated from the premium after subtracting the tax.

Then check that SM not takes any advanced loan and any claim from

zonal, regional.

Structure of commission:

First year premium QUARTER BONUS

SR-------- 35% 2.5%

SO------- 15% 2.5%

SM------ 8% 2%

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Persistency bonus:

It gives on the persistency of the last year business.

On 80% business the commission is 1.1 percent. On 81, it is 1.2 and

onward.

Second year premium

SR-------- 10%

SO------- 2%

SM------ 1%

THIRD YEAR PREMIUM

SR------ 5%

SO----- 1%

SM----- 0.5%

SALARY & LOAN:

Employees are lying in the four categories Related to their appointment

and their promotion. According to their category the funds, benefits and

salary are gives to employees. In this section loan application and salary

form are filled here related their category and then according to that

make the voucher slip and passed by the officer.

CASH COUNTER:

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In cash counter premium and loan amount is submitted .There is two

accounts for policy holders.

First year account e.g. 1173 A/C

Renewal A/C

1089 A/C is account no of renewal account.

Collection is done in two ways:

Cash

Cheque

Different accounts no for renewal

Renewal on time 675

Renewal with late fee 696

Loan 383

Lapsed policies 571

Alteration 572

Other zone 573

Wrong policy 570

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POLICYHOLDER & SERVICE

DEPARTMENT

Management Hierarchy Of PHS Department:

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PHS department performs following functions.

Renewal or revival of policies

Alteration in the policy

Payments of death claims

Payment of maturity claims

Payment of injury claims

Renewal/ Revival of Policies:

ASSISTANT GENERAL

MANAGER

MANAGER

DEPUTY MANAGER

ASSISTANT MANAGER

STAFF

DEPUTY MANAGER

ASSISTANT MANAGER

STAFF

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PHS does renewal or revival of policies. Renewal of policies is done when

term of the policy ends and policyholder wants to renew his policy.

Revival is done of those policies which has been lapsed due to none

payment of policies premium. A lapsed policy may be revived during the

lifetime of the life insured, but within a period of 5 years from the due date

of the first unpaid premium and before the date of maturity. Revival of a

lapsed policy is considered either on non-medical or medical basis

depending upon the age of the life insured at the time of revival and the

sum to be revived.

Alteration:

Alteration may be done in table or in conditions or in sum insured. The

endorsement will be attached with original policy documents for alteration

purpose.

Kinds of alteration

Calculated alteration

Contractual alteration

Calculated alteration

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This alteration includes alteration in

Sum insured

Table & term

Load

After revival term & condition

Special revival after revival

Change in terms & conditions

Contractual alteration

For legal point of view this alteration is called contractual alteration.

Alteration may have specified period for alteration in the policies for

example in anticipated policies before the 4 year of term of policy alteration

can be made.

In Jeevan Sathi policy if any alteration is done it should be done with in one

year.

For this policy the evaluation will be on

Financial aspect

Physical aspect

Moral aspect

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Mode of payment is usually yearly then policy holder in the time on need

say to change it in the monthly, quarterly, half yearly. Excess is charged for

this purpose.

Half yearly 52 % of annual premium

Quarterly 27 % annual premium

Monthly 9% of annual premium

Procedure for Maturity Claims:

A good news letter is send to policyholder consists of following

information.

It is a matter of great pleasure that your policy has matured. It is a time to

fulfill the goals that you had set years back. For collecting maturity

benefits, please send a written request along with following documents to

your servicing State Life zonal office:

Original policy document

Copy of National Identity Card

Maturity discharge voucher duly verified by your bank

If your signature has changed over the years, please send us your three

specimen signatures of old and new styles.

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Immediately on receipt of above documents, we will process the case

further for payment of amount due, if any, against maturity claim under

above policy.

Procedure for Death Claim:

State Life insurance policies provide wide range of benefits in case of death

of the persons covered against them. If loved one covered under any of

State Life has expired, you should lodge a death claim with state life. All

you have to do is to send a written intimation to the zonal office of State

Life servicing the policy against which you are lodging a death claim.

State life will, after evaluating the case, contact for other required

documents for processing of death claim.

Survival Benefit Claim:

If Anticipated Endowment Assurance policy has completed 1/3rd or 2/3rd

term of the policy, it can withdraw a sum equal to 25% of the sum insured

of policy.

For withdrawal of Survival Benefit, send a written request along with

following documents to the servicing State Life zonal office:

i. Original policy document

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ii. Copy of National Identity Card

iii. Survival Benefit discharge voucher duly verified by your bank

iv. If the signature of persons has changed over the years, then are need

to send three specimen signatures of old and new styles

Immediately on receipt of above documents, state life will process the case

for payment of amount due, if any, against survival benefit claim under

above policy.

Injury Claim:

If State Life insurance policy contains an Accidental Death & Indemnity

Benefit (AIB) supplementary cover, and the insured have sustained an

injury as specified in the contract, he can apply to state life for an injury

claim within 20 days of sustaining the accident. For lodging injury claim,

there is need to send a written intimation of the accident mentioning

therein the date of accident to servicing State Life zonal office.

After receipt of intimation from insured, the case will be further looked

into and zonal office will contact accordingly.

Procedure for Loan against Insurance Policy:

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

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

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

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of 10% per annum compounded semiannually. If policyholder is interested

to avail loan under his policy, he can apply for loan.

Procedure for Volunteer Policy Surrender

If policy holder wants to surrender his policy he informs to the state life

about its decision and fills a form of surrender of policy after that his

request will be entertained and surrender amount will be transferred to

policyholder.

PROCEDURE OF DEATH CLAIMS IN GROUP

LIFE INSURANCE;

Procedure to lodge Death Claim

Procedure / requirement for the settlement of death claims

Death intimation, on death of any government employee, the department /

employer sends the written death intimation to the Incharge Claims

concerned G&P zone along with the death certificate.

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On receiving the death intimation, the department / employer would

sent the claim forms „C‟ & „ D‟ by the claim department of the Group

& Pension Zone.

The Department / employer is required to fill in the claim forms „C‟

& „D‟, properly sign and stamp them and send them back to the

concerned G&P zone, alongwith the following requirements.

1. Death certificate, issued by Local Municipal body, Cantonment

bodies, Union Councils, Services hospital, Government hospitals,

Semi Government hospitals, Railway hospitals and Trust hospitals

(any one of the above). In case of tribal areas, the death certificate

issued by political agents, Commissioner, Assistant Commissioner,

Magistrate Class-I are also acceptable.

2. NIC of the deceased and the claimants (attested photocopies).

3. Pension book in original for post retirement death (the same would

be returned back after verification).

4. Attestation: All the photocopies must be attested by the concerned

Gazetted officer.

NOTE:

The provision of all above requirements would ensure the quick

settlement of the claims.

Deficiency of any one of the above would result in the delay in the

claim settlement.

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Commercial Groups:

Procedure / Requirement for the settlement of Death/Disability

Claims:

1. Death intimation: The policyholder/employer is required to send

the written death intimation, to the Incharge Claims of concerned

Group & Pension zone.

2. On receipt of intimation, after necessary checking, the necessary

claim forms would be sent to the policyholder/employer by the

Claims department of the Group & Pension zone.

3. The policy holder/employer is required to fill in the claim forms,

properly sign and stamp them and send them back to the G&P

zone along with the following requirements.

For Death Claims:

1. Death certificate, issued by the local bodies, cantonment board,

services hospitals, government hospitals, semi government

hospitals and railway hospital. (Any one of above)

2. Last attending physician‟s statement.

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

Accidental death benefit.

A. For Age proof:

i. School/college certificate showing date of birth

ii. National Identity card

iii. Valid passport

iv. Discharge certificate (in respect of ex-defense forces Personnel)

v. Certificate of age by the policyholder organization

vi. Birth certificate issued by local body/cantonment board

(Any one of the above)

B. For disability claims:

1. Employee‟s statement.

2. Employer‟s statement.

Attending Surgeon‟s statements.

(Claim forms A, B, and C, respectively).

3. X-rays and medical investigation reports etc, if any.

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

Officer).

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5. The provision of all above requirements would ensure the quick

settlement of the claims.

6. Deficiency of any one of the above would result in the delay in the

claim settlement.

PERSONNEL & GENERAL

SERVICE DEPARTMENT

This division has dual functions

1. Personnel management

2. General services

This department performs following functions;

FUNCTIONS:

Personal Management

Personnel policies, motivation, incentive and implementation of

service regulations

Office management development

Personnel management

Liaison with government labor relations and maintenance or office

discipline including investigation against officers and staff

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General Services

Procurement

Purchase of goods and services

Uniforms

Communication

Other services

Maintenance

Office machines & equipment

Furniture & fixture

Transport & conveyance

Telephone and telex

Receipt and dispatch

Assets register

Service like canteen security and cleanliness

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Relation of personnel & general service

department with other departments:

Management Hierarchy:

P&GS

AUDIT

B& F NEW

BUSINESS

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SECTIONS:

Personnel Section:

All the employee matters such as appointment, promotion, demotion,

transfer and allowances are dealt by personnel section. Annual confidential

reports- ACR the employees are prepare, under the supervision of this

section, by the departmental heads.

For the appointment of the staff, an advertisement is initiated in the

newspaper. Zonal head is competent authority for this appointment. This

appointment also depends on the business of zonal office .the appointment

of officers is done by principal office Karachi or regional office. Selection

committee constituted by zonal head conducts test and interview.

MANAGER

P&GS

ASST. MANAGER

STAFF

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For promotion of the employees, there are ACR‟S are necessary and

minimum three years are required to remain in one cadre. Each employee

is promoted by the criteria and instructions set by principal office. PO or

Regional office does promotion of officers.

In Lahore there are 362 office employees, 9 sector head and 43 area

managers (AM).

Sub Sections:

There are no of subsections in this department;

1. Medical Section:

All the medical expenses are beard by SLIC provided that these are

incurred in approved hospital the expenses of medicine are reimbursed.

The reimbursement of medicine is not allowed to staff (having grade 1 to 8)

but they are given Rs 1500 per month in shape of salary as medicine

allowance.

2. Leave Section:

Following are the two main types of leaves:

Casual leave

Medical leave

18 days casual leaves are allowed to all employees in a year .the medical

leave or application leave is allowed for 48 days in a year .unused leaves

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are accumulated and after two years these leaves in excess of 180 days can

be encashed,in case of death all leaves, not utilized, can be enchased.

3. Rent Section:

When sale manager is promoted to area manager he is categorized as A, B,

C, and he is entitled to his own office at his own choice at the expenses of

state life .a good location is selected by AM. After selection of place, zonal

head is informed about the location, by application written by AM. This

application is transfer to P&GS department for the analysis of location of

the office. This location is analyzed by zonal rent committee (ZRC).

A lease agreement is made with the landlord after analyzing the approved

map for the location and property registration form.

The office rent entitlement for categories of A, B, C, Am is Rs .2000, Rs 2000,

& Rs 2000-10000 P.M. respectfully.

4. Stationary Section:

This section maintain the record of stationary such as paper, pencil,

envelops printed letters, forms, calculators, etc .when ever any department

requires the stationary ,the concerned department fills a requisition slip.

The stationary is issued to concerned department and is recorded in the

register.

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5. Capital Section:

This section is responsible for purchase, sale and maintenance of furniture

& fixture; equipment etc .a zonal procurement committee is constituted for

purchase of assets. The assets are purchased from suitable supplier after

critically analyzed the quotation offered by different venders.

Each year assets are depreciated @ 10% p.a. the entry for the purchase asset

is made in the register for fixed assets. Each year the closing balance is

intimated to PO Karachi.

6. Daily Attendance:

All the employees of Group and pension call their attendance before

starting their duty. If any employee is not at time than he will call late

attendance and three late attendances will be considered a casual leave.

7. Record Of Employees:

There is complete record of employees who are at work or have retired.

And all necessary data is maintained about every employee as date of

appointment, date of retirement, promotions, medical services and all other

data.

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PRODUCTS

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As we know that SLIC has dominated life insurance market and it acquires

about 90%market share of life insurance. So it has introduced a great

number of products and it is offering products appropriate for every

inhabitant of Pakistan

SLIC offers different products for

Individual life

Group life insurance

INDIVIDUAL LIFE PRODUCTS

Whole Life Assurance:

It is a unique combination of protection and savings at a very economical

premium. Death at any time before age 85 years terminates payment of

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

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

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policy matures and the sum insured plus bonuses become payable. Under

this plan the rates of bonuses are usually much higher than the other plans

and they help in increasing not only protection but also the investment

element of the policy substantially. This plan is best suited for youngsters

who have at initial stages of their careers and cannot afford to pay high

premiums. Individuals who anticipate requirement of a lump sum in far

future can also this plan

Endowment Assurance:

It‟s a safest and surest method of guaranteed cash provision either at a

specified time or at death (Allah forbid). Under these policies, the sum

insured plus bonuses are payable at the end of the specified number of

years or at death of the life insured if earlier. Premiums are payable for the

specified number of years or till death, if earlier. The benefits under the

plan can be further increased by attaching supplementary covers.

The plan serves the requirements of a family in various shapes by way of

financial help at retirement, education of children or provision of capital

for business.

Anticipated Endowment Assurance:

This is a modified form of endowment assurance and is also called „Three

Payment Plan‟. Besides fulfilling the long-term financial needs, it also helps

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in meeting the short-term financial exigencies. As the name suggests, the

plan offers three payments throughout term of the policy.

The plan offers survival benefits equal to 25% of sum insured on

completion of 1/3rd and 2/3rd term of the policy. If the policyholder does

not withdraw the survival benefits, a very attractive special reversionary

bonus is available. On completion of term of the policy, the remaining 50%

sum insured plus accrued bonuses shall be payable. If the life insured

expires during term of the policy, sum insured, accrued bonuses,

unclaimed survival benefits and special reversionary bonuses are payable.

The plan is suitable for the individuals who have long-term financial needs

but also anticipate requirement of money relatively earlier. Three Payment

Plan helps fulfilling these short-term financial needs without terminating

the actual contract.

Sadabahar Plan:

Sadabahar is an anticipated endowment type with-profit plan that provides

lump sum benefit at certain stages during the premium-paying term or on

earlier death. In addition, this plan has a built-in Accidental Death Benefit

(ADB) rider so that the policyholder gets an additional sum assured in case

of death due to an accident.

This plan is a safe instrument for cash provision at the time of need. With

this plan, the policyholder can secure greater protection and continued

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prosperity for the family at affordable cost affordable cost.

Admissible Ages and Terms this plan is available to all members of the

general public, aged from 20 to 60 years nearest birthday. Both males and

females may purchase this plan. Terms offered under this plan are 12, 15,

18, 21, 24, 27 and 30 years.

Survival Benefits:

On completion of one-third of the policy term, 20% of basic sum assured

can be taken by the policyholder. Another 20% of the sum assured can be

taken on completion of two-third of the policy term and the remaining 60%

of basic sum assured plus accrued bonuses (if any) shall be payable at the

end of the policy term in the event of survival of the assured.

1) If the option to withdraw an installment of 20% sum assured is not

exercised on the due date or within 6 months after the due date, a

special bonus will automatically be added to the policy at the end of 6

months. In this event:

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

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

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Reversionary Bonuses accrued on the policy and (3) the amount of

any installment left with State Life.

3) On the maturity date, the special bonus will be payable together with

all the installments of the sum assured remaining with State Life, in

addition to regular reversionary bonuses accrued on the policy.

4) So long as the policy remains in force, the policyholder may

surrender the unclaimed installment of sum assured together with

the related special bonus. The aggregate cash surrender value of the

two shall not be less than the amount of the said unclaimed

installment.

5) The reversionary bonuses as per usual practice will continue to be

allotted each year on the basic sum assured (if in force) as and when

Actuarial Surplus is declared. However the unclaimed installments of

the sum assured and related special bonus will not participate in

State Life‟s Actuarial Surplus.

Death Benefits:

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

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

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

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subject to maximum limit, will be paid. The usual maximum on the ADB of

Rs. 4 million will apply and premium will be calculated accordingly

Bonuses:

This policy will participate in State Life‟s surplus. Rates of bonus applicable

will be 25% higher than those on anticipated endowment plan.

Under endowment insurance these plans are available.

Shad Abad Assurance:

Shad Abad Plan is an extended form of endowment assurance. The benefits

under the policy increase manifold in the event of death of the life insured.

On completion of term of policy, sum insured plus bonuses attached to the

policy are payable. However, on death during the policy term, the death

benefit consists of double of sum insured with accrued bonuses. In case of

death due to accident, the death benefit consists of four times the sum

insured plus bonuses. The coverage can be further widened by attaching

supplementary covers with the policy.

This plan meets the requirements of those who appreciate the basic savings

purpose of endowment assurance but also like some additional cover to

protect loved ones in case they die, Allah forbid, before maturity.

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Child Education & Marriage Assurance:

Child Education & Marriage Assurance is a plan for the protection of

child‟s future. It provides a lump sum benefit for the child at the

completion of the policy term. On completion of term of the policy, full

sum insured together with the accrued bonuses become payable to the

policyholder.

If the policyholder dies (Allah forbid) before completion of the term, a

family income benefit of Rs 240 per 1000 sum insured per annum is paid to

the child until the completion of policy term. Further, future premiums

under the policy are waived and policy remains in force with full sum

insured and continues to participate in State Life‟s surplus and receive

bonuses. Upon the completion of policy term, the child gets two options of

either getting the proceeds in a lump sum or in five equal installments.

i. Continue the policy in the same manner as earlier by switching the

plan for the benefit of another child.

ii. Get a refund of all the previous premiums paid till the death of the

child or the cash value of the policy, whichever is higher and

terminate the contract.

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iii. Continue the policy without naming another child in which case the

benefit of Refund of Premium [as provided above under condition

(b)] will not be available.

Child Education & Marriage Plan is suited for the parents who are

conscious about the future of their children. The term of the plan is such

that the lump sum benefit becomes payable when the child attains a

predetermined age of 18, 21 or 25 years. These ages may be selected

considering the occasion at which children generally need financial

assistance for higher education, marriage, or setting up business.

Depending upon your individual needs, the plan is available in two

separate versions of with and without built-in family income benefit. In

addition to parent, this plan can also be affected by grandparents, uncles,

aunts or any other person who is paying for the maintenance of the child

Jeevan Sathi Assurance:

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This is a joint life plan and covers lives of two partners say husband and

wife simultaneously. Premiums are payable till the end of the specified

term or till death of either of the insured persons, if earlier. The plan

contains extensive benefits; an overview of which appears as under:

On the death of the first life, the sum insured will be paid to the survivor.

Further premiums under the policy will be waived, but the insurance

protection of the second life will continue. Also, the policy will continue to

participate in profits of the Corporation. On death of the second life, again

the sum insured will be paid together with the attaching bonuses. In this

event the policy will terminate.

If the second life survives the term of the policy, he or she will be paid sum

insured together with the attached bonuses, even though the sum insured

has been paid once, on the death of the first life. If both the lives survive the

term of the policy, the sum insured will be paid to them jointly, only once,

together with the attached bonuses. Different supplementary covers are

also available for increasing coverage under the policy.

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Child Protection Assurance:

This is a joint life assurance and covers the lives of child and either of the

parents. If the policyholder and the child both survive full term of the

policy, sum insured and accrued bonuses become payable. If the

policyholder dies before completion of term of the policy the payment of

premiums ceases and the child is paid an income of Rs 100/- per thousand

sum insured per annum till the completion of the policy term. On

completion of policy term, sum insured inclusive of bonuses accrued till

the death of the policyholder is paid to the child.

If the child dies (Allah forbid) before maturity of the policy and during

lifetime of the policyholder, the death claim payable to the policyholder

depends on the age at death of the child.

As the name suggests, the plan is suitable for parents who want to cater

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

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

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

supplementary covers.

Sunehri Policy:

Sunehri Policy is an innovative life insurance product. It is flexible, secure

and meets the challenges of inflation quite economically. Under a special

feature of this plan, from third policy year onwards, sum insured under the

policy and premium will increase by 6% per annum without providing any

evidence of insurability. From the third policy year onward, the

policyholder is provided with a statement showing the buildup of cash

value of the policy and sum insured for the year. The policy also

participates in the surplus of State Life and currently the rate of bonus is Rs

105 per thousand per annum of the adjusted opening cash value.

Optional Maturity Endowment:

It is an endowment assurance with a built in option to mature early. The

plan is available for individuals aged 20 to 45 years. The policyholder has

following options regarding maturity of this plan.

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After the policy has been in force for 20 years or more, the

policyholder gets an option to mature the policy for a proportionately

reduced sum insured.

After the policy has been in force for 20 years or more, the

policyholder, depending on his or her needs, can mature the policy in

parts.

Let the policy mature at originally selected term. In this case the

policyholder gets an additional bonus.

The policy participates in bonuses declared by State Life from time to time.

Please click here for details of bonuses currently available for this plan.

Coverage under the policy can also be enhanced by attaching

supplementary covers.

Nigehban Plan:

This plan provides term insurance cover for a period ranging from 5 to 10

years.

As the name suggests, this plan is meant to provide protection during the

term of the policy only i.e. sum insured is payable on death if it occurs

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

carry any survival benefits, maturity benefits, surrender values, loan values

etc. The policies will be without profits. The plan is available in two

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versions namely, with single premium and with annual premiums.

Attaching certain supplementary covers can widen the coverage under the

plan.

Muhafaz Plus Assurance:

Muhafaz Plus provides a substantial sum of money on maturity or earlier

death (Allah forbid) of the life insured. On maturity, the policyholder will

receive sum insured plus bonuses attached with the policy.

However if the life insured dies before completion of term of the policy,

basic sum insured plus attached bonuses will be paid to the dependants

immediately. In case of death due to accident, the double of the sum

insured is paid. In addition, the dependents will also be paid an income of

Rs 240 per thousand sum insured per annum for a fixed period of 15 years.

The first payment will fall due on the policy anniversary immediately after

the death of the life insured.

SHEHNAI POLICY:

Features:

Shehnai Policy is an innovative life insurance product. It provides a

solution to the problems of many concerned parents who want to save now

in order to provide for their children‟s higher education, marriage and

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other expenses when the need arises. The term of the plan is such that the

lump sum benefit becomes payable as the child attains the age of 25 years.

Shehnai Policy also caters from the ravages of inflation. This is done by the

option of automatic increase of 6% per annum in sum insured and

premium from third policy year onward. From the fourth policy year

onward, the policyholder is provided with a statement showing the

buildup of cash value of the policy and sum insured for the year. The

policy also participates in the surplus of State Life and currently the rate of

bonus is Rs 105 per thousand per annum of the adjusted opening cash

value

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SUPPLEMENTARY CONTRACTS

SLIC offers a number of supplementary covers to enhance coverage under

different plans. These supplementary covers can be attached with the main

policy and are not available exclusively.

Accidental Death & Indemnity Benefit (AIB)

Accidental Death Benefit (ADB)

Family Income Benefit (FIB)

Waiver of Premium (WP)

Special Waiver of Premium (SWP)

Term Insurance (TI)

Guaranteed Insurability (GI)

Refund of Premium Rider (RPR)

Hospital & Surgical Benefit (H&S)

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Accident Death & Indemnity Benefit (AIB):

This supplementary cover provides for payment of additional amount

equal to the sum insured under the policy in the event of death by

accidental means, or in the event of loss of two or more limbs or loss of

sight in both eyes. One-half of the sums insured will be paid for loss of one

limb; one-third of sum insured in the event of loss of one eye and one-

fourth of sum insured will be paid for loss of thumb and index finger.

Moreover, weekly indemnities are also available for total and partial

disability of the life insured as a result of the accident. If the life insured

becomes permanent and total disable, an annuity of 10% of sum insured

will be payable for a maximum period of ten years.

AIB is suitable for office commuters and individuals who travel and use

different modes of transport. The rates of premium for this supplementary

benefit range from Rs 4 to Rs10 per thousand sum insured depending upon

the occupational rating of proposer for standard lives whose age should be

between 18 to 55 years.

AIB can be attached with following plans:

Whole Life Assurance

Endowment Assurance

Anticipated Endowment Assurance

Jeevan Sathi Assurance

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Child Education & Marriage Assurance

Shad Abad Assurance

Shehnai Policy

Child Protection Assurance (For adult life only)

Muhafiz Plus Assurance

Nigehban Plan

Optional Maturity Plan

Accidental Death Benefit (ADB):

This supplementary cover will provide for payment of an additional

amount equal to sum insured in the event of death by an accident as

defined in the contract. On payment of a modest premium, a handsome

accidental coverage is obtained through this supplementary cover. ADB

is highly recommended for individuals who travel daily through road

transport.

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

term of this supplementary benefit is not allowed to exceed the

premium paying term of the basic policy, or 60 years of age of the life

proposed whichever is earlier

ADB can be attached with following plans:

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Whole Life Assurance

Endowment Assurance

Anticipated Endowment Assurance

Jeevan Sathi Assurance

Child Education & Marriage Assurance

Shehnai Policy

Child Protection Assurance

Muhafiz Plus Assurance

Nigehban Plan

Optional Maturity Plan

Family Income Benefit (FIB):

This supplementary cover provides that incase of death of the life insured

during term of this cover, an annuity of 10% to 50% per annum of the basic

sum insured will be payable till the completion of term of this cover. For

instance, if a life insured has taken 25% FIB supplementary cover for 20

years on his policy having sum insured of Rs 1,000,000. If the life insured

expires during term of FIB, say at the end of fourth year, an annual sum of

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

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While the basic plan provides a lump sum, FIB provides a regular stream

of income to the dependents and helps in meeting the day to day expenses.

This supplementary cover is available to lives between 18 and 55 years of

ages. It can be attached with following plans:

Whole Life Assurance

Endowment Assurance

Anticipated Endowment Assurance

Jeevan Sathi Assurance

Child Education & Marriage Assurance

Shad Abad Assurance

Shehnai Policy

Child Protection Assurance (For adult life only)

Muhafiz Plus Assurance

Optional Maturity Plan

Waiver of Premium (WP):

This supplementary cover provides for waiver of due premiums in the

event of the life insured‟s Total and Permanent Disability caused by

accident as defined in the contract. With the help of WP, the life insured

gets relieved of vagaries of paying premiums in case of his or her being

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incapacitated as a result of accident. The rate of premium for standard risk

will be Rs 0.50 to 1.00 per thousand of sum insured depending upon the

age of life insured.

WP is available to lives between 18 and 55 years of ages. It can be attached

with following plans:

Whole Life Assurance

Endowment Assurance

Anticipated Endowment Assurance

Jeevan Sathi Assurance

Child Education & Marriage Assurance

Child Protection Assurance (For adult life only)

Muhafiz Plus Assurance

Optional Maturity Plan

Special Waiver of Premium (SWP):

This supplementary cover will provide for waiver of premiums under the

policy incase of the life insured‟s Total and Permanent Disability due to

accident or disease which renders him unable to engage in any occupation.

With the help of SWP, the life insured gets relieved of vagaries of paying

premiums incase of his or her being incapacitated as a result of accident or

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disease. SWP is available to lives between 20 and 55 years of ages. SWP can

be attached with following plans:

Whole Life Assurance

Endowment Assurance

Anticipated Endowment Assurance

Jeevan Sathi Assurance

Child Education & Marriage Assurance

Child Protection Assurance (For adult life only)

Optional Maturity Plan

Term Insurance (TI):

In the event of death of the life insured during term of TI supplementary

cover, the sum insured will be payable in addition to the benefits payable

under the basic policy. Suppose, Mr. A, covered under a policy of Rs

1,000,000, also attaches TI supplementary cover with his policy. Incase of

his death during term of TI, a sum equal to Rs 1,000,000 will be payable

under this supplementary cover. This will be in addition to the benefits

payable under main policy.

This supplementary cover is an excellent opportunity for individuals who

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

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meager amount of premium. TI is available to lives between 18 and 55

years of age. TIR can be attached with following plans:

Whole Life Assurance

Endowment Assurance

Anticipated Endowment Assurance

Jeevan Sathi Assurance

Child Education & Marriage Assurance

Shad Abad Assurance

Shehnai Policy

Child Protection Assurance (For adult life only)

Muhafiz Plus Assurance

Optional Maturity Plan

Guaranteed Insurability (GI):

Under this supplementary cover, State Life gives the policyholder a right to

purchase additional life insurance up to specified maximum amounts on

specified further dates at standard rates, without evidence of insurability

being required at such later dates.

The specific further dates on which additional insurance can be taken are

the policy anniversaries of the basic policy nearest the 25th, 28th, 31st, 34th,

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

various issue ages

Issue Ages No of Option

Dates

Option Date Ages

10 – 24

25 – 27

28-30

31-33

34-36

37

6

5

4

3

2

1

25, 28, 31, 34, 37, 40

28, 31, 34, 37, 40

31, 34, 37, 40

34, 37, 40

37, 40

40

This supplementary cover is available only to standard lives between 10

and 37 years of ages and who are not engaged in hazardous occupations.

Only one GI will be issued on the life of any one person. GI is available

only at the time of issue of the basic policy and can not be attached to the

policy after its issuance.

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

can get benefit from this supplementary cover. It saves them from

providing any further evidence of insurability incase they desire to

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enhance coverage under the policy. GI can be attached with following

plans:

Whole Life Assurance

Endowment Assurance

Anticipated Endowment Assurance

Child Education & Marriage Assurance

Optional Maturity Plan

Refund of Premium Rider (RPR):

RPR provides for refund of premiums paid under the policy in the event of

death of the life insured during term of the policy. It is an ideal form of

enhancing the life cover under the policy with a modest increase in

premium.

This supplementary cover is available to lives between 20 and 60 years of

ages. The available term ranges from 10 to 25 years. RPR can be attached

with following plans:

Endowment Assurance

Anticipated Endowment Assurance

Shad Abad Assurance

Child Protection Assurance (For adult life only)

Optional Maturity Plan

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Hospital And Surgical Benefits (H&S):

This supplementary cover provides benefits in case of hospitalization of the

life insured, in State Life‟s approved hospitals, as a result of sickness or

accident. On payment of double amount of premium specified for H&S, the

benefits and their limits will also be doubled.

H&S is available to lives between 18 and 50 years of ages. The available

term ranges from 10 to 25 years. RPR can be attached with following plans:

Whole Life Assurance

Endowment Assurance

Anticipated Endowment Assurance

Jeevan Sathi Assurance

Shad Abad Assurance

Child Protection Assurance (For adult life only)

Optional Maturity Plan

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GROUP LIFE INSURANCE

PRODUCTS

These includes

Term Insurance Scheme

House Building & perquisites Insurance Scheme

Pay Continuation Scheme

Group Endowment Insurance Scheme

Group Pension Scheme

Term Insurance Scheme:

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Group Term Insurance Plan provides life insurance coverage to the

member of a group, such as the employees of an employer. The

amount of coverage of each member is determined with reference to

either his designation or salary or employment category or some

other similar variable.

This plan provides insurance protection to the members of a group at

a very affordable minimum possible cost, 24 hours coverage around

the world.

By promoting a sense of financial security amongst the employees it

contributes to improving the working environment for the employer

resulting in higher productivity.

In most cases the employer is legally obliged to provide insurance

cover to his employees. This plan helps the employer to fulfill this

requirement.

Premiums are tax-deductible for the employer. Total premium under

group term insurance is lower as compared to sum of premium of all

policies if issued individually to each life, due to savings in expenses.

On death of any insured member the sum assured on his life is paid

for the benefit of his surviving family. This benefit is payable

regardless of the total number of the deaths even if the total amount

paid out exceeds the total premiums received under the policy.

However, if in any three-year period State Life earns a net profit on

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

policyholder, depending upon the total number of members in the

scheme. This share can go up to 90% in case of large sized schemes.

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The supplementary contracts or riders which can be attached with

this scheme are:

PTD (Accident) Rider:

Under this rider the insured member is entitled to payment of the sum

assured in case of any accident causing permanent and total disability,

which includes loss of two limbs or two eyes or loss of hearing in both ears

or severe facial disfigurement. If the disability is permanent but not total

then some percentage of the sum assured is payable depending upon the

severity of the disability. In this regards the same schedule of disabilities is

applicable as is prescribed under the labor laws. In case of a temporary

accidental disability causing absence from work a fortnightly benefit

calculated at the rate of Rs. 3,000 per month or the monthly salary

whichever is less is payable.

A.D.B. Rider:

Under this rider the death benefit of an insured member is doubled if the

death was caused by an accident.

Natural Disability Rider:

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

any occupation or vocation for gainful employment due to permanent

disability caused by disease or sickness then he is entitled to the sum

assured as benefit.

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Critical Illness Rider:

If an employee contracts any of the following critical illnesses while

insured under this rider then he is entitled to the rider sum assured as

benefit.

Covered critical illnesses include.

Heart attack

Coronary Artery by-pass surgery

Stroke

Cancer

Kidney Failure

Major organ transplant such as heart, kidney or liver

The insured member must survive for at least 31 days after contracting the

illness to become eligible for his benefit. Some restrictions apply during the

first two years of coverage.

Suitable For:

The plan is suitable for employers who desire to provide financial security

to their employees by means of insurance coverage or for members of a

professional body or association or some welfare association or a social

club who desire to avail insurance protection on their life.

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House Building & Perquisites Insurance

Scheme:

Under this plan each member of the group is insured for the total amount

of loan outstanding against him inclusive of accumulated interest. The

amount of Insurance is the actual amount of loan outstanding on the date

of death whereas the premium is charged on the average loan outstanding

over the whole policy year.

It provides financial security to employers and financial institutions against

the risk of untimely death of any of their indebted employee or client. Very

often the family of the deceased person is not is a position to repay the

loans taken out by him, especially if the deceased person was the sole

breadwinning member of the family. In such a case the insurance coverage

provides an assurance to the creditor that he would be able to recover his

capital without causing hardship to the distressed family.

The creditor is also protected from the headache of constantly monitoring

cases of delayed repayments of loan in hardship cases caused by

unforeseen death of a bread winning family member. The premium due

under this policy may be recovered by the creditor from the borrowers

along with the loan repayment installments.

Benefits:

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Benefits of this plan are

In case of death of an insured member of the scheme the total amount

of the loan outstanding against him including accumulated interest is

payable to the policyholder. In case State Life earns a profit on any

policy during a 3-year period, the policyholder is also entitled to

some share in the profits depending upon the size of the group.

Riders or supplementary contract that can be attach with this plan is

PTD (Accident) and NDB rider may be attached with this plan. These

riders provide insurance cover against permanent disability due to

accidental and natural causes rendering the insured member unable

to earn a livelihood for himself and his family.

In such a case the attaching riders can facilitate the creditor in

recovering the outstanding amount of loan.

This plan is suitable for employers who have a scheme for providing

loans to their employees for house building, purchases of conveyance

or any other goods of household use. It is also suitable for banks that

are in the business of granting loans to their clients for purchase of

house or conveyance or for some business venture. Similarly leasing

companies and other financial institutions with similar facility may

find this plan quite attractive.

Pay Continuation Scheme:

1. Manpower is still considered as one of the most important elements

of productions in spite of the dramatic growth of microchip based

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automation in all walks of life, especially in commerce and industry.

The overall efficiency of an organization therefore depends upon the

quality of the manpower of its employees. The more devoted,

hardworking and loyal the employees the higher the reward to the

employer in the form of greater efficiency and profitability. Quality

manpower can be attracted by offering a good employee benefits

package based on ensuring security and peace of mind of the

workforce so that a greater commitment is obtained from them. This

is why the enlightened employer pays particular attention to the

welfare and well being of their workforce through various employee

benefits scheme.

2. One of the functions of such schemes is to provide protection to the

employee‟s dependants in the event of his death. Progressive

employers do provide group insurance which pays a lump sum to

the dependants. This however does not last long. What is required in

addition is a regular monthly income for a period of time. To meet

this Requirement State Life proudly presents a plan, which offers

invaluable protection to the employee‟s family during his working

life. The family‟s regular monthly income is protected for 15 years or

until age 60 whichever is earlier. In this way coverage is provided for

pay upon the death of the employee. This is illustrated by the

following example: -

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a. Supposing the pay of an employee is Rs 2000/- per month. If

death takes place at age 47 then the benefits payable will be Rs

2000/- per month up to age 60, i-e., for a period of 13 years.

Total amount payable Rs.3,12,000/-

b. If death takes place at age 35 then the benefit payable will be

2,000/- per month for a period of 15 years. Total amount

payable Rs. 3,60,000/-

3. Annual premiums will be calculated on the basis of the employee‟s

pay and his age and will be payable at the beginning of each scheme

year. If this policy qualify for profit commission it will be payable in

accordance with the rules at the end of 3 years.

4. “Cover without medical evidence” is allowed on the same basis as

group term with the monthly benefits being converted into a lump

sum equivalent. The total of the benefits so arrived at should,

however not exceed the maximum allowable under the policy.

Group Endowment Insurance Scheme:

Group Endowment Scheme is a unique saving and protection scheme

through which the employees of an employer can enjoy insurance

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protection throughout their service and also get a lump sum cash amount

upon their retirement if they survive up to retirement.

In Pakistan most employers do not operate any pension scheme for their

employees although some employers may have a provident fund scheme

or a gratuity scheme. The expected benefits at retirement under a typical

provident fund scheme and gratuity scheme combined are woefully

inadequate for a retiring employee for maintaining his standard of living

after retirement unless he supplements these benefits with his own

personal savings. Keeping this in view some employers may wish to

encourage a habit of saving amongst their employees for their own welfare.

Group Endowment Insurance Scheme can be a means of introducing a

compulsory saving scheme for the employees under the sponsorship of the

employer. Participation in the scheme is usually compulsory. However, if

participation in the scheme is voluntary, at least 75% of eligible employees

must participate.

Benefits:

Under this scheme each employee is provided insurance protection for an

amount which may be flat or depends upon the designation or salary of the

employee. The amount of insurance is payable on maturity or death if it

occurs earlier. In most cases the term of the endowment insurance for each

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

his retirement date.

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This enables the maturity proceeds to coincide with retirement and

supplement the retirement benefits.

Profit Participation:

The endowment insurance is issued on a with profits basis. The same

bonus rate is applicable as for the corresponding individual endowment

insurance policies.

Premium Rates

The same premium rates are applicable as for individual endowment

policy but with the added attraction that in group form some volume

discounts are also applicable depending upon the size of the annual

premium.

Surrender Value

The policy acquires Surrender Value in respect of a member after insurance

cover has been in force for at least two years on that member and no

premiums are in default.

Loan Facility

Under this scheme if the member needs immediate liquidity and a policy

has acquired Surrender Value in respect of member, he/she can avail a

maximum loan of 80% of the net surrender value of the policy.

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Continuation Privileges :

If an employee leaves the service of the employer, he can surrender his

policy against the Net Surrender Value. He is also provided with the

option of continuing his endowment insurance coverage in an individual

capacity without any evidence of good health, for the same sum assured

and term as he was enjoying during his service. The premium rates

applicable to the policy are the same as are generally applicable to the same

class of business in and individual capacity.

The ADB, PTD (Accident) and NDB can be added to this policy if desired.

Suitable For:

This plan is suitable for employers who desire to inculcate a habit of saving

amongst their employees in addition to providing them insurance against

premature death.

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Group Pension Scheme:

State life, have become increasingly aware of the predicament of

progressive employers wanting to better the lifestyle of their employees by

providing financial security and job satisfaction, but not being able to do

so, due to lack of availability of avenues and opportunities. This booklet is

a guide to the State Life‟s Pension Scheme that enables an employer to

provide substantial benefits to employees and ensure a higher state of well

being for them. It explains the institution, administration and benefits of

the pension scheme and with the help of expert professionals in our

Pensions Division, we can assist you in availing it, in your own and your

employees‟ interest. Our representatives will only be too pleased to be of

any service to you.

Introduction:

Once the working life of an individual is over, or he has retired, what will

he live on? This is a question which every individual faces during his

working life and is of equal importance to a concerned employer. Personal

savings, Provident Fund and Gratuity are the normal assets he acquires. If

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

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State life‟s Pension Scheme is the only source which provides a steady

monthly income, when other sources of income stop.

This booklet explains step-by-step the nature of the Pension Scheme, how it

operates and what are its benefits to the employer as well as to the

employees.

What is Pension Scheme ?

Basically it is a saving, or call it a contribution, which is collected during

the working life of an individual and invested profitably. After retirement

the individual is entitled to a steady monthly income from a fund built up

from the earlier savings.

In a sense, it is a reward to the employee, granted today, while money is to

be received on retirement.

Benefits/Why a Pension Scheme ?

We advise a pension scheme due to following benefits to the Employees:

o After retirement when the monthly pay-cheque stops, the

individual starts receiving a regular monthly income in the

form of a pension.

o While contribution to the scheme, the individual gets a tax

concession.

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

reduction in his standard of living.

o All pensions are completely tax-free.

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

Benefits to the Employer:

Contributions to the Pension Scheme by the employer are

treated as business expenses and deductible in full.

The knowledge that at the end of the career, the employee will

get a regular pension helps to build up his job loyalty and the

adherence to the job, to the employer‟s satisfaction.

Employer does not have to find money to compensate an

employee when he ceases to work.

Shows that the Management cares for their staff and is

concerned about their welfare.

Attracts new employees.

Retirement of personnel is planned in advance, removing

uncertainty both for the employer and the employee.

Promotion channels in the management hierarchy are

unclogged.

Comparison with Provident Fund and Gratuity:

a. Provident Fund :

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

employee along with interest accumulated over the years is handed over to

the employee on his retirement.

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However, in case an employee wishes to leave before retirement is due,

employer‟s contribution may not have to be paid; or only part payment

may be made.

b. Gratuity :

Gratuity is exclusively the employer‟s contribution for the benefit of the

employee. From half to a full month‟s salary is credited for every year of

service. Reserves are set aside in the balance sheet but they do not attract

tax concession, unless it is a funded scheme.

The security of the employee to receive the gratuity is dependent on the

continued existence of the employer and his profits, except in case of a

funded scheme.

c. Pension Scheme:

In comparison with the aforementioned two retirement benefits the

Pension Scheme has distinct advantages:

Payments through Pension Scheme are guaranteed for

life.

A pensioner can look forward to his retirement with

confidence and security.

Pension Scheme is the only method through which

regular income accrues to an employee after

retirement.

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The payment of the pension is not dependent upon the

fortune of the employer.

Lump sum comparable to those received from

Gratuity or Provident Fund, can still is drawn by

commutation or the pension while maintaining a

steady monthly income.

State Life maintains a full-fledged pension Department capable of handling

each and every scheme in the most competent and professional manner. It

has actuaries, lawyers and other experts, besides offering a unified

administrative, technical and investment service. An employer can relieve

himself of the tedious and cumbersome work by using the professional

service offered by State Life, the major ones being:

Designing a Pension Scheme according to am

employer‟s exact requirements, in addition to

determining the rate of contribution etc.

Preparation of explanatory documents, if required, for

consideration by employees.

Assisting the employer‟s legal advisers with the

preparation of Trust deed and Rules.

Providing reasonable assistance in negotiations with

the Central Board of revenue for approval of the

scheme.

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Maintenance of Individual records of members of the

scheme, their contributions, the employer‟s

contribution, and pension accrued etc.

Facilities for payment of pensions, when due

Security:

All policies issued by State Life are guaranteed and enjoy full financial

security, backed by the Government under Article 35 of Life Insurance

Nationalization Order 1972.

Payment of Pension

The pension will be payable by monthly installments; commencing from

the retirement of member and ceases upon his death.

Guaranteed Payments

By incorporating a Guaranteed Pension period, payment can be ensured

for a defined period say 5 to 10 years, whether or not a pensioner is alive

after retirement, if, however, a pensioner survives the guaranteed period,

pension will continue throughout his lifetime.

Supplementary Benefits

They may be termed as supplementary, but are indeed those invaluable

finishing touches that make the picture complete. Employees would not

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feel secure unless their families were provided for in the event of their

untimely demise. At a little extra cost employees may be given peace of

mind by providing these benefits, some of which are listed below:-

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

The pension will be payable to the wife of a member if he dies while in

service. Normally, a widow‟s pension is one half of the member‟s pension

entitlement.

b) Widow’s Pension (upon death after retirement)

The pension is payable to the wife if the member dies after retirement. In

this case also a widow‟s pension is one half of the pension the member was

receiving. The widow‟s pension, in either case would be payable for life but

would cease in the event of remarriage.

c) Orphan's Benefits

The inclusion of orphan‟s benefits in Pension Scheme along with the

widow‟s pension, gives the scheme a level of completeness. A normal scale

of orphan‟s benefit is 33% of the widow‟s pension per child, payable upon

the child‟s attainment of age 18 or earlier marriage. Limit is imposed on the

number of children who can claim such benefits.

d) Retirement Aspects

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Pension will be payable to a member according to a predetermined scale on

the normal retirement date fixed by the employer.

e) Early Retirement

A member who retires before his normal retirement date on account of

becoming incapacitated, or for any other reason, may be granted a reduced

immediate pension to commence on the day following the actual date of

retirement.

f) Late Retirement

A member who remains in employer‟s service after the normal retirement

date will receive an appropriately increased pension on retirement.

g) Withdrawal Benefits :

If a member withdraws from the service of the employer before the normal

retirement date due to any reason and without any entitlement to early

retirement pension, his future contribution, or contribution made on his

behalf, will cease.

Benefits to be paid on withdrawal will depend upon the “withdrawal from

service” rules of the scheme. In such a case one of the following procedures

may be adopted:

i. Refund of contribution:

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If a member withdraws from the contributory scheme a refund is made of

all the contributions made by the employee.

ii. Deferred Paid-Up Pension:

A withdrawing member may be allowed a deferred paid-up pension of the

amount accrued to his account on the date of withdrawal. The reduced

pension will commence on his normal retirement date.

Group Provident Fund Insurance Scheme:

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

What Need Does It Fulfill?

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

Benefits:

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

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

Riders:

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

Education Continuation Scheme:

Education of children is clearly cherished by every parent. While parent is

alive there is no problem. But unforeseen can happen sometimes

disrupting the education of children. To protect against these Eventualities

State life has designed this plan.

AIM:

The purpose of this plan is to provide smooth continuation of education of

child until he/she completes education.

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FINANCIAL

ANALYSIS

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PRIMIUM Income- Individual Life:

YEAR (RS. IN MILLION)

2005 11,260.0

2006 13,112.0

2007 15,907.1

2008 19,152.1

2009 24,853.2

2010 31,943.0

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Sales

2006

2007

2008

2009

2010

0

5000

10000

15000

20000

25000

30000

35000

2005 2006 2007 2008 2009 2010

PREMIUM INCOME-INDIVIDUIAL LIFE

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Premium Income-Group Life

YEAR (RS. IN

MILLION)

2005 2,560.1

2006 2,879.6

2007 2,809.6

2008 3,543.2

2009 3,513.7

2010 3,705.3

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Investment Income

Year (Rs. In Millions)

2005 13,105.5

2006 14,923.8

2007 17,505.2

2008 19,134.6

0

500

1000

1500

2000

2500

3000

3500

4000

2005 2006 2007 2008 2009 2010

GROUP LIFE

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Total Premium Income:

2009 21,544.7

2010 27434.1

0

5000

10000

15000

20000

25000

30000

2005 2006 2007 2008 2009 2010

INVESTMENT INCOME

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Total Premium Income:

YEAR (Rs. In Millions)

2006 30915.4

2007 36221.9

2008 41829.9

2009 49911.6

2010 63072.9

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Investment Portfolio:

0

10000

20000

30000

40000

50000

60000

70000

2006 2007 2008 2009 2010

TOTAL INCOME

Investment Portfolio

Year (Rs. In Millions)

2005 124,983.7

2006 142,158.8

2007 161,965.8

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0

50000

100000

150000

200000

250000

2005 2006 2007 2008 2009 2010

INVESTMENT PORTFOLIO

2008 182,874.2

2009 205,804.2

2010 235,934.5

Life Fund:

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Life Fund

Year (Rs. In Millions)

2005 122,775.2

2006 137,958.8

2007 156,737.3

2008 177,459.1

2009 199,445.3

2010 230,422.0

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0

50000

100000

150000

200000

250000

2005 2006 2007 2008 2009 2010

LIFE FUND

Total Assets:

Total Assets

Year (Rs. In Million)

2005 132,017.1

2006 149,448.6

2007 169,821.4

2008 193,117.6

2009 217,685.4

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HORIZONTAL ANALYSIS:

0

50000

100000

150000

200000

250000

300000

2005 2006 2007 2008 2009 2010

ASSETS

2010 251,478.1

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Profit and Loss Account

2008 (%)

2009 (%)

Return on government securities 5.19 (5.58)

Interest income loan & advances to employees 0.844 16.16

Interest income on bank deposits 110.50 55.65

Net investment income 12.34 13.97

Expenses not attribute to statutory fund 15.03 (23.7)

Surplus appropriated to shareholder‟s fund

37.15 10.57

Profit before tax 31.05 11.24

Taxation 36.39 18.43

Profit after tax 28.49 7.61

Earnings per share 5.15 7.61

BALANCE SHEET

2008 (%)

2009 (%)

Issued subscribed & paid-up capital 22.2 0

Accumulated surplus (58.26) 231.3

Net shareholder equity 5.8 18.6

Balance of statutory fund 13.22 12.38

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Staff retirement benefits 8.6 13.57

Outstanding claims 19.57 21.01

Premium received in advance 15.44 1.77

Amount due to other insurers 38.61 74.37

Amount due to agents 41.51 41.27

Accrued expenses 34.87 31.27

Inter-fund balance (36.01) 49.65

Others 109.64 29.44

Total creditors & accruals 22.15 16.54

Total liabilities 13.77 12.68

Total equity & liabilities 13.77 12.72

BALANCE SHEET 2008 (%)

2009 (%)

Assets

Cash & others 42.83 51.45

Current & other accounts 277.4 3.91

Deposits maturing within 12 months 41.76 23.37

Fixed deposits maturing after 12 months 44.85 6.32

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Loan secured against life insurance policies 19.37 20.93

Loan secured against other assets 0.09 4.11

Unsecured loan 1.56 11.70

Investment properties 4.5 4.15

Investments 10.27 15.39

Premium due but unpaid 20.27 5.57

Amount due from insurer/reinsurer 177.11 80.65

Agents balance 0 0

Investment income due but outstanding 9.87 22.89

Investment income accrued 17.5 16.63

Taxation-payment less provision 4996 1984.8

Prepayments 2.09 13.03

Inter-fund balances (36.01) 49.65

Sundry receivables 48.50 180.53

Other 17.37 15.20

Furniture, fixture, office equipment 7.75 10.19

Total assets 13.71 12.72

RATIO ANALYSIS:

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INTERPRETATION:

The cash ratio or the SLIC shows a slight

change during these two years. Company should give intention toward

this change otherwise it effect company in the future.

INTERPRETATION:

Claims ratio is decreasing gradually it is a positive sign and

corporation must tried to decrease it.

CASH RATIO 2008

1.267

2009

0.874

CLAIM RATIO 2008

56.31%

2009

55.43%

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INTERPRETATION:

As the business of the company is expanding so the

expense is on increasing side. But management should tried to keep it into

a acceptable limits.

INTERPRETATION:

Due to inflation and increase of work force of the

corporation this ratio is increasing.

EXPENSE RATIO 2008

9.15%

2009

12.56%

COMMISSION RATIO

2008

26.04%

2009

28.333%

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INTERPRETATION:

This shows a positive sign for the company as it‟s on

increasing side which shows that company is efficiently using its fixed

assets to generate sales.

INTERPRETATION:

Another positive sign for the company as its increasing.

Company is using its assets to generate more and more sales of policies.

FIXED ASSET RATIO 2008

26.04%

2009

28.33%

TOTAL

ASSETS

TURNOVER

RATIO

2008

11.75%

2009

13.03%

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INTERPRETATION:

This ratio shows how much of the assets of the company

is owned by company as compare to the assets taken on lease.

ASSETS TO EQUITY 2008

161.44%

2009

153.43%

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SWOT ANALYSIS

STRENGTHS:

Number One Player:

SLIC is ranked 1st among the life insurance business of Pakistan. It has

about 90% of life insurance business of the industry.

Sound Financial Position:

State life has authorized capital of Rs.1, 100 million. It is a great strength of

company to have such a big amount of authorized capital. That is why it is

enjoying good financial position.

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Skill Work Force:

The staff of SLIC is well trained and skilled

Comprehensive Customer Inside:

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

their requirements.

Easy Policy Wordings:

The of policies carefully design in a simple and plain language so that even

a illiterate customer can understand it easily. For customer assistance for

both English and Urdu

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Government Assistance:

SLIC is Government organization and it gets support from the government

in different ways. It increases its stability and Goodwill.

Zero Percent Fraud:

The working mechanism of SLIC is so good so no one can make fraud

neither the staff members nor customer.

Good Reputation:

SLIC has good reputation in the market. It is recognize as one of the best

insurance companies of the country.

An Established Distribution Channel:

It has a pretty good distribution channel. It sales its products through its

efficient work force and advertisement

In-Depth Knowledge of the Industry:

SLIC has very good knowledge of the industry. About its competitors and

the area it has to work.

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Corporative Atmosphere:

The working atmosphere of SLIC is very corporative and friendly. The

work force is eager to helps its customer.

Computerization:

State has done the record of policyholder computerized .so the

policyholder can access to their record of policy immediately. And the

officers can also access the record when they want. It is a great benefit for

officers of the company and an advantage for the company.

WEAKNESSES:

Political recruitments:

SLIC is GOVT Corporation and working under Ministry of Commerce.

Ministers cannot hinder in managerial decisions but some hiring are done

on political pressure and ill competent people are handled which reduces

proficiency of work.

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Marketing:

As the marketing play a vital role in sale of policies and in case of SLIC it is

usually done by the persons who don‟t possess good knowledge of the

insurance.

IT Problem:

SLIC is a leading corporation in insurance sector. But mostly computers

which are being used by staff are outdated. Such a big organization should

develop its own IT system with complete security. But unfortunately about

all data in SLIC is maintained handily.

Feed Back:

The Corporation does not have any effective and efficient feedback channel

to disseminate sales force suggestions to upper management. Further,

organization has no well organize system for feedback between office

employees and manager, managers and Board of Directors.

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OPPORTUNITIES:

Increase in Growth

Increase in growth is the major aim of any company, as well as SLIC‟s.

Increasing in growth by having more market share, by having more sales

and by increasing the quality and in line services will result in the increase

in the overall growth of the SLIC... Increase in growth needs a long term

strategic planning. The broader view of the market and demand. The

capability to utilize the recourse more efficiently then to the competitors.

Government Support:

As SLIC is government organization. So it can take advantage of the

Government policies while making of its own rules for the corporation

which can expand its operations.

Innovation:

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SLIC also bring so many innovations in their present product, like they

decrease the maturity duration of policy or can decrease sun assured of

policy etc

Insured Population:

In Pakistan 2% to 3% population is insured while rest of the population

provides opportunity to life insurers to enhance their business.

THEARTS:

Privatization:

State life has a threat of being privatization

Natural Disasters:

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

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Religious and Cultural Resistances:

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

Inflation:

The trend of the inflation is on the increasing side due to which people left

with less money to pay for such expenses

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MY EXPERIENCE IN

WESTERN ZONE

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I started my internship in State Life Insurance Corporation, on 27th of June,

2011.

My incharge for my internship was Sir Jawad Iqbal . He was a gentle and

corporative personality. He made schedule for my six weeks internship

program. I worked in 6 different departments, a week in each department.

The departments in which I worked are as follow:

1. Financial and accounts department.

2. Policy holder and service department

3. New business department

4. Agency department

5. Internal audit department

6. Personnel and general services department

1. Financial and Accounts Department:

The 1st department in which I went in SLIC was F&A. Mr. Sajjad was my

incharge in that department. He was a friendly person and he tried his

level best to transfer his knowledge to me. First two days he told me about

payments and payroll. In the remaining days he taught about preparation

of vouchers, banking, ledger and reconciliation of accounts etc.

2. Policy Holder and Service Department:

My second week was in Policy Holder and Service department. In this

department I learned about :

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a) Renewal or revival of policies

b) Alteration in the policy

c) Payments of death claims

d) Payment of maturity claims

e) Payment of injury claims

3. New Business:

I spent my third week in New Business department. This is the department

from where the business of policy begins. In this department I learned the

processing of new business that is carried forward by the sale force. The

main function of this department is the assessment of the risk. The risk is

assessed by keeping in view the different factors like personal data ,

occupation ,physical and social features , health , family history of the

prospect , moral hazard , source of income , nomination , relationship

between the nominee and the prospect .

4. Agency Department:

My forth week in SLIC was in its agency department. In this department I

came to know about:

a) Recruitment

b) Promotion

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c) Prize & awards

d) Benefits

e) License

f) Termination and Demotion of the employees.

5. Internal Audit.

I spent my second last week of internship in internal audit department.

Syed Ehtaram was our incharge in this department, who was also the head

of audit department. In this department I learned why audit is necessary?

What are different types of audit in SLIC?

Audit is carried out to check out fraud,error and any loss to the

assest of the organization.

There are two main heads of audit , these are:-

a) Internal audit

b) External audit

a) Internal audit

This is the internal function of the organization and carried on by the

employees hired by the organization.

b) External audit

This is carried by a third party like Govt or any other firm.

There are two further types of audit:-

a) Pre audit(audit before the payment is made)

b) Post audit(audit after the payment is made)

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6. Personnel and General Service Department:

My last week of internship was in personnel and General service

department.

In this department I learned about the personnel management of State Life

Insurance Corporation. I came to know about Personnel policies,

motivation, incentive and implementation of service regulations.

This department has many sub sections like capital section, employees

record and attendance sections etc. I was really impressed with the way

SLIC used to keep record of their employees. SLIC is very strict about

attendance; even they use to keep eye on the attendance of internees.

In the end I would like say that I had a really good experience of working

in State Life. The management especially the senior management gave me

time from their busy schedule and I learned a lot about insurance and

especially about SLIC from them. I am thankful to all the stuff of SLIC who

helped me out in my time of need and to my respected teacher who guided

me to join such organization.

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CONCLUSION &

RECOMMENDATIONS

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RECOMMENDATION

State Life Insurance Corporation Of Pakistan is a leader in insurance

market. Like every other organization SLIC also has some pro‟s and con‟s

but in this organization drawbacks are very few and most of the things are

up to the mark. However, I would like to recommend some suggestions for

the betterment of State Life Insurance Corporation.

These recommendations are:-

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Marketing jobs should be assigned to those personnel who have

perfect knowledge of insurance.

Online selling facility of policies should be made available. This will

increase the number of customers of the SLIC.

There should be a blend of young blood with the senior staff. This

will help the junior members to learn from the experience of senior

management.

State Life struggles to stay ahead in technical adoption. It should

adopt technological changes of modern era.

Refreshment trips for the staff must be arranged so that the working

potential of the staff will be increased

The management should keep in touch with the customers and take

the proper feed back by the customers. This will provide satisfaction

to their customers.

CONCLUSION

It was splendid experience for me that makes me familiar with

business environment and culture of SLIC was so comfortable and it

provides me real life working opportunity in short span of time.

Management of SLIC is true asset of Corporation and such a

competent and experienced people are working here who make a

Government institute corruption free and the market leader. SLIC is

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providing life Security coverage to about 6.00 million person of the

country. Apart from this it provides self finance jobs to thousands of

the countrymen, and mobilized the country economic and financial

resources, and also contributes a lot to Government in terms of

providing funds.

BIBLIOGRAPY

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I took assistance in preparation of my projects on State Life Insurance

Corporation.

My course books

Class Notes during our class lectures

Special Instructions and guideline by teachers

Booklets provided by the concerned organizations

In house newsletters of State Life Insurance Corporation.

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E-Data Sources:

www.kse.com

www.iap.gov.pk

www.secp.gov.pk

www.businessplus.com

www.wrightreport.co

www.brecorder.com

www.cii.co.uk/

www.lloyds.com/