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 32 EXCETIVE SUMMARY 43 HISTORY OF INSURANCE 54 What is insurance 75 Terms 86 Classes of insurance 127 4i’s of insurance 178 Principles 199 STATE LIFE INSURANCE

CORPORATION22

10 History 2311 Function 2512 Organizational Structure 2713 DEPARTMENT 3714 PRODUCTS 8415 FINANCIAL ANALYSIS 12816 RATIO ANALYSIS 14017 SWOT 14418 MY EXPERIENCE 15219 RECOMMENDATION 15820 CONCLUSION 15921 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

INSURANC

E

HISTORY OF INSURANCE

In some sense we can say that insurance appears simultaneously with the appearance of human society. We know of two types of economies in human societies: natural or non-monetary economies (using barter and trade with no centralized nor

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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.

WHAT INSURANCE IS ?

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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.

PROPOSAL FORM

Through Proposal Form Insured/Assured presents various type of information to the Insurer/Assurer for obtaining a cover for risk.

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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.

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

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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

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

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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.

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

Insurance

General Insurance Life Assurance

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

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

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by paying the stipulated sum , a premium and not having a

motive of making profit from the insurance contract.”

Some of the General Rules:

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

I N S U R A N C E

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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

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is paid to the agents on each policy that they sell. Hence, not 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 INSURANCEIn 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 figures and other famous

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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

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

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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 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

HISTORY

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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

111 Sector Offices

461 Area Offices

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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

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.

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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

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

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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.

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.

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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 EVENTSTaking over of management of life insurance companies19 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

Merger of units and formation of zones 1st Oct,

1975

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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 VALUESMISSION:

“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 GENER

AL MANAG

ER

MANAGERDE

PUTY MANAGER

ASST MANAGER

EXECUTIVE OFFICER

ASST SUPERINTENDENT

OFFICE ASST

RECORD

NAB QUASIDQUASID

SUPERINTENDENT

SENIOR OFFICE ASST

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BOARD OF DIRECTORS:

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

CHAIRMAN

EXECUTIVEDIRECTOR

DIVISIONAL HEADS

REGIONAL HEADS

ZONAL HEADS

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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

AUDITORS:

PAKISTAN

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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

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

E-mail: edpgs@statelife.com.pk Website: www.statelife.com.pk

Regions:

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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;

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,

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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

RahimYar Khan Zone

Dera Ghazi Khan Zone

Bahawalpur Zone

Peshawar Zone

Rawalpindi Zone

Abbottabad Zone

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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

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Agency Department

Finance & Accounting Department

Policyholder Service Department

Personal & General Service Department

AUDIT DEPARTMENTAudit 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.

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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.

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:

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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.

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

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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.

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

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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.

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:

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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.

All cases where accident benefit is payable will continue to

be pre-audited.

NEW BUSINESS DEPARTMENT

Management Hierarchy Of New Business

Department”

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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

A.G.M

MANAGER

DEPUTY MANAGER

ASSISSTANT MANAGER

STAFF

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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

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

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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 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:

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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.

Sections of New Business

1. Proposal section

2. Underwriting section

3. Calculation section

4. Policy issue section

5. Computer section

1.Proposal Section:

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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:

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

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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.

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

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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

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.

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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.

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

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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. 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

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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:

ASSISSTANT GENERAL MANAGER

MANAGER

DEPUTY MANAGER

ASSISSTANT MANAGER

STAFF

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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”

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.

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Recruitment:

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

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

They are paid stipend.

Both above type of sale representative are registered under

insurance ordinance 2000 and insurance rules 2002.they are

required to get their registration renewed after every two

years and submit a statement and declaration annually as

required under above referred ordinance & rules .Their

primary job is to sell life insurance policies.

Promotion:SR is promoted, upon fulfillment of certain terms and

conditions and on achievement of business targets, to SO.

Similarly SO is promoted to SM and SM to AM.

Criteria of promotion from SR to SM:

Two year working as SR:

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

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

second year.

Must have at least 20 policies enforce on different lives.

Must have achieved a minimum second year persistency of

75% in the immediate preceding year.

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

immediate proceeding year

Criteria of promotion from SO to SM:

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Must have working of minimum 2 years as SO

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

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

second year

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

Must have minimum renewal persistency of 90% in the

immediate preceding year;

Must have minimum 4 productive SR

Appointment as SR SM & SO:

In response to our application to the state life insurance

corporation of Pakistan for registration as a sale representing

must confirming it under the contract with the legal status of a

state life agent which means an agent whose name appear in

the register of agent maintained by the corporation and who

has valid and subsisting the contract in writing with the

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

under state life employee service regulation 1973). The main

contract should be effective date of your registration.

Following are the basic terms and condition.

This appointment is subject to the provisions of the insurance

ordinance 2000, insurance rules 2002 and Securities and

Exchange Commission rules 2002 as amended from time

to time and other rules and regulations framed by the

government and the securities and exchange commission

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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:

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.

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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.

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:

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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.

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

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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%

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%

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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:

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

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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

POLICYHOLDER & SERVICE DEPARTMENT

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Management Hierarchy Of PHS Department:

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

This alteration includes alteration in

Sum insured

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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

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

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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.

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

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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

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:

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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 @ 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

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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.

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.

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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.

Commercial Groups:

Procedure / Requirement for the settlement of

Death/Disability Claims:

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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.

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

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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).

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.

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PERSONNEL & GENERAL SERVICE DEPARTMENTThis 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

General Services

Procurement

Purchase of goods and services

Uniforms

Communication

Other services

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Maintenance

Office machines & equipment

Furniture & fixture

Transport & conveyance

Telephone and telex

Receipt and dispatch

Assets register

Service like canteen security and cleanliness

Relation of personnel & general

service department with other

departments:

P&GS AUDIT

B& F

NEW BUSINESS

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Management Hierarchy:

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

MANAGER P&GS

ASST. MANAGER

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Karachi or regional office. Selection committee constituted by

zonal head conducts test and interview.

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

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.unused leaves 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 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

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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 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

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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 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.

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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 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.

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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, 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.

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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.

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

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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.

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

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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:

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:

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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.

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

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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 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

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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.

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:

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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 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.

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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 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)

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Refund of Premium Rider (RPR)

Hospital & Surgical Benefit (H&S)

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

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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

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

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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:

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

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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.

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):

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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 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.

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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 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

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substantially on payment of a 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

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25th, 28th, 31st, 34th, 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

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incase they desire to 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

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

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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:

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.

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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.

The supplementary contracts or riders which can be

attached with this scheme are:

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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.

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

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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.

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

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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:

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,

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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 automation in all walks of life, especially in

commerce and industry. The overall efficiency of an

organization therefore depends upon the quality of the

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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: -

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.,

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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 protection throughout their service and also get a lump

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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.

Continuation Privileges :

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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.

State life’s Pension Scheme is the only source which provides a

steady monthly income, when other sources of income stop.

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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.

o Retirement comes as planned and not abruptly as a

shock.

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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.

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.

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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.

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.

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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.

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:

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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 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)

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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

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

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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:

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.

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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 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

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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.

FINANCIAL

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ANALYSIS

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

20062007200820092010

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2005 2006 2007 2008 2009 20100

5000

10000

15000

20000

25000

30000

35000PREMIUM INCOME-INDIVIDUIAL

LIFE

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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2005 2006 2007 2008 2009 20100

500

1000

1500

2000

2500

3000

3500

4000

GROUP LIFE

Investment Income

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2005 2006 2007 2008 2009 20100

5000

10000

15000

20000

25000

30000

INVESTMENT INCOME

Year  (Rs. In Millions)

2005 13,105.5

2006 14,923.8

2007 17,505.2

2008 19,134.6

2009 21,544.7

2010 27434.1

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Total Premium Income:

2006 2007 2008 2009 20100

10000

20000

30000

40000

50000

60000

70000

TOTAL INCOME

Investment Portfolio:

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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0

50000

100000

150000

200000

250000

INVESTMENT PORTFOLIO

Life Fund:Life Fund

 Year(Rs. In Millions)

2005 122,775.2

2006 137,958.8

Investment Portfolio  

 Year (Rs. In Millions)

2005 124,983.7

2006 142,158.8

2007 161,965.8

2008 182,874.2

2009 205,804.2

2010 235,934.5

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2005 2006 2007 2008 2009 20100

50000

100000

150000

200000

250000

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

2010 251,478.1

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2005 2006 2007 2008 2009 20100

50000

100000

150000

200000

250000

300000

ASSETS

HORIZONTAL ANALYSIS:

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

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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 SHEET2008(%)

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

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

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Total creditors & accruals 22.15 16.54

Total liabilities 13.77 12.68

Total equity & liabilities 13.77 12.72

BALANCE SHEET2008(%)

2009(%)

AssetsCash & 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

Loan secured against life insurance policies

19.37 20.93

Loan secured against other assets 0.09 4.11

Unsecured loan 1.56 11.70Investment 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

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Taxation-payment less provision 4996 1984.8

Prepayments 2.09 13.03Inter-fund balances (36.01) 49.65

Sundry receivables 48.50 180.53Other 17.37 15.20

Furniture, fixture, office equipment 7.75 10.19Total assets 13.71 12.72

RATIO ANALYSIS:

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.

CASH RATIO 2008

1.267

2009

0.874

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INTERPRETATION:

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

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.

CLAIM RATIO 2008

56.31%

2009

55.43%

EXPENSE RATIO 2008

9.15%

2009

12.56%

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INTERPRETATION:

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

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.

COMMISSION RATIO

2008

26.04%

2009

28.333%

FIXED ASSET RATIO 2008

26.04%

2009

28.33%

2008

11.75%

2009

13.03%

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INTERPRETATION:

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

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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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.

Skill Work Force:

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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

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:

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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.

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:

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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.

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:

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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.

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

I started my internship in State Life Insurance Corporation, on 27th

of June, 2011.

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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 department3. New business department4. Agency department5. Internal audit department6. 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 :

a) Renewal or revival of policies

b) Alteration in the policy

c) Payments of death claims

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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 c) Prize & awardsd) Benefitse) Licensef) Termination and Demotion of the employees.

5. Internal Audit.

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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)

6. Personnel and General Service Department:

My last week of internship was in personnel and General service department.

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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

RECOMMENDATION

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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:-

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

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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 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.

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BIBLIOGRAPY

I took assistance in preparation of my projects on State Life

Insurance Corporation.

My course books

Class Notes during our class lectures

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Special Instructions and guideline by teachers

Booklets provided by the concerned organizations

In house newsletters of State Life Insurance Corporation.

E-Data Sources:

www.kse.com

www.iap.gov.pk

www.secp.gov.pk

www.businessplus.com

www.wrightreport.co

www.b recorder .com

www.cii.co.uk/

www.lloyds.com/