Introduction:

Whenever there is uncertainty, there is risk .The risk cannot be averted. It involves
multi-faced losses. Risk is uncertainty of a financial loss. We do not have any
command on uncertainties. This makes it essential that we think in favor of a
device that becomes instrumental in spreading the loss .It is in this context that we
think about insurance which is considered to be a social device to accumulate
funds to meet uncertain losses.
The main function of insurance is to provide protection against the possible
chances of generating losses. It eliminates worries and miseries of losses at
destruction of property and lives. Further, it provides capital to national economy
since the accumulated funds are invested in productive heads. The industries,
businesses, individuals are considerably benefited by services that are provided by
insurance organizations. Many may not be aware that the life insurance industry of
India is as old as it is in any other part of the world. The first Indian life insurance
company was the Oriental Life Insurance Company, which was started in India in
1818 at Kolkata1. A number of players (over 250 in life and about 100 in non-life)
mainly with regional focus flourished all across the country. However, the
Government of India, concerned by the unethical standards adopted by some
players against the consumers, nationalized the industry in two phases in 1956
(life) and in 1972 (non-life). The insurance business of the country was then
brought under two public sector companies, Life Insurance Corporation of India
(LIC) and General Insurance Corporation of India (GIC).
In line with the economic reforms that were ushered in India in early nineties, the
Government set up a Committee on Reforms (popularly called the Malhotra
Committee) in April 1993 to suggest reforms in the insurance sector. The

Committee recommended throwing open the sector to private players to usher in

competition and bring more choice to the consumer. The objective was to improve
the penetration of insurance as a percentage of GDP, which remains low in India
even compared to some developing countries in Asia.
Reforms were initiated with the passage of Insurance Regulatory and Development
Authority (IRDA) Bill in 1999. IRDA was set up as an independent regulatory
authority, which has put in place regulations in line with global norms. So far in the
private sector, 12 life insurance companies and 9 general insurance companies
have been registered.
With such a large population and the untapped market area of this population
Insurance happens to be a very big opportunity in India. Today it stands as a
business growing at the rate of 15-20 per cent annually. Together with banking
services, it adds about 7 per cent to the countrys GDP .In spite of all this growth
the statistics of the penetration of the insurance in the country is very poor. Nearly
80% of Indian populations are without Life insurance cover and the Health
insurance. This is an indicator that growth potential for the insurance sector is
immense in India. It was due to this immense growth that the regulations were
introduced in the insurance sector and in continuation Malhotra Committee was
constituted by the government in 1993 to examine the various aspects of the
industry. The key element of the reform process was Participation of overseas
insurance companies with 26% capital. Creating a more efficient and competitive
financial system suitable for the requirements of the economy was the main idea
behind his reform.
Since then the insurance industry has gone through many sea changes .The
competition LIC started facing from these companies were threatening to the

existence of LIC. Since the liberalization of the industry the insurance industry has
never looked back and today stand as the one of the most competitive and
exploring industry in India. The entry of the private players and the increased use
of the new distribution are in the limelight today. The use of new distribution
techniques and the IT tools has increased the scope of the industry in the longer
run.
Type of Life Insurance Policies

TERM LIFE INSURANCE

Protection for a specified period of time.
If you stop paying premiums, coverage stops.
A renewability option means that at the end of the term you can renew the

policy without having a physical.

Conversion option allows you to exchange your term policy to a whole life
policy without having a physical.
With decreasing term insurance your premium stays the same, but the
amount of coverage decreases as you age.

A term insurance policy is a pure risk cover for a specified period of time. What
this means is that the sum assured is payable only if the policyholder dies within
the policy term. For instance, if a person buys Rs 2 lakh policy for 15-years, his
family is entitled to the money if he dies within that 15-year period.

What if he survives the 15-year period? Well, then he is not entitled to any
payment; the insurance company keeps the entire premium paid during the 15-year
period.

So, there is no element of savings or investment in such a policy. It is a 100 per

cent risk cover. It simply means that a person pays a certain premium to protect his
family against his sudden death. He forfeits the amount if he outlives the period of
the policy. This explains why the Term Insurance Policy comes at the lowest cost.

WHOLE LIFE INSURANCE (Straight Life)

You pay a premium as long as you live.
Amount of premium depends on your age when you start the policy.
Provides death benefits and accumulates a cash value.
You can borrow against the cash value or draw it out at retirement.
Look carefully at the rate of return your money earns.

Are there choices within whole life insurance?

1)

Traditional whole life insurance policy- gives you a guaranteed minimum

rate of return on your cash value portion.

2)

Interest-sensitive whole life insurance policy -gives a variable rate on your

cash value portion, similar to an adjustable rate mortgage. With this you can have
more flexibility with your life insurance policy such as increasing your death
benefit without raising your premiums depending on the economy and the rate of
return on your cash value portion.

3)

Single-premium -is for someone who has a large sum of money and would

like to purchase a policy up front. Like other whole life insurance options, singlepremium whole life insurance accrues cash value and has the same tax shelter on
returns.

What are the benefits of choosing a whole life insurance policy over other types of
life insurance policies?

Unlike term life insurance, a portion of your premium money goes toward your
cash value which in turn could pay off your entire policy only after a few years.
Also, your premium will remain constant during the time you are covered unless
you choose otherwise. And, unless you make a change to your whole life
insurance policy, you have lifelong coverage with no future medical exams. Whole
life is also a good choice because of the tax savings.

ENDOWMENT INSURANCE POLICIES

Pay a sum or income to you if you live to a certain age. If you die before the
specified age, the death benefit is paid to the person named as the beneficiary.

Provides a permanent sum of money (called a face amount or death benefit) to

your beneficiaries- even if you die before the maturity date of the policy. OR it will
pay you if you live when the policy pays out (endows).

This is similar to whole life insurance, except: if used before the endowment
period, the life insurance ends and the face value becomes a living benefit.

Another area where they differ is with the period of time when it matures. A whole
life insurance policy is generally set up to mature at age 100. But with an
endowment you can pay the premiums well before the final date, for a limited
period of time, or in a lump sum; and the cash value builds up faster since the
funds are intended to be used while the insured is alive. But the premium is
considerably more expensive than with an ordinary straight life insurance policy.

The sooner a policy endows, the higher the premium will be. The endowment
period can be set for ten years, twenty years or to age 65.

ULIP LIFE INSURANCE

The Unit Trust of India, in collaboration with Life Insurance Corporation and the
General Insurance Corporation (GIC) of India has formulated the ULIP, which is
an insurance plan with:

Security of capital

High returns

Free accident cover

Life insurance cover

Tax rebate

Maturity bonus

Any resident of India who is above 18 years of age can possess ULIP. People who
are less than 55 years and 6 months of age can join the plan for 10 years and those
less than 50 years and 6 months can join for 15 years. In this plan premium is
payable half yearly. This amount is used to pay a small premium to the Life
Insurance Corporation and the rest is invested in units which earns an income and
is re-invested every year. The extent of life insurance cover is equal to the target
amount secured under the plan.

ULIP provides multiple benefits to the consumer

Life protection

Investment and Savings

Flexibility

Adjustable Life Cover

Investment Options

Transparency

Options to take additional cover against

Death due to accident

Disability

Critical Illness

Surgeries

Liquidity

Tax planning

Few Other Types of Insurance Policies

Limited payment policy

Pay premiums for a stipulated period, usually 20 or 30 years, or until you

reach a specified age (65).
Your policy then becomes paid up and you remain insured for life.

Variable life policy

Minimum death benefit guaranteed, but the death benefit can be greater than
the minimum depending on earnings of the dollars invested in a separate stock or
bond fund.

Adjustable life policy

A whole life insurance policy, but you can change your policy as your needs
change. For example, you can change your premium payments or the period of
coverage.

Universal life - gives you more direct control

Lets you pay premiums at any time in almost any amount. The amount of
insurance can be changed more easily than a traditional policy.
The increase in the cash value of the policy reflects the interest earned on
short-term investments.

Group life insurance

Term insurance.
Often provided by an employer.
No physical is required.

Credit life insurance

Debts such as car loan is paid off if you die. Also protects lenders.
Expensive protection.
For the purpose of this regulation: A.
(1)

Advertisement means material designed to create public interest in life

insurance or annuities or in an insurer, or in an insurance producer; or to induce the

public to purchase, increase, modify, reinstate, borrow on, surrender, replace or
retain a policy including: Comment: See drafting note caveat immediately
following the definition of insurance producer in this section.
(a)

Printed and published material, audiovisual material and descriptive

literature of an insurer or insurance producer used in direct mail, newspapers,

magazines, radio and television scripts, telemarketing scripts, billboards and
similar displays, and the Internet or any other mass communication media.
(b)

Descriptive literature and sales aids of all kinds, authored by the insurer,

its insurance producers, or third parties, issued, distributed or used by the insurer or
insurance producer; including but not limited to circulars, leaflets, booklets, web
pages, depictions, illustrations and form letters;
(c)

Material used for the recruitment, training and education of an insurers

insurance producers which is designed to be used or is used to induce the public to

purchase, increase, modify, reinstate, borrow on, surrender, replace or retain a
policy.

Advertisement for the purpose of this regulation shall not include:

(a) Communications or materials used within an insurers own organization and
not intended for dissemination to the public;
(b)

Communications with policyholders other than material urging

policyholders to purchase, increase, modify, reinstate or retain a policy; and

(c)

A general announcement from a group or blanket policyholder to eligible

individuals on an employment or membership list that a policy or program has

been written or arranged; provided the announcement clearly indicates that it is
preliminary to the issuance of a booklet explaining the proposed coverage.

APPLICABILITY
A.

This regulation shall apply to any life insurance or annuity advertisement

intended for dissemination in this state. In variable contracts and other registered
products where disclosure requirements are established pursuant to federal
regulation, this regulation shall be interpreted so as to eliminate conflict with
federal regulation.
B.

All advertisements, regardless of by whom written, created, designed or

presented, shall be the responsibility of the insurer, as well as the producer who
created or presented the advertisement. Insurers shall establish and at all times
maintain a system of control over the content, form and method of dissemination
of all advertisements of its policies. A system of control shall include regular and
routine notification, at least once a year, to agents, brokers and others authorized
by the insurer to disseminate advertisements of the requirement and procedures for
company approval prior to the use of any advertisements that is not furnished by

the insurer and that clearly sets forth within the notice the most serious
consequence of not obtaining the required prior approval.
FORM AND CONTENT OF ADVERTISEMENT
A.

Advertisements shall be truthful and not misleading in fact or by

implication. The form and content of an advertisement of a policy shall be

sufficiently complete and clear so as to avoid deception. It shall not have the
capacity or tendency to mislead or deceive. Whether an advertisement has the
capacity or tendency to mislead or deceive shall be determined by the
Commissioner of Insurance from the overall impression that the advertisement
may be reasonably expected to create upon a person of average education or
intelligence within the segment of the public to which it is directed.
B.

No advertisement shall use the terms investment, investment plan,

founders plan, charter plan, deposit, expansion plan, profit, profits,

profit sharing, interest plan, savings, savings plan, private pension plan,
retirement plan or other similar terms in connection with a policy in a context or
under such circumstances or conditions as to have the capacity or tendency to
mislead a purchaser or prospective purchaser of such policy to believe that he will
receive, or that it is possible that he will receive, something other than a policy or
some benefit not available to other persons of the same class and equal expectation
of life.

DISCLOSURE

A.

The information required to be disclosed by this regulation shall not be

minimized, rendered obscure, or presented in an ambiguous fashion or

intermingled with the text of the advertisement so as to be confusing or misleading.
B.

An advertisement shall not omit material information or use words, phrases,

statements, references or illustrations if the omission or use has the capacity,

tendency or effect of misleading or deceiving purchasers or prospective purchasers
as to the nature or extent of any policy benefit payable, loss covered, premium
payable, or state or federal tax consequences. The fact that the policy offered is
made available to a prospective insured for inspection prior to consummation of
the sale, or an offer is made to refund the premium if the purchaser is not satisfied
or that the policy or contract includes a free look period that satisfies or exceeds
regulatory requirements, does not remedy misleading statements.
C.

In the event an advertisement uses non-medical, no medical

examination required, or similar terms where issue is not guaranteed, terms shall
be accompanied by a further disclosure of equal prominence and in juxtaposition
thereto to the effect that issuance of the policy may depend upon the answers to the
health questions set forth in the application.
D.

An advertisement shall not use as the name or title of a life insurance

policy any phrase that does not include the words life insurance unless
accompanied by other language clearly indicating it is life insurance. An
advertisement shall not use as the name or title of an annuity contract any phrase
that does not include the word annuity unless accompanied by other language
clearly indicating it is an annuity. An annuity advertisement shall not refer to an
annuity as a CD annuity, or deceptively compare an annuity to a certificate of
deposit.

E.
F.

An advertisement shall prominently describe the type of policy advertised.

An advertisement of an insurance policy marketed by direct response

techniques shall not state or imply that because there is no insurance producer or
commission involved there will be a cost saving to prospective purchasers unless
that is the fact. No cost savings may be stated or implied without justification
satisfactory to the commissioner prior to use.
G.

An advertisement for a life insurance policy containing graded or modified

benefits shall prominently display any limitation of benefits. If the premium is

level and coverage decreases or increases with age or duration, that fact shall be
commonly disclosed. An advertisement of or for a life insurance policy under
which the death benefit varies with the length of time the policy has been in force
shall accurately describe and clearly call attention to the amount of minimum death
benefit under the policy.
H.

An advertisement for the types of policies described in Subsections F and

G of this section shall not use the words inexpensive, low cost, or other phrase
or words of similar import when the policies being marketed are guaranteed issue.
J.

Analogies between a life insurance policy or annuity contracts cash values

and savings accounts or other investments and between premium payments and
contributions to savings accounts or other investments shall be complete and
accurate. An advertisement shall not emphasize the investment or tax features of a
life insurance policy to such a degree that the advertisement would mislead the
purchaser to believe the policy is anything other than life insurance.
K.

An advertisement shall not state or imply in any way that interest charged

on a policy loan or the reduction of death benefits by the amount of outstanding

policy loans is unfair, inequitable or in any manner an incorrect or improper

practice.
L.

If nonforfeiture values are shown in any advertisement, the values must be

shown either for the entire amount of the basic life policy death benefit or for each
$1,000 of initial death benefit.
M.

The words free, no cost, without cost, no additional cost, at no

extra cost, or words of similar import shall not be used with respect to any benefit
or service being made available with a policy unless true. If there is no charge to
the insured, then the identity of the payor shall be prominently disclosed. An
advertisement may specify the charge for a benefit or a service or may state that a
charge is included in the premium or use other appropriate language.
Q.

Testimonials, Appraisals, Analysis, or Endorsements by Third Parties

(1)

Testimonials, appraisals or analysis used in advertisements must be

genuine; represent the current opinion of the author; be applicable to the policy
advertised, if any; and be accurately reproduced with sufficient completeness to
avoid misleading or deceiving prospective insureds as to the nature or scope of the
testimonial, appraisal, analysis or endorsement. In using testimonials, appraisals or
analysis; the insurer or insurance producer makes as its own all the statements
contained therein, and these statements are subject to all the provisions of this
regulation.
(2)

If the individual making a testimonial, appraisal, analysis or an

endorsement has a financial interest in the insurer or related entity as a stockholder,

director, officer, employee or otherwise, or receives any benefit directly or
indirectly other than required union scale wages, that fact shall be prominently
disclosed in the advertisement.

(3)

An advertisement shall not state or imply that an insurer or a policy has

been approved or endorsed by a group of individuals, society, association or other

organization unless such is the fact and unless any proprietary relationship between
an organization and the insurer is disclosed. If the entity making the endorsement
or testimonial is owned, controlled or managed by the insurer, or receives any
payment or other consideration from the insurer for making an endorsement or
testimonial, that fact shall be disclosed in the advertisement.
(4)

When an endorsement refers to benefits received under a policy for a

specific claim, the claim date, including claim number, date of loss and other
pertinent information shall be retained by the insurer for inspection for a period of
five (5) years after the discontinuance of its use or publication.
R.

An advertisement shall not contain statistical information relating to any

insurer or policy unless it accurately reflects recent and relevant facts. The source
of any statistics used in advertisement shall be identified.

IDENTITY OF INSURER

A.

The name of the insurer shall be clearly identified in all advertisements

about the insurer or its products, and if any specific individual policy is advertised
it shall be identified either by form number or other appropriate description. If an
application is a part of the advertisement, the name of the insurer shall be shown
on the application. However, if an advertisement contains a listing of rates or
features that is a composite of several different policies or contracts of different
insurers, the advertisement shall so state, shall indicate, if applicable, that not all

policies or contracts on which the composite is based may be available in all states,
and shall provide a rating of the lowest rated insurer and reference the rating
agency, but need not identify each insurer. If an advertisement identifies the issuing
insurers, insurance issuer ratings need not be stated.
B.

An advertisement shall not use a trade name, an insurance group

designation, name of the parent company of the insurer, name of a particular

division of the insurer, a reinsurer of the insurer, service mark, slogan, symbol or
other device or reference without disclosing the name of the insurer, if the
advertisement would have the capacity or tendency to mislead or deceive as to the
true identity of the insurer or create the impression that a company other than the
insurer would have any responsibility for the financial obligation under a policy.
C.

An advertisement shall not use any combination of words, symbols or

physical materials that by their content, phraseology, shape, color or other

characteristics are so similar to a combination of words, symbols or physical
materials used by a governmental program or agency or otherwise appear to be of
such a nature that they tend to mislead prospective insurers into believing that the
solicitation is in some manner connected with a governmental program or agency.

JURISDICTIONAL LICENSING AND STATUS OF INSURER

A.

An advertisement that is intended to be seen or heard beyond the limits of

the jurisdiction in which the insurer is licensed shall not imply licensing beyond
those limits.

B.

An advertisement may state that an insurer or insurance producer is

licensed in a particular state or states, provided it does not exaggerate that fact or
suggest or imply that competing insurers or insurance producers may not be so
licensed. .
An advertisement shall not create the impression that the insurer, its financial
condition or status, the payment of its claims or the merits, desirability, or
advisability of its policy forms or kinds of plans of insurance are recommended or
endorsed by any governmental entity. However, where a governmental entity has
recommended or endorsed a policy form or plan, that fact may be stated if the
entity authorizes its recommendation or endorsement to be used in an
advertisement.

INSURANCE MARKET IN INDIA

India with about 200 million middle class household shows a huge untapped
potential for players in the insurance industry. Saturation of markets in many
developed economies has made the Indian market even more attractive for global
insurance majors. The insurance sector in India has come to a position of very high
potential and competitiveness in the market. Innovative products and aggressive
distribution have become the say of the day.
Indians, have always seen life insurance as a tax saving device, are now suddenly
turning to the private sector that are providing them new products and variety for
their choice. Life insurance industry is waiting for a big growth as many Indian and

foreign companies are waiting in the line for the green signal to start their
operations. The Indian consumer should be ready now because the market is going
to give them an array of products, different in price, features and benefits. How the
customer is going to make his choice will determine the future of the industry.

Overview of Insurance Industry :

Its a business growing at the rate of 15-20 per cent
annually and presently is of the order of Rs 450 billion. Together with banking
services, it adds about 7 per cent to the countrys GDP. Gross premium collection
is nearly 2 per cent of GDP and funds available with LIC for investments are 8 per
cent of GDP. Yet, nearly 80 per cent of Indian population are without life
insurance cover, health insurance and non-life insurance continue to be below
international standards. And this part of the population is also subject to weak
social security and pension systems with hardly any old age income security. This
itself is an indicator that growth potential for the insurance sector is immense.
A well-developed and evolved insurance sector is needed for economic
development as it provides long term funds for infrastructure development and at
the same time strengthens the risk taking ability. It is estimated that over the next
ten years India would require investments of the order of one trillion US dollar.
The Insurance sector, to some extent, can enable investments in infrastructure
development to sustain economic growth of the country.

Insurance companies not only provide risk cover to infrastructure projects, they
also contribute long-term funds. In fact, insurance companies are an ideal source of
long term debt and equity for infrastructure projects. With long term liability, they
get a good asset- liability match by investing their funds in such projects. IRDA
regulations require insurance companies to invest not less than 15 percent of their
funds in infrastructure and social sectors. International Insurance companies also
invest their funds in such projects.

INSURANCE DEFINATION :
a From the viewpoint of the Individual : Insurance is an economic
device whereby the individual can substitute a small relatively
definite cost (premium) for a large uncertain financial loss that
would have to be borne if insurance was not available.
b From the viewpoint of the Society : Insurance is a mechanism
which relieves the individual citizens and the industry from the
burden of carrying on themselves the various risks , they are
likely to face from day to day.
THE RISK: There is risk insured against the policyholder .
THE INSURED: is the person or company entering into insurance contract.
THE INSURER: is the insurance company which has contracted with the insured
to provide cover for the risk insured against.

TYPES OF INSURANCE BUSINESS :

 LIFE INSURANCE
NON-LIFE INSURANCE (GENERAL INSURANCE)

THE IRDA ACT,1999 :

The IRDA Act was passed in 1999, providing for the establishment of the IRDA
as a ten member body, with the Chairperson, and nine other members, of whom
not more than five will be whole time members. The IRDA is the Authority to
regulate the insurance industry in India and has the powers to issue registration
certificates and licenses, lay down codes of conduct, monitor the performance
of insurers and other persons referred to in the Insurance Act and to make
regulations to carry out its purposes.
The IRDA is to be advised by the Insurance Advisory Committee, to consist of
not more than 25 members. This committee is to be appointed by the IRDA and
will represent the interests of commerce, industry, transport, agriculture,
surveyors, agents, organizations engaged in safety and loss prevention, research
bodies and employees association in the insurance sector.

INSURANCE REGULATORY AND DEVELOPMENT AUTHORITY

( IRDA )

The Insurance Act, 1938 provided that the Government should appoint a
Controller of Insurance, to ensure that insurance companies registered under the
Act, comply with the various provisions of the Act. His duties included
approval of the terms and conditions of various plans being offered by the

companies, including the adequacy of the bases of premia, scrutiny of the

various returns on investments, annual accounts, periodical actuarial valuations
etc. are required to be submitted by the companies. The Insurance Regulatory
And Development Authority Act,1999 came into being effective 19th April
2000

OBJECTIVE OF IRDA :
An Act to provide for the establishment of an Authority to protect
the interests of holders of insurance policies, to regulate , promote and ensure
orderly growth of the insurance industry and for matters connected therewith or
incidental thereto and further to amend the Insurance Act, 1938, the Life Insurance
Corporation Act, 1956.

FUNCTIONS OF IRDA :
To regulate , promote and ensure orderly growth of the insurance and
reinsurance business
Issue a certificate of registration, renew, modify, withdraw, suspend or cancel
such registration to the applicant i.e. insurance company
Prepare a code of conduct for the agents, surveyors and loss assessors or the
intermediaries who take part in development of insurance business
To exercise all powers and perform all functions of the Controller of Insurance
under Insurance Act 1938

 To promote efficiency in the conduct of insurance business

To promote and regulate professional organizations connected with the
insurance business

WINDS OF CHANGE
Reforms have marked the entry of many of the global insurance majors into the
Indian market in the form of joint ventures with Indian companies. Some of the
key names are AIG, New York Life, Allianz, Prudential, Standard Life, Sun Life
Canada and Old Mutual. The entry of new players has rejuvenated the erstwhile
monopoly player LIC, which has responded to the competition in an admirable
fashion by launching new products and improving service standards.
The following are the key winds of change brought about by privatisation.
Market Expansion: There has been an overall expansion in the market. This has
been possible due to improved awareness levels thanks to the large number of
advertising campaigns launched by all the players. The scope for expansion is still
unlimited as virtually all the players are concentrating on large cities and towns except by LIC to an extent there was no significant attempt to tap the rural
markets.
New Product Offerings: There has been a plethora of new and innovative products
offered by the new players, mainly from the stable of their international partners.
Customers have tremendous choice from a large variety of products from pure term
(risk) insurance to unit-linked investment products. Customers are offered

unbundled products with a variety of benefits as riders from which they can
choose. More customers are buying products and services based on their true needs
and not just traditional money-back policies, which is not considered very
appropriate for long-term protection and savings. However, there are still some key
new products yet to be introduced - e.g. health products.
Customer Service: Not unexpectedly, this was one area that witnessed the most
significant change with the entry of new players. There is an attempt to bring in
international best practices in service and operational efficiency through use of
latest technologies. Advice and need based selling is emerging through much better
trained sales force and advisors. There is improvement in response and turnaround
times in specific areas such as delivery of first policy receipt, policy document,
premium notice, final maturity payment, settlement of claims etc. However, there
is a long way to go and various customer surveys indicate that the standards are
still below customer expectation levels.
Channels of Distribution: Till two years back, the only mode of distribution of life
insurance products was through Agents. While agents continue to be the
predominant distribution channel, today a number of innovative alternative
channels are being offered to consumers. Some of them are bancassurance,
brokers, the internet and direct marketing. Though it is too early to predict, the
wide spread of bank branch network in India could lead to bancassurance emerging
as a significant distribution mechanism.
Table 2 below gives a snapshot of the performance for 2003-04 (up to October) of
the 13 life insurance payers in India based on the first year premium figures4.
STRATEGIC ALTERNATIVES

If one analyses the history of growth of the insurance industry since reforms, it is
marked by all-round growth of all players. More or less all players (including the
market leader LIC) have aggressively recruited and trained advisors, appointed
agents, launched new products, improved customer service standards and
revamped/expanded their distribution networks. If at all there was any major
difference between players it was only in time lag in launching of services. Every
player would like the customers to believe that its service standards are the best or
that its agents are the most informed and ethical, but is debatable whether there are
any significant differences. In other words, each company is trying to be
everything to everybody.
Our argument is that the strategy of being everything to everybody is risky. Some
players justify the above strategy on the basis that the Indian market is huge and it
can accommodate everybody. Still, in a market where it is difficult to distinguish
oneself sufficiently on service or any other parameter to be able to charge a
premium, it will lead to unmitigated price competition to the detriment of all
players. One may achieve sales turnover, but margins and profitability will suffer
severely. In the insurance industry where large amounts of capital are required, this
is risky.
While there is room for a few scale players with a finger in every pie, it is
profitable for other players to focus on different segments to survive and thrive in a
multi-firm open environment. While each company has to choose its own unique
positioning based on its unique strengths, the below-mentioned generic positioning
alternatives5 appear worth considering. Needless to say the positioning choices
discussed here are not mutually exclusive and can be overlapping.
Variety-based Positioning

This type of positioning is based on varieties in products and services rather than
customer segments. It is a sensible strategy for those companies who have
distinctive advantages or strengths in offering certain products and services.
In the insurance industry too, it is possible to achieve a unique position by focusing
on certain category of products. One such example is Birla Sunlife Insurance,
which has been placing particular focus on investment-related products since its
launch in India6. Through its superior fund management capabilities, the insurance
company can deliver better returns on its investment-linked products and thereby
carve for itself a leadership position in this segment.
Then there is the entire category of pension products which is widely touted to
have immense growth potential in India due to imminent pension reforms. It is
possible to achieve profitable positioning by focusing and excelling in only
pension products.

Needs-based Positioning
This is the most commonly understood positioning and is based on the differing
needs of different groups of consumers. This can be done successfully if a
company has unique strengths to service a group of customer needs better than
others.
The insurance needs of customers vary significantly for different groups of
customers. The insurance needs of young family with small children will be quite
different from that of a family in which the income-earner is close to retirement.
However, in India most of the life insurance companies have a wide variety of

products tailored for different customer needs and there is no company focusing on
a particular customer need.
An example would be a life insurance company that focuses only on High Networth Individuals (HNIs). The needs of HNIs would be quite different from those
of a general consumer and would require an entirely different marketing mix right
from the type of products offered and the way they are distributed, to the
promotion methods employed.

Access-based Positioning
Positioning of customers can also be done by the way they are accessible. That is
different groups of customers may be accessible in different ways even though they
may have similar needs. Access is typically a function of customer geography or
customer scale.
There is excellent opportunity in the insurance industry to employ access-based
positioning by targeting the rural insurance sector. The rural market for life
insurance is very different from the urban market in terms of needs, income levels
and distribution (seasonality, for example), penetration of media and so on. So far
except for LIC, no other player has paid any attention or focus on the rural sector.
Contrary to common perception it is a big opportunity as emphasised repeatedly by
such eminent strategists like C.K. Prahlad7. Rural market can be a highly
profitable position if one is able to carefully plan and tailor an entire set of lowcost activities of advertising, distribution, and product design etc. to successfully
exploit the potential.

CHOOSING THE RIGHT STRATEGY

The right strategic choice is not a matter of positioning choice alone. It involves
the very way a company organizes itself to do business. It is the configuration of
the entire value chain of the company through a different set of activities to deliver
unique value to consumers. The set of activities cover all upstream and
downstream activities, from the selection of the product mix, the way the products
are priced, promoted, the type of distribution mechanism used, the way customers
are serviced and so on.
Some life insurance companies focusing on rural markets have adopted innovative
means of distribution. Instead of appointing agents as is done typically, they have
used gramsevaks in different villages across the country to promote life insurance
and act as their sales arm
ADVERTISING INITIATIVES OF THE NEW PLAYERS
The new insurance companies used all channels of advertising from newspapers
and the television to insurance agents and direct mailers. A fierce battle seemed to
have begun among Indian insurance companies to make ones own brand win over
the other.
A majority of Indian customers being very conservative and averse to risk, trust
was an extremely important factor in the insurance business. Since LIC was a
government owned body, there was an element of security embedded in its services
and products. This proved to be the biggest hurdle for the new insurance
companies as Indian customers were reportedly rather skeptical about them.
Hence, the new companies focused their campaigns primarily on building an image
of trustworthiness and reliability for themselves. Secondly, their advertisements

focused on insurance as an investment option and not a mere tax saving tool
another first for the Indian market. Most of these advertisements carried messages
like the familys happiness, human bonding, etc., with underlying emphasis on the
security that insurance could provide. Also, instead of projecting the idea, that an
insurance policy actually starts working only after the death of the insured, the new
campaigns projected that insurance protects people throughout their lives.
In one of its TV commercials, ICICI Prudential showed a series of scenes depicting
the childhood, marriage and old age of an individual. The purpose of using these
visuals was to translate the companys message it will protect into real-life
incidents. In order to project its commitment towards consumers to protect at every
stage of life, the company brought in the concept of sindoor, which symbolizes
protection. Sindoor was shown throughout the commercial as a mark of
auspiciousness and protection, and at the end, it became the red line below the
ICICI Prudential logo
Max New York also resorted to depicting positive emotions such as trust and
protection in its print advertisements. The company released two print
advertisements. While one of them carried an image of the revered deity Goddess
Durga, the other projected three teenagers standing together, with their faces
painted green, white and saffron like the Indian national flag. Reportedly, Max
New York wanted to convey the message that insurance is your partner for your
life. Suhel Seth of Equus Advertising the ad agency, which created the
advertisements for Max New York said, we had to break the clutter, as insurance as
a category has largely communicated doom and fear. Therefore, the campaign lent
itself better to an emotional route. Max New York Life also carried out an
extensive outdoor media campaign across the country, focusing on India-specific
images such as traditional wrestlers and village people.

In addition to such TV commercials, the private insurance companies were trying

to make their presence felt by organizing blood donation camps, contests and
sponsoring various events. ING Vysya tied up with leading US-based Columbia
Pictures Indian arm to carry out promotional activities using the blockbuster
English movie Spiderman. In the metros, ING Vysya distributed free movie tickets
to its customers. A similar exercise was carried out for another English movie
Mitr (Friend). Reportedly, Columbia Pictures and ING Vysya had planned to join
hands on a long-term basis. The latter also organized the Green Mumbai Drive and
several blood donation camps in association with the Red Cross, besides
sponsoring the action replay of the India-West Indies cricket match series in May
2002 and also in November 2002.
Om Kotak and Birla Sun Life took to sponsoring events in a major way, to attract
prospective customers. In 2001, Birla Sun Life sponsored a play to which a few
Citibank credit card customers were invited. A company official said, Sponsoring
plays and events like these give us good mileage. They may not directly give us
leads to sales, but certainly give us better visibility. According to company
sources, Birla Sun life was considering the sponsorship of premier shows and
offering tickets to corporate agents like Citibank and employees of Deutsche Bank,
who helped in the sale of policies. A senior company official said, It is all about
building relationships with our corporate agents.
Om Kotak initially highlighted in its advertisements the credibility and
trustworthiness of individual partners (Old Mutual & Kotak Mahindra) through its
generic campaigns. The TV commercials featured men and women meeting
themselves in the future happy, healthy and secure, thanks to insurance. In early
2002, company also launched product specific campaigns. Om Kotak was also
considering sub-branding of products. Allianz Bajaj went a step ahead. Apart from

bringing out TV commercials and putting up hoarding and billboards, it entered

into a two-month long contract with Shoppers Stop.
Allianz Bajaj kiosk that provided information about policies in order to attract
customers. According to company sources, its plans were to try any kind of activity
that would generate awareness about company and its policies and leads (interest
by a prospective customer) and converting the same into its customers. Allianz
Bajajs entire communication package included print advertisements, outdoor
media campaigns and direct marketing methods. All its print advertisements
carried a visual of human hands, which symbolized partnership and care to stress
on the concept of care.
Similarly, Tata AIG entered into an agreement with Westside to set up information
kiosks in all its outlets in order to attract Peoples attention. Also, Tata AIG was
one of the first insurance companies to adopt the celebrity endorsement strategy.
Tata AIG chose the Hindi movie star, Naseeruddin Shah (Shah), as its brand
ambassador for endorsing its personal accidental death insurance policy. According
to company sources, Shah was selected because he had the image of being an
intelligent and reliable individual. Another private insurer AMP Sanmar roped in
former Australian cricket captain, Steve Waugh for endorsing its life insurance
policies.
MetLife came up with simple, lucid advertisements that could be easily understood
by all. One of its advertisements read, Why does anyone need insurance? Well,
why does a car need a spare tire? According to analysts, this advertisement
successfully projected the importance of insurance for an individual. MetLifes
advertisements carried cartoons from the popular Peanuts series and carried
emotional messages.

In addition to all the above, private players in the insurance sector charted out
various innovative marketing plans to establish their products. For instance, ICICI
Prudential launched the TruLife Club for its high-value policyholders as part of
its marketing strategy. Through TruLife Club, the company offered a wide range of
health-related products, health and fitness equipment and membership in gyms,
health resorts and clinics in India. Policyholders with a sum assured of Rs 0.5
million or more were included into this club. According to company sources, the
purpose of this whole exercise was to encourage a healthy life of its customers.
During the late-2001, when SBI Life was concentrating on building its brand it was
offering packaged products to its customers.
S Muralidharan, Chief of Marketing & Sales, SBI Life, said, We are slowly and
steadily building our brand. Very soon we will be launching print advertisements in
regional languages too. As for launching a club for the premium segment, its
certainly a possibility which we are now evaluating. According to Muralidharan,
SBI Life was also exploring the possibility of advertising on the Internet in its bid
to reach out to its target audience.
Another interesting development was regarding the punch lines used by private
insurance players that invariably tried to associate positive emotions with
insurance products. While ING Vysya said Adding life to insurance, ICICI
Prudential Said, We cover you. At every step in life. Similarly, HDFC Standard
advertisements projected a happy man asserting; Now I can continue enjoying a
comfortable lifestyle even after I retire. AMP Sanmar commercials carried the line
The joy of living life to the fullest, with a 153-year old expert taking care of your
insurance needs. Om Kotak highlighted its campaigns with Jeene ki azaadi
(Freedom to live) and Allianz Bajaj stated Allianz Bajaj, Life insured by care.

. In July 2002, India's state owned insurer, Life Insurance Corporation of India
(LIC) announced aggressive marketing plans with a budget of around Rs 1 billion.
The aim of this unusual decision was to woo customers across the country through
a multimedia campaign including advertisements on the radio and the press media,
the outdoor media and the television. However, this did not come as a major
surprise to industry observers who said that LIC did not have too many options.
With the insurance bill being passed in 2000, the Indian insurance sector saw a host
of private players enter the market with multinationals as their partners. These new
players resorted to aggressive marketing and advertisement strategies something
the market had never seen earlier. This sudden spurt of advertisements and
awareness programs was visible on all the media channels.

Print, electronic and outdoor advertisements of the new private insurers flooded
could be seen everywhere. This prompted many comparisons of such behavior of
insurance companies with the advertising frenzy of the dotcoms in India not too
long ago with similar full-page advertisements, huge hoardings and costly
electronic media advertisements.

According to a survey conducted by a leading marketing research firm, ORG

Marg, brand awareness of private insurers in India was increasing in the early 21st
century. The difference in the level of awareness of these new players as compared

to the hitherto monopoly of LIC was decreasing fast because of the aggressive
advertising measures adopted by private insurers.
Background Note
The life insurance industry in India dates back to 1818, when a British firm
Oriental Life Insurance Company opened its office in Kolkata, followed by
Bombay Life Assurance Company in 1823. During the British rule in India, 'The
Indian Life Assurance Companies Act' was enacted in 1912, which was followed
by the Indian Insurance Companies Act, 1928 enabling government to collect the
data regarding life and non-life business conducted by both Indian and foreign
insurance companies.
Benefits of life Insurance:

superior to any other saving plan:Life insurance policies offer protection against the risk of death which is not
available in any other contemporary saving plan. In the event of death of a policies
holders the insurance makes available the full sum assured to the policies holders
near and dear ones. In comparison any other saving plan would amount to the total
saving accustomed till date. If the death occurs prematurely, such saving can be
much lesser than the sum assured.
Encourage thrift:- .A saving deposits can easily be withdrawn. The payment
of life insurance premiums, however is considered sacrosanct and is viewed
with the same seriousness as the payment of interest on mortgage. Thus, a
life insurance policy in fact brings about compulsory

 Easy settlement and protection against creditors:- a life insurance policy is

the only financial instrument the proceeds of which can be protected against
the claims of a creditors of the assured by effecting a valid assignment.

Administering the legacy for beneficiaries: - speculative or unwise expenses

can quickly cause the squandered. Several policies have foreseen this
possibility and provide for payments over a period of years or in a
combination of installments and lump sum amounts.

Ready marketability and suitability for quick borrowing:- a life insurance

policy can after a certain time period (generally three years) Most cost
effective means to ensure that the important milestones in the childrens
lives are not hampered by the uncertainties of life.

Investment: - life insurance also be an investment. Apart from the tax

benefits that are also allowable by the government of India for investing in
life insurance, some life insurance policies offer returns on investment along
with the cover for life. This can help you with long-term financial goals.

 Charity:- life insurance is a great avenue to help a charitable cause. For

people with philanthropic desire but short of means, life insurance provides
the option to contribute much more than is possible by the life insured.

Critical illness benefit:- many policy can also provide for cover against
Critical illness.
Hospital cash benefit:- many policies can also provide for covering the
hospitalization expenses, along with cover for life.
Tax benefit:- under the Indian income tax act, tax relief under section 88 is
available for premium paid and section 1010D benefits are available for
Death/ maturity/surrender proceeds from a life insurance policy.

ENFORCEMENT PROCEDURES
A.

Each insurer shall maintain at its home or principal office a complete file

containing a specimen copy of every printed, published or prepared advertisement

of its individual policies and specimen copies of typical printed, published or
prepared advertisements of its blanket, franchise and group policies, hereafter
disseminated in this state, with a notation indicating the manner and extent of
distribution and the form number of any policy advertised. The file shall be subject
to inspection by the department. All advertisements shall be maintained in the file
for a period of five (5) years after discontinuance of its use or publication.

B.

If the commissioner determines that an advertisement has the capacity or

tendency to mislead or deceive the public, the commissioner may require an

insurer or insurance producer to submit all or any part of the advertising material
for review or approval prior to use.
C.

Each insurer subject to the provisions of this regulation shall file with the

commissioner with its annual statement a certificate of compliance executed by an

authorized officer of the insurer stating that to the best of his or her knowledge,
information and belief the advertisements that were disseminated by or on behalf
of the insurer in this state during the preceding statement year, or during the
portion of the year when these rules were in effect, complied or were made to
comply in all respects with the provisions of these rules and the insurance laws of
this state as implemented and interpreted by this regulation.

VARIOUS ADVERTISEMENT OF LIFE INSURANCE

Insurance is viewed largely as a tax-saving instrument in India. People put aside

money every year to invest in insurance but is insurance really good only as an
investment tool? With the tax season upon us, life insurance brands have been
bracing up with new communication campaigns that tell us how important it is to
be insured beyond looking at it just as an investment product.
Life insurance companies have been invading all forms of media including digital.
Most have resorted to storytelling as its the most effective tool to convey the brand
message, however, this has led to a heap of life insurance stories being shared on

social feeds. And the onslaught has little to differentiate brands from the clutter of
ad campaigns.
Father-son, Father-daughter, Son-old parents, Husband-wife, most of these
relationships have formed the crux of life insurance campaigns since ages. So,
what can be done differently to stand out in the clutter?
Here we look at how much different can one be, when it comes to promoting life
insurance in the digital space, with our focus on five major life insurance brands
that have launched some interesting campaigns this tax-saving season:
1) Tata AIA #DaddyAurZooey
Tata AIA Life insurance has started 2015 on a new note. The insurance company
has joined hands with Citibank in a bancassurance partnership under which the
company will launch products to be sold by Citibank. Along with wealth
management, life protection, saving and retirement solutions, the partnership will
see a digitisation process in place to aid smoother transactions and real-time instant
service options.

The change is being communicated through its newly launched brand makeover
campaign that is focussed on Making good happen. Launched in phases, the first
phase of the campaign uses storytelling to highlight brand values, while the later
phases will focus on the various product propositions for both new and existing
customers.

At the heart of Making good happen is the adorable story of a father and son
Daddy aur Zooey. The four-minute ad film conceptualized by JWT tells the story
of their unique relationship and what makes them family of the year.

The film begins in a hill station where a little boy is seen waking up his father in
the morning. As the day wears on, we see the father trying his best to impress the
little boy through minor actions like getting a cookie jar from the top shelf and
more. The story proceeds through amusing failures by the father where we see him
being pushed around in queues or getting entangled in a blanket or being plain
jerky.

The boy is shown to be a big fan of superheroes making it even more mandatory
for the father to be his real life superhero.

At the sons birthday party, we see the father get upset as the son sits on the
shoulders of his favourite super hero, jumping with joy. This makes him challenge
the superhero to an arm wrestling match which is obviously skewed towards the
stronger man.

To the fathers surprise, his little son starts cheering for him, bringing tears to his
eyes. Later we see the two sharing a laugh at a field, as we see the fathers arm is
bandaged.

The voiceover in the end says, Hum jeete haibas apno ke achche ke liye.
The hashtag #daddyaurzooey is displayed along with Making good happen.

2) Birla Sun Life Insurance #KhudKoKarBuland

With the tax season upon us, insurance brands are bracing up with new
communication campaigns. While some are taking the humour route, others are
leveraging pure storytelling to get their messages across. Birla Sun Life Insurance
(BSLI), the life insurance arm of Aditya Birla Financial Services Group has come
up with the touching story of a single fathers grit and determination in raising his
autistic son.

With this positioning, the insurance brand seeks to celebrate the human spirit rather
than talk directly about how it can help you during the uncertainties of your life.
Conceptualised by Taproot India, the three-and-a-half minute film titled Khud ko
kar buland is already creating waves on social media.

The ad film opens rather sadly with a father learning that his son has autism. Later
we see a photo frame of his wife with a tikka applied on it, implying she is no
more, as the little boy wails loudly for her. Not one to be defeated by

circumstances, we see this young father strive hard to take care of his son and his
special needs, while also managing the finances at home.

The story then moves on to a slightly grown up son who needs to be put into a
special school. As destiny would have it, the factory at which the father is
employed has to shut down at the same time.

The scene then cuts to home where the son is upset at his father coming home late.
Right then the father promises him that hell never be late again as the son has
been enrolled into the new program while he has started his own business venture.
A voiceover states, Honi ko aap rok nahi sakte. Par honi bhi aap ko kaha rok
sakegi. Apno ko, apne sapno ko karo surakshit.

3) Max Life Insurance #Second Chance

Lifes uncertain. A freak accident while on a pilgrimage, a life threatening disease,
the demise of a loved one and you are reminded of the absolute uncertainty of life.
Questions like, Who will take care of my parents?, Will my wife have to go
back to work?, Who will provide for my children? dont take a moment to loom
large in our minds.

Time and again, we have heard of amazing stories of people who have had close
encounters with death. Yet the reality doesnt settle in when it comes to facing
ones own demise. Max Life Insurance takes a realistic approach in its latest

campaign titled Second Chance. A joint venture between Max India and MS, the
insurance brand is hoping to initiate awareness on the importance of life insurance
through #SecondChance.

Max Lifes Second Chance brings forth true stories of people who have had a close
encounter with death and how it jolts them into realization and not take their lives
for granted. Partnering with creative agency Ogilvy & Mather, Delhi and digital
agency Flying Cursor for this storytelling campaign, the insurance brand has
chosen to leverage the social internet to spread second chance stories of Avani
Bhati, Dr. Raj Anand and Shalabh Goglani, all of whom have had a very close
brush with death.

All the films are housed at the Max Life Second Chance website. Apart from
these short stories, the website also provides information on the Max Life Online
Term Plan and how it can help secure ones family and also about life cover
options available at Max Life.

This is the real story of Avanti Bhati who has had a second chance at life. The
realization of what she meant for her parents and her sister dawns on her to take
action. Protecting her family turned into a priority following which she can now
breathe a sigh of relief.

Dr. Raj Anand is a seasoned marathoner who believed he was immortal. The loving
father and husband was taken aback after surviving an unexpected heart attack. He
shares his miraculous story of a second chance at life with story inputs from his
colleagues and family.

4) SBI Life Insurance #GreatDad

Life insurance companies are gearing up for the tax saving season. Be it television,
radio, newspapers or the social media world, every life insurance brand is going
gung ho about the importance of having your life insured. SBI Life Insurance the
joint venture life insurance company between State Bank of India (SBI), the largest
state-owned banking and financial services company in India, and BNP Paribas
Assurance has taken the dad route to do this.

SBI Life is asking dads Are you a great dad? through its latest campaign called
Great Dad. Conceptualised by Ogilvy and Mather, the campaign has a beautiful
ad film at the center that emphasizes on fatherhood.

In the ad we see an army man back from duty waiting outside his sons school to
receive him. The overjoyed son rushes into his arms on seeing his dad. We see the
two of them spending a lot of time together until the mum steps in to get the son
ready for school.

Like kids begin imitating their parents, this little guy follows his dads every action
including polishing his shoes. Later when the son is about to fall asleep on the sofa,
tired from reading a storybook, the dad gets in just in time to place a cushion
between his head and the sofa. A narrative all throughout the film takes the story
towards its message it talks about how great dads always make sure to be there
for their kids even in their absence.

5) HDFC Life #MyFamilyMyPride

Its the season of life insurance investments. While most working professionals are
on the lookout for ways to save their tax, life insurance companies have been
invading all forms of media in an attempt to woo them. The idea is to leave the
maximum impact while differentiating themselves from the clutter. But, how much
different can one be, when it comes to selling life insurance?

The recently launched, Apno Ko Apne Dum Pe Jeena Sikhao is one campaign by
HDFC Life that makes sure to leave a lasting impact. Powered by a long format 3minute film, it features a heart warming story of a father and his beloved daughter
who dreams of being a dancer. Her prosthetic leg never comes in the way of her
dream, as the encouraging father instills a habit of independence and self pride in
her.

Conceptualised by Leo Burnett and directed by filmmaker Vikramaditya Motwane

with music composed by Hanif Shaikh, the film opens with a little girl being
awakened lovingly by her father and then having breakfast together before fixing

up her artificial leg. We see the two go to a dance class where she insists he put on
the dance anklets for her, while he argues that she should do it. She promises she
would do it the next time.

On the big day when she has a group dance performance on stage, he isnt there to
tie up her dance anklets. While she was accompanied by her grandma, he had
deliberately excused himself with some work. After waiting anxiously for him, she
ties it up herself just before the curtains go up.

The father is actually standing backstage, as her performance goes on. It is only
when the performance ends to a loud applause and the curtains come down, that
she sees her father backstage beaming with pride. The two get into a tight hug, as
the narrative says later, Apne parivaar ko apne dum pe jeena sikhaosar utha ke
jiyo. The hashtag #MyFamilyMyPride is displayed at the end.
Well aligned with the brand proposition, Sar Utha Ke Jiyo, the film has earned
positive appreciation for the brand, including the likes of veteran actor, Anupam
Kher. The actor has called it a great film that portrays the father-daughter
relationship beautifully. Uploaded on HDFC Life YouTube channel, the video has
garnered more than 145K views in 5 days.

Social media was leveraged in a creative manner to build curiosity about the story
of a little girl and how she achieves her dream with a supportive father. HDFC Life
began sharing teaser visuals on its social media pages, prior to releasing the ad
film. Each of the visuals shared on its Facebook and Twitter pages took the story
forward, while creating buzz for the new ad film.

GUIDELINES FROM IRDA FOR

ADVERTISEMENT
The success of sales communication depends on public confidence and the faith
they repose in the insurance companies, when they receive a communication
from them promoting their products. As such the insurers are expected to adopt
honest and fair practices in the market-place and avoid practices that tend to
impair the confidence of the public. As it is very difficult for the public to
understand and evaluate the latent intricacies involved in the various insurance
products, it is of paramount importance that the publicity material is relevant,
fair and transparent enabling informed decision making about whether or not to
buy a specific insurance product. The verbal communication that the prospects
receive from their advisors can be supplemented by the written material that is
made available to them.

These guidelines issued with the above background are intended to protect the
interests of the insuring public, enhance their level of confidence on the nature of
sales material used and ultimately encourage fair business practices. They are to
be considered as the minimum standards to be adhered to, in addition to
compliance with the IRDA (Insurance Advertisements and Disclosure)
Regulations, 2000 (hereinafter referred to as Advertisement Regulations) and
the code of conduct prescribed by the Advertisement Standards Council of India
(ASCI) and any other regulations as applicable. These guidelines reinforce the
extant regulations on all promotional communications with
policyholders/prospective policyholders or targeted market segment with the
objective of soliciting insurance business or otherwise.
2. Categories of Advertisements:
For the purpose of these guidelines an advertisement may be classified into two
types:
2.1 Institutional Advertisements
2.2 Insurance Advertisements