Final

Study Of Compensation Of Employees And Its Associates In MNYL 15119103909

PROJECT REPORT

ON

STUDY OF COMPENSATION OF EMPLOYEES AND ITS ASSOCIATES IN

MAX NEW YORK LIFE INSURANCE

Submitted for Partial Fulfillment for the Award of the Degree of

MASTER OF BUSINESS ADMINISTRATION

(MBA 2009-11)

UNDER THE GUIDANCE OF

Ms. Jyoti Kukreja

Submitted by

REEMA AGRAWAL

ENROLLMENT No: 15119103909

GITARATTAN INTERNATIONAL BUSINESS SCHOOL

(Affiliated to GURU GOBIND SINGH INDRAPRASTHA UNIVERSITY)

ROHINI, NEW DELHI-110085

Gitarattan International Business School 1


CERTIFICATE

This is to certify that the Summer Training Report titled “ Study Of Compensation Of

Employees And Its Associates In Max New York Life Insurance” is an original work

submitted by Reema Agrawal, Enrollment No. 15119103909, MBA III semester student

of Gitarattan International Business School (giBS) for the partial fulfillment of Master of

Business Administration (MBA) program of Guru Gobind Singh Indraprastha University

under the guidance of Ms. Jyoti Kukreja and the same has not been submitted to any

other University or Institute for award of any Degree or Diploma.

Ms. Jyoti Kukreja Dr. S.S. Narula

Asst Professor Director

Project Guide Gitarattan International Business School



DECLARATION

I, Ms. Reema Agrawal Enrollment no 15119103909, MBA III semester hereby declare

that, the project report titled “ Study Of Compensation Of Employees And Its

Associates In Max New York Life Insurance” is an original work done by me under

the guidance of Ms. Jyoti Kukreja and has not been submitted to any other university or

institute for the award of any degree or diploma or fellowship.

Dated:- Ms. Reema Agrawal

Enrollment no:- 15119103909



ACKNOWLEDGEMENT

Project work is never the accomplishment of one individual. Rather it is an amalgamation

of the efforts, ideas and co operation of a number of individuals. It gives me immense

pleasure to take this opportunity to thank all those who helped me in successfully

completing the project.

I express my deep sense of gratitude to Mr. Utsav Khanna (Manager Sales) at Max

New York Life Insurance who spared his precious time and gave me advice whenever I

needed. I am also thankful to all other associated persons who benign attitude made me to

strive for the best. The ambience during the entire training was very professional. I learnt

a lot.

I am extremely thankful to Ms. Jyoti Kukreja, Assistant Professor in MBA department

for her timely guidance, support, advice and co operation during the project. Her

guidance is invaluable in this project; otherwise project would not have been according to

the given format.

I would also like to take this opportunity to thank Dr. S.S. Narula, Director, Gitarattan

International Business School for giving me this opportunity to learn so much from him

and this institute.

Last but not the least I am thankful to all those who have directly or indirectly lent me a

helping hand at the hour of need in completing this project successfully.

Reema Agrawal

Enrollment No: 15119103909



EXECUTIVE SUMMARY

With the entry of private insurance players the indian insurance industry has enrered a

new growth orbit and has seen an exponential growth since the year 2000. The highly

competitive scenario has compelled employers and managers to minimise wastages and

improve efficiency. The collective efforts of the employer, managers and other relative

people assume relevance in this context. And this is where marketing management and

human resources play an important role.

I have made an attempt to study this aspect of Insurance industry in my project. In this

project, compensation for developing channel at Max New York Life is considered. I

have tried to find out how exactly compensation is very important for this firm as well as

this industry, which are the different strategies firm use to compensate quality people and

so on. It is more qualitative rather than a quantitative data.

To get knowledge and to fulfill the requirements for my project on “ Study Of

Compensation Of Employees And Its Associates In Max New York Life Insurance”, I

have worked in MNYL.



CHAPTER 1

INTRODUCTION



INTRODUCTION

Insurance may be described as a social device to reduce or eliminate risks of loss to life

and property. It is a provision which a prudent man makes against inevitable

contingencies, loss or misfortune. Under the plan of insurance, a large number of people

associate themselves by sharing risks attached to individuals. The risks, which can be

insured against, include fire, the perils of sea, death and accidents and burglary. Any risk

contingent upon these, may be insured against at a premium commensurate with the risk

involved. Thus collective bearing of risk is insurance.

Once Frank H. Knight said ”Risk is uncertainty and uncertainty is one of the fundamental

facts of life.” Insurance is the modern method by which men make the uncertain, certain

and the unequal, equal. It is the means by which success is almost guaranteed. Through

its operation, the strong contribute to the support of the weak and weak secure, not by

favour sent by right duly purchased and paid for, the support of the strong (Calvin

Coolidge)

Insurance is a contract whereby, in return for the payment of premium by the insured, the

insurers pay the financial losses suffered by the insured as a result of the occurrence of

unforeseen events. The term "risk" is used to describe the possibility of adverse results

flowing from any occurrence or the accidental happenings, which produce a monetary

loss.



Characteristics of insurance

Sharing of risks

Cooperative device

Evaluation of risk

Payment on happening of a special event

The amount of payment depends on the nature of losses incurred.

The success of insurance business depends on the large number of people

insured against similar risk.

Insurance is a plan, which spreads the risk and losses of few people among a

large number of people.

The insurance is a plan in which the insured transfers his risk on the insurer.

Insurance is a legal contract which is based upon certain principles of insurance

which includes, utmost good faith, insurable interest, contribution, indemnity

causes proxima, subrogation, etc.

The scope of insurance is much wider and extensive.

Functions of insurance:

Primary functions:

1. Provide protection:- Insurance cannot check the happening of the risk, but can provide

for the losses of risk.

2. Collective bearing of risk: - Insurance is a device to share the financial losses of few

among many others.

3. Assessment of risk: - Insurance determines the probable volume of risk by evaluating

various factors that give rise to risk.



4. Provide certainty: - Insurance is a device, which helps to change from uncertainty to

certainty.

Secondary functions:

1. Prevention of losses: - Insurance cautions businessman and individuals to adopt

suitable device to prevent unfortunate consequences of risk by observing safety

instructions.

2. Small capital to cover large risks: - Insurance relives the businessman from security

investment, by paying small amount of insurance against larger risks and uncertainty.

3. Contributes towards development of larger industries.

Other Function:

Means of savings and investment:

Insurance companies are business houses. The product they sell is financial protection.

To succeed and survive, they must cover their costs, which include payments to cover the

losses of policyholders, as well as sales and administrative expenses, taxes and dividends.

Insurance companies have two sources of income for covering these costs:

premiums and investment income.

The premiums are collected on a regular basis and invested in Government Bonds, Gilt,

stocks, mutual funds, real estates and other conservative avenues.

However, investment income depends on market conditions, interest rates, economy etc.

and varies from year to year.

Because of the uncertainty associated with the investment income, insurance companies

must generate enough income from premiums to cover the bulk of their expenses.



Fundamentals of Insurance

The fundamental Principles of the Insurance are as follows:

Principle of cooperation: Insurance is a business based on the principle of

cooperation. It is a voluntary device to share the risks and uncertainties

collectively.

Insurance is based on the ideology of common interest and welfare. Cooperation

is based on the cooperative principle, “one for all, and all for one.” Really

speaking the origin and development of insurance are based on cooperation.

Principle of probability: This principle is the important determinant of insurance

premium. Insurance is a contract to bear the risk against consideration, i.e.

premium. Premium is the value of insurance and an important factor of insurance

cost. The rate of premium depends on the quantum of risk and probability of risk.

The rate of premium will be more where the quantum of risk and its probability

are more.

Principle of Insurable Interest: The assured must have an actual interest in the

subject matters of insurance, either in full or in part. Any person may be said to

have an interest in the subject matter of insurance who may be injured by the risks

to which the subject-matter is exposed.

Principle of Utmost Good Faith: Utmost good faith refers that the parties to the

contract are legally bound to reveal to each other all information about the subject

matter which would influence each other’s decision. If this principle is not

observed by either party, the contract may be avoided by the other.



Principles of Warranties : According to Section 35 of Marine Insurance Act,

1963, “A warranty means a promissory warranty by which the assured undertakes

that some particular thing shall or shall not be done or that some conditions shall

be fulfilled or whereby he affirms or negatives the existence of a particular state

of facts.”

A warranty may be express or implied.

An express warranty is a condition which is set forth in the policy or attached

there. An implied warranty is an essential condition implied by law, though not

written in the policy. Strict compliance with these warranties is absolutely

essential.

Principles of Indemnity: This principle is applied to all other contracts of

insurance except life insurance, personal accident and sickness insurance. This

principle is specially applied to fire, marine, burglary or any other policy of

indemnity. Under the indemnity contract, the insurer undertakes to ”indemnity”

the insured against loss suffered by the insurer. Literally, indemnity means, “make

good the loss.”

Principle of Subrogation: Subrogation is the substitution of one person in place

of another in relation to a claim, its rights, remedies or securities. This principle is

applicable to both fire and marine insurance. Having satisfied the claim of the

assured, the insurer stands in his place, and subrogated to all the rights of the

insured.

Principle of Contribution: This principle is applicable in all types of insurance

contracts, except life insurance. Where an insurer gets the subject matter insured

with more than one insurer, and in case of loss/damage to the insured property, all



of them shall be called upon to contribute towards the claim in proportion to the

sum assured with each.

Principle of Cause Proxima/Proximate Cause: The cause due to which the

subject matter of insurance suffer losses may be classified into two parts: (1)

Insured perils and (2) Excluded perils. The insured perils are those for the

protection of which, the subject matter is insured and in case of any event

happening during the period of insurance gives loss to the subject matter, the

insurer can be made liable for it.

The perils that fall outside insured perils are called excluded perils.

The insurer cannot be made liable for any type of loss that happens due to other

causes.

Principle of Mitigation of Loss: The principle of mitigation of loss places a duty

on the part of insured to make every effort, and to take all such steps, as a man of

ordinary prudence to mitigate or minimize the loss in the event of some mishap to

the insured properly. Literally this term refers to make less severe or painful.



COMPANY PROFILE

OVERVIEW OF MAX NEW YORK LIFE:-

Max New York Life Insurance Company Ltd. is a joint venture between Max India

Limited, one of India's leading multi-business corporations and New York Life

International, the international arm of New York Life, a Fortune 100 company. The

company has positioned itself on the quality platform. In line with its vision to be the

most admired life insurance company in India, it has developed a strong corporate

governance model based on the core values of excellence, honesty, knowledge, caring,

integrity and teamwork.

Incorporated in 2000, Max New York Life started commercial operation in April 2001.

In line with its values of financial responsibility, Max New York Life has adopted

prudent financial practices to ensure safety of policyholder's funds. The Company's paid

up capital as on 30th May, 2009 is Rs 1,968 crore.

Max New York Life has multi-channel distribution spread across the country. Agency

distribution is the primary channel complemented by partnership distribution,

bancassurance, alliance marketing and dedicated distribution for emerging markets. The

Company places a lot of emphasis on its selection process for agent advisors, which

comprises four stages - screening, psychometric test, career seminar and final interview.

The agent advisors are trained in-house to ensure optimal control on quality of training.

The company currently has around 70,152 agent advisors at 676 offices across 389 cities.

The company also has 36 referral tie-ups with banks, 24 partnership distribution and

alliance marketing relationships each. Max New York Life has put in place a unique hub

and spoke model of distribution to deepen our rural penetration. This is the first time such

a model has been put in place for rural marketing of insurance. The company has 139



offices dedicated to rural areas.

Max New York Life offers a suite of flexible products. It now has 25 products covering

both life and health insurance and 9 riders that can be customized to over 800

combinations enabling customers to choose the policy that best fits their need. Besides

this, the company offers 6 products and 7 riders in group insurance business.

The company currently has more than 11,380 employees.

AWARDS AND ACHIEVEMENTS

Some of the Industry Firsts:-

a) First company to provide Freelook period of 15 days to the customer. This was

later made mandatory by the regulator

b) First company to start toll free line for agent services

c) First and the only life insurance company in India to implement Lean

methodology of service excellence in service industry

d) First life insurance company in India to provide various services to the agents and

customers over phone

e) First Indian life insurance company to start service center at the regional level

f) First life insurance company in India to receive ISO 9001:2000 certification

g) First life insurance company to be awarded CII-EXIM Bank commendation

certificate for “Strong Commitment to Excel”.



Awards:-

a) Outlook Money survey ranked MNYL No.1 in Slow, Medium and Quick fund

categories

b) BT Mercer – Ranked No7 in the “Best companies to Work For”

c) Awarded the Gallup Great Work Place Award 2009

d) CII – Exim Bank Commendation Certificate for Business Excellence – 2008 &

2009

e) Received ‘Best Six Sigma Project’ award at 6th CII National Six Sigma

conventions – 2009.

f) Recognized as a Superbrand

g) Recipient of 2008 CIO 100 Award for technology implementation

h) Golden Peacock Award for Innovation – 2008

i) Among the top 25 companies to work for in India, according to Businessworld

2003 ‘Great Workplaces of India’

j) Among the top five most respected insurance companies in India as per

Businessworld 2004 & 2006 survey

k) Won Indo-American Corporate Excellence Award for Best Indo-US company in

Financial Services Category in 2006

l) Received ‘Best Six Sigma Project’ award at Sakal Six Sigma Excellence Awards

– 2006

m) Among top 3 in Asia Life Insurance Company of the Year Award 2007 instituted

by Asia Insurance Review

n) Received the Amity Corporate Excellence Award – 2007

o) Received the ‘Outlook Money Award’ for being “among the best new insurers in

the country”.

p) Max New York Life bags the Asia Insurance Industry ‘Innovation of the Year’

Award 2009.



PROMOTERS OF MAX NEW YORK LIFE:-

Max New York Life Insurance Company Ltd. is a joint venture between New York Life,

a Fortune 100 company and Max India Limited, one of India's leading multi-business

corporations. Since its inception in 2000, the organization has progressed and positioned

itself on the quality platform. In line with its vision to be the most admired life insurance

company in India, it has developed a strong corporate governance model based on the

core values of excellence, honesty, knowledge, caring, integrity and teamwork. The

strategy is to establish itself as a trusted life insurance service provider through a quality

approach to business.

Max India Limited:-

Max India Limited is a multi-business corporate, driven by the spirit of enterprise and

focused on people and service oriented businesses. The Company’s vision is to be one of

India’s most admired corporates for Service Excellence.

It ‘Protects Life’ through its Life Insurance subsidiary Max New York Life, a joint

venture between Max India and New York Life, a Fortune 100 company; ‘Cares for Life’

through its Healthcare company, Max Healthcare, a subsidiary of Max India Limited;

‘Enhances Life’ through its Health Insurance company, Max Bupa Health Insurance, a

joint venture between Max India and Bupa Finance Plc., UK which is set to launch after

statutory approvals; and ‘Improves Life’ through its Clinical Research business, Max

Neeman, a fully owned subsidiary of Max India. From its past, Max India continues its

interest in manufacture of Speciality Products for the packaging industry.

Max India Group’s consolidated turnover for half year ended Sept 09 was Rs. 4166 crore.

The consolidated operating revenue was Rs. 2543 Crore, a growth of 23% over the same

period last year. The Group is on a high growth path, with over 700 offices across around



400 locations in the Country and with people strength of 100,000+ persons as on 30 th

Sept 2009.

Key Subsidiaries:-

Max Healthcare is the country's first comprehensive provider of standardized, seamless

and world-class healthcare services. It is committed to the highest standards of medical

and service excellence, patient care, scientific and medical education. MHC operates

eight centers in Delhi & NCR, offering services in over 30 medical disciplines. MHC has

state of the art tertiary care facilities at Saket in South Delhi, secondary care hospitals at

Pitampura, Patparganj, Gurgaon and Noida and an out patient facility, the Max

Medcentre and a Speciality centre focused on Eye and Dental care at Panchsheel Park.

The tertiary care hospitals at Saket include Max Devki Devi Heart & Vascular Institute, a

Centre of Excellence in cardiac services and the Max Super Speciality Hospital, a super

speciality facility in Orthopaedics & Joint Replacement, Neurosciences, Paediatrics,

Obstetrics & Gynaecology, Aesthetic & Reconstructive Plastic Surgery and Internal

Medicine. In addition, it has an Institute of Allied Medical Services where it provides

General and Laparoscopic surgery, Urology, Eye & ENT, Nephrology, Dermatology,

Department of Mental Health & Behavioural Sciences amongst others. MHC has

collaboration with Singapore General Hospital in the areas of medical practices, nursing,

paramedical, research and training.

Max Bupa Health Insurance Limited is a joint venture between Max India Limited, a

$1.5 billion multi-business corporate in the business of life and the Bupa Group, a leading

international healthcare company with a legacy of providing specialized healthcare

services for over 60 years. The company’s vision is to become the most admired health

insurance company in India with ‘customer first’ culture as the key.

With a mission to help families’ live healthier, more successful lives and be a healthcare

partner providing expertise for life, Max Bupa aims to deliver high quality health

insurance and ensure consistent customer experience.



Max Neeman Medical International is a Clinical Research services provider offering

services across the value chain of new drug development to a growing list of

Pharmaceutical, Biotech and Clinical Research clients, in India and abroad. MNMI

continues to focus on developing alliances with mid sized pharma and biotech companies

to transition their drug development work to India. It has an employee base of 200 and

five Regional offices in India & one business development office in USA.

Max Speciality Products specializes in manufacturing of wide range of sophisticated

barrier and packaging films. The BOPP division of MSP has an installed capacity of

29,000 tons per annum. MSP’s leather finishing foil business division manufactures a

range of leather finishing and laminating foils.

New York Life LLC:-

New York Life Insurance company, a Fortune 100 company founded in 1845, is the

largest mutual life insurance company in the United States and one of the largest life

insurers in the world. Headquartered in New York City, New York Life’s family of

companies offer life insurance, annuities and long-term care insurance. New York Life

Investment Management LLC provides institutional asset management and retirement

plan services. Other New York Life affiliates provide an array of securities products and

services, as well as institutional and retail mutual funds.

The mission of New York Life is to maintain its superior 'financial strength', adhere to

the highest standards of 'integrity' and demonstrate 'humanity' by treating its customers,

agents and employees with compassion, consideration and respect.

New York Life is one of the largest and strongest life insurance companies in the world

with more than USD$215 billion assets under management and has received among the

highest ratings for financial strength from the life insurance industry's principal rating

agencies: A.M. Best (AA+), Standard & Poor's (AA+), Moody's (Aa1), Fitch (AAA).



As a leader in the insurance industry, New York Life continues to bring to its operations

new management concepts, advanced technologies, new distribution and training systems

and innovative insurance products.

PRODUCT PORTFOLIO OF MAX NEW YORK LIFE:-

The different products offered by Max New York Life are:-

1. Protection Plan

The primary earning member needs to make sure that his family is never lacking in

anything even if he is taken away from them forever.. In double income families, both

spouses should get adequate life covers especially if there are dependent children

involved. There are plans that guarantee maximum protection at a low cost. These are:-

Five Yr Renewable and Convertible

Whole Life Participating

20 year Endowment (Par)

Endowment to Age 60 (Par)

Life Gain Plus 20 (Par)

Level Term Policy

Life Gain Plus 25 (Par)

Life Pay Money Back

Life Gain Endowment

Life Partner Plus

2. Children Plan


http://www.maxnewyorklife.com/individual/5yrrenewable.aspx

http://www.maxnewyorklife.com/individual/lifepartnerplus.aspx

http://www.maxnewyorklife.com/individual/lifegainendowment.aspx

http://www.maxnewyorklife.com/individual/lifepaymoneyback.aspx

http://www.maxnewyorklife.com/individual/lifegainplus25participating.aspx

http://www.maxnewyorklife.com/individual/leveltermpolicy.aspx

http://www.maxnewyorklife.com/individual/lifegainplus20participating.aspx

http://www.maxnewyorklife.com/individual/endowment60plan.aspx

http://www.maxnewyorklife.com/individual/endowmentplan.aspx

http://www.maxnewyorklife.com/individual/wholelifeparticipating.aspx


Many children are keen to pursue unconventional careers. Are parents in tune with

their aspirations and passions? Parents would never let money come in the way of

their children and the fulfillment of their true potential. There are plans will help

build the corpus that allows your children to dream big and soar high. These are:-

Children's Endowment to 18 (Par)

SMART Steps

SMART Steps Single Premium

Children's Endowment to 24 (Par)

SMART Steps Plus

3. Investment Plan

The Investment Plans offers the dual benefit of protection and market-linked returns

with the flexibility to choose the premium and determine the market exposure.

These are:-

Life Maker Premium

Life Maker Platinum

SMART Assure

Life Maker Gold

Max New York Life SMART Xpress

4. Retirement Plans

A person never misses his salary cheque or be constrained by rising inflation. Even

as he works hard to make a better today, it is up to him to create a superior


http://www.maxnewyorklife.com/individual/Smartxpress.aspx

http://www.maxnewyorklife.com/individual/lifemakergold.aspx

http://www.maxnewyorklife.com/individual/Smart_Assure.aspx

http://www.maxnewyorklife.com/individual/lifemakerplatinum.aspx

http://www.maxnewyorklife.com/individual/lifemakerpremium.aspx

http://www.maxnewyorklife.com/individual/smartstepsplus.aspx

http://www.maxnewyorklife.com/individual/smartstepsplussinglepremium.aspx

http://www.maxnewyorklife.com/individual/smartsteps.aspx

http://www.maxnewyorklife.com/individual/childrensendowment.aspx


tomorrow. If one wants to sustain his current lifestyle even after he stops working,

he should make that money works for him. The retirement Plans will keep one

comfortable and content, and let him live the life he deserves. These are:-

Easy Life Retirement (Par)

SMART Invest Pension

5. Health Plans

The health of every member of the family is precious and one needs to safeguard it

as a priority. The Health Plans make every family stays fit and fine. These are:-

LifeLine MediCash

LifeLine MediCash Plus

LifeLine Wellness

LifeLine Wellness Plus

LifeLine Safety Net

Max New York Life LifeLine Healthy Family

6. Group Plans

People are the most valuable asset of any organization. Organizations have to

innovate newer forms of compensation to retain talented employees. Pay and perks

are all very fine but an organization needs to show employees that it cares. Ensuring

the financial well being of employees and their families will earn an organization

their enduring trust and loyalty. The Group Plans offer a three-in-one advantage, as


http://www.maxnewyorklife.com/individual/lifelinehealthyfamily.aspx

http://www.maxnewyorklife.com/individual/lifelinesafetyplan.aspx

http://www.maxnewyorklife.com/individual/lifelinewellnessplus.aspx

http://www.maxnewyorklife.com/individual/lifelinewellness.aspx

http://www.maxnewyorklife.com/individual/lifeLinemedicashPlus.aspx

http://www.maxnewyorklife.com/individual/lifelinemedicash.aspx

http://www.maxnewyorklife.com/individual/smartInvestpension.aspx

http://www.maxnewyorklife.com/individual/EasyLifeRetirement.aspx


they are a powerful tool for motivation, reward and retention, in these times of high

attrition. These are:-

Group Credit Life

Group Gratuity cum Term Assurance

Unit Linked Group Superannuation Plan

Group Term Life

Unit Linked Group Gratuity Plan

Max Super Life

Employee Deposit Linked Insurance

Emerging Market Plans

The company is conscious of its social responsibility to serve the financially vulnerable

sections of society. It has created specialized Emerging Market Plans to meet the

particular needs of customers in rural areas. The ticket size has been kept low, the

premiums are affordable and the procedures are simple. Customers in rural areas can now

find a plan to meet their unique requirements - EASY TERM POLICY


http://www.maxnewyorklife.com/Corporate/Employee_Depoit_Linked_Insurance.aspx

http://www.maxnewyorklife.com/Corporate/MaxSuperLife.aspx

http://www.maxnewyorklife.com/Corporate/unit_linked_group_gratuity.aspx

http://www.maxnewyorklife.com/Corporate/life_shield.aspx

http://www.maxnewyorklife.com/Corporate/unit_linked_group_superannuation.aspx

http://www.maxnewyorklife.com/Corporate/group_gratuity_cum_term.aspx

http://www.maxnewyorklife.com/Corporate/group_credit_life.aspx


MANAGEMENT AT MAX NEW YORK LIFE:-

An experienced and talented team of leaders manages the strategic direction of the

company. The company has Board of Directors and Management Team as well.

Mr. Analjit Singh is the Founder and Executive Chairman of the Max India Group.

He has been the driving force behind the Max Group's sustained growth and success

since Mid 80's.

Mr. Anuroop Singh was appointed as a Chief Executive Officer and Managing

Director of the company with effect from February 23, 2001 till December 31, 2004. He

is also an independent Director on the Board of other corporate entities including

philanthropies.

Mr. Rajesh Sud was appointed CEO and Managing Director with effect from

November 1, 2008 of Max New York Life Insurance.

Mr. Rajit Mehta is the Executive Director and Chief Operating Officer of Max New

York Life, a leading private life insurance company in India . He is a member of the

Board of Directors of the Company and coordinator of the HR and Compensation

Committee of the Board as well.

Mr. William Beaty is the Vice Chairman of New York Life International, LLC and the

Chief Executive Officer of Latin America.

Mr. Richard (Dick) L. Mucci was appointed director of the company with effect from

September 29, 2008.



Dr. Omkar Goswami was appointed director of the company with effect from

December 3, 2008. Dr. Goswami is the Founder and Chairman of CERG Advisory

Private Limited, a corporate and economic research company.

Mr. Leo Puri was appointed director of MNYL with effect from December 11, 2009.

Mr. Sunil Kakar is in charge of finance, accounts and investment management.

Mr. John Poole is the Chief Actuary at Max New York Life Insurance and is also the

Appointed Actuary for the Company in terms of Indian insurance Regulations.

Mr. Prashant Tripathy looks after the strategic initiatives of the company and works

closely with cross functional teams for business development.

INDUSTRY PROFILE

Origin of Life Insurance

Life Assurance was born in England when the first policy providing temporary cover for

a period of 12 months was issued as easy as 1583 A.D. The Amicable Society started

granting fluctuating sum on death since 1705 and a fix sum since 1757, With the

development of mortality tables, the life Assurance acquired a scientific character. The

Equitable Society founded in 1762 was the first Society established on scientific basis.

ORIGIN OF LIFE INSURANCE IN INDIA

In India, after failure of two British companies, the European and the Albert in 1870,

which attempted writing business on Indian lives, first Indian Life Assurance Society was

formed in the same year called Bombay Mutual Assurance Society Ltd. It was followed

by the Oriental Life Assurance Company Limited in 1874, Bharat in 1896 and Empire of

India in 1897. The Idea of insurance was born out of a desire of the people to share loss

of an individual by many. Originally it restricted to forms other than life assurance. It

started with Marine Insurance, where the losses on account of perils of sea were shared



by all who were engaged in trade. Reference to some forms of insurance, is found in the

codes of Hammurabi, Manu (Manav Dharma Shastra). The word `Yogakshema’ is used

in the Rig Veda suggesting that some form of community insurance was practiced by the

Aryans in India over 3000 years ago. In India during Buddhist period burial societies

existed which were mutual in their character and used to help a family by building a

house, protecting the widow, marrying the girls.

The Swadeshi Movement of 1905 provided impetus to the formation of several

companies such as the `Hindustan Cooperative’, the `United India’, the `Bombay Life’,

the `National’. Further in the wake of freedom movement number of companies such as

the `New India’, the `Jupiter’ the `Lakshmi’ emerged.

The Government began to exercise a certain measure of control on Insurance business by

passing the `Insurance Act’ in 1912. For controlling investment of funds, expenditure and

management, a comprehensive Act was passed known as `The Insurance Act 1938’. For

controlling the affairs, the office of Controller of Insurance was established. The act was

extensively amended in 1950.

In the year 1955, approximately 170 Insurance Offices and 80 Provident Fund

Societies had been registered for transacting Life Assurance business in India.

There were, however, no full guarantees to the policyholders. The concept of

trusteeship was lacking. Many insurance companies went into liquidation. There

were malpractices in insurance business. For achieving the following purposes it

was felt necessary to nationalize the insurance business in India.

(i) To utilize the funds for nation-building activities.

(ii) To avoid cut throat competition

(iii) To abolish mal-practices

(iv) To spread the insurance message to the rural areas.

INSURANCE TODAY



With a huge population base and large untapped market, insurance industry is a big

opportunity area in India for national as well as foreign investors. India is the fifth largest

life insurance market in the emerging insurance economies globally and is growing at 32-

34% annually. This impressive growth in the market has been driven by liberalization,

with new players significantly enhancing product awareness and promoting consumer

education and information. The strong growth potential of the country has also made

international players to look at the Indian insurance market. Moreover, saturation of

insurance markets in many developed economies has made the Indian market more

attractive for international insurance players, according to 'Booming Insurance Market in

India (2008-2011)”.

This research report will help the client to analyze the leading-edge opportunities critical

to the success of insurance industry in India. Based on this analysis, the report gives a

future forecast of the market that is intended as a rough guide to the direction in which

the market is likely to move.

Research Findings:

Total life insurance premium in India is projected to grow Rs 1,230,000 Crore by

2010-11.

Total non-life insurance premium is expected to increase at a CAGR of 25% for

the period spanning from 2008-09 to 2010-11.

With the entry of several low-cost airlines, along with fleet expansion by existing

ones and increasing corporate aircraft ownership, the Indian aviation insurance

market is all set to boom in a big way in coming years.

Home insurance segment is set to achieve a 100% growth as financial institutions

have made home insurance obligatory for housing loan approvals.

Health insurance is poised to become the second largest business for non-life

insurers after motor insurance in next three years.

A booming life insurance market has propelled the Indian life insurance agents

into the ‘top 10 country list’ in terms of membership to the Million Dollar Round



Table (MDRT) -an exclusive club for the highest performing life insurance

agents.

IRDA

As per the section 4 of IRDA Act' 1999, Insurance Regulatory and Development

Authority (IRDA, which was constituted by an act of parliament) specify the composition

of Authority.

The Authority is a ten member team consisting of :

(a) a Chairman;

(b) five whole-time members;

(c) four part-time members,

(all appointed by the Government of India)

DUTIES, POWERS AND FUNCTIONS OF IRDA

Section 14 of IRDA Act, 1999 lays down the duties, powers and functions of IRDA:-

(1) Subject to the provisions of this Act and any other law for the time being in

force, the Authority shall have the duty to regulate, promote and ensure

orderly growth of the insurance business and re-insurance business.



(2) Without prejudice to the generality of the provisions contained in sub-section (1), the

powers and functions of the Authority shall include –

(a) issue to the applicant a certificate of registration, renew, modify, withdraw,

suspend or cancel such registration;

(b) protection of the interests of the policy holders in matters concerning

assigning of policy, nomination by policy holders, insurable interest,

settlement of insurance claim, surrendervalue of policy and other terms and

conditions of contracts of insurance;

(c) Specifying requisite qualifications, code of conduct and practical training

for intermediary or insurance intermediaries and agents;

(d) Specifying the code of conduct for surveyors and loss assessors;

(e) Promoting efficiency in the conduct of insurance business;

(f) Promoting and regulating professional organizations connected with the

insurance and re-insurance business;

(g) Levying fees and other charges for carrying out the purposes of this Act;

(h) calling for information from, undertaking inspection of conducting

enquiries and investigations including audit of the insurers, intermediaries,

insurance intermediaries and other organizations connected with the

insurance business;

(i)control and regulation of the rates, advantages, terms and conditions that

may be offered by insurers in respect of general insurance business not so

controlled and regulated by the Tariff Advisory Committee under section

64U of the Insurance Act, 1938 (4 of 1938);



(j) Specifying the form and manner in which books of account shall be

maintained and statement of accounts shall be rendered by insurers and

other insurance intermediaries;

(k) Regulating investment of funds by insurance companies;

(l) Regulating maintenance of margin of solvency;

(m) Adjudication of disputes between insurers and intermediaries or insurance

intermediaries;

(n) Supervising the functioning of the Tariff Advisory Committee;

(o) specifying the percentage of premium income of the insurer to finance

schemes for promoting and regulating professional organizations referred

to in clause (f);

(p) Specifying the percentage of life insurance business and general insurance

business to be undertaken by the insurer in the rural or social sector; and

(q) Exercising such other powers as may be prescribed.



PLAYERS IN INDIAN INSURANCE INDUSTRY

Insurers

Insurance industry, as on 1.4.2000, comprised mainly two players:-

Life Insurers:

Life Insurance Corporation of India (LIC)

General Insurers:

General Insurance Corporation of India (GIC) (with effect from Dec'2000, a National

Reinsurer)

GIC had four subsidary companies, namely ( with effect from Dec'2000, these

subsidaries have been de-linked from the parent company and made as independent

insurance companies.

The Oriental Insurance Company Limited

The New India Assurance Company Limited

National Insurance Company Limited

United India Insurance Company Limited.


http://www.uiic.co.in/

http://www.nationalinsuranceindia.com/

http://www.newindia.co.in/

http://www.orientalinsurance.nic.in/

http://gicofindia.in/

http://www.licindia.com/


Yr:2004-2005:

Insurance Industry in this year, so far has 1new entrants; namely

Life Insurers:

S.No. Registratio

n

Number

Date of

Reg.

Name of the Company

1 128 17.11.200

5

Shriram Life Insurance Company

Ltd.

Yr:2006-2007 :

Insurance Industry in this year, had 1new entrants; namely

Life Insurers:

S.No

.

Registratio

n

Number

Date of

Reg.

Name of the Company

1 130 14.07.200

6

Bharti AXA Life Insurance Company

Ltd.

Yr: 2007-2008 :

Insurance Industry in this year, had 5 new entrants; namely

Life Insurers:

S.N

o.

Registrat

ion

Date of

Reg.

Name of the Company


http://www.bharti-axalife.com/

http://www.bharti-axalife.com/

http://www.shriramlife.com/

http://www.shriramlife.com/


Number

1 133 04.09.2

007

Future Generali India Life Insurance

Company Limited

2 135 19.12.2

007

IDBI Federal Life Insurance Company

Ltd.

General Insurers:

3 131 03-08-

2007

Apollo Munich Health I nsurance

Company Limited

4 132 04-09-

2007

Future Generali India Insurance Company

Limited

5 134 16-11-

2007

Universal Sompo General Insurance

Company Ltd.

Yr: 2008-2009 :

Insurance Industry in this year, so far has 3 new entrants in Life and 1 new entry in

General ; namely

Life Insurers:

S.

No

.

Registr

ation

Numbe

r

Date

of

Reg.

Name of the Company

1 136 08.05.

2008

Canara HSBC Oriental Bank of Commerce

Life Insurance Company Ltd.

2 138 27.06. Aegon Religare Life Insurance Company Ltd.


http://www.aegonreligare.com/

http://www.canarahsbclife.com/

http://www.canarahsbclife.com/

http://www.universalsompo.com/

http://www.universalsompo.com/

http://www.irdaindia.org/www.fg-general.in

http://www.irdaindia.org/www.fg-general.in

http://www.apollodkv.co.in/




http://www.idbifortis.com/

http://www.idbifortis.com/

http://www.irdaindia.org/www.fg-life.in

http://www.irdaindia.org/www.fg-life.in


2008

3 140 27.06.

2008

DLF Pramerica Life Insurance Company Ltd.

4 142 Star Union Dai-ichi Life Insurance Co. Ltd.,

5 143 05.11.

2009

IndiaFirst Life Insurance Company Ltd.

General Insurers:

S.N

o.

Registrati

on

Number

Date of

Reg.

Name of the Company

1 137 8.05.200

8

Shriram General Insurance Company

Limited,

2 139 27.06.20

08

Bharti Axa General Insurance Company

Ltd.

3 141 15.12.20

08

Raheja QBE General Insurance Co. Ltd


http://www.irdaindia.org/www.bharti-axagi.co.in

http://www.irdaindia.org/www.bharti-axagi.co.in

http://www.shriramgi.com/

http://www.shriramgi.com/

http://www.dlfpramericalife.com/


REVIEW OF LITERATURE

Human Resource is the most vital resource for any organization. It is responsible for each

and every decision taken, each and every work done and each and every result.

Employees should be managed properly and motivated by providing best remuneration

and compensation as per the industry standards. The lucrative compensation will also

serve the need for attracting and retaining the best employees.

COMPENSATION:



Compensation is the remuneration received by an employee in return for his/her

contribution to the organization. It is an organized practice that involves balancing the

work-employee relation by providing monetary and non-monetary benefits to employees.

Compensation is an integral part of human resource management which helps in

motivating the employees and improving organizational effectiveness.

Evolution Of Compensation:

Today’s compensation systems have come from a long way. With the changing

organizational structures workers’ need and compensation systems have also been

changing. From the bureaucratic organizations to the participative organizations,

employees have started asking for their rights and appropriate compensations. The higher

education standards and higher skills required for the jobs have made the organizations

provide competitive compensations to their employees.

Compensation strategy is derived from the business strategy. The business goals and

objectives are aligned with the HR strategies. Then the compensation committee or the

concerned authority formulates the compensation strategy. It depends on both internal

and external factors as well as the life cycle of an organization.

Evolution of Strategic Compensation



Traditional Compensation Systems

In the traditional organizational structures, employees were expected to work hard and

obey the bosses’ orders. In return they were provided with job security, salary increments

and promotions annually. The salary was determined on the basis of the job work and the

years of experience the employee is holding. Some of the organizations provided for

retirement benefits such as, pension plans, for the employees. It was assumed that

humans work for money, there was no space for other psychological and social needs of

workers.

Change in Compensation Systems

With the behavioral science theories and evolution of labour and trade unions, employees

started asking for their rights. Maslow brought in the need hierarchy for the rights of the

employees. He stated that employees do not work only for money but there are other

needs too which they want to satisfy from there job, i.e. social needs, psychological

needs, safety needs, self-actualization, etc. Now the employees were being treated as

human resource.

Their performance was being measured and appraised based on the organizational and

individual performance. Competition among employees existed. Employees were

expected to work hard to have the job security. The compensation system was designed

on the basis of job work and related proficiency of the employee.



Maslow’s Need Hierarchy

Today’s Modern Compensation Systems

Today the compensation systems are designed aligned to the business goals and

strategies. The employees are expected to work and take their own decisions. Authority is

being delegated. Employees feel secured and valued in the organization. Organizations

offer monetary and non-monetary benefits to attract and retain the best talents in the

competitive environment. Some of the benefits are special allowances like mobile,

company’s vehicle; House rent allowances; statutory leaves, etc.

Importance Of Compensation:

Compensation and Reward system plays vital role in a business organization. Since,

among four Ms, i.e. Men, Material, Machine and Money, Men has been most important

factor, it is impossible to imagine a business process without Men. Every factor

contributes to the process of production/business. It expects return from the business

process such as rent is the return expected by the landlord, capitalist expects interest and

organizer i.e. entrepreneur expects profits. Similarly the labour expects wages from the

process.



Labour plays vital role in bringing about the process of production/business in motion.

The other factors being human, has expectations, emotions, ambitions and egos.

Labour therefore expects to have fair share in the business/production process. Therefore

a fair compensation system is a must for every business organization. The fair

compensation system will help in the following:

a) An ideal compensation system will have positive impact on the efficiency and

results produced by employees. It will encourage the employees to perform better

and achieve the standards fixed.

b) It will enhance the process of job evaluation. It will also help in setting up an

ideal job evaluation and the set standards would be more realistic and achievable.

c) Such a system should be well defined and uniform. It will be apply to all the

levels of the organization as a general system.

d) The system should be simple and flexible so that every employee would be able to

compute his own compensation receivable.

e) It should be easy to implement.

f) It will raise the morale, efficiency and cooperation among the workers. It, being

just and fair would provide satisfaction to the workers.

g) Such system would help management in complying with the various labor acts.

h) Such system should also solve disputes between the employee union and

management.

i) The system should follow the management principle of equal pay.

j) It should motivate and encouragement those who perform better and should

provide opportunities for those who wish to excel.

k) Sound Compensation/Reward System brings peace in the relationship of

employer and employees.

l) It aims at creating a healthy competition among them and encourages employees

to work hard and efficiently.



m) The system provides growth and advancement opportunities to the deserving

employees.

n) The perfect compensation system provides platform for happy and satisfied

workforce. This minimizes the labour turnover. The organization enjoys the

stability.

o) The organization is able to retain the best talent by providing them adequate

compensation thereby stopping them from switching over to another job.

p) The business organization can think of expansion and growth if it has the support

of skillful, talented and happy workforce.

q) The sound compensation system is hallmark of organization’s success and

prosperity. The success and stability of organization is measured with pay-

package it provides to its employees.

Components of Compensation System



Compensation systems are designed keeping in minds the strategic goals and business

objectives. Compensation system is designed on the basis of certain factors after

analyzing the job work and responsibilities. Components of a compensation system are as

follows:

Job analysis:

Job analysis is a systematic approach to defining the job role, description, requirements,

responsibilities, evaluation, etc. It helps in finding out required level of education, skills,

knowledge, training, etc for the job position. It also depicts the job worth i.e. measurable

effectiveness of the job and contribution of job to the organization. Thus, it effectively

contributes to setting up the compensation package for the job position.

Pay-Structures:



Once job analysis has been done organizations need to decide upon the pay structures.

Pay structure refers to the process of setting up the pay for a job in an organization. The

process deals with internal and external analysis to estimate the compensation package

for a job profile. Internal equity, External equity and Individual equity are the most

popular pay structures. Job description provides the in depth knowledge about the job

profile and its worth.

Pay structures are the strong determinant of employee’s value in the organization. It helps

in analyzing the employee’s role and status in the organization. It provides for fair

treatment to all employees. Pay structures also include the estimation of incentives.

The level of incentives also depends on the level of job position in the organizational

hierarchy.

Salary-Surveys:

Organizations have to bridge the gap between the industry standards and their salary

packages. They cannot provide compensation packages that are either less than the

industry standards or are very higher then the market rates. For the purpose they

undertake the salary survey. The Salary survey is the research done to analyze the

industry standards to set up the compensation strategy for the organization. Organizations

can either conduct the survey themselves or they can purchase the survey reports from a

reputed research organization. These reports constitute the last 2-5 years or more

compensation figures for the various positions held by the organizations. The analysis is

done on the basis of certain factors defined in the objectives of the research.

Types of Compensation

Compensation provided to employees can direct in the form of monetary benefits and/or



indirect in the form of non-monetary benefits known as perks, time off, etc.

Compensation does not include only salary but it is the sum total of all rewards and

allowances provided to the employees in return for their services. If the compensation

offered is effectively managed, it contributes to high organizational productivity.

Financial Compensation

Non Financial Compensation

FINANCIAL COMPENSATION:

Financial compensation refers to monetary benefits offered and provided to employees in

return of the services they provide to the organization. The monetary benefits include

basic salary, house rent allowance, conveyance, leave travel allowance, medical

reimbursements, special allowances, bonus, Pf/Gratuity, etc. They are given at a regular

interval at a definite time.

Basic Salary

Salary is the amount received by the employee in lieu of the work done by him/her for a

certain period say a day, a week, a month, etc. It is the money an employee receives from

his/her employer by rendering his/her services.

House Rent Allowance

Organizations either provide accommodations to its employees who are from different

state or country or they provide house rent allowances to its employees. This is done to

provide them social security and motivate them to work.

Conveyance

Organizations provide for cab facilities to their employees. Few organizations also

provide vehicles and petrol allowances to their employees to motivate them.



Leave Travel Allowance

These allowances are provided to retain the best talent in the organization. The

employees are given allowances to visit any place they wish with their families. The

allowances are scaled as per the position of employee in the organization.

Medical Reimbursement

Organizations also look after the health conditions of their employees. The employees are

provided with medi-claims for them and their family members. These medi-claims

include health-insurances and treatment bills reimbursements.

Bonus

Bonus is paid to the employees during festive seasons to motivate them and provide them

the social security. The bonus amount usually amounts to one month’s salary of the

employee.



Special Allowance

Special allowance such as overtime, mobile allowances, meals, commissions, travel

expenses, reduced interest loans; insurance, club memberships, etc are provided to

employees to provide them social security and motivate them which improve the

organizational productivity.

NON FINANCIAL COMPENSATION:

Non Financial compensation refers to non-monetary benefits offered and provided to

employees in lieu of the services provided by them to the organization. They include

Leave Policy, Overtime Policy, Car policy, Hospitalization, Insurance, Leave travel

Assistance Limits, Retirement Benefits, Holiday Homes.

Leave Policy

It is the right of employee to get adequate number of leave while working with the

organization. The organizations provide for paid leaves such as, casual leaves, medical

leaves (sick leave), and maternity leaves, statutory pay, etc.

Overtime Policy

Employees should be provided with the adequate allowances and facilities during their

overtime, if they happened to do so, such as transport facilities, overtime pay, etc.

Hospitalization

The employees should be provided allowances to get their regular check-ups, say at an

interval of one year. Even their dependents should be eligible for the medi-claims that

provide them emotional and social security.



Insurance

Organizations also provide for accidental insurance and life insurance for employees.

This gives them the emotional security and they feel themselves valued in the

organization.

Leave Travel

The employees are provided with leaves and travel allowances to go for holiday with

their families. Some organizations arrange for a tour for the employees of the

organization. This is usually done to make the employees stress free.

Retirement Benefits

Organizations provide for pension plans and other benefits for their employees which

benefits them after they retire from the organization at the prescribed age.

Holiday Homes

Organizations provide for holiday homes and guest house for their employees at different



locations. These holiday homes are usually located in hill station and other most wanted

holiday spots. The organizations make sure that the employees do not face any kind of

difficulties during their stay in the guest house.

Flexible Timings

Organizations provide for flexible timings to the employees who cannot come to work

during normal shifts due to their personal problems and valid reasons.

COMPENSATION OF EMPLOYEES AND ITS ASSOCIATES IN MNYL:-

Employees in MNYL consist of agent advisors and the sales managers.

Compensation Of Agent Advisors in MNYL:

Agent advisors are compensated in three ways:- commission, incentives and bonus



1. Commission:-

Commissions vary from different plans which are gained by the agent

advisors. These are given below in the table:-

Protection plan:-

SL.NO PLANS DURATION

OF PLAN

COMMISSION BONUS

OPTIONS

1 Five Year

Renewable And

Convertible

5 Years 35%, 7.5%,

7.5%, 5%

thereafter

Not Applicable

2 Whole Life

Participating

100 Years 35%, 7.5%,

7.5%, 5%

thereafter

1. Paid In Cash

2. Premium

Offset

3. Paid Up

Additions

3 20 Year

Endowment

(participating)

20 Years 25%, 7.5%,

7.5%, 5%

thereafter

1. Paid In Cash

2. Premium

Offset

3. Paid Up

Additions

4 Endowment to

Age 60

(participating)

60 Years 25, 7.5, 7.5, 5%

thereafter

1. Paid In Cash

2. Premium

Offset

3. Paid Up

Additions

5 Life Gain Plus 18-55 Years 25%, 7.5%, 1. Paid In Cash



(participating) 7.5%, 5%

thereafter

2. Premium

Offset

3. Paid Up

Additions

6 Level Term

Policy

60 Years 5-9 yrs:6,5%

10-14 yrs:15,5%

15-19 yrs:20,5%

20-24 yrs:25,5%

25 above:30,5%

Not Applicable

7 Life Pay

Money Back

16, 20, 24

Years

25%, 7.5%,

7.5%, 5%

1. Paid In Cash

2. Premium

Offset

3. Paid Up

Additions

8 Life Gain

Endowment

10/15/20/25 yrs

as well as to

Age 60

25%, 7.5%,

7.5%, 5%

1. Paid In Cash

2. Premium

Offset

3. Paid Up

Additions

9 Life Partner

Plus

75 Years 35% ,27%,

20%,10%, 5%

1. Paid In Cash

2. Premium

Offset

3. Paid Up

Additions

Children plan:-

SL.NO PLANS DURATION COMMISSION BONUS



OF PLAN OPTIONS

1 Children

Endowment to

18(participating)

18 Years 15%, 5%

thereafter

Paid In

Cash

2 SMART Steps 10-25 Years 15%, 14%, 13%,

12%, 11%

Not

Applicable

3 SMART Steps

Single

Premium

10-25 Years 1%

Not

Applicable

4 Children

Endowment To

24(participating)

20-50 Years 15%, 5%

thereafter

Paid In

Cash

5 SMART Steps

Plus

10-25 Years 15%, 14%, 13%,

12%, 11%

Not

Applicable

Investment plan:-


OF PLAN

COMMISSION BONUS

OPTIONS

1 Life Maker 18-75 Years 20%, 19%, 18%, Not



Premium 17%, 16%, 3%,

2%

Applicable

2 Life Maker

Platinum

10 to 25 Years 20%, 22.50%,

25%, 27.50%,

7.5%, 2%

Not

Applicable

3 SMART

Assure

60 Years 7.50%, 7%, 6% Not

Applicable

4 Life Maker

Gold

10 to 25 Years 20%, 22.50%,

25%, 27.50%,

7.5%, 2%,7.5%

Not

Applicable

5 Max New York

Life SMART

Xpress

60 Years 0.75%, 2% Not

Applicable

Retirement plan:-


OF PLAN

COMMISSION BONUS

OPTIONS



1 Easy Life

Retirement

(participating)

60 Years 7.5%, 2%

thereafter

Purchase Of

Pure

Endowment

Benefits

2 SMART Invest

Pension

50-70 Years 7.50%, 7%, 6%,

2%

Not Applicable

Health plan:-


OF PLAN

COMMISSION BONUS

OPTIONS

1 LifeLine

MediCash

10-25 Years 25%, 7.5%,

7.5%, 5%

Paid In Cash

2 LifeLine

Medicash Plus

20-50 Years 35%, 27%, 20%,

10%, 5%

Not Applicable

3 LifeLine

Wellness

60 Years 25%, 7.5%,

7.5%, 5%

Paid In Cash

4 LifeLine

Wellness Plus

60-80 Years 15%, 14%, 13%,

12%, 11%

Not Applicable

5 LifeLine Safety

Net

20-80 Years 25%, 7.5%,

7.5%, 5%

thereafter

1. Paid In Cash

2. Premium

Offset



3. Paid Up

Additions

6 Max New York

Life LifeLine

Healthy Family

80 Years 35%, 27%, 20%,

10%, 6%

Not Applicable

Easy Term Policy:-

The Easy Term is a term plan to age of 60 of the life insured. It is targeted at the

rural/socially underprivileged/economically backward sections. The befit is payable only

on the death of the life insured. This policy can only be sold to the socially/economically

weaker sections of the society.

Commission to agents: None

Bonus Options: Not Available

2. Incentives:

Monthly contests are conducted for the agents to earn incentives. Some of them are:-



Date with destiny contest: This contest is conducted during the month of April and

June. If an agent advisor brings in 10 Lakh business for the company, he/she gets a

chance to meet Mr. Amitabh Bachchan.

June ka naam Sai ke naam: This contest is conducted during the month of June. If an

agent advisor brings in 5 Lakh business for the company, he/she gets a chance to visit

the Shrine of Shirdi Sai Baba.

Monsoon Magic: This contest is conducted during the month of July. If an agent

advisor brings only cases with ticket size of Rs 15000 or above will be considered for

the contest. The contest is like:-

2 Paid Cases: MNYL branded timex wrist watch.

4 Paid Cases: Swatch wrist watch.

3. Bonus:

Bonuses are also given to agent advisors varying according to different plans along

with the commission and also on providing a good business to the company. Some of the

bonuses include:

On doing three policies in a month, the company gives a bonus of 5%

On doing nine policies in 90 days, the company gives a cash prize of Rs 5000

On doing five policies in a month, the company gives a certificate.

Bonus to agent advisors are also given in the form of Training Programme

Reimbursements.

Training Programme Reimbursements: This consists of Gurukul 1/2 sessions.

Gurukul1: This consists of 4 sessions for 6 months. For each session Rs 500 is given i.e.

Rs 2000 a month which adds up a bonus for an agent advisor.

Gurukul2: This session is for 6 months. There are 2 sessions in every 15 days. For each

session Rs 500 is given i.e. Rs 3000 a month which again adds up a bonus for an agent

advisor.



Reward and Recognitions for the agent advisors:-

1) Premium Leader

Qualifying Criteria : Rs.1Lakh AFYP in a month

Rewards & Recognition : Mention in leaders report

Gitarattan International Business School

C

MDRT

Executive Council

Paul Colgan Trophy

Centurion

Agent of the Year

Paid Case, FYC, Persistency, Rider, Referral and CEIP Leader

Career Foundation Club

Career Producer Award

Career Success Award

Hi-Flier

Ten-A-Monther

Premium Leader

54


2) Ten-A-Monther

Qualifying Criteria : 10 applications in a month &Rs30, 000 AFYP

Rewards & Recognition : MNYL Crystal Glass, MentionIn leaders report, Lunch

3) Hi-Flier

Qualifying Criteria : 20 applications in a month

Rewards & Recognition : MNYL Silver Medal, MNYL Crystal Glass, mention in Leaders report, Lunch

4) Career Success Award

Qualifying Criteria : 15 paid cases & Rs 40,000 FYC at the end of month 3

Rewards & Recognition : Recognition Award

5) Career Producer Award

Qualifying Criteria : 25 paid cases & Rs 80,000 FYC at the end of month 6

Recognition Award : Recognition Award

6) Career foundation Club

Qualifying Criteria : 50 paid cases & Rs1.8 Lakhs FYC in July-June for Recruiting



during this period

Rewards & Recognition : CFC meeting takes place at Zone level.

7) Paid Case, FYC, Persistency, Rider, Referral and CEIP Leader

Qualifying Criteria : Top Agent in each category in Each GO

Rewards & Recognition : Recognition Plaque

8) Agent Of The Year

Qualifying Criteria : Highest points in each GO

Rewards & recognition : Recognition Award

9) Centurion

Qualifying Criteria : 100 net paid cases in a year

Rewards & Recognition : Centurion trophy

10) Paul Colgan Trophy

Qualifying Criteria : Highest FYC with 100 or more Paid cases & 95% or more 13th Month persistency

Rewards & Recognition : Recognition Trophy

11) Executive Council

Qualifying Criteria : June 2006-June2007



(4,30,000 Council Credits)

January 07-June 07(1,60,000 Council Credits)

40 paid cases in the council Pd

Rewards & Recognition : Trip to Malaysia to attend the Executive Council Meeting

12) Million Dollar Round Table(MDRT)

Qualifying Criteria : MDRT FYC Rs 7,19,800 p.m. (Rs14,3,600)

Rewards & Recognition : MDRT dues for all qualifiers. Top 35 by FYC will bear Domestic travel and vista Costs. Next 15 will bear Registration fees,

Domestic travels & visa costs. Rest all will bear international

Airfare, domestic travel & Visa.

13) CEO’s Council

Qualifying Criteria : July 06-June 07: 8,00,000 CC Jan 07-June 07: 3,20,000 CC

Rewards & Recognition : Trip to Amsterdam to attend the CEO Council Meeting.

Compensation Of Sales Managers in MNYL:

The sales managers in MNYL are compensated on the basis of Payroll and Increments.



These are given as below:-

1. Payroll:

The sales managers are compensated on the basis of salary system. They are given

around 3.5 to 5 Lakh per annum.

2. Increments:

Increments are given to the sales managers based on their performance. Some of

them are:-

1 Lakh Increment: If the Sales Managers bring 50 Lakh business for the company

in a year they get an increment of 1 Lakh for the next year.

2 Lakh Increment: If the Sales Managers bring 75 Lakh business for the company


3 Lakh Increment: If the Sales Managers bring 1 crore business for the company




CHAPTER 4

RESEARCH METHODOLOGY AND DESIGN



Research methodology:-

This study is based on explanatory design, which will explore and analyse the factors that

lead towards satisfaction. The questionnaire method is used for data collection. This

questionnaire consists 19 questions in a structured way. During the course of interviews.

Respondents were made to fed free all were motivated, by giving clear information about

this study, to express their feeling. Hence, questionnaire is used as a tool for this study.

This study is an explorative study as it explores and analyses all the factors that lead to

satisfaction level in the compensation structure.

1.) Determine the sources of information :-

(a) Primary Data :- Primary datas are those which are gathered specially for the

project at hand, directly – e.g. through questionnaires & interviews. Primary data sources

include company salesman, middleman, consumers, buyers, trade association’s

executives & other businessman & even competitors, interns.

(b) Secondary Data :- These are generally published sources, which have been

collected originally for some other purpose. Source are internal company records,

government publication, reports & publication, reports & journals, trade, professional and

business associations publications & reports.



SAMPLING TECHNIQUE USED & SAMPLE SIZE

Sample design is a definite plan of obtaining some items from the whole population. The

sample design used in this project is Random sampling.

SAMPLING

1. Sampling Technique : Non probability sampling

2. Sample Unit : People who are working as agent advisors

3. Sample size : 50 respondents

4. data collection method : Direct interview through questionnaire.

5. Data analysis method : Tabulation and Graphical method.

6. Area of survey : Delhi



DATA ANALYSIS, INTERPRETATION AND PRESENTATION:

1. Your Age:

TABLE:

SLNO CATEGORY NO OF

RESPONDENTS

PERCENTAGE

1 18-24 10 20

2 25-30 5 10

3 31-36 15 30

4 37 above 20 40

Base 50 respondents

GRAPH:



Your Age?

18-24 20%

25-3010%

31-3630%

37 above40% 18-24

25-30

31-36

37 above

INTERPRETATION:

From the above graph it can be inferred that:-

20% of agent advisors working in MNYL are of 18-24 age group.



40% of agent advisors working in MNYL are of 37 above age group.

2. Marital Status:

TABLE:

SL.NO CATEGORY NO OF

RESPONDENTS

PERCENTAGE



1 Married 35 70

2 Unmarried 15 30

Base 50 respondents

GRAPH:

Marital Status

Married70%

Unmarried30%

Married

Unmarried

INTERPRETATION:




70% of agent advisors working in MNYL are married.

30% of agent advisors working in MNYL are unmarried.

3. Educational Qualification:

TABLE:


RESPONDENTS

PERCENTAGE

1 Under Graduate 3 6

2 Graduate 37 74

3 Post Graduate 10 20

Base 50 respondents

GRAPH:



Educational Qualification

Under Graduate

6%

Post Graduate

20%

Graduate74%

Under Graduate

Graduate

Post Graduate

INTERPRETATION:


6% of agent advisors working in MNYL are under graduates.

74% of agent advisors working in MNYL are graduates.

20% of agent advisors working in MNYL are post graduates.

4. Perception about insurance sector:

TABLE:




RESPONDENTS

PERCENTAGE

1 Poor 5 10

2 Average 15 30

3 Good 20 40

4 Excellent 10 20

Base 50 respondents

GRAPH:

Perception about insurance sector

Poor10%

Average30%

Good40%

Excellent20%

Poor

Average

Good

Excellent



INTERPRETATION:


10% of agent advisors working in MNYL have a poor perception about insurance

sector.

30% of agent advisors working in MNYL have an average perception about

insurance sector.

40% of agent advisors working in MNYL have a good perception about insurance

sector.

20% of agent advisors working in MNYL have an excellent perception about

insurance sector.

5. How did you come to know about MNYL?

TABLE:


RESPONDENTS

PERCENTAGE

1 Newspaper 25 50

2 Friends/Family 5 10

3 Magazines 15 30

4 Others 5 10

Base 50 respondents

GRAPH:



How did you come to know about MNYL?

Newspaper50%

Friends/Family10%

Magazines30%

Others10% Newspaper

Friends/Family

Magazines

Others

INTERPRETATION:


50% of agent advisors working got to know about MNYL through newspapers.

10% of agent advisors working got to know about MNYL through friends/family.

30% of agent advisors working got to know about MNYL through magazines.

10% of agent advisors working got to know about MNYL through others.

6. Number of years in MNYL?

TABLE:




RESPONDENTS

PERCENTAGE

1 Less than 5 yrs 40 80

2 More than 5 yrs 10 20

Base 50 respondents

GRAPH:

Number of years in MNYL

Less than 5 yrs

80%

More than 5 yrs

20%Less than 5 yrs

More than 5 yrs



INTERPRETATION:


80% of agent advisors working in MNYL have spent for less than 5 yrs.

20% of agent advisors working in MNYL have spent for more than 5 yrs.

7. Perception of the compensation structure:

TABLE:


RESPONDENTS

PERCENTAGE

1 Unsatisfactory 4 12

2 Satisfactory 40 80

3 Good 4 8

Base 50 respondents

GRAPH:



Perception of the compensation structure

Unsatisfactory

12%

Satisfactory80%

Good8%

Unsatisfactory

Satisfactory

Good

INTERPRETATION:


12% of agent advisors working in MNYL are unsatisfied with the compensation

structure.

80% of agent advisors working in MNYL are satisfied with the compensation

structure.

8% of agent advisors working in MNYL feel the compensation structure is good.

8. Compensation structure needs modification:



TABLE:


RESPONDENTS

PERCENTAGE

1 Yes 20 40

2 No 30 60

Base 50 respondents

GRAPH:

Compensation structure needs modification

yes40%

No60%

yes

No



INTERPRETATION:


40% of agent advisors working in MNYL say yes to modify the compensation

structure.

60% of agent advisors working in MNYL say no to modify the compensation

structure.

9. What are the areas to be rectified?

TABLE:


RESPONDENTS

PERCENTAGE

1 Percent of

commission in

individual scheme

5 25

2 Difference in

commission

between different

8 40



schemes

3 Time lag in payment

of commissions

5 25

4 Others 2 10

Base 20 respondents

GRAPH:



Areas to be rectified?

Percent of commission in

individual scheme

25%

Difference in commission

between different

schemes40%

Time lag in payment of

commissions25%

Others10%

Percent of commissionin individual scheme

Difference incommission betweendifferent schemes

Time lag in payment ofcommissions

Others

INTERPRETATION:


25% of agent advisors working in MNYL feel that percent of commission in

individual scheme should be rectified.

40% of agent advisors working in MNYL feel that difference in commission

between different schemes should be rectified.

25% of agent advisors working in MNYL feel that time lag in payment of

commissions should be rectified.

10% of agent advisors working in MNYL feel that there are other areas to be

rectified.

10. Does the compensation structure compare favorably with those of competitors?

TABLE:




RESPONDENTS

PERCENTAGE

1 Yes 40 80

2 No 10 20

Base 50 respondents

GRAPH:

Does the compensation structure compare favorably with those of

competitors?

Yes80%

No20%

Yes

No

INTERPRETATION:


80% of agent advisors working in MNYL think that the compensation structure is

favorable with those of competitors.

20% of agent advisors working in MNYL think that the compensation structure is

not favorable with those of competitors.



11. Have you ever backed a performance reward?

TABLE:


RESPONDENTS

PERCENTAGE

1 Yes 45 90

2 No 5 10

Base 50 respondents

GRAPH:

Have you ever backed a performance reward?

Yes90%

No10%

Yes

No

INTERPRETATION:




90% of agent advisors working in MNYL have backed a performance reward.

10% of agent advisors working in MNYL have not backed a performance reward.

12. Do you think the reward was commensurate with your performance?

TABLE:


RESPONDENTS

PERCENTAGE

1 Yes 30 66.6

2 No 15 33.3

Base 45 respondents

GRAPH:

was the reward comensurate with your performance?

Yes67%

No33%

Yes

No

INTERPRETATION:




67% of agent advisors working in MNYL feel that the reward was commensurate

with their performance.

33% of agent advisors working in MNYL feel that the reward was not

commensurate with their performance.

13. Rate your overall experience with MNYL?

TABLE:


RESPONDENTS

PERCENTAGE

1 1 13 26

2 2 20 40

3 3 8 16

4 4 5 10

5 5 4 8

Base 50 respondents

GRAPH:



INTERPRETATION:


26% of agent advisors working in MNYL rate their overall experience as 1.





Gitarattan International Business School

Rate your overall experience with MNYL

126% 2

40%

316%

410%

58%

12345

81


ANNEXURE

1. QUESSIONAIRE



QUESSIONAIRE

Dear Sir/Madam

I am a student of Gitarattan International Business School, Delhi, presently doing a

market survey” Study Of Compensation Of Employees And Its Associates In

MNYL”. I request you to kindly fill the quessionaire below and I assure you that the

data generated shall be kept confidential.

1. Your Age:

2. Marital Status:

o Married

o Unmarried

3. Educational Qualification:

o Undergraduate

o Graduate

o Past Graduate

4. Perception about insurance sector?

o Poor


Name:

Address:

Contact No: (R) (O) (M)

City: Pin: State:


o Average

o Good

o Excellent

5. How did you come to know about MNYL?

o Newspaper

o Friends/Family

o Magzines

o Others

If Others, please specify:

6. Number of years in MNYL?

o Less than 5 years

o More than 5 years

7. Perception of the compensation structure:-

o Unsatisfactory

o Satisfactory

o Good

8. Compensation structure needs modification?

o Yes

o No

9. What are the areas to be rectified in the compensation structure?

o Percent of commission in individual scheme

o Difference in commission between different schemes

o Time lag in payment of commissions

o Others



If Others, please specify:

10. Does the compensation structure compare favorably with those of competitors?

o Yes

o No

11. Have you ever backed a performance reward?

o Yes

o No

12. Do you think the reward was commensurate with your performance?

o Yes

o No

13. Rate your overall experience with MNYL?

o 1

o 2

o 3

o 4

o 5

Date:

Place:

Signature:



Thank You

ABBREVIATIONS USED

1. MNYL: Max New York Life


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