Master of Business Administration: Project Report ON

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

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

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
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

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.

Yr:2004-2005:
Insurance Industry in this year, so far has 1new entrants; namely
Life Insurers:
S.No. Registration Date of Name of the Company

Number Reg.
1 128 17.11.2005 Shriram Life Insurance Company Ltd.
Yr:2006-2007 :
Insurance Industry in this year, had 1new entrants; namely
Life Insurers:

Number Reg.
1 130 14.07.2006 Bharti AXA Life Insurance Company Ltd.
Yr: 2007-2008 :
Insurance Industry in this year, had 5 new entrants; namely
Life Insurers:

Number Reg.
1 133 04.09.2007 Future Generali India Life Insurance Company Limited
2 135 19.12.2007 IDBI Federal Life Insurance Company Ltd.
General Insurers:
3 131 03-08- Apollo Munich Health Insurance Company Limited

2007

4 132 04-09- Future Generali India Insurance Company Limited

2007
5 134 16-11- Universal Sompo General Insurance Company Ltd.
2007
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.N Registrati Date of Name of the Company

o. on Reg.
Number
1 136 08.05.20 Canara HSBC Oriental Bank of Commerce Life Insurance
08 Company Ltd.
2 138 27.06.20 Aegon Religare Life Insurance Company Ltd.
08
3 140 27.06.20 DLF Pramerica Life Insurance Company Ltd.
08
4 142 Star Union Dai-ichi Life Insurance Co. Ltd.,
5 143 05.11.20 IndiaFirst Life Insurance Company Ltd.

09
General Insurers:

Number Reg.
1 137 8.05.2008 Shriram General Insurance Company Limited,

2 139 27.06.2008 Bharti Axa General Insurance Company Ltd.
3 141 15.12.2008 Raheja QBE General Insurance Co. Ltd
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 COMMISSION BONUS

OF PLAN OPTIONS
1 Five Year 5 Years 35%, 7.5%, Not Applicable
Renewable And 7.5%, 5%
Convertible thereafter
2 Whole Life 100 Years 35%, 7.5%, 1. Paid In Cash
Participating 7.5%, 5% 2. Premium
thereafter Offset
3. Paid Up
Additions
3 20 Year 20 Years 25%, 7.5%, 1. Paid In Cash
Endowment 7.5%, 5% 2. Premium
(participating) thereafter Offset
3. Paid Up
Additions

4 Endowment to 60 Years 25, 7.5, 7.5, 5% 1. Paid In Cash

Age 60 thereafter 2. Premium
(participating) Offset
3. Paid Up
Additions
5 Life Gain Plus 18-55 Years 25%, 7.5%, 1. Paid In Cash
(participating) 7.5%, 5% 2. Premium
thereafter Offset
3. Paid Up
Additions
6 Level Term 60 Years 5-9 yrs:6,5% Not Applicable
Policy 10-14 yrs:15,5%
15-19 yrs:20,5%
20-24 yrs:25,5%
25 above:30,5%
7 Life Pay 16, 20, 24 25%, 7.5%, 1. Paid In Cash
Money Back Years 7.5%, 5% 2. Premium
Offset
3. Paid Up
Additions
8 Life Gain 10/15/20/25 yrs 25%, 7.5%, 1. Paid In Cash
Endowment as well as to 7.5%, 5% 2. Premium
Age 60 Offset
3. Paid Up
Additions
9 Life Partner 75 Years 35% ,27%, 1. Paid In Cash
Plus 20%,10%, 5% 2. Premium
Offset
3. Paid Up
Additions

Children plan:-

OF PLAN OPTIONS
1 Children 18 Years 15%, 5% Paid In
Endowment to thereafter Cash
18(participating)
2 SMART Steps 10-25 Years 15%, 14%, 13%, Not
12%, 11% Applicable
3 SMART Steps 10-25 Years 1% Not
Single Applicable
Premium
4 Children 20-50 Years 15%, 5% Paid In

Endowment To thereafter Cash
24(participating)
5 SMART Steps 10-25 Years 15%, 14%, 13%, Not

Plus 12%, 11% Applicable
Investment plan:-

OF PLAN OPTIONS
1 Life Maker 18-75 Years 20%, 19%, 18%, Not
Premium 17%, 16%, 3%, Applicable
2%
2 Life Maker 10 to 25 Years 20%, 22.50%, Not
Platinum 25%, 27.50%, Applicable
7.5%, 2%
3 SMART 60 Years 7.50%, 7%, 6% Not
Assure Applicable
4 Life Maker 10 to 25 Years 20%, 22.50%, Not

Gold 25%, 27.50%, Applicable
7.5%, 2%,7.5%
5 Max New York 60 Years 0.75%, 2% Not
Life SMART Applicable
Xpress
Retirement plan:-

OF PLAN OPTIONS

1 Easy Life 60 Years 7.5%, 2% Purchase Of

Retirement thereafter Pure
(participating) Endowment
Benefits
2 SMART Invest 50-70 Years 7.50%, 7%, 6%, Not Applicable
Pension 2%
Health plan:-

OF PLAN OPTIONS
1 LifeLine 10-25 Years 25%, 7.5%, Paid In Cash
MediCash 7.5%, 5%
2 LifeLine 20-50 Years 35%, 27%, 20%, Not Applicable

Medicash Plus 10%, 5%
3 LifeLine 60 Years 25%, 7.5%, Paid In Cash

Wellness 7.5%, 5%
4 LifeLine 60-80 Years 15%, 14%, 13%, Not Applicable

Wellness Plus 12%, 11%
5 LifeLine Safety 20-80 Years 25%, 7.5%, 1. Paid In Cash

Net 7.5%, 5% 2. Premium
thereafter Offset
3. Paid Up
Additions
6 Max New York 80 Years 35%, 27%, 20%, Not Applicable

Life LifeLine 10%, 6%

Healthy Family
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:-

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
1) Premium Leader
Qualifying Criteria : Rs.1Lakh AFYP in a month
Rewards & Recognition : Mention in leaders report
2) Ten-A-Monther
Qualifying Criteria : 10 applications in a month &

Rs30, 000 AFYP
Rewards & Recognition : MNYL Crystal Glass, Mention

In 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 PERCENTAGE

RESPONDENTS
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%
37 above
40%
18-24
25-30
25-30
10%
31-36
31-36
37 above
30%
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 PERCENTAGE

RESPONDENTS
1 Married 35 70
2 Unmarried 15 30
Base 50 respondents
GRAPH:

Marital Status
Unmarried
30%
Married
Unmarried
Married
70%
INTERPRETATION:
 70% of agent advisors working in MNYL are married.

 30% of agent advisors working in MNYL are unmarried.

3. Educational Qualification:
TABLE:

RESPONDENTS
1 Under Graduate 3 6
2 Graduate 37 74
3 Post Graduate 10 20
Base 50 respondents
GRAPH:
Educational Qualification
Post Under
Graduate Graduate
20% 6%
Under Graduate
Graduate
Graduate Post Graduate
74%
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
1 Poor 5 10
2 Average 15 30
3 Good 20 40
4 Excellent 10 20
Base 50 respondents
GRAPH:

Perception about insurance sector
Excellent Poor
20% 10%
Poor
Average
Average
Good
30%
Excellent
Good
40%
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
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?
Others
10% Newspaper
Magazines Newspaper Friends/Family

30% 50% Magazines
Friends/Fa Others
mily
10%
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
1 Less than 5 yrs 40 80
2 More than 5 yrs 10 20
Base 50 respondents
GRAPH:

Number of years in MNYL
More than 5
yrs
20%
Less than 5 yrs
More than 5 yrs
Less than 5
yrs
80%
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
1 Unsatisfactory 4 12
2 Satisfactory 40 80
3 Good 4 8
Base 50 respondents
GRAPH:
Perception of the compensation

structure
Unsatisfact
Good ory
8% 12%
Unsatisfactory
Satisfactory
Satisfactory Good
80%
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
1 Yes 20 40
2 No 30 60
Base 50 respondents
GRAPH:

Compensation structure needs

modification
yes
40%
yes
No No
60%
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
1 Percent of 5 25
commission in
individual scheme
2 Difference in 8 40
commission
between different
schemes
3 Time lag in payment 5 25
of commissions
4 Others 2 10
Base 20 respondents
GRAPH:

Areas to be rectified?
Percent of Percent of commission

commission in in individual scheme
individual
Others
Time lag in scheme Difference in
10%
payment of 25% commission between
commissions different schemes
25% Time lag in payment of
Difference in commissions
commission
between Others
different
schemes
40%
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
1 Yes 40 80
2 No 10 20
Base 50 respondents
GRAPH:
Does the compensation structure

compare favorably with those of
competitors?
No
20%
Yes
No
Yes
80%
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
1 Yes 45 90
2 No 5 10
Base 50 respondents
GRAPH:
Have you ever backed a performance

reward?
No
10%
Yes
No
Yes
90%
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
1 Yes 30 66.6
2 No 15 33.3
Base 45 respondents
GRAPH:
was the reward comensurate with your

performance?
No
33%
Yes
No
Yes
67%
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
1 1 13 26
2 2 20 40
3 3 8 16
4 4 5 10
5 5 4 8
Base 50 respondents
GRAPH:
Rate your overall experience with

MNYL
1
2
5 26% 1
40%
8% 2
3
3 4
4 16% 5
10%
INTERPRETATION:


 26% of agent advisors working in MNYL rate their overall experience as 1.
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.
Name:
Address:
Contact No: (R) (O) (M)

City: Pin: State:
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
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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Study Of Compensation Of Employees And Its Associates In MNYL 15119103909

STUDY OF COMPENSATION OF EMPLOYEES AND ITS ASSOCIATES IN

Submitted for Partial Fulfillment for the Award of the Degree of

MASTER OF BUSINESS ADMINISTRATION

UNDER THE GUIDANCE OF

GITARATTAN INTERNATIONAL BUSINESS SCHOOL

Gitarattan International Business School 1

Ms. Jyoti Kukreja Dr. S.S. Narula

Gitarattan International Business School 2

Dated:- Ms. Reema Agrawal

Enrollment no:- 15119103909

Gitarattan International Business School 3

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

Gitarattan International Business School 4

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

Gitarattan International Business School 5

Gitarattan International Business School 6

Gitarattan International Business School 7

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

Gitarattan International Business School 8

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

3. Contributes towards development of larger industries.

Gitarattan International Business School 9

The fundamental Principles of the Insurance are as follows:

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

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

Gitarattan International Business School 10

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

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

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

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

Gitarattan International Business School 11

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

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

Gitarattan International Business School 12

OVERVIEW OF MAX NEW YORK LIFE:-

Gitarattan International Business School 13

offices dedicated to rural areas.

AWARDS AND ACHIEVEMENTS

Some of the Industry Firsts:-

Gitarattan International Business School 14

Gitarattan International Business School 15

PROMOTERS OF MAX NEW YORK LIFE:-

Max India Limited:-

Gitarattan International Business School 16

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

Gitarattan International Business School 17

Max Neeman Medical International is a Clinical Research services provider offering

Max Speciality Products specializes in manufacturing of wide range of sophisticated

New York Life LLC:-

Gitarattan International Business School 18

PRODUCT PORTFOLIO OF MAX NEW YORK LIFE:-

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

 Five Yr Renewable and Convertible

Gitarattan International Business School 19

 Children's Endowment to 18 (Par)

 Life Maker Premium

Gitarattan International Business School 20

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

 Easy Life Retirement (Par)

Gitarattan International Business School 21

 Group Credit Life