The Islamia University of Bahawalpur

INTERNSHIP REPORT
STATE LIFE INSURANCE

Supervised by:
Dr. Ghullam Murtaza
Mr. Sajid Amin

Presented by:
Muhammad Suleman
(SP19M1BA030)

Session 2019-2023

Department of Commerce
Baghdad-Ul-Jadeed Campus
Bahawalpur
 ACKNOWLEDGEMENTS

“If you are grateful, I will give you more”

Surah Ibrahim, V. 7

All gratefulness and thanks to almighty “ALLAH” the Gracious, The Most
merciful and Beneficent who gave me courage to undertake and complete this
task. I am very much obliged to my ever caring and loving parents whose prayers
have enabled to reach this stage.

I am grateful to almighty ALLAH who made me able to complete the work

presented in this report. It is due to HIS unending mercy that this work moved
towards success.

I am highly indebted to my IUB management for providing me an opportunity to

learn about the insurance system of Pakistan which is vital ingredient of BS
program. I am very great full to officers of STATE LIFE for providing me
guideline for the completion of this report.

I feel great pride and pleasure on the accomplishment of this report.

 Executive Summary
I started my internship in State Life Insurance Corporation of Pakistan at
Bahawalpur ZONE 15-July-2021.

I worked for six weeks there and it gives me a lot of practical knowledge about the operation of
an insurance company .I has learned many things in this duration. In the following pages I have
summarized my experience, observations and working activities which I observed in my six
week internship. This report will discuss internship with state life .It will outline following.

 History

 Departments

The source of information used during the preparation of this report includes

 Personal observations

 Discussions with staff & management

 Annual reports

 Handouts

 Different websites

Report is based on my personal experience & observations about insurance sector which I gain
during my internship in state life.
 Table of Contents
ACKNOWLEDGEMENT...........................................................................
EXECUTIVE SUMMARY ......…...............................................................
Chapter 1: Introduction of State Life
History ..................................................................................................
Functions .................................................................................................
Achievements .................................................................................................
Core Values .................................................................................................
Organizational Structure ......................................................................
Chapter 2: Products
Individual Life Products ............................................................................................
Group Life Insurance Products .................................................................................................
Chapter 3: Departments
3.1 Finance and Accounts .................................................................................................
3.2 FMD Department .................................................................................................
3.3 P& GS .................................................................................................
3.4 Audit Department .................................................................................................
3.5 PH & S .................................................................................................
3.6 New Business .................................................................................................
3.7 Agency .................................................................................................

Chapter 4: SWOT Analysis

Chapter 5: Ratio Analysis
Recommendations
Conclusion
References
Chapter 1: Introduction of State Life

BRIEF HISTORY
The Life Insurance Business in Pakistan was nationalized during March 1972.
Initially Life Insurance business of 32 Insurance Companies was merged and
placed under three Beema Units named “A”, “B” and “C” Beema Units.
However, later these Beema Units were mergedand effective November 1, 1972
the Management of the Life Insurance Business was consolidated and entrusted
to the State Life Insurance Corporation of Pakistan.
State Life Insurance Corporation of Pakistan is headed by a Chairman and assisted by the
Executive Directors appointed by Federal Government. Up to July 2000 the Corporation was run
by Board of Directors constituted under Life Insurance (Nationalization) Order 1972. In July
2000, under Insurance Ordinance 2000, the Federal Government reconstituted the Board of
Directors of State Life which runs the affair of this Corporation.
The basic structure of the Corporation for Individual Life Insurance consists of

Four Regional Offices

 Twenty-Six Zonal
Offices
 Few Sub-Zonal
Offices
 111 Sector
Offices
 461 Area Offices

For Group & Pension there are

 Four Zonal Offices

 6 Sector Offices
 20 Sector Heads

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 FUNCTIONS PERFORMED BY OFFICES
ZONAL OFFICES:
The Zonal Offices deal exclusively with Sales and Marketing Underwriting of
Life InsurancePolicies and the Policyholder’s Services
REGIONAL OFFICES:
Regional Offices, each headed by a Regional Chief, supervise business activities
of the Zonesfunctioning under them.
PRINCIPAL OFFICE:
The principal office, based at Karachi, is responsible for corporate
activities suchas investment, real estate, actuarial, overseas operation,
etc.

MAJOR ACHIEVEMENTS
The major function of the State Life Insurance Corporation of Pakistan is to carry out
Life Insurance Business; however, it is also involved in the other related business
activities such as Investment of policyholders’ fund in

 Government securities

 Stock market

 Real Estate

The major achievements of State Life are as under:

1. The Corporation has reduced up to33% in the premiums on the past

and potential LifePolicies for the benefit of the Policyholders.
2. It is a profitable organization and it paid Rs.2.657 billion as dividend to
the Governmentof Pakistan since its inception in 1972.
3. State Life has played very vital role in the economy by providing
employment to thepeople of the country.
 As permanent employees
 As part of its marketing force
 Investing the huge funds in different sectors of the economy.

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 4. The Investment Portfolio of State Life as at 31.12.2010 stands at Rs.191.445
billions.
5. Investment portfolio also includes investment in Real Estate
which stands at book valueRs.2.538 billion as at
31.12.2010
6. Whereas Fair value is Rs.21.681 billion as at 31.12.2010
7. The Paid up Capital increased from Rs.10 million in 1972 to Rs.1, 100 million
in 2010.
8. The Premium income increased from Rs.0.317 billion in 1972 to 28.367billion
in 2010.
9. Similarly, Investment income including rental income increased from
Rs.0.81 billion in1972 to 274.152 billion in 2010.
10. Total statutory fund of State Life stands at Rs.199.445 billion in 2010 as
against Rs.1.494billion in 1972.
11. State Life is smoothly striving towards its objective of making life
insurance available to large section of the society by extending it to
common man.

As at December, 2010 the total number of policiesin force Under individual life 2.895
million
Under group life insurance 3.754 million

Chronology of Events

Taking over of management of life insurance companies 19 March 1972

Establishment of state life insurance corporation 1st Nov, 1972

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

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

Establishment of UK branch 1st Jan, 1974

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

Establishment of branch office in Dubai July 1978

Establishment of agency office in Kuwait May, 1983

Establishment of Multan zone 1st Oct, 1985

Establishment of Faisalabad zone 1st march, 1986

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Establishment of Gujranwala zone 1st July 1986

Establishment of Sucker zone 1st April, 1990

Establishment of branch office in Pakistan May, 1992

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CORE VALUES
MISSION:

“To remain the leading insurer in the country by extending the benefits of
insurance to all sections of society and meeting our commitments to our policy
holders and the nation.”
QUALITY POLICY:

To ensure satisfaction of our valued policyholders in processing new business,

providing after sales service and optimizing return on Life Fund through a
quality culture and to maintain ourselves leading life insurer in Pakistan
OBJECTIVES:

To run life insurance business on

sound line. To run life insurance
business on sound line.

 To provide more efficient

service to the policyholders.

 To maximize the return to the

policyholders by economizing
on expenses and increasing
the yield on investment.

 To make life insurance a more

effective means of mobilizing
national savings.

 To widen the area of operation

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

 To use the policyholders fund

in the wider interest of the
community.

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ORGANIZATIONAL STRUCTURE
It is headed by chairman Mr. Shoaib Javed Hussain, who is a Chairman & CHIEF
EXECUTIVE of the corporationand appointed by the government the other administrative level
and authorities is given below

MANAGEMENT HIERARCHY:

CHAIRMAN

EXECUTIVE

DIRECTOR

DIVISIONAL HEADS

REGIONAL HEADS

ZONAL HEADS

DEPARTMENTAL
HEADS

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ORGANOGRAM:

CHAIRMAN

EXECUTIOVE DIVISONAL HEAD

DIRECTOR

ZONAL HEAD

DEPUTY GENERAL ASST GENERAL

MANAGER
MANAGER MANAGER

DEPUTY
ASST MANAGER
MANAGER

EXECUTIVE

OFFICER

ASST
SUPERINTENDENT
SUPERINTENDENT

SENIOR OFFICE
OFFICE ASST
ASST

RECORD

NAB QUASID

QUASID

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 BOARD OF DIRECTORS
It comprises of 4 directors, chairman and secretary board who are responsible for making plans
and policies to achieve the set goals of the organization.

Mr. Shoaib Javed Hussain

Chairman

Mr. Anwar Mansoor Khan Director

Mr. Humayun Bashir Director

Mr. Moin M. Fudda Director

Mrs. Pouruchisty Sidhwa Director

Mr. Mushtaq Ahmed Secretary

EXECUTIVE DIRECTORS
It comprises of 4 members responsible for implementation of policies and directives
of theboard of directors.
 Syed Arshad Ali
 Mrs. Nargis Ghalo
 Mr. Muhammad Yahya
 Mr. Allah Rakha Aasi

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 REGIONS:

There are 4 regions in Pakistan headed by regional chiefs responsible for looking after
all thezones under his administration. These regions are;

 Southern Region
 Central
Region
 Multan
Region
 North
Region

ZONES:

There are 26 zones in Pakistan headed by the zonal head responsible for
procurement of business to achieve the set business target of the organization.
The basic structure of the Corporation consists of:
 Four Regional Offices
 Twenty-Six Zonal Offices
 A few Sub-Zonal Offices
 111 Sector Offices
A network of 461 Area Offices across the country for Individual
Life Insurance; Four Zonal Offices,6 Sector Offices with 20 Sector
Heads for Group & Pension are involved in the Marketing of Life
Insurance Plans policies and products offered by State Life and a
Principal Office.
The Zonal Offices deal exclusively with Sales and Marketing. Underwriting of Life Insurance
Policies and the Policyholder’s Services. Regional Offices, each headed by a Regional Chief,
supervise business activities of the Zones functioning under them. The Principal Office, based at

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Karachi, is responsible for corporate activities such as investment, real estate, actuarial, overseas
operations, etc.

ZONES
Karachi (Southern) Mirpurkhas Zone Sargodha Zone Bahawalpur Zone

Karachi (Central) Larkana Zone Sialkot Zone Peshawar Zone

Karachi (Eastern) Lahore Central Multan Zone Rawalpindi Zone

Hyderabad Zone Lahore Western Sahiwal Zone Abbottabad Zone

Quetta Zone Gujranwala Zone Rahim Yar Khan Gujrat Zone

Sukkur Zone Faisalabad Zone Dera Ghazi Khan Islamabad Zone

Mirpur (AK) Zone

GROUP AND PENSION

There are 4 zonal offices of Group &Pension and under these zones there are
many sectoroffices;
 Group & Pension
Rawalpindi Zone
 Group and Pension
Peshawar Zone
 Group and Pension Karachi
Zone
 Group and Pension Lahore
Zone

PRODUCTS
As we know that SLIC has dominated life insurance market and it acquires about
90% market share of life insurance. So it has introduced a great number of products
and it is offering products appropriate for every inhabitant of Pakistan

SLIC offers different

products for

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 Individual life

 Group Life
Insurance

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INDIVIDUAL LIFE PRODUCTS

WHOLE LIFE ASSURANCE:

It is a unique combination of protection and savings at a very economical premium.
Death at any time before age 85 years terminates payment of premiums and the sum
insured and attached bonuses become payable. In the event the insured survives to
the policy anniversary at age 85 years, the policy matures and the sum insured plus
bonuses become payable. Under this plan the rates of bonuses are usually much
higher than the other plans and they help in increasing not only protection but also
the investment element of the policy substantially. This plan is best suited for
youngsters who have at initial stages of their careers and cannot afford to pay high
premiums. Individuals who anticipate requirement of a lump sum in far future can
alsothis plan
ENDOWMENT ASSURANCE:
It’s a safest and surest method of guaranteed cash provision either at a specified time
or at death (Allah forbid). Under these policies, the sum insured plus bonuses are
payable at the end of the specified number of years or at death of the life insured if
earlier. Premiums are payable for the specified number of years or till death, if
earlier. The benefits under the plan can be further increased by attaching
supplementary covers.
The plan serves the requirements of a family in various shapes by way of financial
help at retirement, education of children or provision of capital for business.
ANTICIPATED ENDOWMENT ASSURANCE:
This is a modified form of endowment assurance and is also called ‘Three Payment
Plan’. Besides fulfilling the long-term financial needs, it also helps in meeting the
short-term financial exigencies. As the name suggests, the plan offers three
payments throughout term of the policy.
The plan offers survival benefits equal to 25% of sum insured on completion of 1/3rd and
2/3rd term of the policy. If the policyholder does not withdraw the survival benefits, a
very attractive special reversionary bonus is available. On completion of term of the
policy, the remaining 50% sum insured plus accrued bonuses shall be payable. If the life
insured expires during term of the policy, sum insured, accrued bonuses, unclaimed
survival benefits and special reversionary bonuses are payable. The plan is suitable for
the individuals who have long-term financial needs but also anticipate requirement of
money relatively earlier. Three Payment Plans helps fulfilling these short-term financial
needs without terminating the actual contract.

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SADABAHAR PLAN:
SadaBahar is an anticipated endowment type with-profit plan that provides lump
sum benefitat certain stages during the premium-paying term or on earlier death. In
addition, this plan has a built-in Accidental Death Benefit (ADB) rider so that the
policyholder gets an additional sum assured in case of death due to an accident.
This plan is a safe instrument for cash provision at the time of need. With this plan, the
policyholder can secure greater protection and continued prosperity for the family at affordable
cost affordable cost.

Admissible Ages and Terms this plan is available to all members of the general
public, aged from 20 to 60 years nearest birthday. Both males and females may
purchase this plan. Terms offered under this plan are 12, 15, 18, 21, 24, 27 and 30
years.

 Survival Benefits:
On completion of one-third of the policy term, 20% of basic sum assured can be taken by the
policyholder. Another 20% of the sum assured can be taken on completion of two-third of the
policy term and the remaining 60% of basic sum assured plus accrued bonuses (if any) shall be
payable at the end of the policy term in the event of survival of the assured.

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

exercised on the due date or within 6 months after the due date, a
special bonus will automatically beadded to the policy at the end of 6
months. In this event:

2. On death of the assured while the policy is in force, the special bonus
will be payable in addition to (1) Basic Sum Assured (2) Other
Reversionary Bonuses accrued on the policy and (3) the amount of
any installment left with State Life.

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 3. On the maturity date, the special bonus will be payable together
with all the installments of the sum assured remaining with State
Life, in addition to regular reversionary bonuses accrued on the
policy.

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

surrender the unclaimed installment of sum assured together with the
related special bonus. The aggregate cash surrender value of the two
shall not be less than the amount of the said unclaimed installment.
5. The reversionary bonuses as per usual practice will continue to be
allotted each year on the basic sum assured (if in force) as and when
Actuarial Surplus is declared. However the unclaimed installments of
the sum assured and related special bonus will not participate in State
Life’s Actuarial Surplus.
 Death Benefits:
The full basic sum insured plus accrued bonuses are payable on death of insured
any time whilethe policy is in force. In addition, if death occurs as a result of an
accident, additional amount equal to one basic sum assured, subject to maximum
limit, will be paid. The usual maximum on the ADB of Rs. 4 million will apply
and premium will be calculated accordingly

 Bonuses:
This policy will participate in State Life’s surplus. Rates of bonus applicable will
be 25% higher than those on anticipated endowment plan.
Under endowment insurance these plans are available.

SHAD ABAD ASSURANCE:

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

under the policy increase manifold in the event of death of the life insured.
On completion of term of policy, sum insured plus bonuses attached to the policy
are payable. However, on death during the policy term, the death benefit consists
of double of sum insured with accrued bonuses. In case of death due to accident,
the death benefit consists of four times the sum insured plus bonuses. The
coverage can be further widened by attaching supplementary covers with the
policy.
This plan meets the requirements of those who appreciate the basic savings
purpose of endowment assurance but also like some additional cover to protect
loved ones in case they die, Allah forbid, before maturity.

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CHILD EDUCATION & MARRIAGE ASSURANCE:

Child Education & Marriage Assurance is a plan for the protection of child’s future.
It provides a lump sum benefit for the child at the completion of the policy term. On
completion of term of the policy, full sum insured together with the accrued bonuses
become payable to the policyholder.
If the policyholder dies (Allah forbid) before completion of the term, a family income benefit of
Rs 240 per 1000 sum insured per annum is paid to the child until the completion of policy term.
Further, future premiums under the policy are waived and policy remains in force with full sum
insured and continues to participate in State Life’s surplus and receive bonuses. Upon the
completion of policy term, the child gets two options of either getting the proceeds in a lump sum
or in five equal installments.

i. Continue the policy in the same manner as earlier by switching the plan
for the benefit ofanother child.
ii. Get a refund of all the previous premiums paid till the death of the child or
the cash value ofthe policy, whichever is higher and terminate the contract.
iii. Continue the policy without naming another child in which case the
benefit of Refund of Premium [as provided above under condition (b)]
will not be available.
Child Education & Marriage Plan is suited for the parents who are
conscious about the future of their children. The term of the plan is such
that the lump sum benefit becomes payable when the child attains a
predetermined age of 18, 21 or 25 years. These ages may be selected
considering the occasion at which children generally need financial
assistance for higher education, marriage, or setting up business.
Depending upon your individual needs, the plan is available in two separate
versions of with and without built-in family income benefit. In addition to
parent, this plan can also be affected by grandparents, uncles, aunts or any
other person who is paying for the maintenance of the child

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JEEVANSATHI ASSURANCE:
This is a joint life plan and covers lives of two partners say husband and wife
simultaneously. Premiums are payable till the end of the specified term or till death
of either of the insured persons, if earlier. The plan contains extensive benefits; an
overview of which appears as under: On the death of the first life, the sum insured
will be paid to the survivor. Further premiums under the policy will be waived, but
the insurance protection of the second life will continue. Also, the policy will
continue to participate in profits of the Corporation. On death of the second life,
again the sum insured will be paid together with the attaching bonuses. In this event
the policy will terminate.
If the second life survives the term of the policy, he or she will be paid sum insured
together with the attached bonuses, even though the sum insured has been paid once,
on the death of the first life. If both the lives survive the term of the policy, the
sum insured will be paid to them jointly, only once, together with the attached
bonuses. Different supplementary covers are also available for increasing coverage
under the policy.

CHILD PROTECTION ASSURANCE:

This is a joint life assurance and covers the lives of child and either of the parents. If
the policyholder and the child both survive full term of the policy, sum insured and
accrued bonuses become payable. If the policyholder dies before completion of term
of the policy the payment of premiums ceases and the child is paid an income of Rs
100/- per thousand sum insured per annum till the completion of the policy term. On
completion of policy term, sum insured inclusive of bonuses accrued till the death of
the policyholder is paid to the child.
If the child dies (Allah forbid) before maturity of the policy and during lifetime of
the policyholder, the death claim payable to the policyholder depends on the age at
death of the child.
As the name suggests, the plan is suitable for parents who want to cater future
financial needs of their children in case of death of the breadwinner of the
family. The plan has a unique feature of providing coverage on the life of child.
The coverage of the policy can further be widened by attaching supplementary
covers.

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SUNEHRI POLICY:
Sunehri Policy is an innovative life insurance product. It is flexible, secure and
meets the challenges of inflation quite economically. Under a special feature of this
plan, from third policyyear onwards, sum insured under the policy and premium will
increase by 6% per annum without providing any evidence ofinsurability. From the
third policy year onward, the policyholder is provided with a statement showing the
buildup of cash value of the policy and sum insured for the year. The policy also
participates in the surplus of State Life and currently the rate of bonus is Rs 105 per
thousand per annum of the adjusted opening cash value.

OPTIONAL MATURITY ENDOWMENT:

It is an endowment assurance with a built in option to mature early. The plan is
available forindividuals aged 20 to 45 years. The policyholder has following options
regarding maturity ofthis plan.

 After the policy has been in force for 20 years or more, the policyholder gets
an optionto mature the policy for a proportionately reduced sum insured.

 After the policy has been in force for 20 years or more, the policyholder,
depending onhis or her needs, can mature the policy in parts.

 Let the policy mature at originally selected term. In this case the policyholder
gets anadditional bonus.
The policy participates in bonuses declared by State Life from time to time. Please
click here fordetails of bonuses currently available for this plan. Coverage under the
policy can also be enhanced by attaching supplementary covers.

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NIGEHBAN PLAN:

This plan provides term insurance cover for a period ranging from 5 to 10 years.
As the name suggests, this plan is meant to provide protection during the term of the
policy only i.e. sum insured is payable on death if it occurs during the term of
insurance while the policy is in force. The plan does not carry any survival benefits,
maturity benefits, surrender values, loan values etc. The policies will be without
profits. The plan is available in two versionsnamely, with single premium and with
annual premiums. Attaching certain supplementary covers can widen the coverage
under the plan.

MUHAFAZ PLUS ASSURANCE:

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

(Allah forbid) of the life insured. On maturity, the policyholder will receive sum
insured plus bonuses attached with the policy.
However if the life insured dies before completion of term of the policy, basic sum
insured plus attached bonuses will be paid to the dependants immediately. In case of
death due to accident, the double of the sum insured is paid. In addition, the
dependents will also be paid an income of Rs 240 per thousand sum insured per
annum for a fixed period of 15 years. The first payment will fall due on the policy
anniversary immediately after the death of the life insured.

SHEHNAI POLICY:

Features:
Shehnai Policy is an innovative life insurance product. It provides a solution to
the problems of many concerned parents who want to save now in order to
provide for their children’s higher education, marriage and other expenses when
the need arises. The term of the plan is such that the lump sum benefit becomes
payable as the child attains the age of 25 years. Shehnai Policy also caters from
the ravages of inflation. This is done by the option of automatic increase of 6%
per annum in sum insured and premium from third policy year onward. From the
fourth policy year onward, the policyholder is provided with a statement showing
the buildup of cash value of the policy and sum insured for the year. The policy

18
 also participates in the surplus of State Life and currently the rate of bonus is Rs
105 per thousand per annum of the adjusted opening cash value

Maturity Benefit:
The policy matures when the child attains age 25 years. At maturity the cash value of
the policy is paid to the child. The cash value includes all the bonuses attached with
the policy.

Death Benefit:
If the life insured dies during term of the policy, premium payments stop and the
sum insured applicable to the policy year of death is deferred to be payable when the
child attains age of 25.At the time of death of the life insured, the said sum insured
is added to the „adjusted opening cash value‟ to be called the „enhanced cash value‟
and participates in State Life’s surplus until it is paid out to the child when he or she
attains the age of 25 Years. The child will have an option of either collecting the
benefit in a lump Sum or in fiveequal annual installments

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GROUP LIFE INSURANCE PRODUCTS

These includes

 Term Insurance Scheme

 House Building & perquisites Insurance Scheme

 Pay Continuation Scheme

 Group Endowment Insurance Scheme

 Group Pension Scheme

Term Insurance Scheme:

Group Term Insurance Plan provides life insurance coverage to the

member of a group, such as the employees of an employer. The amount
of coverage of each member is determined with reference to either his
designation or salary or employment category or some other similar
variable.
This plan provides insurance protection to the members of a group at a very
affordableminimum possible cost, 24 hours coverage around the world.
By promoting a sense of financial security amongst the employees it
contributes to improving the working environment for the employer
resulting in higher productivity.
In most cases the employer is legally obliged to provide insurance
cover to his employees. This plan helps the employer to fulfill this
requirement.
Premiums are tax-deductible for the employer. Total premium under
group term insurance is lower as compared to sum of premium of all
policies if issued individually toeach life, due to savings in expenses.
On death of any insured member the sum assured on his life is paid for the
benefit of his surviving family. This benefit is payable regardless of the
total number of the deaths even if the total amount paid out exceeds the
total premiums received under the policy.
However, if in any three-year period State Life earns a net profit on
any policy, then some share in the profit is passed on to the

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 policyholder, depending upon the total number of members in the
scheme. This share can go up to 90% in case of large sizedschemes.
The supplementary contracts or riders which can be attached with this scheme are:

PTD (Accident) Rider:

Under this rider the insured member is entitled to payment of the sum assured in
case of any accident causing permanent and total disability, which includes loss
of two limbs or two eyes or loss of hearing in both ears or severe facial
disfigurement. If the disability is permanent but nottotal then some percentage of
the sum assured is payable depending upon the severity of the disability. In this
regards the same schedule of disabilities is applicable as is prescribed under the
labor laws. In case of a temporary accidental disability causing absence from
work a fortnightly benefit calculated at the rate of Rs. 3,000 per month or the
monthly salary whichever is less is payable.

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 A.D.B. Rider:
Under this rider the death benefit of an insured member is doubled if the death
was caused byan accident.

Natural Disability Rider:

Under this Rider if an, insured member is rendered incapable of pursuing
any occupation or vocation for gainful employment due to permanent
disability caused by disease or sicknessthen he is entitled to the sum assured
as benefit.

Critical Illness Rider:

If an employee contracts any of the following critical illnesses while insured
under this riderthen he is entitled to the rider sum assured as benefit.
Covered critical illnesses include.

 Heart attack
 Coronary Artery by-
pass surgery
 Stroke
 Cancer
 Kidney Failure
 Major organ transplant such as heart, kidney or liver
The insured member must survive for at least 31 days after contracting the illness to
become eligible for his benefit. Some restrictions apply during the first two years of
coverage.

SUITABLE FOR:

The plan is suitable for employers who desire to provide financial security to their employees by
means of insurance coverage or for members of a professional body or association or some
welfare association or a social club who desire to avail insurance protection on their life.

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HOUSE BUILDING & PERQUISITES INSURANCE SCHEME:
Under this plan each member of the group is insured for the total amount of loan
outstanding against him inclusive of accumulated interest. The amount of
Insurance is the actual amount ofloan outstanding on the date of death whereas the
premium is charged on the average loan outstanding over the whole policy year.

It provides financial security to employers and financial institutions against the

risk of untimely death of any of their indebted employee or client. Very often the
family of the deceased person is not is a position to repay the loans taken out by
him, especially if the deceased person was the sole breadwinning member of the
family. In such a case the insurance coverage provides an assurance to the
creditor that he would be able to recover his capital without causing hardship to
the distressed family.
The creditor is also protected from the headache of constantly monitoring
cases of delayed repayments of loan in hardship cases caused by unforeseen
death of a bread winning familymember. The premium due under this policy
may be recovered by the creditor from the borrowers along with the loan
repayment installments.

Benefits:
Benefits of this plan are

 In case of death of an insured member of the scheme the total amount of the
loan outstanding against him including accumulated interest is payable to the
policyholder. In case State Life earns a profit on any policy during a 3-year
period, the policyholder is also entitled to some share in the profits depending
upon the size of the group.

 Riders or supplementary contract that can be attach with this plan is

 PTD (Accident) and NDB rider may be attached with this plan. These riders
provide insurance cover against permanent disability due to accidental and
natural causes rendering the insured member unable to earn a livelihood for
himself and his family. In such a case the attaching riders can facilitate the
creditor in recovering the outstanding amount of loan.

 This plan is suitable for employers who have a scheme for providing loans to
their employees for house building, purchases of conveyance or any other
goods of household use. It is also suitable for banks that are in the business of
granting loans totheir clients for purchase of house or conveyance or for some
business venture.

23
Similarly leasing companies and other financial institutions with similar facility may findthis plan
quite attractive.

PAY CONTINUATION SCHEME:

1. Manpower is still considered as one of the most important elements of

productions in spite of the dramatic growth of microchip based
automation in all walks of life, especially in commerce and industry. The
overall efficiency of an organization therefore depends upon the quality
of the manpower of its employees. The more devoted, hardworking and
loyal the employees the higher the reward to the employer in the form of
greater efficiency and profitability. Quality manpower can be attracted by
offering a good employee benefits package based on ensuring security
and peace of mind of the workforce so that a greater commitment is
obtained from them. This is why the enlightened employer pays
particular attention to the welfare and well being of their workforce
through various employee benefits scheme.

2. One of the functions of such schemes is to provide protection to the

employee’s dependants in the event of his death. Progressive employers
do provide group insurance which pays a lump sum to the dependants.
This however does not last long. What is required in addition is a regular
monthly income for a period of time. To meet this Requirement State Life
proudly presents a plan, which offers invaluable protection to the
employee’s family during his working life. The family’s regular monthly
income is protected for 15 years or until age 60 whichever is earlier. In
this way coverage is provided for pay upon the death of the employee.
This is illustrated by the following example:
a. If death takes place at age 35 then the benefit payable will be
2,000/- per monthfor a period of 15 years. Total amount payable
Rs. 3,60,000/-

3. Annual premiums will be calculated on the basis of the employee’s pay

and his age andwill be payable at the beginning of each scheme year. If
this policy qualify for profit commission it will be payable in
accordance with the rules at the end of 3 years.
4. “Cover without medical evidence” is allowed on the same basis as
group term with the monthly benefits being converted into a lump sum
equivalent. The total of the benefits so arrived at should, however not
the maximum allowable under the policy exceed.

24
GROUP ENDOWMENT INSURANCE SCHEME:

Group Endowment Scheme is a unique saving and protection scheme through

which the employees of an employer can enjoy insurance protection throughout
their service and also get a lump sum cash amount upon their retirement if they
survive up to retirement.

In Pakistan most employers do not operate any pension scheme for their
employees although some employers may have a provident fund scheme or a
gratuity scheme. The expected benefits at retirement under a typical provident
fund scheme and gratuity scheme combined are woefully inadequate for a
retiring employee for maintaining his standard of living after retirement unless
he supplements these benefits with his own personal savings. Keeping this in
view some employers may wish to encourage a habit of saving amongst their
employees for their own welfare. Group Endowment Insurance Scheme can be a
means of introducing a compulsory saving scheme for the employees under the
sponsorship of the employer.

Participation in the scheme is usually compulsory. However, if participation in

the scheme isvoluntary, at least 75% of eligible employees must participate.

Benefits:
Under this scheme each employee is provided insurance protection for an
amount which may be flat or depends upon the designation or salary of the
employee. The amount of insurance is payable on maturity or death if it occurs
earlier. In most cases the term of the endowment insurance for each employee is
determined in such a way that the policy matures at or near hisretirement date.

This enables the maturity proceeds to coincide with retirement and supplement the
retirementbenefits.

Profit Participation:
The endowment insurance is issued on a with profits basis. The same bonus rate
is applicable asfor the corresponding individual endowment insurance policies.

25
 Premium Rates
The same premium rates are applicable as for individual endowment policy but
with the added attraction that in group form some volume discounts are also
applicable depending upon the size of the annual premium.

Surrender Value
The policy acquires Surrender Value in respect of a member after insurance cover
has been in force for at least two years on that member and no premiums are in
default.

Loan Facility
Under this scheme if the member needs immediate liquidity and a policy has
acquired Surrender Value in respect of member, he/she can avail a maximum
loan of 80% of the netsurrender value of the policy.

Continuation Privileges :
If an employee leaves the service of the employer, he can surrender his policy
against the Net Surrender Value. He is also provided with the option of
continuing his endowment insurance coverage in an individual capacity without
any evidence of good health, for the same sum assured and term as he was
enjoying during his service. The premium rates applicable to the policy are the
same as are generally applicable to the same class of business in and individual
capacity.
The ADB, PTD (Accident) and NDB can be added to this policy if desired.

Suitable For
This plan is suitable for employers who desire to inculcate a habit of saving
amongst their employees in addition to providing them insurance against
premature death.

26
 INTRODUCTION OF STATE LIFE

INTERNEE WORK:

WORK DONE BY ME

WEEKLY TIME TABLE:

Monday to Friday 09:00am to05:00pm
Saturday to Sunday SLIC are closed

Introduction:

I done my six week internship in state life insurance Pakistan in SLIC Bahawalpur. My
internship duration is to First three weeks I perform my duties in Personnel & General
Service
Department, Audit Department, Finance &Accounting Department and last three week I
done my work in Policy holder Service Department, New Business Department, Agency
Department. All the staff of company support me i learned many things in this six week
internship duration

SLIC has following departments which performs the different functions of SLIC.
Thesedepartments are;

 Personnel & General Service

Department
 Audit Department
 Finance &Accounting Department
 Policyholder Service Department
 New Business Department
 Agency Department
 F M D Department

27
First Three Weeks
First three weeks I learn these things explained below:

FINANCIAL AND ACCOUNT DEPARTMENT

In the area of finance and account department, l done my work in this department
of three weeks. l went to Sir Zafar sahib who was Head of the finance and account
department. First of all he told me about cheque issuance. How a cheque issue?
There are four types.

1. Loan cheque
2. Maturity cheque
3. Claim cheque
4. Surrender cheque
Loan cheque:
Loan cheque are those cheques that are issued to the policy holders. In this if there
are300000 rupees that exist in our company. So it is our policy to offer the loan to
policy holder less than 300000. We do not concern his monthly installment if it is
30000 or 20000 etc.

Maturity cheque:
Maturity cheques are those cheques whose are issued after completion of the
agreement.

Claim cheques:
Claim cheque in those cheques that are issued after the inquiry of the policy holder
that how the policy holder dead and why it did? It issued to those people who are
the eligible and heritage holder of the cash etc.

Surrender cheques:
Surrender cheques are those cheques which are issued to policy holder when he
disappointed due to any reason. May be unemployment or inflation he went to
restrict to join the policy as per agreement so he request to company that stop my
policy and return me my amount that you have.

Vouchering Record:
The working of vouchering record, l done my working of this area only three days. The record
vouchering is maintained in a proper register and four types of the cheques. How to make a
voucher, the name of policy holder, address, amount of policy and cheques issuance record etc.

28
Data entry in computer:
I done the working in data entry in computer only 3 days. The policy holder and
their cheques record maintain on it. I take help form senior head that name was
Gohar Shah. In this I learn how a debit and credit amount record and their policy
record etc. ln debit we record theamount of the policy holder that he withdraw his
amount. For example Zakat , late fees, loan cheques etc.
In the credit we record the amount of the policy holder that he deposit in the company.
The software that a company of state life insurance corporation of Pakistan used,it is
older and not satisfactory. It should be modern because often time the data entry
problemsexist and not favorable for employee and customer disappointed.

Bank reconciliation statement:

The head of department told me that you done other work in this area the one week.
And they refer to the Sir Yousaf that was deputy manager of the accounting and
finance department.
First of all amount statement of company and the statement of the bank check that
and tell that the balance of both statement are equally and balanced. If there was
problem incheques stopper payment and other issues toward the statement.

I do the work of tell the bank reconciliation statement in two days. After the work of
it. Ifound that there are two to three things are incorrectly typed by the bank and told
to head of the department. In the working my boss appreciate me on my well
working.

Un-presented cheque statement:

The head of the department told me that why the cheques were unpresented and when.
I observe that there are following reasons of the unpresented cheques due to time,
incorrectname and address etc.
After the unpresented cheque, the cheques return to policy holder and or company.The company
after this un presented, the issuance of cheques are reissue and do work on topresent the cheques,

 Maintains the records of cash transactions.

 Prepares payroll for the regular employees
 Takes care of the fringe benefit (medical facilities)
 Commission paid to SR, SO and SM are also calculated and paid through this
department.
keep the corporation on financial track balance sheets and income statement also prepared on
annually, monthly and weekly basis. The principal office sends annual budget to the department
and department is responsible for proper utilization of cash disbursements. The department
also send budget forecast for new budget proposal.

29
This department consists of following section:
 Commission
 Salary
 Disbursement
 Loan
 Cash counter
COMMISSION:
Commission department facilitates the field force by offering commission and due
bonuses. The department is directed to calculate and analyze the earning of last
year, providing advances andloans to field force and offer other fringe benefits to
motivates the field force.
Commission is only give to commission based persons who are SM, SO AND SR.
Commission is calculated from the premium after subtracting the tax. Then check
that SM nottakes any advanced loan and any claim from zonal, regional.
Structure of commission:
First year premium QUARTER BONUS
SR-------- 35% 2.5%
SO------- 15% 2.5%
SM------ 8% 2%

Persistency bonus:
It gives on the persistency of the last year business.

On 80% business the commission is 1.1 percent. On 81, it is 1.2 and onward.
Second year premium

SR 10%
SO 2%
SM 1%

30
THIRD YEAR PREMIUM

SR 5%
SO 1%
SM 0.5%

SALARY & LOAN:

According to their category the benefits, funds and salary are gives to employees.
Application and salary form are filled here related their category and then
according to that make the voucher slip and passed by the officer.
CASH COUNTER:
In cash counter premium and loan amount is submitted. There is two
accounts for policyholders.
First Year Accounting 1173 A/C

Renewal A/C

1089 A/C is account no of renewal account

Collection is done in two ways:

I. Cash

II. Cheque

FMD department(field man power development):

I done the working in the f m d department of 4 days. The department do
with for newemployee or their old employee for promotion the company do
for them.

When l went to their department. I saw that their was same as in our class and
sameenvironment as well as same in our class same in university.

The department head Qaiser Nawaz take class of sale represent. The
companies of insurance life hold their own company book. They define 75
tables that describe the child education and marriage. I took two classes that
timing 9:00 am to 12.

31
They told that how a department work and do their jobs. Their under 3 employees.
Wedone the 3 type of course as follow.
1. Foundation advance course
2. Per motive management orientation course
3. Marketing management skill course

32
Foundation advance course:
This course done for new sale representors. In which new skill promote and
attractive information given to them. In their course the head of course adios told
them about marketing, history of company, assets of the company, product of
company and information of all the department.

Pro-motive management oriented:

This course done by sales officers and done in five days and after five days exams
will be conducted. In this course, the course advisors told and reach the about
recruitment, selection,supervision and training etc.

Marketing management skill:

It had done the course for sale managers to area managers. It describes to 15 days
course. In which, marketing, selection, supervision and training the working of the
company.
During my internship the paper of foundation advance are conducted. It is held on Fridayand two
hours duration and paper exist on book of the insurance co. the first position holder take
advantage of the trophy and prize.

33
PERSONNEL & GENERAL SERVICE DEPARTMENT:

There are two functions

 Personal Management
 General Service

FUNCTIONS:

Personal Management:
 Personnel policies, motivation, incentive and implementation of service
regulations
 Office management development
 Personnel management

General Services:

Procurement

 Purchase of goods and services

 Uniforms
 Communication
 Office machines & equipment
 Furniture & fixture
 Transport & conveyance
 Receipt and dispatch
 Assets register
 Other Services Maintenance

34
SECTIONS:
Personnel Section:
All the employees’ engagement, promotion, demotion, shift and allowances are
dealt by personnel section. Yearly classified reports- ACR the employees are set
up, under the control ofthis section, by the departmental heads.

For the appointment of the staff, an advertisement is initiated in the newspaper. Zonal
head iscompetent authority for this appointment.

 For promotion of the employees ACR’S are necessary

 Minimum three years are required to remain in one cadre
 Each employee is promoted by the criteria
 These instructions set by principal office
 Regional office does promotion of officers.

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

Sub Sections:
1. Medical Section:
 Medical expenses are beard by SLIC provided that these are
incurred in approvedhospital.
 The reimbursement of medicine is not allowed to staff (having
grade 1 to 8) but they are given Rs 1500 per month in shape of
salary as medicine allowance.

2. Leave Section:
There are two types of casual leaves:

 Casual leave
 Medical leave
18 days casual leaves are allowed to all employees in a year .The medical leave or application
leave is allowed for 48 days in a year .

3. Rent Section:
When sale manager is promote to area manager he is categorized as A, B, C, and
he is unrestricted to his own office at his own choice at the expenses of state
life .a good location is selected by AM. After selection of place, zonal head is
informed about the location, by application written by AM. This application is
transfer to P&GS department for the analysis of location of the office. This
location is analyzed by zonal rent committee (ZRC).

35
 A lease agreement is made with the landlord after analyzing the approved map
for the locationand property registration form.

4. Stationary Section:
This section maintain the record of stationary such as paper, pencil, envelops printed letters,forms,
calculators, etc. .Whenever any department requires the stationary ,the concerned department fills
a requisition slip. The stationary is issued to concerned department and is recorded in the register.

5. Capital Section:
This section is responsible for purchase, sale and maintenance of furniture & fixture;
equipment etc .a zonal procurement committee is constituted for purchase of assets.
The assets are purchased from suitable supplier after critically analyzed the quotation
offered by different venders.

6. Daily Attendance:
All the employees of Group and pension call their attendance before starting their duty. If
any employee is not at time than he will call late attendance and three late attendances
will be considered a casual leave.

7. Record of Employees:
There is complete record of employees who are at work or have retired. And all necessary datais
maintained about every employee as date of appointment, date of retirement, promotions, medical
services and all other data.

36
AUDIT DEPARTMENT
It is an internal audit transaction system which base on daily work. Management is responsible
for ensuring that proper accounting records are kept and its assets are safeguard. The whole
system is relay on production of reliable management information and the financial account, and
to prevent errors, fraud and loss of assets. Actually internal audit is a essential part of internal
control.

Internal Control:
The internal control goes beyond financial and accounting matters and the
custody of organization assets to include controls designed to improve
operational efficiency andadherence to organization policies.

Objects of Internal Audit:

This is an independent appraisal function. Internal audit is to assist member of the
organization is effective discharge of their responsibilities. To this end internal
auditing furnishing those with analyses, appraisal, recommendations, counsel, and
information concerning the activities are viewed.

Internal auditor should:

i. Review the system to ensure compliance with those policies, plans,procedures,
laws and regulations which could have a significant impact on operations and
report
ii. Review the means of safeguard assets and as appropriate verify the existence of
suchassets
iii. Appraise the economy and efficiency with which resources are employed.
iv. Internal auditor should be independent of the activities they audit Internal
auditors are independent when they can carry out their work freely and
objectively.

TYPES OF INTERNAL AUDIT:

1. Pre- audit(Audit before making payment )
2. Post- audit:(Audit after making payment is e.g. groups and pension)
3. External-audit(Audit which is done through external parties like chartered firms,
GOVTorganization audit)

37
Objectives of Internal Accounting Controls:

SLIC receives and enters its accounting records, all the income and revenue
to which it isentitled.

Expenditure is properly authorized.

Assets are properly recorded and safeguard.
Liabilities are properly recorded and provision is made for known or expected
losses.
Accounting records provide a reliable basis for the preparation of accounts.

Internal Audit Role in State Life:

Right information is one of the essential factors in the process of decision making.In the absence
of accurate and dependable information management, board of directors are unableto make policy
and management decisions. In state life some items are subject to pre-audit while some are
subject to post-audit.

List of payment subject to post audit:

 Payment and vouchers of salaries, except Dec, Jan do changes
 Every month fixed overtime to staff
 Entertainment to officers for sitting late night
 Every month officer’s entertainment and newspapers
 Monthly car rental to officers
 Monthly tea expenses to staff
 Air ticket
 Air insurance
 Telephone antiseptic bills
 Labor charges
 Office telephones
 Current monthly salary advances
POLICYHOLDER & SERVICE DEPARTMENT
PHS department performs these functions:

 Renewal or revival of policies

 Alteration in the policy
 Payments of death claims
 Payment of maturity claims
 Payment of injury claims

38
 Renewal or Revival of Policies:
When policy holder want to renew the policy when existing policy time is over.

Alteration:
Kinds of alteration

Calculated alteration
Contractual alteration

Calculated alteration
This alteration includes following things:

i. Sum insured
ii. Table & term
iii. Load
iv. After revival term & condition
v. Special revival after revival
vi. Change in terms & conditions

Contractual alteration
Legal point of view this alteration is called contractual alteration.

For specified period for alteration in the policies e.g anticipated policies before
the 4 year ofterm of policy alteration can be made.

For this policy the evaluation will be on:

i. Financial aspect
ii. Physical aspect
iii. Moral aspect
Mode of payment is usually yearly then policy holder in the time on need say to change it in the
monthly, quarterly, half yearly. Excess is charged for this purpose.

Half yearly 52 % of annual premium

Quarterly 27 % annual premium
Monthly 9% of annual premium

39
Procedure for Maturity Claims:

Letter is send to policyholder which provide following information.

It is a matter of great pleasure that your policy has matured. It is a time to fulfill the
goals that you had set years back. For collecting maturity benefits, please send a
written request along with following documents to your servicing State Life zonal
office:

1. Original policy document

2. Copy of National Identity Card
3. Maturity discharge voucher duly verified by your bank
4. If your signature has changed over the years, please send us your three
specimensignatures of old and new styles.
5. Immediately on receipt of above documents, we will process the case further
forpayment of amount due, if any, against maturity claim under above policy.

Procedure for Death Claim:

State Life insurance policies provide wide range of benefits in case of death of the personscovered
against them.

Survival Benefit Claim:

If Anticipated Endowment Assurance policy has completed 1/3rd or 2/3rd term of
the policy, itcan withdraw a sum equal to 25% of the sum insured of policy.
For withdrawal of Survival Benefit, send a written request along with following
documents tothe servicing State Life zonal office:

1. Original policy document

2. Copy of National Identity Card
3. Survival Benefit discharge voucher duly verified by your bank
4. If the signature of persons has changed over the years, then are need to send
threespecimen signatures of old and new styles.

Immediately on receipt of above documents, state life will process the case for payment ofamount
due, if any, against survival benefit claim under above policy.

40
Injury Claim:
If State Life insurance policy contains an Accidental Death & Indemnity Benefit (AIB)
supplementary cover, and the insured have sustained an injury as specified in the contract, hecan
apply to state life for an injury claim within 20 days of sustaining the accident.

41
 NEW BUSINESS DEPARTMENT
Syed Nazar Askari Shah is the incharge of new business department. In this
department as the name shows, new contracts start between proposes and insurance
company.

Proposer is a person who applies for the insurance protection:

Function of NB is underwriting
1) Department is responsible for processing the new business introduced by the
sales force right from receiving a proposal on the counter to mailing the policy
document to the policy holder
2) Various sections to perform the different task relating to the acceptance or
rejection ofrisks for life insurance.
3) Completion of all columns and then processed by the underwriters depending
upon whether they have been introduced under the medical or non-medical
scheme. The riskis assessed keeping in view the following factors
4) Personal data, occupation physical and social features health, family history of
the prospect, moral hazard , source of income , nomination , relationship
between the nominee and the prospect . Previous life insurance history of the
prospect if any, fieldofficer’s or sale representative confidential report included
in the proposal from,
5) Financial underwriting i.e. Source of income, its legality and proof, relationship
between the prospect’s income and sum assure .in case of field officers or sale
representative’s reports have more importance.
Policy contract are issued under intimation to the field force, and concerned department i.e
commission payment, agency administration, computer division and marketing. This in brief
terms is the function on new business department. That play key function as the underwriters are
responsible for the financial health of life institution. By accepting good risks they promote
profitability and growth, which helps in meeting the financial obligations of the life institutions
towards the policyholders, its employees and government.

 Process of dealing with new customer

 First of all sale rap motivate the customer to take policy
 Then sale rap fills proposal form for that customer
 Then sale rap takes Rs.500 as token money as underwriting fee for customer.
 Then proposal form come in new business for allotment of proposal number where
proposal number for a particular customer is allotted.
 Then process of underwriting is done. If the customer fulfills the requirements of
underwriting then further process continues otherwise request is rejected and
underwritersuggests some other alternative.
 If underwriter accepts the proposal then calculation of premium is done.

42
  After the calculation of premium the policy number is allotted and policy bond is
issued tocustomer.

Sections of New Business:

 Proposal section
 Underwriting section
 Calculation section
 Policy issue section
 Computer section
Proposal Section:

Proposal section policy number allot to a new customer’s proposal for future
reference.

 Issued the proposal number and then record the proposal number, serial no, age,
table& term and then SR, AR, PR no and the name of owner of policy form.

 These form are send with attaching the balance statement to underwriting
department.

 Some other forms which have some objections after clearing these things than
recordedinto the ledger.

Underwriting Section:
 Assesses the risk associated with the insurance proposal
 Underwriter verifies the proposal
 He feels that client should have a medical checkup than SLIC have
its own panel ofdoctors to provide medical assistance.

Types of underwriting:

Lay underwriting
Final authority

43
Lay underwriting:
Junior underwriter who check all the documents of policyholder. If the documents
are correctthen he sends to final authority

Final authority:
Person who check all the documents and decision of lay underwriter makes final decision.

Underwriting panel:
Underwriting specialist check the case thoroughly and check his name, NIC no, age,
weight, height, nominee, name occupation and address. There is something wrong
then they must beconscious and call medical report or other tests of medical.

Doctor’s panel:
The doctor panel head is known as CMA (CHIEF MEDICAL ADVISOR) i.e.
Dr. Naeem and also authorized doctors Dr. Saira who has recommended the
case by underwriters for medical reports etc.
They must check the nominee name, NIC no and his occupational stress.If the policyholder has
government employee then they can give the categories no 4 such as school teacher, doctor etc.
but if they are carpenter, bricks holder then they can give 5,6.

There are basically three categories of female:

 Government job and education
 Private illiterate
 Household

But the male have only one category:

If the case has 10, 00,000 then only one person sign but if they are Rs 20, 00,000
then they areRs 30, 00,000 then three persons can check.

If the policyholder are smoker then they will allow only smoking daily 6 up to
10.but if theysmoke 20 up to 25 then they are not capable to grant the policy.

Calculation section:

Calculation section calculation of premium is done. Premium can be pay in the

following way:

 Yearly

 Half Yearly

 Quarterly

44
Monthly:
Rate of interest and premium rate is calculated.
Rate of premium depends upon the age of a person. If the age is higher, then more rates will be
charged and if age is low then low rate will be charged. Rate also depends upon the maturity
period.

Different tables are used for calculating the rate of premium.

Most commonly used table is:

Table 3
Table 5
Table 7

Table 12
Table 18

Table 19

Policy issue section:

After completing this section, Number is allotted to policy holder .In policy issue
section, all therecords are maintained in the policy register.

Computer section:
This department has its own computer section, which contains all the records of policy holders.
The department is computerized in 1995.

45
 AGENCY DEPARTMENT
The marketing force, usually known as field workers, is regulated through an important
department which in insurance industry is called agency administration department.

 Agency administration results, trained, promote and provide services to

its field workers so as to ensure them skilled profession, sound career,
handsome
 Field force of SLIC plays an effective role in selling of intangible and
tangible products. In order to maintain record of the field force agency
department was established.
 Head of agency department is Mr. Shakeelansari and executive officer
Mr. Asif mir
 .Main function of this department includes recruitment, promotion, and
termination of field force, allied and medical facility for field force and is also
responsible for issuance and renewal of licenses to the field force.

State life has two levels of recruitment:

Recruitment:
Sale representative is appointed by SO/SM .The requirement and conditions for theappointment of
SR are as follows. State life has two level of recruitment.

Regular sales representatives:

 Minimum qualification required is matric
 Age at entry must not be less than 18 years.
 Annual quota for SR is Rs 10000
 Application for the issuance of license is necessary and is renewed after each 3
years.
 An application form, along with license fee Rs 50, attested photocopies of
documentsand nomination form is submitted to the agency department

46
Graduate sales representatives:
 Must be graduate required
 Less than 30 years of age having N.I.C.
 They are paid stipend.

Both above type of sale representative are registered under insurance

ordinance 2000 andinsurance rules 2002.

Promotion:
SR is promoted, upon fulfillment of certain terms and conditions and on
achievement ofbusiness targets.

Prize & Awards:

Awards and prize on annually, monthly achievements bases. Height of it is an
annual convention which held at a prominent place of prestige in the country in
which all the qualitiesaround the country share their knowledge and experience,
enjoy recreational activities and above all get benefit of company of successful
seniors.

Other Benefits:
Maintained furnishes offices are provided and those who wish to open their
officers according desire are paid cash compensation in lieu of an office to
maintain their own offices.
Receive heavy sum of insurance against accident and death through variety of Group
Insurance Policies. Company pays the premiums and for additional coverage subsidized rate
of premium ischarged which is deducted from their commission.

Termination and Demotion:

Any agent of SLIC, who behave negatively, violates the rules and regulation,
can be terminated by the zonal head. Any agent who fails to meet the annual
quota of FYP is demoted to immediate lower rank.

License:
License to work as agent for SLIC is issued by the controller of insurance Karachi. At specific
interval of time, a list of the field force is transferred to controller of insurance Karachi for
newand renewal of license.

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 The list of license fee is given below:

SR (new license for IST year) = Rs 50

SR (renewal of license) = Rs 150
SR (renewal with late fee) = Rs 250
SO/SM (renewal of license) = Rs 250
SO/SM (renewal with late fee) = Rs 400

The agency department is also involved in the following matters of

fieldpersons:
 Medical of Fieked person
 Rent

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SWOT Analysis of State life Insurance:
The joining of experienced people, advance management, advance set up and
facilities gave SLI Ltd an edge over its competitors.
STRENGTHS:
1. Enjoying economies of scale.
2. Good will in the market.
3. Strong financial position.
4. Long standing clients.
5. Experienced owners.
6. Organization gives opportunity to this employee for career path.
7. Have strong distribution channel in Pakistan.
8. Variety of Products.
WEAKNESS:
1. Majority of people are not well aware about State life Co. Ltd’
2. Product, so it needs extensive advertisement.
3. Employees discriminate customers on the basis of their status.
4. Improper human recourse management.
5. Less Incentives to Lower level employees.
6. The furniture available at the branch is not sufficient to occupy a larger
number of people at a time in the branch.
7. Limited area covered (only major cities are insured).
8. Lack of infrastructure.
9. No segmentation of market.
OPPORTUNITIES:
1. Used Latest IT Technology.
2. Hire insurance experts from other countries.
3. Explore unidentified market segments.
4. Agriculture and live stock market.
THREATS:
1. Change in government policies
2. The competition has become sever by the entrance of new companies.
3. The decrease in the purchasing power of people in the current economic
situation affect in the business activity speed.
4. Facing tough competition in market.
5. New business practices rules and regulations by SECP / Government sectors.
6. High risk in insurance business.

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 RATIO ANALYSIS

Ratio Analysis Liquidity ratios:

 Current ratio: current assets
/current liabilities
 Liquid ratio: liquid assets /
current liabilities

2019 2020 2021

Current ratio: 1.91 1.70 1.01

Liquid ratio 1.89 1.68 1.5

Interpretation:
Current ratio is much better and it is a positive sign that corporations
liquidity position is much better. It was near about 2 but in 2019 it
decreases because in 2019 investments were increased and claims ratio also
increased which decreased liquidity but it is more than 1 which is a
positive sign.

Liquid ratio is changing accordingly and there is no extra ordinary change in it. It means
that both current and liquidity ratios are better

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 Opportunity cost of capital:
(Investment income/ investments)*100

2021 2020 2019

Opportunity cost of 12.2 12.11% 12.34%
capital:

Interpretation:
Investment return is about 12% in these three years and it is a good return
on assets itmeans that opportunity cost of capital is much better. and it is
more than interests of banks. It means corporation is investing in profitable
business.

Claims ratio:
(Total claims/Business of Underwriting)* 100

2021 2020 2019

Claims ratio 54.5% 55.43% 56.30%

Interpretation:
Claims ratio is decreasing gradually it is a positive sign and corporation
must tried todecrease it more but it is much better and it cannot be said a
negative sign and it is marginal but it must be decreased and corporation
should try to accept those which haveless mortality ratio.

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Return on equity:
(Net profit after tax/total equity) *100

2021 2020 2019

Return on equity 21% 22.46% 24.76%

Interpretation:
Return on equity is so good and is so positive sign and in these three years it is more than
20% it means that profitability is so good it jumps 4 points in 2020 but its percentage
decreased in 2021 because there was recession globally. But it survived so well and return
on equity is much better in these three years.

Overall expense ratio:

(Management expenses/underwriting premium)*100
2021 2020 2019

Overall expense ratio 37% 41% 35%

Interpretation:
Overall expenses are increasing with passage of time and it is a negative sign and
corporation must try to decrease these expenses. Salaries and travelling expenses are
increasing it means that it is overstaffing and is also huge amounts on travelling expenses.

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 Earning per share:

(Net profit after tax /number of shares)

2021 2020 2019

Earning per share

45.46 28.98 26.93

Interpretation:
Earning per share is increasing and is so good sign that profitability of corporation is
increasing and it shows that in condition of recession it is profitable institution of company
and it survived well in period of recession also and it is so good.

Dividend rate:
(Dividend per share/face value of share)*100

2021 2020 2019

Dividend rate 49% 8.7% 21.1%

Interpretation:
Dividend rate is much better in 2019 and 2020 but it decreases to 8.7% in 2020 which is
negative sign it decreases in 2020 becauses profitability decreases in 2009. And there was
high claim ratio in 2020.

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 Investment income to Underwriting income:
(Investment income /premium income)*100

2021 2020 2019

Investment income to 67.7% 74.6% 82%
Underwriting income

Interpretation:
Because SLIC is Insurance Corporation and its main business is insurance so underwriting
income is more than investment income which is a positive sign. Because it is necessary
for any company to earn more from it main business for which it is incorporated.

RECOMMENDATIONS
SLIC no doubt a positive contributor in economic as well as insurance
industry growth. I am not able enough to make any suggestions about the
competence and working of the company yet during my internship period I
think there are some assured points adopting of which can serve more
effectively and efficiently. These points are as under

 It is practical that the employees were overburdened so they have work a lot.
In this way their efficiency is artificial and hiring more employees can
diminish their work.

 The employees should be signed jobs for specific period and than they should
shifted to other department so that they gain knowledge of other jobs. It means
rotation of their jobs must be done.

 State life should properly advertise and Communicate to public about the
servicesprovided by it, so that more customers will be attracted.

 IT draw backs should be improved.

 Expenditures must be control, which are very high.

 There is also a need of proper recruitment and selection program. New young
talentshould be introduced to inject the new ideas

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CONCLUSION
As of the above brief and wide discussion I have come to the point that
SLIC insurance playsa vital role in present insurance market in Pakistan.
The gross premium of the company is increasing. It was an interested
experience to do internship in state life insurance corporation. The staff
was highly cooperated and due to their help I learned big deal about
insurance sector.

I suggest that such an internship program highly integrative for the

students of management so that the students should be enquired with the
knowledge of practice world
.I do summarize that it would be a great help to me in selection of job
or future field ofwork.

REFERENCES:

In the preparation internship report me discussed various books

economist newspapers and visited websites. Following are references
from which I took assistance in preparation of my projects on State Life
Insurance Corporation.
www.statelife.com.pk www.businessplus.com

www.iap.gov.pk www.kse.com

www.secp.gov.pk

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