INSURANCEThe term “ insurance” can be defined in both financial & legal terms .

The financial definition focuses on an arrangement that redistributes the cost

of unexpected losses . That is the collection of a small premium payment

from all exposed & distributed to those suffering loss . The legal definition

focuses on a contractual arrangement whereby one party agrees to

compensate another party for losses .

The financial definition provides for the funding of losses whereas the

legal definition provides for the legally enforceable contract that spells out

the legal rights, duties , & obligations of all the parties to the contract . Let

us have a look at these definitions .

In legal sense :-

A contract of insurance is a contract by which one party in

consideration of the price paid to him proportionate to the risk provides

security to the other party that he shall not suffer loss , damages or

prejudice by happening of certain specified events .

Insurance is mean to protect the insured against uncertain events

which may cause disadvantages to him . Life insurance however is a

distinctive type of insurance where there is certainty of the payment of a

specified amount either on the death of insured or on the maturity of the

policy whichever is earlier .

1.2 COST & BENEFITS OF INSURANCE :-

The purpose of insurance mode of risk transfer is to provide

economic protection against the losses that may be incurred but to chance

events such as :-

(a) Death

(b) Disabilities

(c) Economic losses .

One party (the insurer ) for set amount of money ,( premium) agrees

to pay the other party ( insured or beneficiary ), a sum of money ( benefit )

upon the occurrence of an event which may or may not occur .

Insurance provides economic protection against losses that may

incurred due to chance events that may or may not occur during the

effective time of the contract called the policy .

Insurance of business organization is essential in the sense that

adverse events , if not guarded , may affect - the business itself , the

business owner or owner’s personal property & may also threaten the

owner’s financial well - beings .

INSURANCE DEVICE:-

The fundamental characteristics of insurance are :-

(a) It involves transfer of risk from the individual to the group , &

(b) There is sharing ( polling) of losses on some equitable basis such that

fortuitous losses will be indemnified ( paid ) More specifically , the cost &

benefits of insurance are :-

BENEFITS:-

Reimbursement for losses .

Reduction in tension & fear .

Avenue for investments - life insurance investment officer attractive

return .

Prevention of losses .

Credit multiplication .

Costs of insurance to society .

Cost of business operations - social wastage of resources .

Fraudulent & exaggerated claims – Malacious & undesirable transfer of

wealth .

1.3 ELEMENTS OF INSURANCE :-

For pure risk to be insurable , it should possess the followings

characteristics .

Large Numbers Of Exposure Units :-

The theory of insurance is based on law of large numbers .

Therefore the prime necessity for a rise to be insurable is that there must

be a sufficiently large number of units in a distribution & insurance

products are priced accordingly .

Define & measurable ( calculable ) loss :-

The losses are fairly predictable & can be measured in money terms .

Loss of peace of mind , tension etc. or loss of life cannot be

indemnified .

Determinable probability distribution :-

The probability distribution of the happening of adverse event is

determinable . This condition is necessary to establish the free premium

according to the theory of equivalence . If there is not determinable

distribution , there is no question of issuing a cover by an insurance

company .

Random ( Fortuitous ) Loss :-

The adverse event may or may not occur in future and once which

the insurance control . Naturally , if the event is non – random or the loss

has occurred in the past , there is no question of insurance . Also , it is

important to note that randomness is ensured by underwriters who guard

against adverse selection - the tendency of the poorer than average insured

to seek or continue insurance coverage .

Non – catastrophic Loss:-

The losses should be non – catastrophic . Not all the units in a

homogenous group will be subject to an adverse event . Recall that if all

the units meet losses , the company will be ruined only few out of a large

group will be exposed .

Premium should be Economically Feasible :

Since the insurance pool is structured to be sufficiently large , the price

charged by the insurer for buying the risk is generally low . It should be

sufficient to cause the rich for the insurer as well as viable for the insured .

Insurance Versus gambling :-

If gambling events were insurable , the gambler would be put in the

enviable position of being unable to lose because if it is head , he wins

else if fails , he collects the money from insurance company . Since , the

insurance premium must include the charge for the losses and the expenses

of operating the insurance pool , the resulting premium must be more than

mathematically fair value of the potential loss .

1.4 PRINCIPLES OF INSURANCE:-

Insurance is the contract between insurer & the insured in which an

insurer agrees to cover the risk of losses of the subject matter . For this

the insured has to pay premium at regular intervals of time .The

insurance contract is based on certain principles .

They are as follows :-

PRINCIPLE OF UTMOST GOOD FAITH :-

It is very important principle of insurance . According to this

principle insured should not give any false information in the proposal

form . He should not try to hide any fact from the insurer .

If it is found at the later stage that any false information was furnished ,

the insurance contract may stand cancelled .

PRINCIPLE OF INSURABLE INTEREST :-

According to this principle an insured must have insurable interest in

the subject matter . He should be directly connected with the subject .

E.g. A person can purchase life insurance policy for himself or any of his

family member . A businessman can insure his goods etc.

PRINCIPLE OF INDEMNITY :-

According to this principle actual amount of loss should be calculated

in case of loss of subject matter . The amount of actual loss should be

paid the insurer to the insured . This principle is not applicable to life

insurance .

e.g. Mr. X insured his good worth RS. 60,000 /- fire occurred & goods of

RS.40,000/- burnt by fire .

Insurance company will pay RS.40,000/- only to MR. X.

PRINCIPLE OF SUBROGATION :-

It is also an important principle of insurance . This principle is

applicable to fire & marine insurance .As per the principles if the sum

assured is paid to the insured , the damaged property should be handed

over to the insurer .

e.g. Mr. P insured his car for Rs. 3,00,000/- which badly damaged in an

accident .The insurance company will pay Rs.3,00,00/- to Mr. P & the

damaged car should be handed over to the insurer by

Mr. P .

PRINCIPLE OF MITIGATION :-

According to this principle the insured should try to minimize the

loss of subject matter . It is applicable to all types of insurance .

PRINCIPLE OF CAUSA PROXIMA :-

According to this principle if there are more than one causes of loss

of subject matter , the nearest cause should be considered .

PRINCIPLE OF CONTRIBUTION :-

If the subject matter is insured with more than one insurer , the amount of loss will have to be contributed by all the insurers in certain proportion . This principle is not applicable to life insurance

CONCEPT OF INSURANCE / HOW INSURANCE WORKS

The concept behind insurance is that a group of people exposed to similar risk come together and make contributions towards formation of a pool of funds. In case a person actually suffers a loss on account of such risk, he is compensated out of the same pool of funds. Contribution to the pool is made by a group of people sharing common risks and collected by the insurance companies in the form of premiums.

History In India, insurance has a deep-rooted history. Insurance in various forms has

been mentioned in the writings of Manu (Manusmrithi), Yagnavalkya (Dharmashastra) and Kautilya (Arthashastra). The fundamental basis of the historical reference to insurance in these ancient Indian texts is the same i.e. pooling of resources that could be re-distributed in times of calamities such as fire, floods, epidemics and famine. The early references to Insurance in these texts has reference to marine trade loans and carriers' contracts.

Insurance in its current form has its history dating back until 1818, when Oriental Life Insurance Company was started by Anita Bhavsar in Kolkata to cater to the needs of European community. The pre-independence era in India saw discrimination between the lives of foreigners (English) and Indians with higher premiums being charged for the latter. In 1870, Bombay Mutual Life Assurance Society became the first Indian insurer.

At the dawn of the twentieth century, many insurance companies were founded. In the year 1912, the Life Insurance Companies Act and the Provident Fund Act were passed to regulate the insurance business. The Life Insurance Companies Act, 1912 made it necessary that the premium-rate tables and periodical valuations of companies should be certified by an actuary. However, the disparity still existed as discrimination between Indian and foreign companies. The oldest existing insurance company in India is the National Insurance Company Ltd., which was founded in 1906. It is in business.

The Government of India issued an Ordinance on 19th January, 1956 nationalising the Life Insurance sector and Life Insurance Corporation came into existence in the same year. The Life Insurance Corporation (LIC) absorbed 154 Indian, 16 non-Indian insurers as also 75 provident societies—245 Indian and

foreign insurers in all. In 1972 with the General Insurance Business (Nationalisation) Act was passed by the Indian Parliament, and consequently, General Insurance business was nationalized with effect from 1st January, 1973. 107 insurers were amalgamated and grouped into four companies, namely National Insurance Company Ltd., the New India Assurance Company Ltd., the Oriental Insurance Company Ltd and the United India Insurance Company Ltd. The General Insurance Corporation of India was incorporated as a company in 1971 and it commence business on January 1sst 1973.

The LIC had monopoly till the late 90s when the Insurance sector was reopened to the private sector. Before that, the industry consisted of only two state insurers: Life Insurers (Life Insurance Corporation of India, LIC) and General Insurers (General Insurance Corporation of India, GIC). GIC had four subsidiary companies.

With effect from December 2000, these subsidiaries have been de-linked from the parent company and were set up as independent insurance companies: Oriental Insurance Company Limited, New India Assurance Company Limited, National Insurance Company Limited and United India Insurance Company Limited.

Distribution of Insurance in the Private Sector

With largest number of life insurance policies in force in the world, Insurance happens to be a mega opportunity in India. It's a business growing at the rate of 15-20 per cent annually and presently is of the order of Rs 450 billion. Together with banking services, it adds about 7 per cent to the country's GDP. Gross premium collection is nearly 2 per cent of GDP and funds available with LIC for investments are 8 per cent of GDP.

Yet, nearly 80 per cent of Indian population is without life insurance cover while health insurance and non-life insurance continues to be below international standards. And this part of the population is also subject to weak social security and pension systems with hardly any old age income security. This it is an indicator that growth potential for the insurance sector is immense.

A well-developed and evolved insurance sector is needed for economic development as it provides long term funds for infrastructure development and at the same time strengthens the risk taking ability. It is estimated that over the next ten years India would require investments of the order of one trillion US dollar. The Insurance sector, to some extent, can enable investments in infrastructure development to sustain economic growth of the country. Insurance is a federal subject in India. There are two legislations that govern the sector- The Insurance Act- 1938 and the IRDA Act- 1999.

In India, insurance is generally considered as a tax-saving device instead of its other implied long term financial benefits. Indian people are prone to investing in properties and gold followed by bank deposits. They selectively invest in shares also but the percentage is very small. Even to this day, Life Insurance Corporation of India dominates Indian insurance sector. With the entry of private sector players backed by foreign expertise, Indian insurance market has become more vibrant.

Historical Perspective

The history of life insurance in India dates back to 1818 when it was conceived as a means to provide for English Widows. Interestingly in those days a higher premium was charged for Indian lives than the non-Indian lives as Indian lives were considered more riskier for coverage.

The Bombay Mutual Life Insurance Society started its business in 1870. It was the first company to charge same premium for both Indian and non-Indian lives. The Oriental Assurance Company was established in 1880. The General insurance business in India, on the other hand, can trace its roots to the Triton (Tital) Insurance Company Limited, the first general insurance company established in the year 1850 in Calcutta by the British. Till the end of nineteenth century insurance business was almost entirely in the hands of overseas companies.

Insurance regulation formally began in India with the passing of the Life Insurance Companies Act of 1912 and the provident fund Act of 1912. Several frauds during 20's and 30's sullied insurance business in India. By 1938 there were 176 insurance companies. The first comprehensive legislation was introduced with the Insurance Act of 1938 that provided strict State Control over insurance business. The insurance business grew at a faster pace after independence. Indian companies strengthened their hold on this business but despite the growth that was witnessed, insurance remained an urban phenomenon.

The Government of India in 1956, brought together over 240 private life insurers and provident societies under one nationalized monopoly corporation and Life Insurance Corporation (LIC) was born. Nationalization was justified on the grounds that it would create much needed funds for rapid industrialization. This was in conformity with the Government's chosen path of State lead planning and development.

The (non-life) insurance business continued to thrive with the private sector till 1972. Their operations were restricted to organized trade and industry in large cities. The general insurance industry was nationalized in 1972. With this, nearly 107 insurers were amalgamated and grouped into four companies- National Insurance Company, New India Assurance Company, Oriental Insurance Company and United India Insurance Company. These were subsidiaries of the General Insurance Company (GIC).

Indian federal government considers insurance as one of major sources of funds for infrastructure development. The government has identified the following as major thrust areas:

* Timely and reliable statistical data and information about policies and markets to instill a degree of credibility; * A code of good practices based on international best practices to raise the standard of Indian insurance sector;

* Strengthening of supervision and regulation; * Market participation in decision-making; * High solvency standard' and Developing alternative channels.

Till end of 1999-2000 fiscal years, two state-run insurance companies, namely, Life Insurance Corporation (LIC) and General Insurance Corporation (GIC) were the monopoly insurance (both life and non-life) providers in India. Under GIC there were four subsidiaries-- National Insurance Company Ltd, Oriental Insurance Company Ltd, New India Assurance Company Ltd, and United India Assurance Company Ltd. In fiscal 2000-01, the Indian federal government lifted all entry restrictions for private sector investors. Foreign investment insurance market was also allowed with 26 percent cap. GIC was converted into India's national reinsure from December, 2000 and all the subsidiaries working under the GIC umbrella were restructured as independent insurance companies.

Indian Parliament has cleared a Bill on July 30, 2002 de-linking the four subsidiaries from GIC. A separate Bill has been approved by Parliament to allow brokers, cooperatives and intermediaries in the sector. Currently insurance companies- both private and public-- have to cede 20 percent of its reinsurance with GIC. GIC is planning to increase re-insurance premium by 20 percent which works out at Rs 3000 cr. GIC is actively considering entry into overseas markets including West Asia, South-east Asia and SAARC region.

Insurance Sector Reforms

In 1993, Malhotra Committee- headed by former Finance Secretary and RBI Governor R.N. Malhotra- was formed to evaluate the Indian insurance industry and recommend its future direction. The Malhotra committee was set up with the objective of complementing the reforms initiated in the financial sector. The reforms were aimed at creating a more efficient and competitive financial system suitable for the requirements of the economy keeping in mind the structural changes currently underway and recognizing that insurance is an important part of the overall financial system where it was necessary to address the need for similar reforms. In 1994, the committee submitted the report and some of the key recommendations included:

i) Structure

Government should take over the holdings of GIC and its subsidiaries so that these subsidiaries can act as independent corporations. All the insurance companies should be given greater freedom to operate.

ii) Competition

Private Companies with a minimum paid up capital of Rs.1bn should be allowed to enter the sector. No Company should deal in both Life and General Insurance through a single entity. Foreign companies may be allowed to enter the industry in collaboration with the domestic companies.

Postal Life Insurance should be allowed to operate in the rural market. Only one State Level Life Insurance Company should be allowed to operate in each state.

iii) Regulatory Body

The Insurance Act should be changed. An Insurance Regulatory body should be set up. Controller of Insurance- a part of the Finance Ministry- should be made independent

iv)Investments

Mandatory Investments of LIC Life Fund in government securities to be reduced from 75% to 50%. GIC and its subsidiaries are not to hold more than 5% in any company (there current holdings to be brought down to this level over a period of time)

v) Customer Service

LIC should pay interest on delays in payments beyond 30 days. Insurance companies must be encouraged to set up unit linked pension plans. Computerization of operations and updating of technology to be carried out in the insurance industry

The committee emphasized that in order to improve the customer services and increase the coverage of insurance policies, industry should be opened up to competition. But at the same time, the committee felt the need to exercise caution as any failure on the part of new players could ruin the public confidence in the industry.

The committee felt the need to provide greater autonomy to insurance companies in order to improve their performance and enable them to act as independent companies with economic motives. For this purpose, it had proposed setting up an independent regulatory body- The Insurance Regulatory and Development Authority.

Reforms in the Insurance sector were initiated with the passage of the IRDA Bill in Parliament in December 1999. The IRDA since its incorporation as a statutory body in April 2000 has fastidiously stuck to its schedule of framing regulations and registering the private sector insurance companies. Since being set up as an independent statutory body the IRDA has put in a framework of globally compatible regulations. The other decision taken simultaneously to provide the supporting systems to the insurance sector and in particular the life insurance companies was the launch of the IRDA online service for issue and renewal of licenses to agents. The approval of institutions for imparting training to agents has also ensured that the insurance companies would have a trained workforce of insurance agents in place to sell their products.

Present Scenario

The Government of India liberalized the insurance sector in March 2000 with the passage of the Insurance Regulatory and Development Authority (IRDA) Bill, lifting all entry restrictions for private players and allowing foreign players to enter the market with some limits on direct foreign ownership. Under the current guidelines, there is a 26 percent equity cap for foreign partners in an insurance company. There is a proposal to increase this limit to 49 percent.

The opening up of the sector is likely to lead to greater spread and deepening of insurance in India and this may also include restructuring and revitalizing of the public sector companies. In the private sector 12 life insurance and 8 general insurance companies have been registered. A host of private Insurance companies operating in both life and non-life segments have started selling their insurance policies since 2001.

Non-Life Insurance Market

In December 2000, the GIC subsidiaries were restructured as independent insurance companies. At the same time, GIC was converted into a national re-insurer. In July 2002, Parliament passed a bill, de-linking the four subsidiaries from GIC.

Presently there are 12 general insurance companies with 4 public sector companies and 8 private insurers. Although the public sector companies still dominate the general insurance business, the private players are slowly gaining a foothold. According to estimates, private insurance companies have a 10 percent share of the market, up from 4 percent in 2001. In the first half of 2002, the private companies booked premiums worth Rs 6.34 billion. Most of the new entrants reported losses in the first year of their operation in 2001.

Insurance, like project finance, is extended by a consortium. Normally one insurer takes the lead, shouldering about 40-50 per cent of the risk and receiving a proportionate percentage of the premium. The other companies share the remaining risk and premium. The policies are renewed usually on an annual basis through the invitation of bids.

Of late, with IPP projects fizzling out, the insurance companies are turning once again to old hands such as NTPC, NHPC and BSES for business.

Re-insurance business

The balance risk is re-insured with other insurers. In effect, therefore, re-insurance is insurer's insurance. It forms the backbone of the insurance business. It helps to provide a better spread of risk in the international market, allows primary insurers to accept risks beyond their capacity settle accumulated losses arising from catastrophic events and still maintain their financial stability.

Life Insurance Market The Life Insurance market in India is an underdeveloped market that was

only tapped by the state owned LIC till the entry of private insurers. The penetration of life insurance products was 19 percent of the total 400 million of the insurable population. The state owned LIC sold insurance as a tax instrument, not as a product giving protection. Most customers were under- insured with no flexibility or transparency in the products. With the entry of the private insurers the rules of the game have changed.

The growing popularity of the private insurers shows in other ways. They are coining money in new niches that they have introduced. The state owned companies still dominate segments like endowments and money back policies. But in the annuity or pension products business, the private insurers have already wrested over 33 percent of the market. And in the popular unit-linked insurance schemes they have a virtual monopoly, with over 90 percent of the customers.

With an annual growth rate of 15-20% and the largest number of life insurance policies in force, the potential of the Indian insurance industry is huge. Total value of the Indian insurance market (2004-05) is estimated at Rs. 450 billion (US$10 billion). According to government sources, the insurance and banking services' contribution to the country's gross domestic product (GDP) is 7% out of which the gross premium collection forms a significant part. The funds available with the state-owned Life Insurance Corporation (LIC) for investments are 8% of GDP.

The year 1999 saw a revolution in the Indian insurance sector, as major structural changes took place with the ending of government monopoly and the passage of the Insurance Regulatory and Development Authority (IRDA) Bill, lifting all entry restrictions for private players and allowing foreign players to enter the market with some limits on direct foreign ownership.

Though the focus of this market research report is on the potential growth on the Indian Insurance Sector, it also talks about the market size, market segmentation, and key developments in the market after 1999. The report gives an instant overview of the Indian non-life insurance market, and covers fire, marine, and other non-life insurance. The data is supplied in both graphical and tabular format for ease of interpretation and analysis. This report also provides company profiles of the major private insurance companies.

LeadershipLeadership" is the most common term used in all perspectives & dimensions

whether in organization, politics or personal life. Since time immemorial a big debate on a perfect model & style of leadership along with the traits which could be made applicable has been going on. But it is next to impossible to imagine a 'Tailor made style' or approach towards this power game.

The success of a leader, an effective leader lies in not only commanding & delegating but carving this wonderful relationship immortal.

For making this true, a leader should not compartmentalize a pyramid cal relationship based on flow of orders& accomplishments but in true sense act as a role model by creating enthusiastic, thoughtful, result- oriented & dynamic leaders in all followers.

The leader should try his best to transform every follower into a dynamic representative of values, knowledge, ethics, firmness, equity, justice, flexibility & above all a lifelong & undying spirit of Learning.

With all such ingredients the (LM-X) Leader member exchange theory will prove fruitful

Defining Leadership: -

Leadership is all about….Influencing -- People & Process Molding -       Imperfect into perfectNourishing-   Techniques & valuesRewarding – For motivation & getting the task doneRetaining   -- Trusting & setting exemplary relation

But this should be matched with determination, firmness, facts, self-belief matched with

a) Positive Attitude b) Perception-setting  c) Motivating-pathway d) Proving that leading is always a 2- way process of give & take.

To have great poets you should have great audience too

(A Bi- focal role setting for both leader & members)

It is no longer true that it is only the leader who formulates implements & evaluates. The full enrichment & contribution of the whole team makes every task a success. So the first & foremost quality a leader should instill in his followers is of "Self – Efficacy"

Self – efficacy refers to the level & perception of an individual about himself, the self perceived competence, capability of ones own self. Until this quality is enhanced, the inspirational motivation & self- determination remains overshadowed by fear of failure.

Essential features of self – efficacy

1 Centrality of the mission or the objective2 Integration of plans & action3 Proactively4 Creativity5 Linkage or inter–personal interaction and Team work6 Super-ordination of goals7 Influence8 Growth of 'win – win' situation9 Encouragement of openness for eliminating differences10  Immediate X- ray approach to problems

A leader should focus on the following important techniques:

a)  Inspirational motivationb)  Intellectual stimulationc) Individualized considerationd) Contingent rewarde) Management by exceptionf) Avoidance of laissez faire leadership styleg)  The multi – factor & multi- pronged approach

So, it can be concluded that transformational leadership believes in ways of molding the followers into leaders with an approach of individual handling as per the capacity & goal of the followers.

It is not only in the professional scenario that leader member x-change occurs but is applicable in all spheres & relations whether of a parent – child , Teacher – Student , Boss – Subordinate , Commander – Soldiers etc…

It demands more efforts, commitment& effectiveness of both the leader & the follower which will truly result in "Leadership prevails in practice.

Can more number of brains lead to superior problem-solving ability? The capacity of groups producing more or improved ideas than individuals working alone has been debated for long.

Group-think is the cruelest predicament in our society. It is a grave mental ailment that has not been recognized. It changes members of a group into supporters and adherents of rites and rituals. They firmly assert that the group is right and the rest are incorrect. It shrinks communication from the group to outsiders. In staid instances of group-think, members use might and violence to persuade non-believers.  The essential truth is that the majority of individuals are not mindful that they suffer from group-think.

Governments and other institutions (fundamentalist groups, anti-social groups, religious sects, and so on) splurge large amounts of resources to defend and uphold their group-think.  Power and politics damages the cause of peace, within a nation or among nations. White lies are hyped in the name of diplomacy. To solve the menace of group-think, there should be a focus on the reality; that reality which is in relation to humankind and the reality of the inter dependence of all entities.

Groupthink is a thought demonstrated by members of a group who attempt to reduce inconsistencies and reach a common agreement sans critical investigation, analysis, and evaluation. Groupthink makes groups to make impulsive, unreasonable decisions, where individual qualms and suspicions are set aside, for fear of disturbing the group's stability.

The term "Group-Think" was coined by William H. Whyte in 1952.   Irving Janis worked extensively on this and thus he is considered to be the pioneer in this area.  Irving Janis defines Groupthink as a kind of thinking where people in the group strive for unanimity and this striving eclipses their motivation to truly assess alternatives.

This word was meant to be suggestive of Newspeak words like "double-think" and "duck-speak", from George Orwell's novel, "Nineteen Eighty Four".

Groupthink arises when a homogenous and an exceedingly cohesive group is so deeply concerned with upholding its harmony that there is a failure to assess all available options. A group is said to suffer from groupthink if it:

1. overvalues its immunity 2. jointly rationalizes the decisions made by it  3. typecasts the out-groups 4. follows a culture of homogeneity, and 5. consists of members who shield the group leader

When groups build up cohesiveness and lay internally unswerving set of rules, they don't like to disrupt the group's decision. In most cases, the group's self-esteem, delight and satisfaction becomes vital than the well being of the organization. Thus, "Groupthink" is the term given to the demands that highly cohesive groups wield on their members for identical and up-to-the mark decisions and it in fact decreases their power to make efficient decisions.

There are two observed processes of group dynamics viz., 'group-think' and 'risky shift and/or cautious shift.

In Risky shift, the decider group becomes more far-reaching and is prepared to take a risk or a chance with organizational resources.  In Cautious shift, the group gets to become more conservative.  Risky shift and/or cautious shift behaviors often weaken good decision making and group members need to be receptive to such practices and their repercussions.

Group dynamics and collective actions are intriguing because of the extremes to which they can drive people. For example, an individual risks his life to save a little boy from drowning, whereas another person is ready to sacrifice himself as a suicide bomber for a collective goal which is higher. Many such demonstrations have happened in history like the crowd asking for the crucifixion of Jesus to global benevolence during the recent Olympic Games in Greece.

Constructive social change is unattainable without mass movement. Human rights, the collapse of the Berlin Wall, Environmental Protection, etc are a result of mass movements—i.e., substantial engagement of people who crusaded for a common good, their individual interests taking a back seat.   The irony of groupthink is that the individual hardly ever suffers from a sense of guiltiness. In spite of the risks and mass killings involved, members of the group feel that they

are moving in the right direction.  The war in Vietnam is another example of group stupidity.

The psychology of the group is not pathological. But an individual's self is depersonalized when he or she joins a social group. For instance, a suicide bomber's knowledge has become fully overwhelmed by the collective. Death by sacrifice becomes the utmost form of self-realization.

CAUSES OF GROUP THINK: Irving Janis said that there are three main causes:

1) The higher the cohesiveness, the lesser the likelihood to raise questions. 2) Isolation of the group from outside experts3) Strong leadership, because the leader is likely to promote his/her own solution.

Clark Mc Cauley, a Social Psychologist have identified that Directive leadership, uniformity in members' ideology and background, and insulation of the group from outside sources of information and analysis are the main causes of group think.

CLASSIC CASES OF GROUP THINK:

Disaster of Space Shuttle Challenger (1986)

This is an archetypal case of groupthink. The Challenger, whose launch was scheduled on January 22, 1986, was launched on January 28, 1986 and it blasted shortly after liftoff.  There was a problem in the O-rings in the booster rockets a day before the launch.  Several discussions were conducted to discuss the problem and finally the launch was planned.  Several symptoms of group think were seen here. Warnings that contradicted the group goal were ignored. The target was to launch it as soon as possible and it ended up being a deadly mistake

Bay of Pig Invasion (1959 – 1962)

The main plan of the Bay of Pigs Invasion was to prepare a set of Cuban exiles to attack Cuba and set off a rebellion against Fidel Castro's communist rule.  The plan was hopelessly defective. President Kennedy's top advisers never spoke against the plan as they did not want to upset the President. All of them were highly educated from top class universities. Their high qualification caused them to become a very cohesive group. These advisers were showing many signs of group think.  Also, Robert Kennedy, the President's brother, became the "mind guard",

telling the dissenters that the President had already made up his mind and it would a mere waste to discuss.

GROUPTHINK IN THE INDIA-PAKISTAN CONTEXT

In the India and Pakistan case, groupthink says aloud that India and Pakistan should eternally be divided and every evident harmful act by Pakistan has to be balanced with a reference to a causal action by India, however unjustified or irrational the causality appears. Quintessentially, the specialists review all the data from within the established prototype and forcibly fit the out-of-the ordinary data to the prototype by choosing reasonable calisthenics. In this process the "experts" discharge data that is not in agreement with the prototype as "questionable". By not questioning the India-Pakistan dyad prototype and its underlying suppositions, no new ideas are generated, and more importantly, key trends are missed because of faulty analyses.

PREVENTING GROUPTHINK: According to Irving Janis, there are several ways to prevent groupthink:

1. All useful options should be thoroughly researched.2. Group ideas should be discussed with trusted outsiders.3. Outside experts should be invited. 4. There should be a devil's advocate in every meeting5. There should be one in the group who can critically evaluate6. It would be nice if there are many groups working independently on the same problem.

CONCLUSION:

To conclude, Group-think has raised several male dominated empires/cultures around this planet. These empires or structures are mismatched and have the penchant to fight each other. People, who are fundamentally good, have to abide by the awful 'man made' laws and rituals thus instigating brutal/abusive activity against each other. It will be the providence of females to change these disgusting structures that have been made by male group-think.

God, religion, and laws have been formed by humans to steer and synchronize activities in a well thought-out form, so that it is easy to follow.  But as and when, an activity coordinating system generates benefits, members begin worshipping it. This worshipping slowly turns into a ritual. It is outlandish to find

that this ritual is still followed even when the activity coordination system doesn't yield benefits anymore.

Children of this generation are cleverer than anybody in history because they have better facility to access information. Therefore, free mental development is to be ascertained. Giving explanation about present mental cages to children protects their mind from being caged in.  Cages are religious, governmental and commercial rituals that compel people to obey through cruelty, intimidation and money-slavery against their spirit and their individual intelligence. Human beings are trapped in mental cages and act according to predetermined formulae. They act like a marionette on a string.

Human beings make other humans deliberately suffer only when they follow rituals (group-think).  The more the violent civilization structures, the more the suffering in this world.

MAJOR POLICY CHANGES

Insurance sector has been opened up for competition from Indian private insurance companies with the enactment of Insurance Regulatory and Development Authority Act, 1999 (IRDA Act). As per the provisions of IRDA Act, 1999, Insurance Regulatory and Development Authority (IRDA) was established on 19th April 2000 to protect the interests of holder of insurance policy and to regulate, promote and ensure orderly growth of the insurance industry. IRDA Act 1999 paved the way for the entry of private players into the insurance market which was hitherto the exclusive privilege of public sector insurance companies/ corporations. Under the new dispensation Indian insurance companies in private sector were permitted to operate in India with the following conditions:

Company is formed and registered under the Companies Act, 1956; The aggregate holdings of equity shares by a foreign company, either by

itself or through its subsidiary companies or its nominees, do not exceed 26%, paid up equity capital of such Indian insurance company;

The company's sole purpose is to carry on life insurance business or general insurance business or reinsurance business.

The minimum paid up equity capital for life or general insurance business is Rs.100 crores.

The minimum paid up equity capital for carrying on reinsurance business has been prescribed as Rs.200 crores.

The Authority has notified 27 Regulations on various issues which include Registration of Insurers, Regulation on insurance agents, Solvency Margin, Re-insurance, Obligation of Insurers to Rural and Social sector, Investment and Accounting Procedure, Protection of policy holders' interest etc. Applications were invited by the Authority with effect from 15th August, 2000 for issue of the Certificate of Registration to both life and non-life insurers. The Authority has its Head Quarter at Hyderabad.

Insurance companies:

IRDA has so far granted registration to 12 private life insurance companies and 9 general insurance companies. If the existing public sector insurance companies are included, there are currently 13 insurance companies in the life side and 13 companies operating in general insurance business. General Insurance Corporation has been approved as the "Indian reinsurer" for underwriting only

reinsurance business. Particulars of the life insurance companies and general insurance companies including their web address is given below:

LIFE INSURERS WebsitesPublic Sector

Life Insurance Corporation of India www.licindia.comPrivate Sector

Allianz Bajaj Life Insurance Company Limited www.allianzbajaj.co.in Birla Sun-Life Insurance Company Limited www.birlasunlife.comHDFC Standard Life Insurance Co. Limited www.hdfcinsurance.comICICI Prudential Life Insurance Co. Limited www.iciciprulife.comING Vysya Life Insurance Company Limited www.ingvysayalife.comMax New York Life Insurance Co. Limited www.maxnewyorklife.comMetLife Insurance Company Limited www.metlife.comOm Kotak Mahindra Life Insurance Co. Ltd. www.omkotakmahnidra.comSBI Life Insurance Company Limited www.sbilife.co.inTATA AIG Life Insurance Company Limited www.tata-aig.comAMP Sanmar Assurance Company Limited www.ampsanmar.comDabur CGU Life Insurance Co. Pvt. Limited www.avivaindia.com

GENERAL INSURERSPublic Sector

National Insurance Company Limited www.nationalinsuranceindia.comNew India Assurance Company Limited www.niacl.comOriental Insurance Company Limited www.orientalinsurance.nic.inUnited India Insurance Company Limited www.uiic.co.in

Private SectorBajaj Allianz General Insurance Co. Limited www.bajajallianz.co.inICICI Lombard General Insurance Co. Ltd. www.icicilombard.comIFFCO-Tokio General Insurance Co. Ltd. www.itgi.co.inReliance General Insurance Co. Limited www.ril.comRoyal Sundaram Alliance Insurance Co. Ltd. www.royalsun.comTATA AIG General Insurance Co. Limited www.tata-aig.comCholamandalam General Insurance Co. Ltd. www.cholainsurance.comExport Credit Guarantee Corporation www.ecgcindia.com

HDFC Chubb General Insurance Co. Ltd.REINSURER

General Insurance Corporation of India www.gicindia.com

Protection of the interest of policy holders:

IRDA has the responsibility of protecting the interest of insurance policyholders. Towards achieving this objective, the Authority has taken the following steps:

IRDA has notified Protection of Policyholders Interest Regulations 2001 to provide for: policy proposal documents in easily understandable language; claims procedure in both life and non-life; setting up of grievance redressal machinery; speedy settlement of claims; and policyholders' servicing. The Regulation also provides for payment of interest by insurers for the delay in settlement of claim.

The insurers are required to maintain solvency margins so that they are in a position to meet their obligations towards policyholders with regard to payment of claims.

It is obligatory on the part of the insurance companies to disclose clearly the benefits, terms and conditions under the policy. The advertisements issued by the insurers should not mislead the insuring public.

All insurers are required to set up proper grievance redress machinery in their head office and at their other offices.

The Authority takes up with the insurers any complaint received from the policyholders in connection with services provided by them under the insurance contract.

Distribution channels in insuranceAn insurance cover is an intangible product evidenced by a written contract

known as the ‘policy’. Insurers market various insurance covers either directly or through various distribution channels—individual agents, corporate agents (including Bancassurance) and Brokers. The marketer in the distributionnetwork is in direct interface with the prospect and the customer.Life insurance products are sold through individual agents and many of themhave this as their only career occupation. General insurance products aresold through individual agents, corporate agents and brokers. Distribution channels such as agents are licensed by the IRDA. To get an agency licence, one has to have certain minimum qualifications; practical training in insurance subjects and pass an examination conducted by the Insurance Institute of India. IRDA regulations on licensing of agents/brokers lay down the code of conduct for individual agents, corporate agents and brokers. A separate note on the code of conduct is appended to this note.

Thus it is seen that the dos and don’ts for these intermediaries are givenclearly at the point of sale as well as in the event of a claim. Service does notend with the customer receiving his document; it in fact only begins here.After sales service is as important or even more important – like when arefund has to be made or when a claim has to be made. One of the issues that is of great concern affecting professionalism in insurance activities is resorting rebating by intermediaries. Rebating is prohibited as per Section 41 of the Insurance Act, 1938 and the public are advised not to deal with intermediaries offering rebate of any kind. Rebating means a share of commission receivable by the agent/broker isgiven to the prospect/client. This is done to attract the client in the purchase of insurance contract by offering cash. Competition among agents/brokers is so cut-throat, some agents indulge in such unethical practices. Public areadvised not to ask for any prohibited rebates in premium since commission payment to an agent is the only income for some to take care of their families. Similarly, agents are also advised not to indulge in such practices which could cause them loss of agency income.

Code of Conduct for Intermediaries

I. INSURANCE AGENTEvery insurance agent shall, identify himself and the insurance company

of whom he is an insurance agent; disclose his license to the prospect on demand; disseminate the requisite information in respect of insurance products offeredfor sale by his insurer and take into account the needs of the prospect whilerecommending a specific insurance plan; disclose the scales of commission in respect of the insurance product offered for sale, if asked by the prospect; indicate the premium to be charged by the insurer for the insurance product offered for sale; explain to the prospect the nature of information required in the proposal form by the insurer, and also the importance of disclosure of materialinformation in the purchase of an insurance contract; bring to the notice of the insurer any adverse habits or income inconsistency of the prospect, in the form of a report (called “Insurance Agent’s Confidential Report”) along with every proposal submitted to the insurer, and any material fact that may adversely affect the underwriting decision of the insurer as regards acceptance of the proposal, by making all reasonable enquiries about the prospect; inform promptly the prospect about the acceptance or rejection of the proposal by the insurer; obtain the requisite documents at the time of filing the proposal form with the insurer; and other documents subsequently asked for by the insurer for completion of the proposal; render necessary assistance to the policyholders or claimants or beneficiaries in complying with the requirements for settlement of claims by the insurer; advise every individual policyholder to effect nomination or assignment or change of address or exercise of options, as the case may be, and offer necessary assistance in this behalf, wherever necessary; No insurance agent shall,-solicit or procure insurance business without holding a valid licence; induce the prospect to omit any material information in the proposal form; induce the prospect to submit wrong information in the proposal form or documents submitted to the insurer for acceptance of the proposal; behave in a discourteous manner with the prospect; interfere with any proposal introduced by any other insurance agent; offer different rates, advantages, terms and conditions other than those offered by his insurer; demand or receive a share of proceeds from the beneficiary under an insurance contract; force a policyholder to terminate the existing policy and to effect a new

proposal from him within three years from the date of such termination; have, in case of a corporate agent, a portfolio of insurance business under which the premium is in excess of fifty percent of total premium procured, in any year, from one person (who is not an individual) or one organisation or one group of organisations; apply for fresh license to act as an insurance agent, if his license was earlier cancelled by the designated person, and a period of five years has not elapsed from the date of such cancellation; become or remain a director of any insurance company; Every insurance agent shall, with a view to conserve the insurance business already procured through him, make every attempt to ensure remittance of the premiums by the policyholders within the stipulated time, by giving notice to the policyholder orally and in writing;

II. CORPORATE AGENTEvery Licensed Corporate Agent shall abide by the code of conduct

specified below:Every corporate agent shall:a) be responsible for all acts of omission and commission of its corporateinsurance executive and every specified person;b) ensure that the corporate insurance executive and all specified persons areproperly trained, skilled and knowledgeable in the insurance products theymarket;c) ensure that the corporate insurance executive and the specified person donot make to the prospect any misrepresentation on policy benefits andreturns available under the policy;d) ensure that no prospect is forced to buy an insurance product;e) give adequate pre-sales and post-sales advice to the insured in respect ofthe insurance product;f) extend all possible help and cooperation to an insured in completion of allformalities and documentation in the event of a claim;g) give due publicity to the fact that the corporate agent does not underwritethe risk or act as an insurer;h) enter into service level agreements with the insurer in which the duties andresponsibilities of both are defined. Every corporate agent or a corporate insurance executive or a specifiedperson shall also follow the code of conduct specified below:(i) Every corporate agent/ corporate insurance executive/ specified personshall,---(a) identify himself and the insurance company of whom he is a representative;(b) disclose his licence/ certificate to the prospect on demand;(c) disseminate the requisite information in respect of insurance products offered

for sale by his insurer and take into account the needs of the prospect whilerecommending a specific insurance plan;(d) disclose the scales of commission in respect of the insurance product offeredfor sale, if asked by the prospect;(e) indicate the premium to be charged by the insurer for the insurance productoffered for sale;(f) explain to the prospect the nature of information required in the proposalform by the insurer, and also the importance of disclosure of materialinformation in the purchase of an insurance contract;(g) bring to the notice of the insurer any adverse habits or income inconsistencyof the prospect, in the form of a report (called “Insurance Agent’sConfidential Report”) along with every proposal submitted to the insurer, andany material fact that may adversely affect the underwriting decision of theinsurer as regards acceptance of the proposal, by making all reasonableenquiries about the prospect;(h) inform promptly the prospect about the acceptance or rejection of theproposal by the insurer;(i) obtain the requisite documents at the time of filing the proposal form with theinsurer; and other documents subsequently asked for by the insurer forcompletion of the proposal;(j) render necessary assistance to the policyholders or claimants or beneficiariesin complying with the requirements for settlement of claims by the insurer;(k) advise every individual policyholder to effect nomination or assignment orchange of address or exercise of options, as the case may be, and offernecessary assistance in this behalf, wherever necessary;(ii) No corporate agent/ corporate insurance executive/ specified person shall,----(a) solicit or procure insurance business without holding a valid licence/certificate;(b) induce the prospect to omit any material information in the proposal form;(c) induce the prospect to submit wrong information in the proposal form ordocuments submitted to the insurer for acceptance of the proposal;(d) behave in a discourteous manner with the prospect;(e) interfere with any proposal introduced by any other specified person or anyinsurance intermediary;(f) offer different rates, advantages, terms and conditions other than thoseoffered by his insurer;(g) demand or receive a share of proceeds from the beneficiary under aninsurance contract;(h) force a policyholder to terminate the existing policy and to effect a new

proposal from him within three years from the date of such termination;(i) No corporate agent shall have a portfolio of insurance business from oneperson or one organization or one group of organizations under which thepremium is in excess of fifty percent of total premium procured in any year;(j) apply for fresh licence to act as an insurance agent, if his licence was earliercancelled by the designated person, and a period of five years has notelapsed from the date of such cancellation;(k) become or remain a director of any insurance company;(iii) Every corporate agent shall, with a view to conserve the insurancebusiness already procured through him, make every attempt to ensureremittance of the premiums by the policyholders within the stipulated time,by giving notice to the policyholder orally and in writing.(iv) No director of a company or a partner of a firm or the chief executive ora corporate insurance executive or a specified person shall hold similarposition with another corporate agent of any other insurance company.

III. INSURANCE BROKER

Every Insurance Broker shall follow recognised standards of professionalconduct and discharge his functions in the interest of the policyholders.Conduct in matters relating to clients relationship— Every insurance broker shall: conduct its dealings with clients with utmost good faith and integrity at alltimes; act with care and diligence; ensure that the client understands his relationship with the broker and on whose behalf the broker is acting; treat all information supplied by the prospective clients as completely confidential to themselves and to the insurer(s) to which the business is being offered; take appropriate steps to maintain the security of confidential documents in their possession; hold specific authority of client to develop terms; understand the type of client it is dealing with and the extent of the client’s awareness of risk and insurance; obtain written mandate from client to represent the client to the insurer and communicate the grant of a cover to the client after effecting insurance;obtain written mandate from client to represent the client to the insurer/ reinsurer; and confirm cover to the insurer after effecting re-insurance, and submit relevant reinsurance acceptance and placement slips; avoid conflict of interest.

Conduct in matters relating to Sales practices— Every insurance Broker shall:(a) confirm that it is a member of the Insurance Brokers Association of India orsuch a body of brokers as approved by the Authority which has amemorandum of understanding with the Authority;(b) confirm that he does not employ agents or canvassers to bring in business;

(c) identify itself and explain as soon as possible the degree of choice in theproducts that are on offer;(d) ensure that the client understands the type of service it can offer;(e) ensure that the policy proposed is suitable to the needs of the prospectiveclient;(f) give advice only on those matters in which it is knowledgeable and seek orrecommend other specialist for advice when necessary;(g) not make inaccurate or unfair criticisms of any insurer or any member of theInsurance Brokers Association of India or member of such body of brokers asapproved by the Authority;(h) explain why a policy or policies are proposed and provide comparisons interms of price, cover or service where there is a choice of products;(i) state the period of cover for which the quotation remains valid if theproposed cover is not effected immediately;(j) explain when and how the premium is payable and how such premium is tobe collected, where another party is financing all or part of the premium, fulldetails shall be given to the client including any obligations that the clientmay owe to that party; and(k) explain the procedures to follow in the event of a loss.

Conduct in relation to furnishing of information — Every insurance brokershall: —(a) ensure that the consequences of non-disclosure and inaccuracies arepointed out to the prospective client;(b) avoid influencing the prospective client and make it clear that all theanswers or statements given are the latter's -own responsibility. Ask the clientto carefully check details of information given in the documents and requestthe client to make true, fair and complete disclosure where it believes thatthe client has not done so and in case further disclosure is not forthcoming itshould consider declining to act further;(c) explain to the client the importance of disclosing all subsequent changesthat might affect the insurance throughout the duration of the policy; and(d) disclose on behalf of its client all material facts within its knowledge and givea fair presentation of the risk.

Conduct in relation to explanation of insurance contract — Every insurancebroker shall:(a) provide the list of insurer(s) participating under the insurance contract andadvise any subsequent changes thereafter;(b) explain all the essential provisions of the cover afforded by the policy

recommended by him so that, as far as possible, the prospective clientunderstands what is being purchased;(c) quote terms exactly as provided by insurer;(d) draw attention to any warranty imposed under the policy, major or unusualrestrictions, exclusions under the policy and explain how the contract may becancelled;(e) provide the client with prompt written confirmation that insurance has beeneffected. If the final policy wording is not included with this confirmation, thesame shall be forwarded as soon as possible;(f) notify changes to the terms and conditions of any insurance contract andgive reasonable notice before any changes take effect;(g) advise its clients of any insurance proposed on their behalf which will beeffected with an insurer outside India, where permitted, and, if appropriate,of the possible risks involved; and

Conduct in relation to renewal of policies — Every insurance broker shall:—(a) ensure that its client is aware of the expiry date of the insurance even if itchooses not to offer further cover to the client;(b) ensure that renewal notices contain a warning about the duty of disclosureincluding the necessity to advise changes affecting the policy, which haveoccurred since the policy inception or the last renewal date;(c) ensure that renewal notices contain a requirement for keeping a record(including copies of letters) of all information supplied to the insurer for thepurpose of renewal of the contract;(d) ensure that the client receives the insurer's renewal invitation well in timebefore the expiry date.

Conduct in relation to claim by client— Every insurance broker shall: —(a) explain to its clients their obligation to notify claims promptly and to discloseall material facts and advise subsequent developments as soon as possible;(b) request the client to make true, fair and complete disclosure where itbelieves that the client has not done so. If further disclosure is not forthcomingit shall consider declining to act further for the client;(c) give prompt advice to the client of any requirements concerning the claim;(d) forward any information received from the client regarding a claim or anincident that may give rise to a claim without delay, and in any event withinthree working days;(e) advise the client without delay of the insurer's decision or otherwise of aclaim; and give all reasonable assistance to the client in pursuing his claim.Provided that the insurance broker shall not take up recovery assignment on

a policy contract which has not been serviced through him or should notwork as a claims consultant for a policy which has not been serviced throughhim.

Conduct in relation to receipt of complaints — Every insurance broker shall:—(a) ensure that letters of instruction, policies and renewal documents containdetails of complaints handling procedures;(b) accept complaints either by phone or in writing;(c) acknowledge a complaint within fourteen days from the receipt ofcorrespondence, advise the member of staff who will be dealing with thecomplaint and the timetable for dealing with it;(d) ensure that response letters are sent and inform the complainant of what hemay do if he is unhappy with the response;(e) ensure that complaints are dealt with at a suitably senior level;(f) have in place a system for recording and monitoring complaints.

Conduct in relation to documentation — Every insurance broker shall:—(a) ensure that any documents issued comply with all statutory or regulatoryrequirements from time to time in force;(b) send policy documentation without avoidable delay,(c) make available, with policy documentation, advice that the documentationshall be read carefully and retained by the client;(d) not withhold documentation from its clients without their consent, unlessadequate and justifiable reasons are disclosed in writing and without delay tothe client. Where documentation is withheld, the client must still receive fulldetails of the insurance contract;(e) acknowledge receipt of all monies received in connection with an insurancepolicy;(f) ensure that they reply is sent promptly or use its best endeavors to obtain aprompt reply to all correspondence;(g) ensure that all written terms and conditions are fair in substance and set out,clearly and in plain language, client's rights and responsibilities; and(h) subject to the payment of any monies owed to it, make available to any newinsurance broker instructed by the client all documentation to which theclient is entitled and which is necessary for the new insurance broker to acton behalf of the client.

Conduct in matters relating to advertising — Every insurance broker shall

conform to the relevant provisions of the Insurance Regulatory andDevelopment Authority (Insurance Advertisements and Disclosure) Regulations,2000, and :—(a) ensure that statements made are not misleading or extravagant;(b) where appropriate, distinguish between contractual benefits which theinsurance policy is bound to provide and non-contractual benefits whichmay be provided;(c) ensure that advertisements shall not be restricted to the policies of oneinsurer, except where the reasons for such restriction are fully explained withthe prior approval of that insurer;(d) ensure that advertisements contain nothing which is in breach of the lawnor omit anything which the law requires;(e) ensure that advertisement does not encourage or condone defiance orbreach of the law;(f) ensure that advertisements contain nothing which is likely, in the light ofgenerally prevailing standards of decency and propriety, to cause grave orwidespread offence or to cause disharmony;(g) ensure that advertisements are not so framed as to abuse the trust of clientsor exploit their lack of experience or knowledge;(h) ensure that all descriptions, claims and comparisons, which relate to mattersof objectively ascertainable fact shall be capable of substantiation.

Conduct in matters relating receipt of remuneration— Every insurance brokershall:—(a) disclose whether in addition to the remuneration prescribed under theseregulations, he proposes to charge the client, and if so in what manner;(b) advise the client in writing of the insurance premium and any fees orcharges separately and the purpose of any related services;(c) if requested by a client, disclose the amount of remuneration or otherremuneration it receives as a result of effecting insurance for that client. Thiswill include any payment received as a result of securing on behalf of theclient any service additional to the arrangement of the contract ofinsurance; and(d) advise its clients, prior to effecting the insurance, of their intention to makeany deductions from the amount of claim collected for a client, where this is a recognised practice for the type of insurance concerned.

Conduct in relation to matters relating to training — Every insurance brokershall:(a) that its staff are aware of and adhere to the standards expected of them

by this code;(b) ensure that staff are competent, suitable and have been given adequatetraining;(c) ensure that there is a system in place to monitor the quality of advice givenby its staff;(d) ensure that members of staff are aware of legal requirements including thelaw of agency affecting their activities; and only handle classes of businessin which they are competent;(e) draw the attention of the client to Section 41 of the Act, which prohibitsrebating and sharing of commission.Every insurance broker shall display in every office where it is carrying onbusiness and to which the public have access a notice to the effect that acopy of the code of conduct is available upon request and that if amember of the public wishes to make a complaint or requires the assistanceof the Authority in resolving a dispute, he may write to the Authority.An insurance broker as defined in these regulations shall not act as aninsurance agent of any insurer under section 42 of the Act.Every insurance broker shall abide by the provisions of the InsuranceAct,1938 (4 of 1938), Insurance Regulatory And Development Authority Act1999(41 of 1999), rules and regulations made there under which may beapplicable and relevant to the activities carried on by them as insurancebrokers.