strategic human resource mgmt. ch 1 pulak Das
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Transcript of strategic human resource mgmt. ch 1 pulak Das
prepared by: PAREEN RAVAL
ASSIGNMENT : 1 SHRM
FORCES IN THE ENVIRONMENT
Industrial competition
Social forces
Regulatory forces
Technological forces
REGULATORY FORCES
Term Regulatory forces can be defined as
Forces that depend on various government
regulatory agencies that impact how an
organization operates on a daily basis. An example
is the Food and Drug Administration (FDA),
Federal Communications Commission (FCC),
Environmental Protection Agency (EPA), and
Consumer Product Safety Commission (CPSC) etc.
Areas of concern Due to Change in Regulatory Forces
Economic liberalization;
Protection of consumer rights;
Environmental protection laws;
Govt. tax policy in annual budget: Value added
tax, excise exemption, tariff policy, FDI;
WTO regulation and patent law change;
A change in labor regulations
REGULATORY FORCES IN INSURANCE SECTOR
Normal insurance planULIP : Unit Linked Insurance Plans Difference between ULIP and Mutual Funds
SEBI has announced list of 14 major insurance
companies to stop selling the ULIPs. Such as SBI
Life, ICICI Prudential, TATA AIG, Aegon Religare
Life, Aviva Life, Bajaj Allianz, Bharti AXA, Birla
Sunlife, HDFC Standard Life, ING Vysya Life,
Kotak Mahindra old mutual life, Max New York
Life, Metlife India and Reliance Life
IRDA wins over SEBI on ULIP policy verdictIRDA’s roleCharges on ULIP policy
Most of the ULIP policies charges more fees for the first three years. Basically insurance companies would charges the following fees on the ULIP
1. Initial administration charge
2. Regular administration charge
3. Policy administration fee
4. Investment management charge
ULIP Reforms
There are number of changes done on nature of
the ULIP since October 2009. It makes ULIP
more attractive to the investors compare to the
previous one with high cost deductions.
ULIP with less than 10 Years There is 3% cap on charges levied by the insurance
companies on ULIP. It means, the total fees collected on ULIP premiums can not exceed 3%. It is defined as difference between net yield and gross yield should not exceed 3%.
In the above 3%, the management fee can not be more than 1.5%.
Gross yield is the yield generated by the ULIP before all charges are deducted.
Net yield is the yield generated by the ULIP after all charges are deducted
ULIP with greater than 10 years Over all fees can not be more than 2.25%.Management fees can not be more than 1.25%.
Unit-linked insurance products (ULIPs) filed after September 30, 2009 will have a lock-in of five years.
According to the IRDA, there will be new norms on tightening the commission and fees on ULIP products. It is trying hard to make the investment more attractive for the investors.
The new norms will have the high life cover, in the existing
policies have the high focus on the investment rather than
the protection on life. IRDA want to bring more clarity on
the life cover and investment portion on the same product.
This make investors to clearly understand how much is
invested and how much is insured.
In order to put more money in the hands of investors, IRDA
recently said that insurers cannot charge a fee for
surrendering a unit-linked insurance policy after five years.
At present, insures charge more fees on
surrendering the policy even after the completion
of the lock-in period.
Say Thanks to SEBI!!!
ULIP investors must say thanks to SEBI for
putting pressure on IRDA to introduce new
norms on ULIP policies.