HDFC Life Sar Utha Ke Jiyo
By : Legal Era
Update: 2018-07-04 05:44 GMT
story
Legal Era Magazine throws light on the product portfolio,journey thus far and future plans of one of India’s leadinglights in life insurance…...LE: What led to HDFC Ltd., one ofIndia’s leading housing financeinstitutions, branching out intoHDFC Life, a leading long-term lifeinsurance solutions’ provider in thecountry?HDFC Life Insurance: Since its foundation in 1977 as a...
Legal Era Magazine throws light on the product portfolio,
journey thus far and future plans of one of India’s leading
lights in life insurance…...
LE: What led to HDFC Ltd., one of
India’s leading housing finance
institutions, branching out into
HDFC Life, a leading long-term life
insurance solutions’ provider in the
country?
HDFC Life Insurance: Since its foundation in 1977 as a specialized mortgage
company, HDFC Ltd. has grown to be a financial conglomerate
offering a bouquet of financial services to its customers
through its subsidiary and associate companies. In Aug
2000, when IRDA opened up the market for private players,
HDFC Ltd. saw the underpenetrated insurance market as an
untapped opportunity and was amongst the first to apply for
registration and form the first private life insurance company
in India, which we know as HDFC Life today.
We had a simple and compelling vision for the Company.
We wanted to secure the lives of our customers by giving
them the best value for their money. The objective was that
of empowering customers to enable them to live with pride.
Over the past 18 years, we have strived hard to stay true
to this objective and it continues to be the guiding light for
everything that we do at HDFC Life.
From its inception in the year 2000, today, HDFC Life has
become one of the leading life insurance companies in India,
offering a range of individual and group insurance solutions
that meet various customer needs such as Protection, Pension,
Savings & Investment and Health, along with Children’s and
Women’s Plans.
LE: Can you briefly take us through the gamut
of your individual insurance solutions?
HDFC Life Insurance: As on June 30, 2018, the Company had 34 individual
products in its portfolio. These products cater to a diverse
range of customer needs such as protection, savings &
investment, health insurance and retirement. Below are the
details of some of our offerings:
1. Term Plans: We have a range of term insurance plans
that are comprehensive and provide complete protection
and financial stability to policyholders’ families in case
of any unforeseen events. These plans are competitively
priced. One of our most popular and appreciated products
Click 2 Protect 3D Plus, offers 9 options, which ensure
protection against the three eventualities of life - Death,
Disability and Disease as per customers’ requirements.
2. Health Insurance Plans: These plans offer financial
security to meet health-related contingencies. Depending
on the health insurance plan chosen, the policyholder
can get coverage for critical illness expenses, surgical
expenses, hospital expenses, etc.
3. Child Insurance Plans: Child plans help in financial
planning for one’s child’s future needs. As a parent, one
can secure the child’s future through these plans which
cater to needs like education expenses, even in one’s
absence or otherwise. One such plan that we offer is
HDFC SL Young Star Super Premium, which is a unitlinked
insurance plan (ULIP) designed to save for the
child’s future, even in the absence of the earning parent.
4. Savings and Investment Plans: These products provide
an opportunity to customers for creating wealth for
future financial goals, through disciplined and periodic
investment in different funds, over the long term. Our
HDFC Life Click 2 Invest Ulip plan is one such plan that
offers customers eight fund options to choose from, with
zero allocation charges and the flexibility to choose the
policy term.
5. Women’s Insurance Plans: These plans are a set of
specially created and handpicked products which suit the
needs of women at different stages of their life, such as
protection, health, retirement, child’s education and longterm
savings and investment.
6. Retirement Plans: HDFC Life has Retirement and
Pension Plans which provide regular income post retirement. These plans enable retirees
to live with pride without compromising
on their lifestyle. HDFC Life Click 2 Retire
is one such online Unit Linked Plan that
provides market-linked returns, with
minimal charges.
Legal Era In Conversation With NARENDRA GANGAN, General Counsel, HDFC Life Insurance
LE: As the General Counsel, Company
Secretary of HDFC Standard Life Insurance
Company Limited, you have an overflowing
plate. Can you briefly take us through
the gamut of your legal, compliance and
secretarial functions?
Narendra Gangan: The department has a constant flow of challenging work
and there are various dedicated teams to deal with subject
matters, though we strongly believe in collaborating together
to deliver as a cohesive department. The broad activities in
which the department pans its involvement are Advisory,
Assurance, Regulatory Reporting, Stakeholder Engagement,
Relationship Management with Statutory and Regulatory
Bodies and Governance and Monitoring. Some of the key
activities involved are providing legal advisory to business,
contractual documentation, advising on strategic projects,
policy documentation for insurance products, addressing
pan India litigation, which fall under the Legal vertical.
Implementing listing compliances with Stock Exchanges,
Policy Framework and Corporate Governance responsibilities
are under the Secretarial vertical. Implementing regulatory
compliances mandated by IRDA, policy advocacy, AML
checks and compliances, regulatory advisory to business,
compliance training regarding compliance framework fall
under the compliance vertical. The department as a whole
is also engaged in dealing and meeting requirements of
multiple regulatory bodies like IRDA, SEBI, RBI, MCA, BSE and
NSE on an ongoing basis.
The various teams are led by seasoned professionals, i.e.,
Legal team is led by Sankalp Jain, Secretarial team by Nagesh
Pai and Compliance team by Prithwiraj Sengupta.
LE: Share your listing experience of HDFC
Life and related challenges you encountered
during the journey?
Narendra Gangan: I joined the Company in the month of July 2017 and was
immediately roped in to lead the core team to handle the
IPO post calling off merger with Max Life Insurance Company
Limited (Max Life). The task involved formulating a legal
strategy to take the Company to a successful IPO in a
short span of time and the task involved obtaining critical
regulatory approvals from multiple regulators like IRDA, SEBI,
RBI, MCA, NSE and BSE and other multiple stakeholders such
as JV partners viz. HDFC Ltd and Standard Life, U.K.
The project was further very complex and challenging as
the Company had called off its merger with Max Life in July
2017; the former Head of the Department had decided to
leave the Company. The Company needed strong legal and
regulatory leadership to navigate the IPO project and the
ongoing business responsibilities. Against this backdrop, the
team worked on the IPO, completing the legal due diligence
process, drafting the red herring prospectus, negotiating
and obtaining approvals from multiple regulators like IRDA,
SEBI, and RBI. The legal team worked closely with the team
of investment bankers, and managed the expectation of
multiple stakeholders, both internal and external, to achieve the objective of IPO in record time.
During those four months, we lost count of time as countless
hours were spent on the review and execution of the listing
project and the key team members toiled day and night. We
were virtually “living” in the office.
Since the Company also has a coveted 15-member Board
of Directors, comprising industry stalwarts like Mr. Deepak
Parekh, Sir Gerald Gemstone (Chairman of Standard Life
Group, UK), Mr. Keki Mistry, Dr. JJ Irani, Mrs. Renu Karnad, the
department had to meet the expectations set by the Board,
navigate the reputational and regulatory risks associated
with an unsuccessful IPO, etc. The Company achieved a very
successful IPO and is now amongst the top 30 companies in
India based on market capitalization. The department did a
remarkable job in achieving this milestone for the Company,
which is my favourite project till date as “we delivered” when
it mattered the most.
LE: You are also part of various key Councils
and Committees of HDFC Standard Life
Insurance Company Limited. Can you outline
your functions within each Council and
Committee?
Narendra Gangan: An effective GC is required to be strategic, to be able to
anticipate issues and estimate risks, including safety, security,
reputational, regulatory and legal risks. In this endeavor,
I contribute effectively as a member of some of the key
Councils of the Company with diverse cross-functional
strategic and business objectives and work closely with other
business leaders to resolve issues to advance business. The
key objective being to proactively identify issues, provide
solutions, balance risk and growth, and provide an enabling
framework to seamlessly operate and ensure compliance with
the legal and regulatory framework in which the Company
operates:
1. Risk Management Council
It is an internal risk governance committee entrusted with
the oversight of risk management objectives within the
organization and also has the primary responsibility to embed
the risk culture within the organization:
1. The role is to create a sound risk aware culture and review
risks for the accomplishment of business strategies;
2. Identifying key risks and emerging risks, and devise risk
strategies to ensure its plausible reduction;
3. Evaluating significant risk exposure of the Company and
assist in chalking out action plans to mitigate / manage
the exposure in a timely manner.
2. Whistle Blower Committee
As the GC of the Company, I have to ensure that we are
committed to the highest standards of personal, ethical and
legal conduct for conducting its business in all transactions/
engagements with all internal and external Stakeholders,
including customers. In this endeavor, I strongly encourage
and support employees/whistleblowers to report any suspected instances of unethical/improper behaviour and provide a mechanism
through its ‘Whistle Blower Policy’. The said Policy provides the employees
with a channel for communicating any suspected instances/complaints and a
platform for their resolution through proper governance mechanism.
3. Compliance Council
In my role as a Compliance Officer and part of the Compliance Council, I work
with the management with the following objectives:
1. Approving the compliance monitoring plan and review plans;
2. Overseeing the compliance of guidelines and regulations issued by
regulatory bodies;
3. Strategies around managing potential regulatory issues; and
4. Implement effective compliance risk management and ensuring effective
process and controls to mitigate/manage the exposure.
4. Cyber Council
With increasing threat of cyber attacks and frauds impacting various industries,
we pay lot of importance to strengthening our Information Security Group
(ISG). Some of the key initiatives of the ISG program includes Network DDoS,
web protection of portals, next-generation firewalls, tie-ups with forensic
partners, risk-based authentication, security event configuration and alerts.
Some of these measures are designed to help HDFC Life assess current
capabilities and draft prioritized roadmap toward improved cyber-security
framework and risk mitigation from cyber attacks.
5. Claims Review Committee
The Claims Review Committee (CRC) provides an opportunity for life insurance
claimants to represent further information and their point of view with respect
to the claim decisions taken by HDFC Life. The CRC deliberates on escalations
whether to process or reject the claim based on the facts and circumstances
of each case, evidence on records, prevailing legal jurisprudence on such claim
matters.
In addition to the above committees, I am also a member of the Grievance
Redressal Committee, Disciplinary Committee and Prevention of Sexual
Harassment Committee.
LE: Prior to joining HDFC Standard Life Insurance Company
Limited, you were associated with IDFC Limited, DSP
Merrill Lynch Limited, IL&FS Limited, Baskin Robbins and
20th Century Finance Corporation Limited in various
leadership positions. In what ways have your prior
experiences helped/shaped you?
Narendra Gangan: My career has been majorly in the financial services sector including fund-based
and non-fund-based products. My experience of having worked with large
financial conglomerates has given me an opportunity to observe and inculcate
highest standards of corporate governance and ethics. Working with highquality
management groomed me to develop balanced judgment on critical
issues, ability to handle high-pressure situations, and develop leadership skills.
My role as a GC and Compliance Officer has improved my skills in regulatory
relationship management and policy advocacy, which brings lot of value in
dealing with high-stake projects.
I continuously set new bars for delivering performance, as apart from working
on routine business matters, I ensure that we are always involved in strategic
projects, assisting in designing path-breaking products, advising and developing
risk mitigation solutions for our stakeholders. The approach of “thinking out
of the box” percolates down the team so that we continuously deliver and
add value when the business demands and live up to the expectation of being
part of the most valuable insurance company in India.
7. Rural and Social Plans: These plans are
a special offering from HDFC Life for the
benefit of rural customers. These plans
are designed keeping in view the rural
population and aim to provide stable
returns and insurance. HDFC SL Sarv
Grameen Bachat Yojana is one such plan
that provides robust returns even on an
investment as small as '200 by adding
50% to the original investment in five
years. Apart from guaranteed returns,
this plan offers the essential security of a
life insurance.
Besides these, we also have specialized
products for segments like NRIs and
personnel in the armed forces, police &
paramilitary forces.
LE: Can you briefly take us
through the gamut of your Group
insurance solutions?
HDFC Life Insurance: HDFC Life has 11 group products in its
portfolio. These products help employers and
trusts meet their employee benefit liability
obligations in a simple, efficient and costeffective
manner while helping employees to
secure their family’s financial independence
in case of untimely demise or critical illness.
Some of our Group insurance solutions are
listed below:
HDFC Life Group Unit Linked Pension Plan
provides a flexible solution for managing
superannuation obligations.
The HDFC Life Group Variable Employee
Benefit Plan and HDFC Life New Group Unit
Linked Plans are flexible & cost effective nonparticipating
variable insurance plans to help
employees build a corpus to fund future
financial needs.
Our HDFC Life Group Term Insurance Plan
offers life insurance for members, thus
helping employers to reinforce their bond
with their employees.
Group Term Micro-Insurance: We have
products like HDFC Life Group Jeevan
Suraksha Plan which is a Non-Linked, Non
-Participating, Group Term Micro-Insurance
Product.
Legal Era In Conversation With Sankalp Jain, VP & Head-Legal, HDFC Life Insurance
LE: As the Vice President, Legal, HDFC Standard Life Insurance
Company Limited, you look into legal issues impacting the
life insurance business of the Company. Can you briefly take
us through your various legal functions?
Sankalp Jain: The Legal vertical is split in two silos, Corporate Legal and Zonal Legal with different
mandates, though both silos collaborate together on various projects depending
upon business demands. Under Corporate Legal, we work on all contractual
documentation for the Company, cover insurance product policy documentation,
provide corporate legal advisory to the business. We execute almost 800 plus
contracts annually apart from working on strategic business mandates, providing
routine legal advisory to the business under the Corporate Legal department.
Under Zonal Legal, we handle pan India litigation cases covering Insurance
Ombudsman, Consumer Forums, High Courts with an approx. count of 2,500
plus cases. Both the silos are almost run like a revenue centre as opposed to a cost
center, as we saved approx. '25 crs in FY 2018 through effective litigation and
contract management.
LE: Prior to joining HDFC Life, you worked with the likes of
ZYFIN Group, Morgan Stanley Investment Management
and Principal Financial Group, and also worked as an
Associate Lawyer for a premier law firm in Delhi. How
have these experiences helped/shaped you?
Sankalp Jain: My diverse experience of working with a law firm in the initial years
and as an in-house Legal Counsel with large global MNCs like PFG
and MS during the mid years and with a fintech start-up company like
ZyFin lately strengthened my legal skills, judgment, compliance and risk
management expertise, increased knowledge of business processes, and
honed my leadership skills. The opportunity to work in senior roles with
different companies during different life cycles of businesses was enriching as I
had to calibrate and enhance my legal and management skills set as per the needs
of the business. All these experiences refined my legal acumen to provide legal
solutions with a business mindset, instilled the maturity to handle innovative and
demanding legal projects, improved my leadership skills and encouraged me to
develop gravitas and candor in my working style.
Credit Protect Plans: We also have Credit Protect plans
like the HDFC Life Group Credit Protect Plus Insurance
Plan, where, in the event of death, disability or illness of
the insured member(s), it protects their families from the
burden of repaying the outstanding loan to the financial
institution.
LE: It has been 18 long years since the Company
was established. How has the journey been?
HDFC Life Insurance: The journey from being the first Private Life Insurance
Company in the year 2000 to being amongst the Top 30
companies in India by market cap in 2018 has been a very
fulfilling journey. Some of the key milestones in our journey
have been:
2003: We crossed 1,00,000 policies and 10,000 individual
agents. We also tied up with distribution partners like HDFC Bank and other banks which still run
strong
2004: We launched unit-linked funds and added a new
distribution tie-up with Saraswat Bank
2007: We crossed the 500,000 policy milestone
2010: Our AUM crossed '200,000 million
2011: We incorporated our subsidiary, HDFC Pension in
June, 2011
2012: Our company turned profitable, and registered a
profit of '2,710 million and the total premium for the
year crossed '1,00,000 million
2014: Company’s AUM crossed '5,00,000 million; dividend
was declared for the first time in December 2013
2016: Our total premium crossed the '1,60,000 million
mark. Our subsidiary, HDFC International was authorized by Dubai Financial Services Authority to
carry on financial services
2017: HDFC Life got successfully listed with the IPO being
oversubscribed close to 5 times
Over these 18 years, HDFC Life today has consolidated
its position to being the most valued and amongst the
top three private leading life insurance companies.
Our strategy over the years has helped us differentiate
ourselves by ensuring a Balanced Product Mix, Innovative
Products, Going Digital and a diverse fortified distribution
portfolio.
LE: Do you think HDFC Life’s success is largely
due to the mammoth presence and reach
enjoyed by its parent company, HDFC Ltd.?
HDFC Life Insurance: Leveraging the existing distribution franchise was certainly
one of the key hypothesis when HDFC Ltd. floated
the insurance subsidiary. So, it was only incumbent upon
HDFC Life to rely upon HDFC Ltd., especially in the early
years. But over a period of time, we have developed extremely
strong channels of Bancassurance and online in retail
business and Direct in group business. We owe our
success to these channels as much as we do to the parent
company.
Having said that, the brand of HDFC has emerged as a
recognized financial services conglomerate and has been
ranked amongst the best Indian brands with its partner and
subsidiaries gaining from the same, HDFC Life being no
exception to this.
The cornerstone of HDFC’s excellent brand strength and
recall amongst consumers emerges from its unrelenting
focus on corporate governance, its high standards of ethics
and clarity of vision, and this percolates across its group
companies.
LE: HDFC Life has 413 branches across the
country and additional distribution touchpoints
through new tie-ups and partnerships
within traditional and non-traditional
ecosystems. Please elaborate.
HDFC Life Insurance: Our multi-location and multi-channel distribution network
provides us with the flexibility to adapt to changes in
the regulatory landscape. We believe that our diversified
and geographically spread distribution model gives us a
widespread footprint across different customer segments.
As a result, HDFC Life had 19% (FY’18) market share among
private life insurers in India in terms of total new business
premium.
Despite this diversified distribution spread, we have
maintained a sharp focus on customer needs and distribution
efficiencies, thereby managing to build economies of scale
across most of our distribution channels and maintaining
profitability for each of our distribution channels.
LE: More specifically, you have 163 partners
including NBFCs, MFIs and SFBs and 26 nontraditional
partners. Please elaborate.
HDFC Life Insurance: We have consciously expanded the number of our
partnerships and diversified our sources of new business
premium to increase our geographic reach and penetration
across customer segments. We believe that we can leverage
the large network of potential customers from our distribution
partners to distribute and cross-sell our products.
HDFC Life offers an attractive value proposition for distribution
partners, as demonstrated by our longstanding, successful
relationships with our bancassurance partners through
corporate agency or master policyholder arrangements.
Despite the spread of our distribution, we ensure that our
agile distribution platform and highly skilled key account
managers support all requirements of both traditional and
non-traditional distribution partners.
LE: Having such a gargantuan network can
be both advantageous and disadvantageous
at the same time. Please comment.
HDFC Life Insurance: Yes, a wide network of distribution partners has its own set
of merits and challenges that we need to keep in mind.
We help ‘Reimagine
Life Insurance’, by innovating and collaborating,
to create value through our Legal
prowess
The obvious merits of such a strategy are:
1. Access to partner customers for cross-selling Insurance.
2. Mitigate risk of over-reliance on a single channel or
partner.
3. Access to a larger spectrum of customer segments.
4. Effective leverage of a unified customer and distributor
interaction platform resulting in faster partner and
customer on-boarding.
The risks that one needs to safeguard in this kind of a scenario
are:
1. Tight control on the quality of sales and safeguard against
mis-selling practices.
2. Ensuring all regulatory requirements of partner
representatives from the training and licensing perspective
are taken care of.
3. Technology platforms compatibility between Partner and
our systems.
4. Safeguarding customer data.
LE: Tell us more about HDFC Pension
Management Company Ltd. established in
2012.
HDFC Life Insurance: Our subsidiary, HDFC Pension, was established on June 20,
2011. We are the fastest-growing Pension Fund Manager
under the National Pension System (NPS) architecture with
AUM of '30.2 bn as on 30th June 2018 (113% YoY growth).
…and consistently gaining market share. HDFC Pension ranks
#1 across all the categories including AUM, Monthly Fund
Flow and No. of Retail and Corporate Customers amongst
private PFMs.
LE: Tell us more about HDFC International Life
and Re Company Ltd.
HDFC Life Insurance: Our reinsurance subsidiary, HDFC International Life & Re,
was incorporated on 10th January, 2016 in the DIFC.
The Company offers reinsurance of individual life products
and group credit schemes with UAE, Oman & Bahrain
-based ceding insurers. The Company declared Gross
revenue of USD 0.7 million during Q1 FY19 and
continued to show healthy technical profits. The Company
also became overall profitable during the same quarter,
within three years of operations. This is testimony to the
strength of the underlying underwriting and risk assessment
processes.
LE: What lies ahead for HDFC Life?
HDFC Life Insurance: i. Building a long-term and sustainable business
ii. Deep commitment to customers’ interests
iii. Creating customer-friendly products
iv. Sustained investment in technology for Customers and
Distributors alike
v. Operational and Sales Efficiencies