HDFC Life Sar Utha Ke Jiyo

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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

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