FTR DOCKET

Section 4
Basic Underwriting Guidelines
for Business Insurance
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4.1 Partnership Insurance Underwriting

4.2 MWPA Insurance Underwriting

4.3 Keyman Insurance Underwriting

4.4 Hindu Undivided Family Underwriting

4.5 Employer-Employee Underwriting

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 Section 4
Basic Underwriting Guidelines
for Business Insurance

4.1.1 Partnership Insurance

Category Partnership Guidelines

Type of Product Only Term Plans allowed

Only SPG Level Term cover (Variant 1) without Add-on
SPG Variant
cover, without ROP and Whole life Option allowed
For Cover amount > ₹ 25 Cr would be offered lower
Policy Term
duration (maximum cover upto age 65 years)
Nomination Nomination is not Allowed
Assignment is not allowed –
Assignment
except in the case of dissolution of partnership
Riders Riders are not allowed
• All partners need to apply for cover simultaneously.
Other
• Partnership Business should generate Profit
commensurate with Sum Proposed.
1. Copies of Original Partnership Deed
& Supplementary Partnership Deed.

2. Copies of Latest Audited P&L, BS for last 3 years.

Documentation 3. Statement showing capital account of partners.

4. Letter from Partnership firm authorizing the person

to sign on behalf of the firm.

5. AML-KYC documents of controlling beneficial owners

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4.1 Business
Insurance UW
4.1.2 Married Woman’s Property Act 1874 Insurance

Category MWPA Guidelines

LA & Proposer The Life Assured & Proposer must be one and the same
Beneficiaries, once declared, cannot be changed.

The Beneficiaries may be:

Beneficiary
- Wife
- Any of his children
- Wife and any of his children
• MWPA Policies are considered as ‘Automatic Trust’,
hence the need for Trustee(s).

• A Trustee is the legal owner of the policy under the Act.

• The Policyholder must assign the Trustee(s) at

inception

Trustee • S/he receives the benefits on behalf of the

beneficiaries.

• A Trustee could be:

- Any individual, two or more people
- Any organization
- Wife and one/more adult children

• Trustee(s) can be changed during policy term

MWPA Addendum: Signed by Life Assured,
Documentation
Beneficiaries & Trustee(s) (mandatory)
Type of Plan(s) Term Plan, Traditional & ULIP

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4.1 Business
Insurance UW
4.1.3 Keyman Insurance

Category Keyman Insurance Guidelines

1. Proposal form should be submitted, signed by a
person authorized by company.

2. Copies of memorandum and articles of association.

3. A resolution from the board of directors which should

state that they desire to have a policy on the life of the
key man to be named and they should state the
amount for which the policy is desired.

4. The resolution should also state the name of the

authorized signatory of the company, who must affix
rubber stamp of his designation in the company with
company’s name below his signature on the proposal
form.
Documentation
5. Key-man questionnaire signed by the persons
authorized by the entity -Annexure Key man

6. Copy of audited accounts, profit & loss account and

balance sheet of the entity for the last three years duly
certified by Chartered Accountant. Keyman cover
cannot be granted to loss making entities or Non-
profit organizations

7. KYC documents of the Controlling beneficial owners of

the entity

8. Form 16 for last 2 years or proof of remuneration of

the key man

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4.1 Business
Insurance UW
4.1.3 Keyman Insurance (continued)

The permissible amount of Key Man insurance for a company will be the least of
the amounts arrived at on the basis of below 3 methods:

Method 1: Method 2: Method 3:

Sum Assured = Sum Assured = Sum Assured =

3 x Average 5 x Average net 10 x Annual
Gross Profit of profit of the compensation
the company for company for the Package of Key
the last 3 years last 3 years person

Note: If there is more than one key person in the company the total of the face
value of the policies on the life of all these key persons (from all insurance
companies) should not exceed the overall limit arrived at by methods 1 & 2
mentioned above.

• Key person shareholding is less than or equal to 51%.

• Family (includes spouse and minor child) shareholding is less than or equal
to 70%.

• Cases with different shareholding pattern will be considered on case-to-case

basis

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4.1 Business
Insurance UW
4.1.3 Keyman Insurance (continued)

The companies that are recently established where audited Profit & Loss
Accounts for three years are not available:

No. of years for which audited

Maximum Sum Assured
accounts are available

2 Years 2 Times Average Net Profit

1 Year Equal to Net Profit

Less than 1 Year Nil

4.1.4 HUF Insurance

Category HUF Guidelines

Proposal Form with HUF as Proposer
PAN of HUF mandatory

Documentation Income Proof/ITRs of HUF

(if total premium paid is more than ₹ 5 Lakhs)
HUF addendum signed by HUF Karta, to contain
Declaration & details of Coparcener(s) &/or members
Premium Premium to be paid from HUF Account
Medicals For clubbed SUC (Individual Cover and HUF Cover)

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4.1 Business
Insurance UW
4.1.5 Employer Employee

Category Employer Employee Insurance Guidelines

Partners cannot take EEIS for themselves,
employees of the partnership firm can be covered.
Employees of proprietorship can be covered under EEIS
but not the proprietor.
Eligibility
Director of a company can be covered,
provided he is receiving regular salary from company

Employer must have atleast 10 permanent employees

1. Board Resolution (signed by all directors/partners):

Decision to buy Insurance for employees as per
mentioned in resolution, with mention of authorized
signatory to sign all documents on behalf of employer

2. Employer-Employee Annexure (signed by authorized

signatory): with information of the Employer

3. Assignment Form: Assignment is compulsory with

proposal under EEIS. Please tick on the type of
assignment in the assignment form and provide
necessary details.
Employer’s
Documentation
KYC of Witness of assignment is mandatory

4. Memorandum & Articles of Association & Company

Registration Certificate

5. Shareholding Pattern

6. Audited Accounts: Last 3 years P&L, BS

7. ITR: Last 3 years

8. PAN of company

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4.1 Business
Insurance UW
Category Employer Employee Insurance Guidelines
1. Proof of Employment: Depending on income (any of
the below)
• Last 2 years Form 16 showing income
Employee’s • Bank Account Statement of last 6 months
Documentation (showing salary credit for employees joined in
current FY)
• Last 3 months’ salary slip with employee no., PF
no., month etc
Term Plan, Traditional & ULIP.
Type of Plans
Plans with inbuilt waiver of premium are not allowed
Only SPG Level Term cover (Variant 1) & Increasing Level
SPG Variant (Variant 4) allowed along with all Add-On covers except
WOP and ROP
Cover will not be offered beyond the age of 65, except in
case of a closely held company where policy is assigned in
insured`s name is made post retirement or age 65
Policy Term (whichever is earlier), such companies can be considered
for higher duration covers i.e. 99 years age subject to
“absolute immediate assignment of policy in the name of
LA” (only upto ₹ 25 Cr, higher covers -> reinsurer decision)
• Total Insurance cover on life, will not exceed the
eligible individual life cover, based on employee’s
salary earned from the employer
Financial UW
• PPC of Life Assured has to be justified

• Employer cannot pay more than 50% of net annual

income of Employee towards EEIS premium
No specific restriction for EEIS,
General UW
normal UW guidelines will apply
Employer as policyholder, to be signed by authorized
Proposal Form
signatory of the company
Premium Premium Payment from Employer’s Account

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