Concept Note— Employer-Employee Scheme

Vide the aforesaid circular the IRDA has clarified that products sold under employer- employee schemes
could be other than Term Insurance.

Thus, savings linked insurance policies can be issued under employer-employee schemes where the
Employer will hold the insurance policy on the life of the Employee.

Employers wish to take insurance policies on the life of employees in order to use the insurance policy
as a retention tool. This need can be met through the Employer- Employee schemes which have the
following conditions agreed to by the Employer at the time of making the proposal:

1. The Policy may be absolutely assigned to the Employee during his course of employment with the
Employer.

2. If the Employee quits the job before the policy is assigned to him, the Employer can either
surrender the policy for its surrender value to the insurance company and pay the same to
employee as a part of the terminal benefits. Alternatively, absolutely assign the policy to the
employee as a part of the terminal benefits

3. In the event of death claim/maturity/survival benefit of the policy , the policy proceeds will be paid
to the Beneficiary (appointed by the Employee) or Employee as the case may be at the time of the
proposal

4. No withdrawals or changes to the benefits will be permitted to be made by the Employer

5. The policy document once issued will be endorsed with the special conditions (Annex F) and
dispatched to the employer.

6. The Beneficiary details of the employee will be kept on record to be used at the time of a death
claim

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Additional Documentation:

Sl Particulars Annexure
no.

1 Covering Letter from Employer - on Employer Letter head Format as per Form EE2

2 Undertaking to be taken on the Letter-head of the Company Annex A

signed by the person signing the proposal form as the authorized
signatory

3 Board Resolution granting the permission to apply for an insurance Annex B

policy under the Employer-Employee scheme

4 Format of details of Employees covered Annex C

5 Beneficiary appointment Form Annex D

6 The declaration of the employee Annex E

7 Special conditions endorsed on the Policy Document Annex F

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 (To be issued on the Letterhead of the Company)

Form EE2

Date:

To,

Dear Sirs,

Sub: Policy under the Employer-Employee Scheme.

With reference to the above, we hereby furnish the following:

1. Undertaking from the Company signed by the person signing the proposal form as the authorized
signatory. — Annex A
2. Board Resolution granting the permission to apply for an insurance policy under the Employer-
Employee scheme — Annex B
3. Details of Employees covered — Annex C
4. Beneficiary appointment Form – format as per Annex D
5. The declaration of the employee- Formats as per Annex E
6. Special conditions endorsed on the Policy Document – format as per Annex F

Thank you,

Yours truly,

For

Authorised Signatory Name:

Designation:

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 Annex A

Format of Undertaking on the letter-head of the Company

Ref No. Date:

To,

______________________________

______________________________

______________________________

Dear Sirs,

Sub: Policy under the Employer-Employee Scheme.

With reference to the above, we hereby furnish the following:

1. The Company has vide its Board Resolution dated _______decided to float an Employees Welfare
Scheme whereby the Company would avail insurance policy(ies) from Tata AIA Life Insurance Company
Limited for one or more of its Employees. A certified true copy of the Board Resolution is attached.

2. The Company agrees and undertakes the following:

2.1 During the course of employment the insurance policy taken by the Company on the life of the
employee may be absolutely assigned by the Company in favour of the concerned employee.

2.2 If the employment is terminated before assigning the policy to the employee, the Company may
absolutely assign the policy to the employee as a part of the terminal benefits or surrender the policy
where the surrender proceeds will be paid to employee.

2.3 If any claim arises by reason of death, the claim proceeds will become payable to the Beneficiary
appointed by the Employee.

2.4 If any critical illness claim arises, the proceeds will become payable to the Employee.

2.5 Any loan can be provided against the policy to the employee only after the policy is absolutely
assigned to the employee. Assignment to third party (bank/financial institution) shall not be considered
valid until a NOC in writing is obtained from the employee stating that rights and benefits under the
policy to be assigned to the third party.

3. The Company undertakes and agrees to pay the premium on behalf of the employee under the policy to
Tata AIA Life Insurance Company Limited as and when due, prior to the assignment of the policy to the
employee. After the assignment of policy to the employee, the premium shall become payable by the
employee.

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4. The Company acknowledges that details of the Beneficiary appointed by the employee are provided
along with this undertaking to Tata AIA Life Insurance Company Limited which will be retained by Tata
AIA Life Insurance Company Limited and used for the purpose of payment of a death claim. The
Company hereby accepts and agrees that any claim payment made to such Beneficiary shall conclusively
constitute full and final discharge of all liability on part of Tata AIA Life Insurance Company Limited
under the policy.

5. The Company agrees that the aforesaid undertaking and declaration will be subject to the provisions of
the insurance policy being proposed on the lives of employees covered under the Employees Welfare
Scheme.

6. The Company further agrees and declares that the insurance policies, held in its own name do not bear
the nature of `Keyman' policies and that the policies are being taken as an Employee Welfare measure.
The Company clarifies and declares that none of the employees deemed eligible under the Employee
Welfare Scheme qualify as “Keyman” of the Company. The Company agrees that the benefits accruing
under the policy or the claim amount shall be payable only to the employee or the appointed
Beneficiary and in no event, shall the Company stand to benefit from the policy in the event of death of
the employee, surrender or maturity of the policy.

7. The Company agrees that the concerned employees have been made aware of the details of the
insurance policies being taken on their respective names by the Company and the modalities of the
Employer-Employee Scheme.

8. The Company undertakes and agrees to notify Tata AIA Life Insurance Company Limited in written in
case there is any change in the Employees Details Sheet enclosed herewith.

9. The Company shall provide any other document, declaration, affidavit or undertaking as may be felt
reasonably necessary by Tata AIA Life Insurance Company Limited from time to time.

Thank you,
Yours truly,

For
Authorised Signatory Name: __________________ Company Seal and Stamp

Designation:

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 Annex B

Format of Board Resolution to be given on the Letterhead of the Company

Certified True copy of the resolution passed at the Board meeting held on_____________

A copy of the Employees Welfare Scheme was placed before the Board comprising of details of the
Employees who are proposed to be covered under the Employer-Employee Scheme of Tata AIA Life Insurance
Co. Ltd. The Board after discussions passed the following resolutions:

"RESOLVED THAT the consent of the Board be and is hereby granted for the Employees Welfare Scheme to be
floated by the Company."

"RESOLVED FURTHER THAT the Company does propose to purchase insurance policies from Tata AIA Life
Insurance Co. Ltd, under the Employer-Employee Scheme, in favour of the afore-mentioned Employees and
the premium due thereof shall be paid by the Company on behalf of such Employees, as per the Employees
Welfare Scheme of the Company."

“RESOLVED FURTHER THAT the insurance policies shall be absolutely assigned in favour of the Employees
covered under the Employees Welfare Scheme In the event of the termination of the employment of such
Employee, the Company shall have the option to either absolutely assign the insurance policy to the
Employee or to surrender the insurance policy to Tata AIA Life Insurance Co. Ltd.”

"RESOLVED FURTHER THAT Mr.____________________________, Mr. ________________ and Mr. ______

be and are hereby severally authorized to sign the insurance proposals and all other required documents in
connection with the insurance proposals to be made to Tata AIA Life Insurance Co. Ltd."

"RESOLVED FURTHER THAT the aforesaid authorized signatories be and are hereby severally authorized to
execute all documents, deeds, affidavits, undertakings, declarations etc, and to do all such deeds, matters
and things as may be deemed necessary in connection with and for the purpose of effective implementation
and administration of the Employees Welfare Scheme."

Certified True Copy

Authorized Signatory Name: ______________ Company Seal and Stamp

Designation:

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 Annex C

We hereby furnish the following details of all the employees who have applied for insurance policy
under employer – employee scheme

Employee Details Sheet

Sr.No. Emp Full Name Designation Type of Term Sum Annual

No. Insurance (years) Assured Premium
Product (Rs.) (Rs.)

Thank you,

Yours truly,

Authorized Signatory Name: ______________ Company Seal and Stamp

Designation:

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 Annex D
BENEFICIARY APPOINTMENT FORM
UNDER EMPLOYER-EMPLOYEE SCHEME
Name of the Life Assured:

Proposal No.:

Please give the details of the Beneficiary

Name of the Beneficiary

Date of Birth: Gender: (M/F)
Relationship to the Employee:
Address for correspondence

In case the Beneficiary is a Minor

In case the Beneficiary is a minor, a person (who should be a major other than the Employee Life
Assured under the policy) should be appointed to receive the money secured by the policy in the event
of death of the Life assured during the minority of the Beneficiary.

Please give the details of the Beneficiary

Name of the Appointee

Date of Birth: Gender: (M/F)
Relationship to the Employee (life assured)
Address for correspondence

I accept the appointment

Signature of the Appointee

Declaration of the Employee Life Assured

I have understood and agree to the rules of the Employer-Employee Scheme regarding claim and
nomination.

Signature/Thumb impression of Life Assured ___________________________

Date: Place :

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 Annex E
Declaration of the Employee - Life to be Assured:
To,
Dear Sirs,

Sub: Policy under the Employer-Employee Scheme.

With reference to the above, I _____________ (name of the Employee), hereby declare as follows:

1. I am aware that I am covered under the Employees Welfare Scheme of the Company and that the
Company has decided to propose for an insurance policy from Tata AIA Life Insurance Co. Ltd under
its Employer-Employee Scheme.
2. In case of termination of employment for reasons other than death, the Company shall have the
option to either absolutely assign the policy to me or to surrender the policy to Tata AIA Life
Insurance Co. Ltd. for the then current surrender value (if any)
3. Upon the assignment of the policy in my favour the premium for the said insurance policy shall be
payable by me.
4. I understand and agree that in the event of a death claim arising and becoming payable, the same
shall be paid to my Beneficiary appointed by me.
5. I am therefore appointing a Beneficiary as per the attached Nomination form for meeting the
aforesaid purpose.
6. I am also aware that the Employer-Employee Scheme will be subject to and be governed by the
Policy provisions at all times.

Thank you,

Yours truly, Witness

Signature of the Employee. Signature Name & Address

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 Annex F

Special conditions endorsed on the Policy Document

Policy No. _______

The Life Assured under the Policy is an Employee of the Policyholder who is the Employer. The following
special conditions shall apply to the policy:

a) if any claim arises by reason of death, Tata AIA Life Insurance Co. Ltd is hereby authorised
unconditionally to settle the claim proceeds (where payable) in favour of the Beneficiary of the
Life Assured so appointed by him. Further maturity proceeds or survival benefits shall be made
in favour of Employee.

b) The Policyholder hereby discharges Tata AIA Life Insurance Co. Ltd from all claims to his rights
and interest in the benefits arising under the policy in case of a death claim, in favour of the
Beneficiary so appointed.

c) Any, critical illness claim, the proceeds will become payable to the Life Assured.

I/we hereby understand that state wise GST registered number along with state wise employees list to
be provided to Tata AIA Life in case if our organization needs State wise Tax invoice. We herewith
provide our GST Registration number.

GST registered number:

For

Authorised Signatory Name:

Designation:

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