Complete information about Life Insurance Corporation's (LIC) - History, Products, Document Required, Calculation of Premium, Risk Management

Life Insurance Corporation (LIC)

 

History

Life Insurance in its modern form came to India from England. Oriental Life Insurance Company started by Europeans in Calcutta was the first life insurance company on Indian Soil in 1818. All the insurance companies established during that period were brought up to look after the needs of European community and Indian natives were not being insured by these companies. Bombay Mutual Life Assurance Society heralded the birth of the first Indian life insurance company in the year 1870 and covered Indian lives at normal rates. Starting as an Indian enterprise with highly patriotic motives, insurance companies came into existence to carry the message of insurance and social security through insurance to various sectors of society. The Swadeshi movement of 1905-1907 gave rise to more insurance companies. Before 1912 India had no legislation to regulate the insurance business. In the year 1912, the Life Insurance Companies Act, and the Provident Fund Act were passed. But the Act discriminated between foreign and Indian companies on many accounts, putting the Indian companies at a disadvantage.

The Parliament of India passed the Life Insurance Corporation Act on 19th June 1956. The Life Insurance Corporation of India (LIC) was created on 1^st September 1956, to spread life insurance much more widely and in particular to the rural areas to reach all insurable persons in the country, providing them adequate financial cover at a reasonable cost. LIC had 5 zonal offices, 33 divisional offices and 212 branch offices and a corporate office.

Today LIC functions with 2048 fully computerized branch offices, 113 divisional offices, 8 zonal offices, 1381 satellite offices and the corporate office. LIC’s Wide Area Network covers 113divisional offices and connects all the branches through a Metro Area Network. LIC has tied up with some Banks and Service providers to offer on-line premium collection facility in selected cities. LIC’s ECS and ATM premium payment facility is an addition to customer convenience.

LIC continues to be the dominant life insurer even in the liberalized scenario of Indian insurance and is moving fast on a new growth trajectory surpassing its records. LIC has issued over one crore policies during the current year. It has crossed the milestone of issuing 1,01,32,955 new policies by 15th Oct 2005, posting a healthy growth rate of 16.67% over the corresponding period of the previous year.

 

Features of life insurance

1.     Contract Of Insurance

A contract of insurance is a contract of utmost good faith technically known as Berrima fides. The doctrine of disclosing all material facts is embodied in this important principle, which applies to all forms of insurance. At the time of taking a policy, a policyholder should ensure that all questions in the proposal form are correctly answered. Any misrepresentation, non-disclosure or fraud in any document leading to the acceptance of the risk would render the insurance contract null and void.

 

2.     Protection

Savings through life insurance guarantee full protection against risk of death of the saver. Also, in case of demise, life insurance assures payment of the entire amount assured (with bonuses wherever applicable) whereas, in other savings schemes, only the amount saved (with interest) is payable.

 

3.     Aid To Thrift

Life insurance allows long-term savings since payments can be made effortlessly because of the 'easy instalment' facility built into the scheme. Premium payment for insurance is monthly, quarterly, half-yearly or yearly.

Example: The Salary Saving Scheme popularly known as SSS provides a convenient method of paying premium each month by deduction from one's salary.

 

4.     Liquidity

It is easy to acquire loans on the sole security of any policy that has acquired loan value. Besides, a life insurance policy is also generally accepted as security, even for a commercial loan.

5.     Tax Relief

Life Insurance is the best way to enjoy tax deductions on income tax and wealth tax. This is available for amounts paid by way of premium for life insurance subject to income tax rates in force. Assesses can also avail of provisions in the law for tax relief. In such cases the assured in effect pays a lower premium for insurance than otherwise

 

6.     Money When You Need It

A policy that has a suitable insurance plan or a combination of different plans can be effectively used to meet certain monetary needs that may arise from time-to-time. Children's education, start-in-life or marriage provision or even periodical needs for cash over some time can be less stressful with the help of these policies.

 

Documents required

Documents required to buy a new LIC policy are: The KYC documents required to complete a life insurance policy are

1)     Admission of Age (Age Proof): School leaving certificate, passport, pan card, driving license, aadhar card with full date of birth.

 

2)     Address Proof: Passport, driving license, voter Id, ration card, utility bills (telephone bill/gas bill/mobile postpaid bill/credit card bill), bank passbook Xerox, bank statement, rental agreement, etc.

 

3)     Photo Id proof: Passport, pan card, driving license, voter id, aadhar card, etc.

 

4)     Income Proof: Salary slip/payslip, 3 months bank statements, Form.16, last 3years Income Tax Returns.

 

5)     One passport size photo

6)     Cheque on the name of “Life Insurance Corporation of India/LIC of India” towards policy premium. One more cancelled cheque leaf for NEFT registration for new/existing life insurance policy.

 

Calculation of Premium

Premium Payment

The policyholder should note the due date of premium payment carefully. Non-payment of premium in time results in lapasation of policy. LIC offers a grace period of 30 days for payment of yearly or quarterly premium and 15 days, for a monthly premium.

In case of delay in paying premiums, the policy will lapse. The lapsed policy can be revived within 5 years of due date of first unpaid premium. Policies issued on or after 01-01-2014 can be revived within 5 years of due date of first unpaid premium.

Premium Payment Options (Other then Branch Offices)

In addition to premium payment at the cash counter in LIC Branch Offices, the premium can now be paid conveniently through several Channels for in force policies (except under Salary Scheme where premium collection is through employes).

a)     Offline Payment Channels

·       National Automated Clearing House (NACH)

To opt for NACH a Mandate Form (available in LIC officers) is to be submitted to the LIC Branch office. Commencement of electronic debit of renewal premium to the bank account of the customer is dependent on receipt of ‘approval’ to the details on the NACH mandate submitted at the destination (customer’s) bank.

·       Electronic Bill Presentation and Payment (EBPP)

Bill Pay facility premium can be paid through the Net Banking or Credit cards either by giving standing instructions or paying directly through Bank’s website.

 

b)     Online Payment Channels

·       Portal Payment Gateway

Online premium payment on Lic websites, www.licindia.in can be made for all policies. Digital signed receipt is issued online and sent through e-mail.

Premium can be paid through LIC Portal using Net Banking facility, UPI/BHIM. E-wallets, VISA/MASTER/RUPAY Cards,  American Express Credit Card.

·       Premium collection through the Paytm App

·       Premium collection through Banks

·       Premium collection through Franchisees

Ø  CSC Network

Ø  APT Online

Ø  MP Online

Ø  Suvidhaa infoserve Pvt. Ltd:

·       Premium Point

Premium point has been set up to facilitate collection of premium by Empowered Agents, LIC Associates (LICAs) & Authorized Retired LIC Employees through cash, cheques and using Debit card swipe/Dip on POS (Point of Sales) terminal which is available at select outlets.

·       Life Plus Centres

It is of Senior Business Association (SBA) are also authorized to collect premium through cash and cheques.

·       LIC Mobile Application

Premium can be paid online using LIC Mobile application MyLIC.

·       Digital repayment of policy loan and payment of loan interest

This facility is enabled from 1^st September 2017 on the licindia.in customer portal and through the MyLIC App, permitting online transaction using Cards issued by VISA/MASTER/RUPAY/AMEX, Net Banking, e-wallets and UIP/BHIM.

 

Classification of LIC Products

1.     Endowment Policy

This plan is the most popular one for fulfilling all long/short term financial needs of the population. It is considered as the best sellers amongst all the policies. Premium has to be paid for the full policy term or till policyholder’s death whichever is earlier. An endowment policy is a combination of ‘term insurance’ and ‘pure insurance’ because it offers the benefits of both the plans.

Examples:  New Jeevan Anand, LIC's Jeevan Labh, LIC's New Endowment Plan, LIC's Single Premium Endowment Plan, LIC's New Bima Bachat, LIC's Jeevan Lakshya, LIC's Aadhaar Shila,  LIC's Aadhaar Stambh.

 

Features of Endowment Plan

¨     An Endowment plan serves dual purpose savings and protection

¨     On maturity, a pre-determined will be paid to the policyholder

¨     In case of demise, the beneficiary would be entitled to the sum assured or the maturity amount, less outstanding premiums, whichever is higher

¨     The returns are earned on a compounding basis along with some loyalty additions

¨     One can also get loans for unforeseen expenses.

¨     It also provides tax benefits under section 80C

¨     The returns are also tax exempted under section 10 (10D)

 

(1)  New Jeevan Anand

LIC's New Jeevan Anand Plan is a participating non-linked plan which offers an attractive combination of protection and savings. This combination provides financial protection against death throughout the lifetime of the policyholder with the provision of payment of lumpsum at the end of the selected policy term in case of his/her survival. This plan also takes care of liquidity needs through its loan facility.

§  Sum Assured on Death is defined as higher of 125% of Basic Sum Assured or 10 times of annualised premium. This death benefit shall not be less than 105% of all the premiums paid as on date of death.

§  Accidental permanent disability arising due to accident (within 180 days from the date of accident), an amount equal to the Accident Benefit Sum Assured will be paid in equal monthly instalments spread over 10 years.

 

(2)  LIC's Aadhaar Stambh

LIC’s Aadhaar Stambh Plan offers a combination of protection and savings. This plan is exclusively designed for male lives having Aadhaar Card issued by UIDAI. This plan provides financial support for the family in case of unfortunate death of the policyholder any time before maturity and a lump sum amount at the time of maturity for the surviving policyholder.

      Conditions:

      Minimum age at entry  –  8 years

      Maximum age at entry  – 55 years

      Minimum sum assured  – Rs. 75,000

      Maximum sum assured –  Rs. 3,00,000

      Policy Term                   – 10 to 20 years

      Modes Allowed             –  All

 

2.     Whole Life Policy

As the name suggests, the whole life insurance policies are intended to provide life insurance protection over one’s lifetime. This policy premium are payable and risk is covered throughout the lifetime of the life assured. This type of policy provides for a low premium, provision of high-risk cover & financial security to the family. Premium payment ceases after a fixed term. It is ordinary and cheaper type of life insurance policy.

Examples: LICs Jeevan Umang, Jeevan Tarang.

 

Features of Whole Life Policy

a)     Death Benefit

In the event of the uncertain demise of the insurance holder during the tenure of the policy, the death benefit is paid to the nominee. The death benefit is paid as a total sum assured amount to the beneficiary of the policy by the insurance company, provided all the premiums of the policy are dully paid.

 

b)   Guaranteed Premium

Under the whole life insurance policy, the premium rate of the policy is set for the entire tenure of the policy and does not increase or decrease throughout the term period of the policy. So, if the insured pays a premium of Rs.2500 per month, then he/she will continue to pay the same premium for the whole tenure of the policy.

 

c)   Protection for Life

     Whole life insurance plan is specifically designed to provide life protection to the family of the insured in the form of payment of guaranteed sum assured along with bonuses if any in the of policyholder’s demise.

 

d)   Tax Benefit

     The premium paid towards the policy and maturity proceeds is tax exempted under section 80C and 10(10D) of Income Tax Act 1961.

 

e)   Loan Facility

     After the completion of 3 years of the policy, the insurance holder can avail loan against the policy.

 

i)      LICs Jeevan Umang

LIC’s Jeevan Umang plan offers a combination of income and protection to your family. This plan provides for annual survival benefits from the end of the premium paying term till maturity and a lump sum payment at the time of maturity or on death of the policyholder during the policy term.

      Conditions:

      Minimum age at entry – 30 years

      Maximum age at entry – 70 years

      Minimum sum assured – Rs. 2, 00,000

      Maximum sum assured – No Limit

      Policy Term                  – (100 – age at entry) years

 

ii)     Jeevan Tarang

This is a with profits whole of life plan which provides for annual survival benefit at 5.5 per cent of the sum assured after the chosen accumulation period. The vested bonuses in a lump sum are payable on survival to the end of the accumulation period or on earlier death. It is payable on survival to age 100 years or on earlier death.

 

3.     Money Back Plans

This plan is suitable for businessmen and professionals as money is available at regular intervals. A portion of the sum assured i.e. survival benefit is paid as a percentage once in every five years. Life risk cover for the entire sum is assured even after payment of survival benefit. At the time of first survival benefit the life assured should have attained majority.

Examples: LIC's Bima Shree Policy Document, LIC's Jeevan Shiromani Policy Document,  LIC's New Money Back Plan - 20 years,  LIC's New Money Back Plan - 25 years, LIC's New Children's Money Back Plan, LIC's Jeevan Tarun.

 

Features of Money Back Plans

D      It helps in saving tax.

D      It provides guaranteed returns.

D      They offer dual benefits of insurance and redemption of money at regular intervals

D      Money which is given at regular intervals may be used to pay the premium or some other investments.

 

i)      LIC’s Bima Shree

LIC Bima Shree Policy is a traditional, non-linked and with-profits money back life insurance policy that comes with the feature of guaranteed additions to provide security along with savings to him and family. It is a limited premium paying plan which is known for offering financial protection in dual cases where the policyholder survives the policy term or in the event of the death of the policyholder before the term ends. The plan pays out maturity benefits in the form of multiple guaranteed ‘survival benefits' throughout the policy tenure.

      Conditions:

      Minimum age at entry – 8 years

      Maximum age at entry – 55 years

      Minimum sum assured – Rs. 10, 00,000

      Maximum sum assured – No Limit

      Policy Tenure                – 14, 16, 18& 20years

      Premium Payment Mode– Yearly, Half-yearly, Quarterly, Monthly

 

ii)  LIC's Jeevan Tarun

       LIC's Jeevan Tarun is a participating non-linked limited premium payment plan which offers an attractive combination of protection and saving features for children. This plan is specially designed to meet the educational and other needs of growing children through annual Survival Benefit payments from ages 20 to 24 years and Maturity Benefit at the age of 25 years. It is a flexible plan wherein at proposal stage the proposer can choose the proportion of Survival Benefits to be availed during the term of the policy as per the following four options.

Option	Survival Benefit	Maturity Benefit
Option 1	No survival benefit	100% of Sum Assured
Option 2	5% of Sum Assured every year for 5 years	75% of Sum Assured
Option 3	10% of Sum Assured every year for 5 years	50% of Sum Assured
Option 4	15% of Sum Assured every year for 5 years	25% of Sum Assured

 

4.     Term Insurance Plans

Term Insurance Plans offer protection to individuals at low cost. The plans promise considerable benefits if the policyholder dies during the tenure of the plan. There is usually no maturity value payable under the plan if the person survives till the end of the term. The plan comes cheap and offers high coverage at lower rates of premiums. These plans are called the basic form of insurance since they provide only for the death of the insured during the tenure of the plan and no maturity value.

Examples: LIC's Tech Term, LICs Jeevan Amar.

 

Features of Term Insurance Plans

v A person having a low income can provide for meeting family obligation at low cost.

v Persons on the thresholds of new careers or business can avail of term insurance policies to save on costs.

v It is useful to those who need extra protection for a short duration.

v A supplement to endowment or whole life policies with a view to get higher risk cover

 

i)      LIC's Tech Term

LIC's Tech-Term is a Non-Linked, Without Profit, Pure Protection "Online Term Assurance Policy" which provides financial protection to the insured's family in case of his/her unfortunate demise. This plan will be available through an online application process only and no intermediaries will be involved.

 

ii)     LICs Jeevan Amar

       LIC’s Jeevan Amar, being a pure protection plan, offers life cover to the policyholder at a very affordable price and ensures financial support for the family in case of unfortunate death of the policyholder during the policy term. The policyholder has the option to choose from Single, Regular and Limited Premium payment option. The plan also offers the flexibility to choose death benefit payment either as a lump sum payment and/or in instalments.

       There are two categories of premium rates;

       (1) Non-Smoker rates and

       (2) Smoker rates.

       Also, lower premium rates will be available for female proposers.

 

5.     Unit Linked Insurance Plan (ULIP)

Unit Linked Insurance Plan (ULIP) offers a life insurance cover while the premium is invested in equity or debt products or a combination of both. This product not only helps in protecting in the case of untimely death but also allows superior return to be made. Upon the death of the insured person, the nominees are entitled to receive sum-assured or the value of the investments, whichever is higher.

Examples: LIC's New Endowment Plus, LIC's Nivesh Plus, LIC's SIIP.

 

Features of Unit Linked Insurance Plan

ü  ULIPs offers a high level of flexibility when it comes to choosing fund options, change in life cover, and option of riders.

ü  ULIPs are designed to address key long-term financial goals such as buying a house, funding your child’s education, buying a new car etc

ü  In case of emergencies or unforeseen future events, ULIPs allow you to partially withdraw money from your Unit Linked account

ü  ULIPs offer not only provide life cover along with great returns but also provides you with dual tax benefits.

 

i)                LIC's New Endowment Plus

LIC's New Endowment Plus is a unit linked non-participating endowment assurance plan which offers investment cum insurance cover during the term of the policy. This plan is specially designed for you to provide a very good combination of protection and long term savings and also provides you greater flexibility to build a better life and realise your dreams.

The policyholder has a choice of investing premiums in one of the four types of investment funds available. Premiums paid after deduction of Premium Allocation Charge will purchase units of the Fund type chosen. The unit fund is subject to various charges and value of units may increase or decrease, depending on Net Asset Value (NAV).

 

ii)               LIC's Nivesh Plus

LIC Nivesh Plus is a unit-linked, non-participating and single premium individual life insurance plan. It offers insurance cum investment benefits that help you to stay protected and earn great returns. The plan allows the insured to monetize the investment opportunities associated with the stock market. It offers guaranteed additions at low charges. LIC allows the insured to invest in LIC Nivesh Plus Policy through online and offline modes.

 

6.     Annuities

In the Indian context, the annuities have the same implication as the pension. Both of them involve payment of a certain amount of money at regular periodicity, with reference to the insurance business. An annuity contract is a form of insurance policy, in which insurance company agreeing to pay the buyer of the annuity a specified amount of money at regular periodicity for a specified period during the lifetime of the annuitant.

Examples: Jeevan Akshay VI, Jeevan Nidhi.

 

Features of Annuity

o   Immediate and deferred annuities can be purchased with a single premium payment.

o   Withdraw money or receive income payouts, The part of the payout that represents your premium is not taxed if you bought your annuity.

o   There are no annual limits on the amount of money you can contribute to an annuity.

o   A guaranteed minimum income benefit guarantees a set minimum lifetime annuity payout even if your account falls below the level needed when your payments begin.

i)                Jeevan Akshay VI

LIC Jeevan Akshay Plan VI is an Immediate Annuity Plan by the Life Insurance Corporation of India. They can buy Jeevan Akshay plan by making payment of the lump-sum amount. It offers annuity payouts immediately after the payment of premium for a financially secured life after your retirement. Jeevan Akshay VI plan also offers a stated amount during the lifetime of the annuitant. There are several options are made available for the mode and type of payment of the annuities.

                  Conditions:

                  Minimum age at entry – 30 years

                  Maximum age at entry – 65 years

                  Minimum sum assured – Rs. 1, 00,000

                  Maximum sum assured – No Limit

                  Premium Payment Mode– Yearly, Half-yearly, Quarterly, Monthly

 

ii)               Jeevan Nidhi

LIC’s New Jeevan Nidhi is a traditional participating deferred annuity plan which facilitates savings for regular income after retirement. Life cover is also available under the plan. It is a participating Deferred Annuity or Pension Plan with Regular and Single premium payment option. Guaranteed Additions are accruing in every policy year for first five years. Simple reversionary bonuses and Final Additional Bonus accrue form the 6 policy year till the end of the term. Income tax benefit on the premium paid as per Section 80CCC and on the death benefit under Section 10(10D) of the Income Tax Act.

 

7.     Health Plans

A health insurance policy is a contract between the insurer and policyholder in which insurance company provides financial coverage for medical expenses incurred by the insured. A health policy provides the benefit of reimbursement of medical expenses or cashless treatment mentioned in the health policy. Health Insurance Policy also offers tax under section 80D of the Income Tax Act.

Examples: LIC's Jeevan Arogya, LIC's Cancer Cover, Health Card as a part of "Welcome Kit"

 

Features of Health Policy

l  This feature covers pre and post hospitalisation charges for a month or 60 days and the person is reimbursed after submitting bills and other expense related documents incurred during the period of hospitalisation.

l  It allows ​the benefit to get admitted to any listed hospital as per the list of hospitals of the insurance provider without paying anything for treatment.

l  This policy covers takes care of the expenses incurred by an individual in case of hospitalisation and is designed to cover various illnesses.

l  This plan takes care of the life threatening diseases like cancer, heart attack, Brain tumours and kidney failures.

l  This policy caters to the family members of the policyholder. Families can opt for these plans for it covers all family members against diseases under a single cover.

 

i)                LIC's Jeevan Arogya

LIC's Jeevan Arogya is a unique non-participating non-linked plan which provides health insurance cover against certain specified health risks and provides you with timely support in case of medical emergencies and helps you and your family remain financially independent in difficult times.

Health has been a major concern on everybody’s mind, including yours. In these days of skyrocketing medical expenses, when a family member is ill, it is a traumatic time for the rest of the family.

 

ii)               LIC's Cancer Cover

This is a fixed benefit health plan offering payouts for the treatment of cancer. In case the customer is diagnosed with cancer, this plan will offer benefits irrespective of the costs incurred in the treatment. LIC Cancer Cover provides protection in case of Early Stage and Major Stage Cancer. LIC Cancer Cover Plan is a regular premium plan in which premiums can be paid Yearly or Half-yearly for a policy term ranging from 10 to 30 years. The policy can be purchased offline as well as online.

Conditions:

Minimum age at entry – 20 years

Maximum age at entry – 65 years

Minimum sum assured – Rs. 10, 00,000

Maximum sum assured – Rs. 50, 00,000

Policy Term                   – 10 to 30 years

Premium Payment Mode– Yearly, Half-yearly

 

 

Online Services

Life Insurance Company in India millions of people in the country put down their faith on life insurance policies. To provide simpler and hassle-free services to its wide customer base, the company has started LIC e-services and holds an online data of more than 10 crore insurance policies. With the help of online services, the insurance holder can now avail many more facilities that were previously available only at the branch office. LIC e-service is an initiative taken by LIC to offer its customers on demand services within just a few clicks.

Some of the facilities that can be availed online are E-service registration;

Ø  Facilities of online payment

Ø  Policy Schedule

Ø  Policy Status

Ø  Bonus Status

Ø  Loan status

Ø  Claim status

Ø  Revival quotation

Ø  Premium paid certificate

Ø  Premium due calendar

Ø  Policy bond/Proposal form image

Ø  Claim history

Ø  Grievances registration

Ø  Online forms and process of different services offered by LIC

 

Role of LIC in Risk Management

Insurance companies are in the business of taking risks. IRDA issued a set of guidelines on corporate governance in 2010, which contained a reference to the setting up of a mandatory risk management committee (RMC).  The RMC has to lay down a risk management strategy across various lines of business, and the operating head must have direct access to the Board.

Risk management is not a new concept in life insurance and many of the basic principles are as old as the insurance industry itself. The majority of companies already have some form of risk management process in place.

Given below are the steps involved in possible to reduce Risk Management

1)     Set up the risk management function

In organisations, it is common to form a separate risk management function staffed by a multi-disciplinary team. The purpose of this team is to provide sufficient challenge to the risk management practices of the rest of the organisation, but in many cases, the risk management function's responsibilities extend far beyond this. The work of this team is facilitated by nominated personnel in each of the various departments such as Underwriting, Legal /Compliance, Actuarial, Finance, Marketing & Sales, Policy Owner Servicing, Claims, etc.

 

2)     Identify risk areas

The collection of data from various sources and extensive discussions within the team. Frequently, the risks faced by a life insurer are not isolated and one risk may trigger another risk event. Each department has to carefully consider the risk areas they are subject to and also whether the areas identified by other departments would affect the smooth functioning of their own department. Care will be required to ensure that risks are neither missed nor double counted.

3)     Classify risks and assign responsibilities

There is no single generally accepted classification system of insurance company risks. The insurance companies or the supervisory groups around the world adopt different terminology or summarise risks in different ways. In some countries, the supervisory authorities have an integrated risk classification system for the insurance and banking industries.

Reserve Bank of India suggested the following broad categories for risk classification

¬ Credit Risk

¬ Market Risk

¬ Insurance Risk

¬ Operational Risk

¬ Liquidity Risk

¬ Legal And Regulatory Risk

¬ Strategic Risk

 

4)     Risk Management Techniques

There are several techniques have been designed for measuring and managing risks that are directed towards understanding and matching liability and assets of an insurance company. These techniques can be broadly indicated as:

Portfolio segmentation, cash flow management (CFM), cash flow testing (CFT), solvency testing, optimisation analysis, risk-based capital ratios, actual and expected experience monitoring (A/E Ratio), stress testing; liquidity analysis, scenario analysis.

 

Risk management will depend on the commitment of the top management within a well designed format of risk governance. Risk governance can be established through risk control. There is a necessity of improving risk knowledge, risk information and competitive risk practices. Genuine risk reporting and the starting of risk information will strengthen risk governance. Risk management has its costs,  but management must think in terms of long-term benefits and be willing to bear the costs in the long-term interest of the company. A Chief Risk Officer should have a view of all key risks in the company and should ensure that management is aware of the state of risks in the company and that all key risks are controlled or priced appropriately