REVISED COMMISSION RATES AS PER IRDA

REVISED COMMISSION RATES AS PER IRDA

LIAFI congrats to Mr.Rajeev lohia for his victory

LIAFI congrats to Rajeev lohia for his victory

Ex-agent wins 10-yr battle against LIC for Rs44Lakhs dues //times of india 17-3-2013 kolkatta

KOLKATA: A star agent of the Life Insurance Corporation of India serves the insurer for 27 years, sells so many policies that at one point he is exempted from generating the minimum quantum of business required, and then quits to join another insurance firm as a regional manager. Can the LIC withhold renewal commission that is due to him for joining a rival firm?  In a judgment that has a bearing on the careers of nearly three million LIC agents across the country, the Calcutta high court has ruled that it can't.

 Former LIC agent Rajeev Lohia from Kolkata fought a legal battle against LIC for nearly 10 years and got a ruling in his favour last October. LIC was directed by the division bench of Justice Kalyan Jyoti Sengupta and Justice Asim Kumar Mondal to pay Lohia his entire dues within three months. The insurer, however, didn't do so and when Lohia moved a contempt petition against the company in January this year, it prayed for time to move a Special Leave Petition (SLP) in the Supreme Court. The Supreme Court admitted the SLP on March 1 on condition that LIC deposit Rs 44 lakh that was due to Lohia till 2011 with the court registry.

 Son of an LIC agent, Lohia joined the profession in 1975, when he was barely 18 years old. "I would get up at 4 am, attend classes at St Xavier's College till 9.30 am then go around 'cold canvassing'. This meant knocking on the doors of people I didn't know and asking them if they required a policy. I remember when I met my first client and produced my college identity card to prove that I wasn't a fraud, the man told me his mother, a nominee to his policy, had died 10 years ago. I told him that these are the small issues that can cause problems later on. He was my first client. After my rounds, I would attend management classes in the evenings," said Lohia, who went on to become the youngest Chairman's Club member ever.

 In his career spanning 27 years, Lohia claims to have sold 2,764 policies to about 1,000 people. The premium per year for these policies amounts to Rs 2.25 crore. "My father would get magazines on the insurance industry from the US. These were of great help. From there we came to know of the Million Dollar Round Table (MDRT) and started communicating with it. The MDRT used the purchase price parity index to fix a barrier. Any agent who wished to qualify for MDRT needed to earn a commission of Rs 1.25 lakh per year. This was in 1985. For 15 years, I remained a life and qualifying member of MDRT and attended 12 conferences in the US and Canada. In 1986, for the first time, the Indian flag was hoisted at a MDRT meet due to our efforts," Lohia said.

 On March 7, 2002, he resigned from LIC to join a private firm as regional manager. His agent's licence was also due to expire on March 31 that year. The very next day, he was asked by his branch manager to furnish the name and address of the private firm that he had joined. Lohia refused to do so as he had already resigned and the principal-agent relationship between LIC and him had ceased to exist. On April 22, 2002, he received a show-cause notice for alleged misconduct and LIC threatened to terminate his agency. Lohia replied that he had already resigned and his agency stood terminated. On August 16, 2002, he was informed that the renewal commission due to him would be withheld as penalty for termination of agency. The former agent preferred a departmental appeal but nothing came of it.

 "I had never expected such a reaction from the company that I had served with such commitment. This was when I realized that the company treats agents as bonded labourers who have no rights to seek better opportunities in life. I went to court, not only for myself but for the three million LIC agents across the country. Under law, even after an agent's death, his next to kin are eligible to receive the renewal commission. By withholding my commission, was LIC trying to establish that agents would rather die than join other companies?" Lohia said.

 On August 13, 2003, he moved a writ petition in the high court. He told the court that the renewal commission can't be withheld save for commission of fraud. In his case, termination of agency was not due to fraud, Lohia submitted. The court then wanted to know from LIC how much the company owed the former agent. The company submitted that the renewal commission due till June, 2011, was excess of Rs 44 lakh. A further Rs 32 lakh was also due apart from Rs 1 lakh as gratuity.

 According to the judges, someone's right can't be taken away on 'mere presumption or assumption'. "We hold that the petitioner-appellant is entitled to get all benefits of renewal commission as well as gratuity. We accordingly direct the respondent Corporation to quantify the same and make payment and we permit three months time to do so," the court ordered.

LIAFI …. LIAFI …. LIAFI …. LIAFI …. LIAFI ….

We are for agents, we live for agents

LIAFI …. LIAFI …. LIAFI …. LIAFI …. LIAFI ….

NEW COMMISSION RATES AS PER IRDA NORMS

LIAFI great achivement

Maximum      commsision/remunaration
premium paying term	in any form as % of premiume
	1st year	2&3rd year	subsequent year
5	15	7.5/5*	5
6	18	7.5/5*	5
7	21	7.5/5*	5
8	24	7.5/5*	5
9	27	7.5/5*	5
10	30	7.5/5*	5
11	33/30 *	7.5/5*	5
12years	35/30*	7.5/5*	5
or more

new commission rates as per IRDA notification 

LATEST TRADITIONAL PRODUCT GUIDELINE IRDA

Thursday, 7 March 2013

latest traditional product guideline IRDA

In the latest traditional product guidelines, the Insurance Regulatory and Development Authority (IRDA) have called for non-linked variable insurance products (index-linked products) to be treated at par with unit-linked products (ULIPs). The insurers have been given time till June 30 2013 to re-file group products and September 30, 2013 for individual products re-filing.

The ceiling for first year commissions has been put at 15% for the first year for a 5 year term, 30% for 10 years and 35% for 12 years or more (40% for insurers aged less than 10 years). If the polices are procured by direct marketing no commission will be allowed for direct marketing, IRDA stated.

The minimum guaranteed surrender value would be 30% of the total premiums paid less any survival benefits paid, if policy is surrendered in the second and third year. If surrendered in the fourth year, it would be 70% of the total premiums paid less any survival benefits already paid. If surrendered during the fifth to the seventh policy year, it would be 90% of total premiums paid, less any survival benefits already paid,” the norms said. The surrender value beyond the seventh year would need to be filed by the insurer under the File & Use for clearance.

IRDA fixed the minimum death benefit at highest of 125% of the single premium or minimum guaranteed sum assured on maturity or any absolute amount to be paid on death, for single premium products. For other products, it will be highest of 10 times the annualised premium or 105% of all premiums paid on date on death, or minimum guaranteed sum assured on maturity or any absolute amount to be paid on death.