The Bill seeks to abolish commission charged by LIC agents, wants to replace it with a fee charged from customers

The Supreme Court on Friday rejected at the admission stage a writ petition filed by LIC agents challenging the recent changes proposed in the LIC (Amendment) Bill, 2009, which seeks to do away with the commission charged by them and replace it with a fee to be charged from those desiring to be insured.

A three-Judge Bench consisting of Chief Justice K.G. Balakrishnan and Justices B.S. Chauhan and K.S. Radhakrishnan dismissed the petition Rajamundry Divisional Council of LIC Agents Association against the Bill.

The CJI told the counsel, Chava Badrinath Babu “You are a responsible organisation. You are abusing the process of the court. You are challenging a Bill before Parliament. How can you challenge a Bill? You cannot file this type of petition. Can we ask Parliament not to pass the Bill?” When the CJI said costs would be imposed, the counsel withdrew the petition and it was dismissed as withdrawn.

According to the petitioner, the Bill has proposed to withdraw the commission benefits enjoyed by about 14 lakhinsurance agents and instead put the onus on the agents to collect fees from the policy holders. The amendment Bill has been introduced in the Lok Sabha and is yet to be passed.

The agents are also opposing other changes in the Bill which seeks to do away with their entitlement to earn commissions even if they are incapacitated or unable to work or in serious ill health. “Currently there are provisions that allow them to receive earned renewal commission and hereditary renewal commission.”

The Association said insurance selling was a difficult job not only in India but throughout the world. “Very few people take life insurance agency and mostly choose it when they fail in other professions,” the petition said, alleging that the government had rushed through these amendments without undertaking a proper study into the ramifications of these changes. The agents also expressed fear that this was only a step towards an eventual privatisation of the sector.

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