‘LIC agents must be paid renewal commission even after resigning’

In a first of its kind order, the Madras High Court Bench here has ruled that Life Insurance Corporation (LIC) of India agents must be paid renewal commission until expiry of insurance policies procured by them even if they had given up the agency and joined rival insurance companies.

Justice R. Subbiah passed the order while allowing a writ petition filed by a former LIC agent, D. Jerald Innocent Babu, who was denied the commission on renewal of the policies he had procured for the State-owned firm between July 23, 1997 and February 27, 2007 when he submitted his resignation.

The LIC claimed that he was entitled to commission only until the date on which he had submitted his resignation and not till the expiry of the policies since he had not strictly complied with procedures prescribed for discontinuing agencies under the Life Insurance Corporation of India (Agents) Rules, 1972.

Pointing out that the rules required an agent to issue a month’s notice before giving up the agency, the LIC claimed that the petitioner took up a job in a private insurance company on the very next day of submitting his resignation letter to the Branch Manager of the LIC at Kulithalai in Karur district.

However, the judge rejected the contention by stating that taking up a job in a rival insurance firm itself

would not be sufficient to deny renewal of commission unless it was established that he was also involved in soliciting and procuring customers for the rival company in which he had taken up a job.

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Printable version | Sep 20, 2021 12:48:56 PM |

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