New Delhi [India], November 11(ANI): Congress MP Manickam Tagore on Monday said that he has written to Union Finance Minister Nirmala Sitharaman expressing concerns on behalf of Life Insurance Corporation (LIC) agents and policyholders over the issue of recent policy restructuring.
“I have raised concerns to Hon’ble Finance Minister regarding recent policy changes by LIC, which negatively impact millions of agents and policyholders, especially in rural and low-income communities. Urgent intervention is needed to protect their livelihoods and ensure accessible life insurance,” Tagore said on X.
In the letter dated November 5, Tagore said that the changes in LIC policies are “troubling” and have the potential to affect the livelihood of “approximately 14 lakh LIC agents and millions of policyholders.”
Tagore raised six major concerns in the letter, stating that the recent amendments introduced on October 1, 2024, by the LIC will have an impact on Rural and Low-Income Groups since the new policy restructuring demands the policyholders to pay more premium rates and increased the minimum sum assured to Rs 2 lakh.
Teh MP from Virudhnagar in Tamil Nadu pointed out that the policy changes will also impact the commission rates for LIC agents which was fixed as per the Insurance Act of 1938.
“Despite multiple requests from the agents, there has been no increase in commission rates, even though IRDAI (Insurance Regulatory and Development Authority of India) allowed for increases through Gazette Notifications in 2013, 2017, and 2020. However, LIC failed to implement. The new policies further reduce the commission,” the letter read.
Tagore also registered his apprehension over the reduced bonus and benefits for LIC policyholders and the reduced age limit to 50 for the popular policy, calling it a “regressive move.”
“This will have a direct impact on the ability of agents to produce new business, as many potential policyholders will now fall outside the eligibility criteria for the plans they once had access to,” Tagore wrote in the letter addressed to Union Finance Minister Nirmala Sitharaman.
Finally, Tagore argued that the “clawback commission” policy introduced by the LIC was objectionable, saying that agents were held responsible for surrenders of policies are were required to repay the commission they had earned.
“This is unfair, as the commission is an integral part of the premium, and agents should not be penalised for the policyholders’ decisions…I urge you to reconsider the policies that adversely affect both agents and policyholders and take corrective action to ensure that LIC can continue to fulfil its mandate of providing accessible and affordable life insurances to all sections of society,” Tagore wrote. (ANI)
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