No tinkering with Insurance Act 1938 - Agents threaten nationwide stir

Hyderabad, March 6, 2013: The Hyderabad Divisional Council of Life Insurance Agents' Federation of India has strongly condemned the Insurance Bill 2008 as certain provisions of Insurance Act 1938 proposed to be amended and omissions which are against the Agents, policyholders and the Industry.

Speaking to mediapersons here on Wednesday, S.B. Sreenivasa Chary, All India president of Life Insurance Agents' Federation of India, S. Laxma Reddy, Hyderabad Division president and B. Sriram, general secretary, protested against the amendments to the Insurance Act of 1938 and appealed to the Centre to scrap the Insurance Bill 2008 and save the Life Insurance Industry and the lives of Agents, who are committed to their profession, failing which LIAFI would launch nationwide agitation for protecting their and interests of crores of policy holders. They also threatened to organize "Chalo Delhi" on March 22.

They said existing sections 40,40(2) 40(a), 44 of the Insurance Act 1938 deal with the ceilings for commissions and the Insurance company cannot deny payment of renewal commission after termination and such renewal commission is payable to the legal heirs of the deceased agent after his death. These sections have been proposed to be deleted from the Insurance At 1938 which are giving statutory protection to agents and giving powers to the IRDA to prescribe commissions by way of regulations, they added.

They also pointed out that Parliamentary Standing Committee also differed on these proposals and recommended continuation of the statutory protection currently bestowed by the Act on insurance agents. By this amendment, the class of agents and the persistency of the agency as a career would suffer by losing the statutory protection given to them by the Insurance Act 1938 and consequently it leads to hampering the livelihood of 30 lakhs of Life Insurance Agents in the country, they bemoaned.

They also said that under Section 45, a policy cannot be called in question by the Insurer after two years from the date of issue on the ground that a statement made in the proposal for insurance is inaccurate or false, unless the insurer can prove intention to commit a fraud. This is being changed as Policy cannot be called in question on any ground whatsoever after five years. This could adversely affect the interests of the claimants in case of death claims, they added.

LIAFI leaders said, "By transferring these very important Financial Powers (which are with Parliament for a valid reason for the past 75 years) to the regulator --- there are possibilities of these provisions being misused either deliberately or through ignorance or under influence. Besides, the proposed amendments will adversely affect the Agents, Policyholders and health of Insurance Industry. With regard to the changes and omissions recommended in these sections, maintaining Status Quo would be ideal at the current juncture for the insurance industry as well as the vast number of Insuring public of the country".

B.N. Chary, Advisory Committee Chairman, Singarapu Sreenivas SCZ president, Shaik Shajahan Press & Publicity Chairman, J. Chandra Shekar, SCZ Treasurer, N. Sreenivasulu, Treasurer, M.S. Murthy, Kotireddy, Bhoopal Reddy, Rapolu Sudhakar were also present. (NSS)




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Comments


jamna prasad says...
if an agent dies after serving so many yrs in ins.industry and his renewal commision ceases citing reason that policy become orphan and leading to lapsation,but if policy holder continue his policy on his own,will he be given the benefit what his agent would get had he been alive.


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