Congress MP Manickam Tagore expressed concern over LIC’s policy restructuring
New Delhi: Manickam Tagore, a Congress MP, said on Monday that he has written to Union Finance Minister Nirmala Sitharaman to voice concerns on the recent policy restructuring on behalf of agents and policyholders of the Life Insurance Corporation (LIC).
“I have expressed my concerns to the Hon. Finance Minister about LIC’s recent policy changes, which have a detrimental effect on millions of agents and policyholders, particularly in low-income and rural areas. To safeguard their means of subsistence and provide easily accessible life insurance, immediate action is required,” Tagore said on X.
The modifications in LIC policies, according to Tagore’s letter dated November 5, are “troubling” and might have an impact on the livelihood of “approximately 14 lakh LIC agents and millions of policyholders.”
In the letter, Tagore outlined six main concerns, claiming that the recent changes made by LIC on October 1, 2024, will affect low-income and rural groups because the new policy restructuring requires policyholders to pay higher premium rates and raises the minimum sum assured to Rs 2 lakh.
The policy changes would also affect the commission rates for LIC agents, which were set in accordance with the 1938 Insurance Act, Teh MP of Virudhnagar, Tamil Nadu, said.
Even though the Insurance Regulatory and Development Authority of India (IRDAI) permitted hikes via gazette notifications in 2013, 2017, and 2020, there hasn’t been a rise in commission rates despite several requests from the agents. But LIC was unable to execute. The letter said, “The commission is further reduced by the new policies.”
In addition, Tagore expressed his concern about the LIC subscribers’ diminished bonuses and perks as well as the popular policy’s lowered age restriction of 50, which he described as a “regressive move.”
In the letter to Union Finance Minister Nirmala Sitharaman, Tagore said, “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.”
Lastly, Tagore said that the LIC’s “clawback commission” policy was unjustified, claiming that agents were held accountable for policy surrenders and had to reimburse the money they had received.
“This is unjust since the commission is a necessary component of the premium, and agents shouldn’t be held accountable for the choices made by policyholders…In order for LIC to continue fulfilling its mission of offering easily accessible and reasonably priced life insurance to all facets of society, Tagore wrote, “I implore you to reevaluate the policies that negatively impact both agents and policyholders and take corrective action.”
