LIC has introduced Agent Portability. But the agent portability is currently only applicable to LIC Orphan policies.
What is an “Orphan policy”?
The policies initially effected by an individual agent, whose services were subsequently terminated or removed from LIC, are qualified as Orphan policies for the purpose of Agent Portability rules, excluding:
1. The policies whose effecting agent is entitled to renewal commission under Section 44 of the Insurance Act, 1938
2. The policies falling under the proviso of Rule 10(4) of LIC of India (Agents) Rules, 1972.
What is the Process of Agent Portability?
Only LIC Branch office is allowed to allot any of the lapsed Orphan life insurance policies to insurance agents (for revival and rendering policy servicing to the policyholders) eligible for allotment as per agent portability rules of the branch and whose licence is in force.
What is a “Lapsed Policy”?
‘Lapsed policy’ for the purpose of Agent Portability rules is a policy on which premium remains unpaid even after six months from the due date and is revivable as per rules.
1. At the start of each month, LIC Branch will generate the list of lapsed orphan policies and agents eligible for allotment as per the rules.
2. The concerned eligible insurance agents or Allottee Agent shall be provided with the list of such allotted policies along with the addresses for policy servicing purpose.
Who is an “Allottee Agent”?
‘Allottee Agent’ for the purpose of Agent Portability rules is an individual agent who has completed at least 3 years of continuous tenure as an agent LIC, having at least 75 policies in force under his agency as at end of last agency year and overall lapse ratio less than 10% each year, during last 3 preceding agency years.
3. Allottee Agent has to provide all the policy related service while reviving the policy and thereafter and get the confirmation from the policyholder as per stipulated format.
4. Allottee agent will be eligible for commission on the arrears of premium received on revival and also on subsequent renewal premium thereafter till the time policy stands allotted to him at the rate that original agent would have been eligible for.
Annexure-II: A detailed process for the allotment and control, of these orphan policies (Annexure-II). The process stipulates the formation of an ‘Allotment Committee’ at Branch Office for the purpose of taking decisions regarding allotment, re-allotment, cancellation of allotment etc.
Annexure-III: Formats of various forms required during the process of allotment (Annexure-III).