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Agency Section, Marketing Department,

rd
3 floor, Central Office, “Yogakshema”,
Jeevan Bima Marg, MUMBAI 400 021
Ph: - (022) – 22027527, Fax: - 22824386,
e-mail: -co_agency@licindia.com

Ref: Mktg/ZD/ 26/2009 Date: 04.09.2009

To All Zonal Managers & Sr.Divisional Managers I/c of All Divisions

Re: Review of the Rules of Reinstatement and Reappointment of Terminated Agents

The rules for reinstatement of agency of terminated agents have been reviewed
and the modifications have been made with respect to the following:

1. No. of occasions on which reinstatement can be effected.


2. Competent Authority for reinstatement.

A) Who can be reinstated :

• Agents terminated for failure to bring in minimum business to be secured by


an agent.

• Agents terminated on account of expiry of licence.

Care should be taken that the agency of those agents terminated on account of a
vigilance enquiry, disciplinary action, early claim etc.should not be considered for
reinstatement.

B) No. of occasions on which the agency can be reinstated :

1. The reinstatement of agency of a terminated agent shall normally be allowed


maximum on two occasions within first five years of his agency. However,
reinstatement on third occasion may be allowed in rare and exceptional cases
for which Senior/Divisional Manager I/c shall be the Competent Authority.

2. Once an agent becomes entitled to renewal commission as per section 44 (1)


(b) of Insurance Act, 1938, he/she can be reinstated any number of times
provided the reinstatement is within 24 months from the date of termination.
The Competent Authority to reinstate the agency beyond three occasions in
such cases shall be Senior/Divisional Manager I/c and care should be taken to
allow reinstatement on examining merit of the case.
C) Reinstatement of Agency during First Five agency years:

1. Reinstatement within one year from the date of termination :

A terminated agent may be reinstated within one year from the date of
termination. The competent Authority to allow such reinstatement shall be the
Marketing Manager.

2. Reinstatement beyond 12 months but within 24 months from the date of


termination :

Only genuine first termination cases coming up for reinstatement beyond 12


months but within 24 months from the date of termination may be considered. Such
cases should be treated as “second-reinstatement” cases. Senior / Divisional Manager
I/c will be the Competent Authority in such cases.

3. Reinstatement in fifth agency year :

Reinstatement in fifth agency year should be severely restricted. The Competent


Authority for such reinstatement shall be Regional Manager (Marketing) who will allow
the same on merit after recording the reasons for the same in writing. Care should be
taken to ensure that the reinstatement is not being done merely to make an agent eligible
for renewal commission. The reinstatement in the agency module shall be allowed only
under the password of Regional Manager (Marketing). A yearly statement of such cases
by all Zones is to be sent to Central Office, Marketing Department for information and
review as per Annexure – ‘A’ (enclosed).

Please note that reinstatement of agency in all cases can be allowed only if the
licence of the agent is in force. In case the licence is not in force as on date of
reinstatement, the agent will have to renew the licence and then apply for
reinstatement.

D) Attachment on reinstatement:

All due care should be taken to ensure that reinstatement takes place within 12
months of termination of agency. In all such cases, the reinstated agent continues to work
in the organization of same Development Officer, with whom he was working prior to
termination. If an agent remains terminated for more than 12 months, another
Development Officer may be allowed to motivate him/her to be reinstated. In cases where
such terminated agent is motivated for reinstatement by a Development Officer other than
the one in whose organization he/she was working earlier, his/her agency will be attached
to the Development Officer motivating him/her to get reinstated. In all such cases,
consent of agent as well as declaration to that effect should be obtained as per the
enclosed format. However, care should be taken that agents who were appointed as direct
agents, on reinstatement shall be direct only and shall not be attached to any
Development Officer. Further no Urban Career Agent on reinstatement shall be attached
to any Development Officer.
E) Reappointment:

All such agents who can be reinstated as defined in’A’ above but are not considered
for reinstatement either due to exceeding 24 months from the date of termination of
agency or for any other reason or agent who had resigned earlier will be considered for
reappointment . Under no circumstances, an agent who has been terminated on account of
a vigilance enquiry, disciplinary action, early claim, etc. should be reappointed.
Reappointment for all practical purpose will be considered as a new appointment. The
Competent Authority for reappointment shall be Senior / Divisional Manager I/c and the
reappointed agent will be attached to the Development Officer who has motivated
him/her for reappointment. However, agents who had been appointed as direct, on
reappointment shall be direct only and shall not be attached to any Development Officer.
Further no Urban Career Agent on reappointment shall be attached to any Development
Officer.

The agent on reappointment will get a new agency code. If the agent has a valid
licence, or renews his/her licence so that it is in force on the date of reappointment,
he/she need not undergo fresh training and test as per IRDA Regulations. However, if
the licence of the agent is not in force on the date of reappointment, he/she shall be
required to undergo training and test as per IRDA Regulations like any other person
applying for fresh appointment. If prior to termination he/she was eligible for renewal
commission, he/she continues to get renewal commission under that agency code. If not,
then he/she shall not be entitled to the renewal commission on business done earlier. No
benefits of the tenure of the old agency would be made applicable to the new agency for
gratuity, club membership etc.

The above changes come into force with immediate effect.

The above changes may please be brought to the notice of all concerned.

Executive Director (Marketing)

Encl: Annexure “A”


& Declaration
ANNEXURE ‘A’

Agency Code Date Reason for Date of Reason for Remarks


of termination termination Re-appointment Re-appointment
DECLARATION

I, ___________________________________, do hereby declare that Shri/


Smt._______________________, the Development Officer, attached to
Branch._________ under ________________ Division has motivated me to reinstate
my agency and has provided all necessary support and help for the same.

Hence, my agency may be attached to the organization of


Shri/Smt.___________________.

Signature of the Declarant

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