Tirunelveli MP Urges FM Sitharaman to Resolve LIC Agents' Issues

The Life Insurance Agents Federation of Tirunelveli Divisional Council has submitted a representation to Finance Minister Nirmala Sitharaman, highlighting key concerns affecting LIC policyholders and agents under the guidance of MP Robert Bruce.  The federation has urged immediate intervention to address issues impacting their livelihood and the accessibility of insurance.
One of the primary concerns raised is the reduction in the first-year commission for LIC agents from 35% to 28%, effective October 1, 2024. 
This move contradicts IRDAI’s recommendations of a 40% first-year commission and a 10% renewal commission in previous years. The agents also expressed distress over the "clawback rule," which forces them to return their commissions if policies are surrendered, causing financial strain.
Policyholders are also facing difficulties due to the imposition of GST on late fees and policy revival charges, further increasing their financial burden.  The federation has called for a reduction in the minimum sum assured from Rs. 2 lakh and a rollback of recent premium rate hikes to make insurance more accessible.
Other demands include increasing the eligibility age limit from 50 to 65 years, enhancing bonuses for policyholders, and reducing interest rates on policy loans. 
The representation emphasizes that these issues impact around 14 lakh LIC agents and 20 crore policyholders across India.
The federation has urged the Finance Minister to take urgent steps to safeguard the interests of policyholders and agents while ensuring the continued stability of LIC.