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Zonal Manager's Club

The qualifying criteria for entry as well as continuation of membership of different clubs under both the Conditions ‘A’ and ‘B’ have been revised effective from the qualifying financial year 1.4.2001 to 31.3.2002 and in consequence thereof club membership eligibility for the Membership Year 2002-2003 onwards, until further review will be determined on this revised basis. The revised eligibility conditions are mentioned below:

Entry and continuation conditions will have to be qualified for the number of years as specified below:

1. *Entry under Condition ‘A’ : The criteria is to be fulfilled in the Qualifying Year and 3 out of 4 Financial Years preceding the Qualifying Year.

2. ** Entry under Condition ‘B’ : The criteria is to be fulfilled in the Qualifying Year and 2 Financial Years preceding the Qualifying Year (i.e. same as 3 Financial Years immediately preceding Membership Year as at present).

3. @ Continuation under Condition ‘A’ or ‘B’ : The respective criteria is to be fulfilled in 3 out of 4 Financial Years preceding the Membership Year.

Transitional arrangements

Agents who are already members of different clubs during the membership year 2001-2002 and those who are not members of any club but have fulfilled the criteria for club membership for one or more relevant years for entry either under Conditions ‘A’ or ‘B’ prior to Financial Year 2001-2002 according to the rules prevailing immediately prior to this revision, will be allowed transitional arrangements for two financial years 2001-2002 and 2002-2003. The transitional arrangements are mentioned in Annexure I.

In terms of these transitional arrangements, the qualifying criteria to be fulfilled by these agents for continuing/earning club membership during the Membership Years 2002-2003, 2003-2004 and 2004-2005 are given in Annexure II, III and IV respectively.
“Relevant years herein referred to are all those financial years prior to Membership Years in which the qualifying criteria is to be fulfilled for gaining entry into the club membership under either Condition ‘A’ or ‘B’.”

Relaxation in fulfillment of qualifying criteria

An agent who has completed the age of 60 years as on the date of commencement of club membership year and had been a
continuous member of the same club for not less than 15 membership years can continue the membership of the same club under the same condition (A or B) by fulfilling at least 75% of the criteria applicable for that condition.

4. ‘Net Sum Assured’ and ‘Net Number of Lives’ under Condition’A’ and ‘Number of lives in force’ under Condition ‘B’

These three terms have been amply clarified before and yet we have been receiving requests for clarification. We, therefore, repeat that:-

i) ‘Net Sum Assured’ in each qualifying financial year will be arrived at by deducting from the total completed business in that financial year, such amount of sum assured out of the business completed by the agent in the financial year preceding the qualifying year as is treated as pucca lapsed as on 31st March of the said qualifying financial year.

ii) ‘Net Number of Lives’ are distinct lives insured (not number of policies) during the qualifying financial year reduced by the Number of lives who had been insured in the financial year preceding the qualifying financial year whose policies are lapsed as on 31st March of the said qualifying financial year.

Credit for revived policies

Effective from the qualifying financial year 2001-2002, any agent who has revived policies in respect of business completed by him/her during the preceding financial year is allowed to claim credit to the extent of ‘Sum assured/lives revived’ in arriving at ‘Net Sum Assured’ and ‘Net Number of lives’ if such policies are in force as on 31st March of the qualifying financial year. However, the agent must submit the full details of such policies revived by him/her in the annexed Performa (Annexure VI) and make a representation to the Branch Office for allowing such credit within a period of 2 months from the close of the qualifying financial year. The Branch Office after due verification of the particulars, shall grant credit in arriving at ‘Net Sum Assured’ and ‘Net Number of Lives’ under Condition ‘A’, only if the agent is falling short of the required norm.

Number of Lives in Force

‘Number of lives in force’ are the number of lives in force at the end of each relevant year out of the total business completed by the agent from the inception of the agency to the end of each such financial year. The same life if it takes more than one insurance in the same financial year will be counted as one life only.

Condonation Clause

The condonation clause is available for entry into all the clubs under Condition ‘A’ only. With effect from the Membership Year 2002-2003 failure to the extent of 25% to satisfy the condition in respect of either ‘Net sum assured’ or ‘Net Number of Lives’ may be condoned if the performance on the other count, registers an increase by at least the same percentage.

The condonation clause is to be applied only after the ‘Net Sum Assured’ and ‘Net Number of Lives’ during any financial year, as mentioned in Para 4 above, are determined and such ‘Net Sum Assured’, or the ‘Net Number of Lives’ during the year is found to be falling short of the required criteria.

Continuation of Club Membership in the year/s of failure

If an agent does not fulfill the condition of minimum ‘net sum assured’ prescribed in the financial year reckoned to allow an agent to continue in any of the clubs, the club membership will be treated as continued for the number of years for which he/she has not fulfilled the condition of ‘net sum assured’ as per the table given below:

The agent should not only make good the shortfall in the next Financial Year but should also show an increase of at least 10% of such shortfall. For example; the minimum ‘Net Sum Assured’ to be fulfilled by an agent for Chairman’s Club is Rs.25 lacs. However, if there is a shortfall of Rs. 5 lacs in one year, the agent should not only make good the shortfall of Rs.5 lacs in the next year, but should also bring in an additional ‘Net Sum Assured’ of Rs. 50,000/-. In other words the ‘Net Sum Assured’ in the next year should be Rs.30,50,000/-.

The agent during the suspended years shall continue as a non-regular member of the club and will not be eligible for any monetary benefits including attendance at the Convention/Training option. He/she will be eligible for functional privileges only, provided Sr./Divisional Manager is satisfied on the basis of an interview that the failure to bring in the minimum Net Sum Assured was due to genuine difficulties. In such a case Sr./Divisional Manager will issue necessary authorisation in writing to the concerned agent.

Fulfillment of Minimum Net Business during years of failure

An agent aspiring to enter into or continue membership of any club must bring in the following net minimum business in the year of failure and keep the agency in force. This will be operative from Financial Year 2001-2002.

The provision of 25% concession for aged Club Member Agents as stated in Para 3 above is meant only in respect of basic criteria for continuation of membership under Condition ‘A’ and ‘B’ only and it is not meant to be granted to the eligible members in the prescribed ‘Minimum Net Business’ viz. Rs. 25 lacs, Rs. 15 lacs, Rs. 10 lacs and Rs. 5 lacs for Chairman’s, Zonal Manager’s, Divisional Manager’s and Branch Manager’s clubs respectively. They will have to comply with the requirement of ‘Minimum Net Business’ in full on par with other agents.

Interview for Club Membership

Mere fulfillment of criteria for entry to any club does not confer upon an agent the club membership unless he/she has been interviewed and found suitable for admission to the club by the Competent Authority. The pre-requisite of interview for admission to a club continues unchanged and as such every agent who is to be admitted to any club for the first time or who is to be promoted to the higher club shall be subjected to an interview by the Competent Authority. This is true even for promotion of a Zonal Manager’s Club Member to the Chairman’s Club or Divisional Manager’s Club Members to Zonal Manager’s Club. However, beginning from the Membership Year 2002-2003 interview for entry into the Chairman’s/Zonal Manager’s/Divisional Manager’s club shall be conducted by a committee constituted as per the guidelines issued by the Central Office from time to time.

More than one committee depending upon the number of candidates to be interviewed can be formed so that interviews are completed as quickly as possible.

The agent/s who do not fit into the philosophy of these clubs meant for professionals should not be admitted. It may however happen that though a few agents, who may be quite conversant with the various plans of insurance, may not be actually working in the field and selling life insurance. Such agents would not be suitable for entry to the clubs and are to be weeded out at the time of interview for entry into these clubs. The real touchstone for membership into these senior clubs is that the agent should be one who besides being conversant with the fundamentals of life insurance, various plans of the Corporation and other saving instruments and market especially Insurance market, should be working in the field and selling life insurance and providing due services to policyholders. In addition, his/her conduct and behaviour shall also be taken into account while granting the membership. For the sake of uniformity the Executive Director(Mktg) shall issue guidelines for the conduct of interview.

The Zonal Manager/Regional Manager (Mktg.)/Sr./Divisional Manager may, if deemed necessary, interview a few new entrants on random basis to satisfy themselves specifically that this basic criterion laid down for admission is followed strictly.

The agents who have been relegated to a lower club due to non fulfillment of business conditions should not be called for the interview.

Training

Every agent who is admitted as a member of any club and/or one whose membership is continued in the said Membership Year will be required to undergo training at ZTC/STC/IFSERT/Jeevan Vidya Trust or training by similar other training institute/s or by institutes engaged in on-line training as may be approved from time to time, failing which the club member agent shall render himself/herself ineligible for continuation of the benefit of the Office Allowance and interest free loan/advances in the following year. The Competent Authority, may however, at it’s sole discretion, allow continuation of the Office Allowance and condone interest in exceptional circumstances if it is satisfied that requirement of training could not be fulfilled due to reasons beyond the control of the agent. The reasons for allowing the benefit etc shall be recorded in writing.

In the latter case, the said agent shall have to undergo training positively in the following year of continuation failing which recovery of amount so reimbursed and/or interest condoned together with interest @ 12% shall be recovered from his/her commission.

NOTE 1: The Life Membership is not governed by this provision.
NOTE 2: Club Members aged 60 years and above are exempted.
NOTE 3: An agent who has undergone training at any of the above institutions even as a non-club member, is treated to have fulfilled this training requirement.
NOTE 4: The training taken shall be valid for this purpose for a period of 4 years only from the date of completion of the training.

Fringe Benefits

The changes effected in the following fringe benefits applicable to different clubs have been brought out in Annexure V and these shall come into effect from the Membership Year 2002-2003:

a) Office Allowance

b) Sales Promotional Gift Items

c) Supply of Letter Heads /Envelopes/Visiting Cards

d) Telephone facility

e) Convention for CMs & ZMs Club Member Agents

f) Travelling Expenses for attending Club Members Convention.

11 Lapsation of Policies:

A Chairman’s/Zonal Manager’s/Divisional Manager’s Club Member agent will be eligible for ‘Additional Office Allowance’ (in addition to the Office Allowance an agent actually earns) at the following rates if the percentage of lapsation of policies is 10% or less in each of the last 3 financial years preceding the qualifying year at the following rates:

The Additional Office Allowance shall be calculated on the total Office Allowance payable to him. Branch Manager’s Club Member Agent will be eligible for Additional Stationery Allowance and the same shall be calculated on the aforesaid lines.

Cases where lapsation of policies secured by an agent is more than 15% are to be dealt with as follows:

a) For Existing Club Member agents:

-An agent will not be eligible for any benefit if the lapsation of policies secured by such an agent is more than 15% in
the financial year immediately preceding the qualifying year even if the agent fulfills the other eligibility conditions
prescribed.

-If the lapsation of policies by an agent is more than 15% for two consecutive financial years then he/she will cease to be a club-member.

b) For such agents who are aspiring to become Club Members:

-If the lapsation of policies secured by such an agent is more than 15% for any financial year then that year will not be
considered for reckoning the eligibility for entry into any club even if he/she meets all the other conditions. The agent will have to qualify for one more year.

-If the lapsation of policies by such an agent is more than 15% for two consecutive financial years preceding the
qualifying year, then the agent shall have to start afresh. No credit will be given for the years during which
he/she would have already qualified.

Lapsation for this purpose will be the ratio of the number of policies lapsed without payment of full first year’s premiums as at 31st March of the qualifying year out of the total number of policies issued during a financial year to the total number of policies issued during that financial year. This ratio will be calculated separately for each of the 3 financial years preceding the qualifying year. For example, if the Membership Year is 2002-2003, the qualifying year will be 2001-2002 and the 3 financial years preceding the qualifying year will be 2000-2001, 1999-2000 and 1998-99.

The clause for lapsation will be applicable prospectively from the Membership year 2002-2003 i.e. qualifying year 2001-2002 as a transitional arrangement.

12 Life Membership:

Beginning from the Membership Year 2002-2003, Life Membership for Chairman’s and Zonal Manager’s Clubs will be granted on fulfillment of any of the following conditions:

A) - Minimum age of 60 completed years as on the date of commencement of Club Membership year ; and

- Continuous membership in the same club (either Chairman’s or Zonal Manager’s club) for not less than 15 membership years

O R

B) Continuous membership in the same club (either Chairman’s or Zonal Manager’s Club) for not less than 25 membership years.

If an agent is a continuous member of the Zonal Manager’s Club for less than 15 years and then becomes a member of the Chairman’s Club and he/she continually retains his/her membership of CM’s Club for at least those many years that is falling short to 15/25 years, then he/she will become a Life-member of the Zonal Manager’s club as provided above.

It may be noted that while reckoning the number of membership years completed in either Chairman’s Club or Zonal Manager’s Club, the suspended membership year will not be counted for eligibility for life membership but will not be treated as a break in the continuity of membership in the club.

A non-regular life member is the one who has not fulfilled the eligibility criteria prescribed for the Chairman’s/Zonal Manager’s Club. A non-regular life member will not be eligible for any monetary benefits including participation in the Convention. Such an agent will be eligible for functional privileges only.

Memento

At present Club Member Agents who are not covered by Group Insurance Scheme are eligible for Memento. Beginning from the Membership year 2002-2003 the cost of memento (inclusive of cost of packaging, taxes, etc.) for various Club Member Agents has been increased and will be as shown below:

Functional Privileges:

There is no change in the functional privileges.

15. Distinguished Agents' Club:

The Distinguished Agents' Club was introduced with effect from 1.4.1999. The qualifying criteria for entry as well as continuation of membership of Distinguished Agents' Club has also been revised effective from the financial year 1.4.2001 to 31.3.2002 i.e. for the Membership year 1.4.2002 to 31.3.2003. The revised criteria applicable for continuation in the club is mentioned in Annexure"VII".

16. Agency with any other Insurer :

If any member/s of the family of an agent of Life Insurance Corporation of India has taken agency with any other insurer, then the agent who is working for LIC of India will not be eligible for grant/continuation of membership of any Club. For the purpose of this Rule, the definition of “members of the family” in relation to an agent will include -

a) the spouse and children whether residing with him/her or not.

b) All immediate in-laws and first cousins staying under the same roof with the agent .

17. General:

i) Definition of Pucca lapsed policies:

The policies under which overdue premium/s remain unpaid for more than six months from the date of the first unpaid premium are deemed to be pucca lapsed for the purpose of arriving at Net Sum Assured and Net Number of Lives in determining agents eligibility for membership of any club. All policies issued in the previous financial year which stand pucca lapsed as on 31st March of the subsequent financial year are to be deducted from the policies issued in the subsequent year to arrive at the 'Net' figure for considering the agent's eligibility for Club Membership under Condition 'A' irrespective of whether the first unpaid premium was due in the previous financial year or the subsequent financial year.

ii) If the agency is terminated for any reason whatsoever the club membership including life membership will automatically cease. On reinstatement of agency, the Club membership including life membership may be revived depending on the merits of the case. If as a result of any disciplinary action against the agent ,the agency is terminated and subsequently it is reinstated by the higher authority , then both the club membership and life membership may be restored unless otherwise decided.

An agent will also lose his/her club membership if his/her agency is terminated on account of non-renewal of license. In such a case, the Sr./Divisional Manager (I/C) may reinstate the club membership and life membership in deserving cases provided the license is renewed in chain by the Competent Authority.

18. All rules/clarification with regard to club provisions including life membership given in the past except those, to which a specific reference is made in this circular, shall remain unaltered.

19. The agent/member is required to submit the claim of membership/and or continuation on prescribed format as per Annexure VIII within 30 days of New Business closing. The Office will verify the claim within 7 days of receipt. The interviews shall be completed in such a way that the results are declared by 31st July every year.

20. Nothing contained in this set of rules shall affect the right of the Managing Director to deny Club- membership to an agent without assigning any reason even if he/she has become eligible to join the scheme or terminate the membership of an agent from a Club if he/she is already a member of one.

21. The Managing Director reserves the right to amend, alter, relax, modify or delete any or all the rules governing the grant or continuation of the Membership of any or all the clubs including the grant of Life Membership and the fringe benefits and the functional privileges thereof.

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