 bill no 61 of  2016 the life insurance agents welfare bill, 2016 bydr a sampath, mp a billto provide for the constitution of a life insurance agents fund for the welfare of life insurance agents and for matter connected therewithbe  it enacted by parliament in the sixty-seventh year of the republic of india as follows:—1 (1) this act may be called the life insurance agents welfare act, 2016(2) it extends to the whole of indiashort title, extent anddefinitions2 in this act, unless the context otherwise requires,—(a) "establishment" means a company or corporation engaged in life insurance; (b) "fund" means the life insurance agents welfare fund constituted under section 3;5(c) "prescribed" means prescribed by rules made under this act; and4 of 1938 10(d) the expression "life insurance agent" shall have the same meaning as is assigned to "insurance agent" under the insurance act, 1938 and includes advisor, sales promoter, sales executive, intermediaries either employed or engaged in any establishment for hire or reward to do any work relating to promotion of sale or business of life insurance, or both, but does not include any such person engaged in a supervisory capacity 3 (1) the central government shall, by notification in the official gazette, constitute a fund to be known as the life insurance agents welfare fund for the welfare of the life insurance agentsconstitution of life insurance agents welfare fund15(2) the fund shall consist of contributions from central government, the life insurance corporation or companies engaged in life insurance and the insurance agents in such ratio as may be prescribed(3) the fund shall be administered by a board consisting of—(a) the union minister of finance—chairperson, ex-officio;20(b) two persons representing the insurance—member; regulatory and development authority(c) one representative from—member; and life insurance corporation of india(d) two persons representing the life insurance agents—member25to be nominated by the central government 4 the fund shall be utilized for—utilization of fund(i) payment of compensation to the next of kin of a life insurance agent in case of death;30(ii) payment of old age pension to a life insurance agent after he has attained the age of sixty years and undertaken minimum ten years of continuous work as an agent;(iii) payment of family pension to the dependents of the deceased life insurance agent;35(iv) payment of premium for the medical insurance of the insurance agents;and(v) such other purposes as the board may deem necessary for the welfare of life insurance agentslicence to life insurance agents5 it shall be the responsibility of the life insurance corporation or an establishment, as the case may be, to issue a licence to every life insurance agent working as an agent under it in such form as may be prescribed406 it shall be the responsibility of the life insurance corporation or an establishment, as the case may be, to create and maintain an online portal of the life insurance agents containing such particulars as may be prescribedonline portal of the life insurance agentsapplication of certain acts to life insurance agents8 of 1923 14 of 1947 11 of 1948 53 of 1961 21 of 1965 and 39 of 197257 the provisions of the workmen's compensation act, 1923, the industrial disputes act, 1947, the minimum wages act, 1948, the maternity benefit act, 1961, the payment of bonus act, 1965 and the payment of gratuity act, 1972, as in force for the time being, shall apply to, or in relation to, life insurance agents as they apply to workmen or employees, as the case may be, within the meaning of those actoffences by life insurance companies or corporation108 where an offence under this act has been committed by an insurance company or corporation and it is proved that the offence has been committed with the consent or connivance of, or is attributable to, any neglect on the part of any director, manager, secretary or other officer of the company/corporation, such director, manager, secretary or other officer shall also be deemed to be guilty of such offence and shall be liable to be proceeded against and punished accordingly:provided that nothing contained in this sub-section shall render any such person liable to any punishment provided in this section, if he proves that the offence was committed without his knowledge or that he exercised all due diligence to prevent the commission of such offence15cognizance of offence9 (1) no court inferior to that of a metropolitan magistrate or a magistrate of first class shall try any offence punishable under this act(2) no courts shall take cognizance of an offence under this act, except upon a complaint in writing is made within six months of the date on which the offence is alleged to have been committed2010 (1) the provisions of this act shall have effect, notwithstanding anything inconsistent therewith contained in any other law or in the terms of any award, agreement, settlement or contract of service, whether made before or after the coming into force of this act:effect of laws and agreements inconsistent with this act25provided that where under any such law, award, agreement, settlement, or contract orservice, a life insurance agent is entitled to benefits in respect of any matter which are more favourable to him than those to which he would be entitled under this act, the life insurance agent shall continue to be entitled to the more favourable benefits in respect of that matter, notwithstanding that he is entitled to receive benefits in respect of other matters under this act30(2) nothing contained in this act shall be construed to preclude a life insurance agent from entering into an agreement with his employer for granting him rights or privileges in respect to any matter which are more favourable to him than those to which he would be entitled under this act35power to make rules11 (1) the central government may make rules for carrying out the purposes of this act40(2) every rule made under this section shall be laid, as soon as may be after it is made, before each house of parliament, while it is in session, for a total period of thirty days which may be comprised in one session or in two or more successive sessions, and if, before the expiry of the session immediately following the session or the successive sessions aforesaid, both houses agree in making any modification in the rule or both the houses agree that the rule should not be made, the rule shall thereafter have effect only in such modified form or be of no effect, as the case may be; so, however, that any such modification or annulment shall be without prejudice to the validity of anything previously done under that rule statement  of  objects  and  reasonsin insurance laws (amendment) act, 2015 has made fundamental changes in the functioning of the insurance companies the life insurance agents play a major role in procuring business and in the growth of the insurance sector more than two million people are engaged as life insurance agents in the industry majority of them have opted this profession as full time job the work requires a lot of time, energy and dedication the competition amongst insurance companies for business has tremendously increased after the opening up of this sector to private players both at national and international levelstheir contribution to insurance sector is immense in creating assets and increasing profit of the companies, at the same time providing benefits of insurance to the general public in the absence of any welfare scheme by the government for social security, these agents live in pathetic conditions a portion of profit earned by the insurance companies through hard work of such agents needs to be devoted for the welfare of insurance agents and their life has to be secured it is the responsibility of the government in a welfare state to provide proper medical care, old age pension, family pension, etc, to every citizen of the countryinsurance agents in general and life insurance corporation of india (lic) agents in particular are a self-employed group and earn their livelihood through the commission paid by lic they are responsible for the growth of lic from inception till today and there is no doubt that lic has been playing a pivotal role in the indian economy there are at present 11,63,604 lic agents all over india and the government is relieved of the burden of providing employment for them however, the amendment to agent's regulations, 1972 of lic has resulted in termination of 21,11,265 agents over the last six years and the number will increase if this method continues the move of lic to do away with the agents will certainly affect the business of lic lic agents are a specialized group who are trained in canvassing insurance business and they may not be fit for any other job moreover, the government will not be in a position to give them alternate jobs once they are terminated from liceven today, 9622% of the business of lic is brought by agents the rest of the 378%of the insurance business is brought by nine public sector banks, four private sector banks, ten regional rural banks, thirty-three co-operative banks, one foreign bank, one hundred and eight corporate agents and two hundred and forty eight brokers the present market share of lic is 844% for which the agents are mainly responsible the agents are a good source of publicity as by the time one policy is finalized, an agent would have met at least ten persons and discussed with them this way, the agents carry messages of insurance to every person in the country the expenditure on publicity is in no way comparable if lic takes up alternative source for publicityin fact, there are only 1,44,854 agents with five year's service who earn more than rupees two lakhs per year those with ten year's service who earn between rupees one lakh to two lakhs per year comes to 2,46,740 and those who earn less than rupees one lakh per year comes to 6,27,783from a capital of rupees five crores in 1956, lic has grown to be a corporation of rupees one hundred crore the assets have grown to rupees 20,31,11608 crore and life fund to rupees 18,24,19495 crore in 2015 thus, lic is the premier global insurance company the agents are mainly responsible for this enviable achievement of lic over the years this agency system has been taken as a global model other companies have taken up this system all over the worldtherefore, a suitable legislation is urgently required to provide for general welfare of persons working as agents in the insurance sector particularly in lichence this billnew delhi;a sampathfebruary 11, 2016 financial memorandumclause 3 of the bill provides for constitution of a life insurance agents welfare fund and a board to administer the fund clause 7 provides that workmen's compensation act, 1923, the industrial disputes act, 1947, the minimum wages act, 1948, the maternity benefit act, 1961, the payment of bonus act, 1965 and the payment of gratuity act, 1972, shall apply to life insurance agents as such, the benefits available under this acts would be available to life insurance agents the bill, therefore, if enacted, will involve expenditure from the consolidated fund of india it is estimated that a recurring expenditure of about rupees one hundred crore per annum will be involved from the consolidated fund of indiaa non-recurring expenditure of about rupees one hundred crore is also likely to be involved memorandum regarding delegated legislationclause 11of the bill empowers the central government to make rules for carrying out the purposes of the bill as the rules will relate to matters of detail only, the delegation of legislative power is of a normal character———— a billto provide for the constitution of a life insurance agents fund for the welfare of life insurance agents and for matter connected therewith————(dr a sampath, mp)gmgipmrnd—4325ls(s3)—03-03-2016