Schedule 3 of The Life Insurance Corporation Act, 1956 in hindi
THE THIRD SCHEDULE (See section 36) PRINCIPLES FOR DETERMINING COMPENSATION PAYABLE TO CHIEF AGENTS The compensation payable to a chief agent shall consist of seventy-five per cent, of the overriding commission specified in the contract relating to chief agency with the insurer on the renewal premiums received by the Corporation during a period of ten years from the appointed day in respect of the business procured by the chief agent before the appointed day; and such compensation shall be determined and paid annually for the said period. PRINCIPLES FOR DETERMINING COMPENSATION PAYABLE TO SPECIAL AGENTS The compensation payable to a special agent shall consist of one eighth of his annual average earnings during the period beginning on the 1st day of January, 1952, and ending on the 31st day of December, 1955, in the form of overriding commissions in respect of business procured by him through insurance agents. 24
Summary
- The Third Schedule contains the principles for determining the compensation payable to chief agents and special agents when their contracts terminate.
- Under Section 36, all chief agent and special agent contracts relate to controlled business and cease to have effect on the appointed day.
- The renewal premiums are those received by the Corporation during a period of ten years from the appointed day for business procured before that day.
- Chief agent compensation is determined and paid annually over the ten-year period.
- A special agent's compensation consists of one-eighth of their annual average earnings from overriding commissions between January 1, 1952, and December 31, 1955.
Practical examples
FAQ
1. What happens to agency contracts when the Corporation takes over?
Under Section 36, all chief agency and special agency contracts appertaining to the controlled business terminate on the appointed day.
2. How is the compensation for a chief agent paid out under the Third Schedule?
It is paid annually over a period of ten years from the appointed day, based on renewal premiums received by the Corporation.
3. How does a special agent's compensation formula differ from a chief agent's?
A special agent receives a one-time compensation equal to one-eighth of their average annual overriding commission earnings from January 1, 1952, to December 31, 1955.
Test yourself
Q1.Under Section 36 and the Third Schedule of The Life Insurance Corporation Act, 1956, what is the percentage of overriding commission used to calculate a chief agent's annual compensation?
Q2.Under Section 36 and the Third Schedule of The Life Insurance Corporation Act, 1956, for what duration is a terminated chief agent entitled to receive annual compensation on renewal premiums?
Q3.Under Section 36 of The Life Insurance Corporation Act, 1956, if a special agent is dissatisfied with the compensation determined by the Corporation under the Third Schedule, what is their legal recourse?
Q4.Under the Third Schedule of The Life Insurance Corporation Act, 1956, what is the formula to calculate the compensation for a special agent?