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Insurance You may earn renewal commission on orphan policies

You may earn renewal commission on orphan policies

IRDAI has asked insurers to allot orphan policies to their existing insurance agents to serve policyholders.
Team Cafemutual Mar 24, 2019

IRDAI has asked insurance companies to allot orphaned life insurance policies to existing insurance agents. IRDAI said, “Keeping in mind the gap created by the exit of insurance agents in servicing the life insurance policies and also to promote the persistency of insurance policies, IRDAI has prescribed that insurance companies allot lapsed orphan life insurance policies to individual insurance agents whose registration is in force. The allotted agent’s details would be intimated by the insurer to the policyholder concerned.”

Orphan policies are those policies that are abandoned by drop-out insurance agents. Only those policies, which have a longer tenure and require regular premium payouts can be termed as ‘Orphan’. Single premium policies are not termed as orphan policies.

Data collated from Life Insurance Council (LIC), a trade body of life insurance industry, shows that over 6 lakh agents in India have left distribution of life insurance in just a year. Experts say many agents, after acquiring a few clients from their family and friends circle, leave the profession.

Insurance companies can allot orphan policies to individual insurance agents whose license is in force. These agents are termed as ‘allottee agents’. Insurance companies are required to take consent of such insurance agents before the allotment process.

Before allotting policies, insurance companies are required to check the complete track record of ‘allottee agents’ like ability, feasibility and number of complaints registered against them.

If these allotted orphan policies don’t receive any response within six month of the date of allotment then insurance companies are allowed to re-allocate these policies to other agents.

These ‘allottee agents’ are eligible to get trail commission for servicing these orphaned policies. However, no upfront commissions are paid to such agents. The insurance companies also have to submit periodic reports of allotment of orphan policies to IRDAI.

 

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1 Comment
Vaishali Bhagwqt · 3 weeks ago
I am interested to serve/to help to orphan policies.
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