Reputed Club Memberships

Agents are the backbone of LIC of India. The agents have therefore to be nurtured and cultivated to grow up in the profession, acquiring sufficient knowledge, skills and competence to discharge their duties effectively towards policyholders and clients. To inculcate professionalism in agents, to motivate them for higher production and consistency of business, to encourage them to render service to policyholders and to accord them a higher status in the organisation and society, the institution of Clubs at 4 levels viz.,Branch Manager’s Club, Divisional Manager’s Club, Zonal Manager’s Club and Chairman’s Club was brought into existence with effect from 1.4.1971. This may be hailed as the landmark in raising the status of the profession of insurance salesman in this country.

In order to promote professionalism amongst a larger number of agents and to enhance insurance coverage at a faster pace, Distinguished Agents’Clubs at Branch Level have been formed w.e.f. 1.4.1999.

A premium Agents Club called the “CORPORATE CLUB” has been formed w.e.f. M.Y. 2004-05 to motivate and recognize high performers.
One more club named the “Galaxy Club” has also been introduced w.e.f.M.Y.2015-16.

Qualifying conditions and other Criteria prescribed for Membership of Agents Clubs (Chairman’s, Zonal Manager’s, Divisional Manager’s and Branch Manager’s)
1. The qualifying criteria for Entry as well as Continuation of membership of different clubs have been revised. These revised rules shall be applicable from the Financial Year 2010-2011 (M. Y. 2011-12).
Membership criteria for Entry and Continuation (Table 1)

sr no. Name of the club → CM ZM DM BM  
1 Min. net no. of lives 40 30 20 15

Mandatory 

condition

2

a) Net no. of lives

or

b) No.of lives inforce

130

 

600

100

 

400

80

 

250

50

 

150

Either of

   a) or b)

3 Renewal Commission paid 2,00,000   1,40,000   90,000   50,000   condonable upto 100% (* see relaxation clause)
4

First year comm paid

(including bonus comm paid in 

the financial year)

2,00,000 1,40,000 60,000 35,000

condonable upto 50%

(* see relaxation clause)

 

The criteria is to be fulfilled in the Qualifying year and in any two out of three financial years preceding the qualifying year for both Entry and continuation.

 

*Relaxation Clause

An agent will have to fulfill condition with regard to Renewal Commission and First Year Renewal Commission as per above Table.
However, a shortfall in fulfillment of FYC (paid) condition may be condoned maximum upto 50%, in years to be reckoned for Club Membership, provided it is compensated with the same or higher percentage increase on the basic condition prescribed for Renewal Commission paid
Or
A shortfall in fulfillment of Renewal Commission paid condition may be condoned up to a maximum of 100% in years to be reckoned for Club Membership provided it is compensated with the same or higher percentage increase on the basic condition prescribed for First Year Commission paid.

Relaxation in fulfillment of criteria :
An agent who has completed the age 60 as on the date of commencement of Club membership year and had been continuous member of the same club for not less than 15 membership years or Life members of CM and ZM Club can continue the membership of the same club by fulfilling at least 75 % of the criteria applicable to that club.

 

Fringe Benefits:

 

Office Allowance

 

It is acknowledged that maintaining an office of his/her own helps the agent to render better and efficient service to policyholders. It also helps to further his sales of new business and increase the income. It helps the policyholder and the public of the area to approach the agent and meet him/her in office for advice, assistance or help. It adds status and raises the agent’s standing in the eyes of the public. Maintaining an office, therefore, applies with greater emphasis in the case of club members. The club members have a much greater standing as compared to the ordinary agents, and therefore, an office is a must for them. With a view to help our club member, who maintains an office of his/her own for the purpose of rendering service to policyholders and claimants, the Corporation is granting Office Allowance.

 

Reimbursement of Office Allowance is done to the CM’s ZM’s and DM’s club members for maintaining an “Office” depending on the expenses incurred during the Membership Year which includes--

 

  • Rent paid (Actual)

 

  • Salaries paid to Staff (Actual)

 

  • Postage incurred (Actual)

 

  • Amount spent on stationery upto a certain fixed maximum amount

 

  • Amount spend on Office maintenance and Electricity upto a certain fixed maximum amount

 

  • Expenses on entertainment upto a certain maximum amount

 

“Office” should at least have the following minimum infrastructure –

 

  1. Room of decent size that can be called an ‘office’ and should have seating space for the agent, his staff and customers.

 

  1. At the entrance a visible board specifying the name of the Agent, his/her club membership, Name of the Corporation.

 

  1. Furniture – Chairs, Table, Almirah / Other storage cabinets for keeping the records/documents of the clients.

 

  1. Adequate publicity of our existing/new products should be made in the office. Needless to mention, that the office should not be indicative of the agent indulging into showing any kind of interest

 

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in the sale of products of our competitors.

 

  1. All important stationery/manuals/relevant brochure/pamphlets documents that would enable him to canvass business.

 

Care has to be taken to ensure that the office is being properly maintained by the agent before his office allowance is released.

 

 

The Sr./Branch Manager(In-charge) or an Admn. Officer to be nominated by the Sr./Branch Manager of the Branch Office where the agent is working will inspect the office/related bills/books of accounts for reimbursement of Office Allowance. The papers for sanction of reimbursement will however be sent to the controlling Divisional Office.

 

A) The rules regarding payment/reimbursement of Office Allowance applicable to different clubs w.e.f. M.Y.2011-12

:

 

 

CM

ZM

DM

BM

Distinguish

 

 

 

 

 

 

ed

 

Basic

50% of

50% of

50% of

Up to

Up to

 

Office

actual

actual

actual

Rs.100/- for

Rs.500 for

 

Allowan

expenses

expenses

expenses

expenses on

expenses on

 

ce

OR

OR

OR

Stationery

Stationery

 

 

7 1/2 % of

7 1/2 % of

7 1/2 % of

 

 

 

 

total

total

total

 

 

 

 

commission

commissio

commissio

 

 

 

 

(FYC + RC)

n

n

 

 

 

 

earned by

(FYC +

(FYC +

 

 

 

 

the

RC)

RC)

 

 

 

 

agent in

earned by

earned by

 

 

 

 

preceding

the

the

 

 

 

 

F.Y.

agent in

agent in

 

 

 

 

OR

 

 

 

 

preceding

preceding

 

 

 

 

Rs.35,000

F.Y.

F.Y.

 

 

 

 

whichever is

OR

OR

 

 

 

 

the least

Rs.22,000

Rs.12,000

 

 

 

 

 

whichever

whichever

 

 

 

 

 

is

is

 

 

 

 

 

the least

the least

 

 

 

 

 

 

 

 

 

 

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Claiming the office allowance:-

 

1. The office allowance as above should be claimed by the member during the Club Membership Year but not later than six months after the expiry of Club Membership Year.

 

  1. The reimbursement of Office Allowance shall be subject to the inspection of office, related bills, books of accounts, etc., by the Sr./Branch Manager in-charge or an officer not below the rank of Administrative Officer to be nominated by the Sr./Manager incharge of the Branch Office where the agent is working.

 

  1. The concerned Club Member Agent will have to submit all the original bills/receipts to the office and our offices while making the payment will affix a stamp (only on those original bills/receipts for which the reimbursement/payment has been made) to the effect that so much amount has been paid as office allowance after deducting TDS.

 

Thereafter the original bills/receipts may be returned to the Club Member Agent after retaining the copies of the same duly certified by a Class I officer of the Corporation.

 

The same procedure may be followed for payment/reimbursement of Telephone Expenses to the eligible Club Member Agents.

 

 

 

The wording of the stamp to be affixed on the Bills/receipts may be as follows:

 

“Rs…………….. reimbursed as

 

office allowance for M.Y……..

 

TDS Rs……………………….”

 

 

 

B) Additional Office Allowance on account of lesser lapsation :

 

A Chairman’s/Zonal Manager’s/Divisional Manager’s Club Member agent will be eligible for ‘Additional Office Allowance’ (in addition to the Basic Office Allowance an agent actually earns as detailed in Clause 17A (i) above) 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:

 

19

 

 

 

 

 

 

 

 

 

 

Percentage of lapsation (In %)

Percentage of lapsation (In %)

 

 

10 or less

5

9 or less

8

8 or less

10

7 or less

12

6 or less

15

5 or less

18

4 or less

20

3 or less

22

2 or less

25

1or less

28

0

30

 

 

 

The Additional Office Allowance shall be calculated on the Basic Office Allowance payable to him as detailed in Clause 17A (i) above. Branch Manager’s Club Member Agent will be eligible for Additional Stationery Allowance and the same shall be calculated on the aforesaid lines.

 

Additional Office Allowance will be calculated on the basis of the average of the lapsation percentages of the last three financial years preceding the Qualifying Year. The Lapsation has to be less than or equal to 10% in each of the last three years.

 

 

 

 

 

 

 

 

C) Graded Office allowance for Higher Performance to Chairman’s Club Members:

 

Graded Office allowance for Higher Performance to Chairman’s Club Members as well as the increased maximum limits for telephone reimbursement and sales promotion gift items :

 

 

 

20

 

 

 

Performance Slab

 

Increased Maximum Limit

 

 

( Agent has to fulfill both the

 

 

 

 

 

 

 

Sales Promotion

 

 

 

conditions)

Basic Graded

Telephone

Gift Items

 

 

 

 

 

Office

Reimbursement

(Inclusive of

 

Sr.

Mandatory

 

Optional Condition

Allowance

(Inclusive of telephone

Amount

 

No.

Condition

 

 

for

reimbursement for CM’s

reimbursable

 

 

 

 

 

performance

Club Membersas

to CM’s

 

 

 

 

RC   Paid   or   TC

 

 

No.of Lives

 

(RC+FYC)Paid in the

slab

detailed in Clause 17D

Clubmembers as

 

 

in force

 

qualifying year

 

(a)(i) )

detailed in

 

 

 

 

 

 

 

Clause 17 E)

 

 

 

 

 

 

 

 

 

1

 

 

Rs.5,00,000

 

 

 

 

 

750

 

Or

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rs.7,50,000

Rs 40,000/-

Rs 7,000/-

Rs 4,000/-

 

 

 

 

 

 

 

 

 

2

1000

 

Rs.6,00,000

 

 

 

 

 

 

 

Or

 

 

 

 

 

 

 

Rs.10,00,000

Rs.45,000/-

Rs.8,000/-

Rs.5,000/-

 

 

 

 

 

 

 

 

 

3

1250

 

Rs.7,50,000

 

 

 

 

 

 

 

Or

 

 

 

 

 

 

 

Rs.12,50,000

Rs 50,000/-

Rs 9,000/-

Rs 6,250/-

 

 

 

 

 

 

 

 

 

4

1500

 

Rs.9,00,000

 

 

 

 

 

 

 

Or

 

 

 

 

 

 

 

Rs.15,00,000

Rs.60,000/-

Rs.10,000/-

Rs.7,500/-

 

 

 

 

 

 

 

 

 

5

1750

 

Rs.10,50,000

 

 

 

 

 

 

 

Or

 

 

 

 

 

 

 

Rs.17,50,000

Rs 70,000/-

Rs 11,000/-

Rs 8,750/-

 

 

 

 

 

 

 

 

 

6

2000

 

Rs.12,00,000

 

 

 

 

 

 

 

Or

 

 

 

 

 

 

 

Rs.20,00,000

Rs.85,000/

Rs.12,000/-

Rs.10,000/-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  • Where both the agent and his/her spouse are Club Member Agents, and then in such a case Office Allowance will be payable to only one Club Member Agent. If both the agent and his/her spouse are Club Member Agents of different clubs, then in such a case only one Office Allowance as applicable to the Higher Club will be reimbursed. In view of this the facility of payment of Office Allowance for maintaining joint office by the club member agents will no longer be available.

 

 

 

 

 

 

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  • HOWEVER  payment of separate office allowance is allowed where

 

both husband and wife are maintaining Premium Point Offices separately w.e.f.M.Y.2015-16.subject to the following conditions:

 

 

 

  1. The agent should have functional Premium Point in the relevant Membership Year, active and operational.

 

  1. The offices should be at different locations,in different premises/area.

 

  1. Their offices are in separate names of husband and wife.(Whether it is on ownership basis, lease or rental)

 

  1. These Premium Point offices are used exclusively for the purpose of servicing LIC Policyholders and not for any other purpose.

 

  1. The respective Club Members daily manage their offices with their fairly own presence as well as the staff hired to serve LIC Policies/Proposals showing a good growth in their New Business Performance.

 

  1. The Manager (Sales)  will  inspect the office/rent receipts/related

bills/books of accounts        for reimbursement of office allowance.

 

The SDM (I/C) of the Division would be the Competent Authority to decide that both the Club Member Agents are working independently and having separate Premium Point Offices.

 

  • The payment of office allowance where two or more club members (other than husband and wife) have a common office has to be one as per the instructions contained in our C.O. Circular Ref: Mktg/ZD/15/79 dated 5.5.1979 which states that –

 

i) If two club members maintain a joint office, each would be entitled to an office allowance not exceeding 75% of individual entitlement of office allowance under the existing club rules, but not less than the allowance available to only one of any of the two agents concerned;

 

ii) If three or more club members maintain a joint office, each would be entitled to an office allowance not exceeding 60% of individual entitlement of office allowance under the existing rules, but not less than the allowance available to only one of any of the three or more agents concerned.

 

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Computer Allowance:

 

  • Chairman's Club Member maintaining a personal computer shall be paid an additional office allowance at the rate of 5% of the amount in excess of the total commission over Rs.1,85,000 subject to a maximum of Rs.10,000/-. This allowance will be called Computer Allowance (Previously called as “Additional Office allowance”.)

 

 

  • Computer Allowance is also payable to Zonal Manager’s and Divisional Manager’s Club Member Agents operating Premium Point w.e.f. M.Y.2015-16 as under:

 

ZM Club Member maintaining Personal Computer shall be paid a Computer Allowance at the rate of 5% of the amount in excess of the total commission over ` 1,30,000/- subject to a maximum of ` 5,000/-.

 

DM Club Member maintaining Personal Computer shall be paid a Computer Allowance at the rate of 5% of the amount in excess of

 

the total commission over `  80,000/- subject to a maximum of `

 

3,000/-.

 

 

 

Office Allowance for potential CM’s Club Members:

 

 

The potential Chairman’s Club qualifiers, i.e. agents who would satisfy the CM’s club conditions in one/two consecutive Financial Years, would be paid Office Allowance in such first F.Y. and second F.Y. as follows:

 

 

  1. For any such financial year in which he satisfies CM’s Club entry conditions an office allowance of Rs.12, 000/- or Office Allowance otherwise payable to him (if any) shall be payable whichever is higher.

 

  1. If an agent satisfies CM’s Club entry conditions in the next financial year also, he will be paid an Office Allowance of Rs.20, 000/- or Office Allowance otherwise payable to him (if any) whichever is higher.

 

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Example:

 

a. An agent who is at present a Divisional Manager’s Club Member and is at present drawing an office allowance of Rs.11250. If such an agent fulfills the Entry conditions for CM’s Club in one year, he shall be paid office allowance of Rs.12000 instead of RS.11250 i.e. he will be paid Rs.750 in excess of the office allowance which he is entitled for his performance as a Divisional Manager’s club member.

 

 

b. An agent who is at present a Zonal Manager’s Club Member and is drawing an office allowance of Rs.22000. If such an agent fulfills the Entry conditions for CM’s Club in one year, he shall not be paid any additional allowance as he is already getting office allowance of Rs.22000.

 

 

c. An Agent who is at present not a Club Member: If such an agent fulfills the Entry conditions for CM’s Club in one year, he shall be paid office allowance of Rs.12000. If he fulfills the conditions consecutively he shall be paid an office allowance of Rs.20000.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

24

 

 

 

 

 

Reimbursement without Production of Bills :-

 

 

Office allowance is reimbursed to agents of Corporate club, Chairman Club, Zonal Manager Club and Divisional Managers Club who have proved their professionalism and productivity over a period of time and acquired the status of club membership. The concerned member agent has to submit all related original bills/ receipts to claim office allowance, the certified copies of which, is retained by the Branch

 

it has now been decided by the Competent Authority to allow reimbursement of office allowance without insisting on production of original bills/ receipts for the following:

 

Corporate, CM and ZM club member agents with minimum 5 years standing in that club or any of the three clubs.

 

While making payment of office allowance to the eligible club member agent, the office should ensure that :-

 

  1. Declaration of expenses as per format attached herewith is given by the eligible agent.

 

  1. Inspection of office is carried out as per existing procedure and inspection report confirming office and required infrastructure is available in the office. ( Inspection of office is mandatory in each and every case)

 

  1. Income tax, as applicable, is to be deducted at source.

 

  1. Supporting bills are submitted for claiming reimbursement of telephone expenses.

 

  1. It has been brought to the notice of eligible agents to preserve the supporting bills/ receipts etc. for at least 5 years after getting reimbursement for the purpose of verification, if required by the office.

 

Needless to add, while reimbursing the office allowance without the original bills/ receipts etc to the eligible agent, the Competent Authority will apply his wisdom and compare the expenses with that of the previous years. Any unreasonable difference or variation should be scrutinized and clarification with original bills/ receipts may be asked from the concerned agent.

 

 

 

 

 

25

 

 

 

Telephone facility to CM’s and ZM’s Club Member reimbursement for Landline and /or Mobile Phone Call Charges:

 

 

a. CM’s and ZM’s Club Member agents:

 

 

Reimbursement for rental and call charges of Landline and /or Mobile phone will be made per year up to the following maximum amounts subject to production of bills:

 

  1. To CM’s Club Members: Rs.6, 000 per year.

 

  1. To ZM’s Club Members: Rs.4, 000 per year.

 

 

  1. Introduction of benefit of Reimbursement for Mobile Phone Call Charges to all DM’s and BM’s Club agents:

 

 

Reimbursement for Mobile phone rental and call charges will be made per year, to all DM/s/BM’s Club Member agents, up to the following maximum amounts subject to production of bills:

 

  1. To DM’s Club Members: Rs.2, 400 per year.

 

  1. To BM’s Club Members: Rs.1, 800 per year.

 

 

Time Limit for Reimbursement:-

 

The Telephone call charges and rental charges etc. as stated above will be settled (or reimbursed) every quarter as soon as the bill is received. The claim for payment will have to be submitted within six months from the expiry of the club membership year.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

26

 

 

 

Income Tax on Office Allowance & Fringe Benefits to Club Members

 

IT at the appropriate rates has to be deducted as per rules on all payments including reimbursements made to the agents towards office allowance, telephone and other items such as letterheads, visiting cards, sales promotional gift items etc. Income Tax should also be deducted at source as per rules on the payment/ reimbursement made to Branch Manager’s/Distinguished Club Member Agents towards stationery items. However, a mention should be made in the yearly Income-Tax certificate issued to the agent about the tax deducted at source on such items. The agents may be suitably advised to claim the expenses incurred by them while filing their Income-tax returns to the satisfaction of the assessing officer.

 

 

Group Insurance Scheme for Club Member Agents

 

Please refer “Knowledge Corner –Agents” available on Marketing site