LIC - The Recalcitrant child

          LIC expects its resigning ex-employees to approach Courts for their hard-earned dues, arrears' payments. When the Supreme Court has already given its judgment in a similar case, why should anyone have to spend time, effort and money on the same matter?
         LIC is just acting like a recalcitrant child which will behave only when rebuked and punished by its teacher, in this case, the Courts! The Management of LIC must start behaving more responsibly and apply its own logic and judgment to its administrative matters. When it stops harassing its ex-employees and pays them their rightful dues, it will prove to be mature and ethical.
        
         Only brats take away others' belongings and refuse to return them at any cost! A sharp rap on their knuckles often does the needful. 
        
         LIC desperately needs one from the Supreme Court for Contempt of Court.

No mention of repudiation in the appointment letters!

         In the appointment letters to the employees, nowhere is it mentioned that the employees can't leave service, or that their arrears' payments will be repudiated if they leave service of the Corporation. So how can this clause be introduced, that too with retrospective effect? If at all it has to be introduced, it could be with prospective effect and the same should be mentioned in the appointment letters.
          In fact, some employees who joined LIC in the recent years, have been given appointment letters stating that the wage revisions are due, meaning that they will be eligible for the same when they are notified. But when they resigned from LIC, they were denied the arrears' payments! Shouldn't they have been informed about the repudiation's clause, beforehand, so that they could've made an informed decision?
          Likewise, even after their resignation letters were received by LIC, they should've been intimated accordingly, with respect to this clause. The fact that LIC regularly accepts resignations without doing so, indicates that LIC is not playing fair. It can easily keep the resignations pending and accept them after the notification is made public, so that they aren't deprived of their hard-earned dues.
         The Supreme Court has declared this clause itself to be ultra vires, meaning 'beyond reach' of the Chairman's powers. But obviously, LIC's management thinks that it is beyond any law of the Nation! It is a law unto itself!
          Besides, the Finance Ministry too ratifies this unjust clause in the Wage Arrears' Notification, every 5 years, since 2000; without considering the Supreme Court's judgement.
          LIC, (and the Finance Ministry), it's time for some serious introspection!

A news report

Source: Internet

Ex-agent wins 10-yr battle against LIC for 

Rs. 44L dues

Jayanta Gupta, TNN | Mar 17, 2013, 01.35AM IST

KOLKATA: A star agent of the Life Insurance Corporation of India serves the insurer for 27 years, sells so many policies that at one point he is exempted from generating the minimum quantum of business required, and then quits to join another insurance firm as a regional manager. Can the LIC withhold renewal commission that is due to him for joining a rival firm?

In a judgment that has a bearing on the careers of nearly three million LIC agents across the country, the Calcutta high court has ruled that it can't.

Former LIC agent Rajeev Lohia from Kolkata fought a legal battle against LIC for nearly 10 years and got a ruling in his favour last October. LIC was directed by the division bench of Justice Kalyan Jyoti Sengupta and Justice Asim Kumar Mondal to pay Lohia his entire dues within three months. The insurer, however, didn't do so and when Lohia moved a contempt petition against the company in January this year, it prayed for time to move a Special Leave Petition (SLP) in the Supreme Court. The Supreme Court admitted the SLP on March 1 on condition that LIC deposit Rs 44 lakh that was due to Lohia till 2011 with the court registry.

Son of an LIC agent, Lohia joined the profession in 1975, when he was barely 18 years old. "I would get up at 4 am, attend classes at St Xavier's College till 9.30 am then go around 'cold canvassing'. This meant knocking on the doors of people I didn't know and asking them if they required a policy. I remember when I met my first client and produced my college identity card to prove that I wasn't a fraud, the man told me his mother, a nominee to his policy, had died 10 years ago. I told him that these are the small issues that can cause problems later on. He was my first client. After my rounds, I would attend management classes in the evenings," said Lohia, who went on to become the youngest Chairman's Club member ever.

In his career spanning 27 years, Lohia claims to have sold 2,764 policies to about 1,000 people. The premium per year for these policies amounts to Rs 2.25 crore. "My father would get magazines on the insurance industry from the US. These were of great help. From there we came to know of the Million Dollar Round Table (MDRT) and started communicating with it. The MDRT used the purchase price parity index to fix a barrier. Any agent who wished to qualify for MDRT needed to earn a commission of Rs 1.25 lakh per year. This was in 1985. For 15 years, I remained a life and qualifying member of MDRT and attended 12 conferences in the US and Canada. In 1986, for the first time, the Indian flag was hoisted at a MDRT meet due to our efforts," Lohia said.

On March 7, 2002, he resigned from LIC to join a private firm as regional manager. His agent's licence was also due to expire on March 31 that year. The very next day, he was asked by his branch manager to furnish the name and address of the private firm that he had joined. Lohia refused to do so as he had already resigned and the principal-agent relationship between LIC and him had ceased to exist. On April 22, 2002, he received a show-cause notice for alleged misconduct and LIC threatened to terminate his agency. Lohia replied that he had already resigned and his agency stood terminated. On August 16, 2002, he was informed that the renewal commission due to him would be withheld as penalty for termination of agency. The former agent preferred a departmental appeal but nothing came of it.

"I had never expected such a reaction from the company that I had served with such commitment. This was when I realized that the company treats agents as bonded labourers who have no rights to seek better opportunities in life. I went to court, not only for myself but for the three million LIC agents across the country. Under law, even after an agent's death, his next to kin are eligible to receive the renewal commission. By withholding my commission, was LIC trying to establish that agents would rather die than join other companies?" Lohia said.

On August 13, 2003, he moved a writ petition in the high court. He told the court that the renewal commission can't be withheld save for commission of fraud. In his case, termination of agency was not due to fraud, Lohia submitted. The court then wanted to know from LIC how much the company owed the former agent. The company submitted that the renewal commission due till June, 2011, was excess of Rs 44 lakh. A further Rs 32 lakh was also due apart from Rs 1 lakh as gratuity.

According to the judges, someone's right can't be taken away on 'mere presumption or assumption'. "We hold that the petitioner-appellant is entitled to get all benefits of renewal commission as well as gratuity. We accordingly direct the respondent Corporation to quantify the same and make payment and we permit three months time to do so," the court ordered.

What is renewal commission?

It is the commission paid to an after the. Renewal commissions generally form a substantial portion of an agent's income and serves as an important incentive for him or her to keep the policies going. After his/her death, his wife/children continue to receive the renewal commission.

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CIC decision in an RTI case against the Ministry of Finance

Central Information Commission
Room No.307, II Floor, B Wing, August Kranti Bhawan, Bhikaji Cama Place, New
Delhi110066
Telefax:01126180532
& 01126107254
Websitecic.
gov.in
Appeal: No. CIC/DS/A/2013/000612/MP
Appellant : Shri Shekhar P.
Kannao, Washim
Public Authority : DFS, New Delhi
Date of Hearing : 24 February 2014
Date of Decision : 24 February 2014
Facts:1.
The appellant, Shri Shekhar P. Kannao, has submitted RTI
application dated 19 October 2012, before the Central Public
Information Officer (CPIO), Ministry of Finance, New Delhi;
seeking information relating to the action taken report on his
earlier letter dated 5 July 2012 sent to Finance Minister,
Government of India.
2. Vide order dated 9 November 2012, CPIO informed the
appellant that the letter dated 5.7.2012 had been received by
the D/o Financial Services on 8 August 2012 and they had sent
to that letter to New India Assurance Co. Ltd. for taking
appropriate action. Not satisfied by the CPIO’s reply, the
appellant preferred appeal dated 5 December 2012, to the First
Appellate Authority (FAA). Vide order dated 3 January 2013,
the FAA upheld the CPIO’s decision.
3. Being aggrieved and not satisfied by the above response
of the public authority, the appellant preferred second appeal
before the Commission.
4. The matter was heard today. The appellant, Shri SP
Kannao, was present at the hearing in person. The respondents,
Shri S.K. Mohanty, CPIO and Shri Lalit Jha were present in
person.
5. The appellant submitted that he is seeking information
regarding Ex Gratia payment, fixed personnel allowance and
Terminal Benefits which had not been paid to him. The
appellant submitted that he had taken ‘VRS’ but was called for
and taken on duty again by the public authority and,
therefore, should get all benefits.
6. The respondents submitted that the companies are board
run companies and the role of the Ministry of Finance is only
as regards the policy making for the Finance/Insurance sector
of the country and they do not interfere with the
service/administrative matters of the Insurance Companies. The
Ministry would interfere only when the policy is being flouted
by the insurance company. It was further submitted that the
appellant’s letter has been forwarded to the New India
Assurance Company Limited and the same has been informed to
the appellant.
Decision Notice
7. The Commission upholds the CPIO’s decision as the
information on action taken on the appellant’s request, as
held by them has been provided to the RTI applicant. The
grievance matters of the appellant may be taken at the
suitable forum. The appeal is dismissed and the case is
closed.
(Manjula Prasher)
Information Commissioner
Authenticated true copy:
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Blog by Mr. Venkatkrishnan, C.A.

Source: Venkat’s Expressions- Blog by Mr. Venkatkrishnan, C.A. on Management issues

LIC breach of Good Faith!  

(Blog-post, dated 06.03.2012)

Any early student of commerce would tell you that a contract of insurance is one of “Uberrimae Fidei” a latin term to indicate “Utmost Good Faith”. That being the case, the actions of the government in the handling and the management of the Life Insurance Corporation is anything but that. The genesis of the Life Insurance Corporation was the insurance fraud by owners of private insurance companies in response to which the Life Insurance Corporation of India was created by consolidating the life insurance business of 245 private life insurers and other entities offering life insurance services.

The actions of the government over the last couple of years have done very little to justify the stand and looks that the governance deficit in the management of the corporation has raised very serious questions.

To start with the largest insurance company has been functioning without a full time Chairman for over a year now.  If that is the importance the government bestows on the “Superbrand”, then it speaks very poorly of the discharge of its responsibilities.

The business of Life Insurance is primarily a fiduciary responsibility and the fact it is controlled or guaranteed by the government does not make it any less onerous. Unfortunately the government appears to have violated this cardinal principle and has begun to use the access to the funds a bit too liberally to make investments in PSU more particularly in banks. It is no wonder that the Insurance Regulator has raised concerns about the overexposure to PSUs. http://www.business-standard.com/india/news/lics-growing-exposure-in-psuscauseconcern-for-irda/466851/

Now the other concern about the investments is the recent fiasco in the disinvestment of ONGC shares.  There are two disturbing issues about the bids by LIC.  First news reports suggest that LIC had been accumulating shares in ONGC much before.  Would that be principles of transparency and good governance? http://www.business-standard.com/india/news/lic-stocked-upongc-before-govt-stake-auction/466890/  From an investment perspective, it appears that LIC was the only institutional investor in the bidding process!  Did LIC miss to see something serious that the other investment manager saw? The investment value has already eroded by nearly 25%.  If this had happened in any other private insurance company the roof would have come down by now.

The sequences of events and happenings have some stark resemblance to what happened to the UTI in the early nineties. It appears that we have not learnt our lessons from the past.

Charity begins at home, but not for LIC!

                   The Times of India dated 12^th March, 2015 carries a report that states that LIC of India would be investing Rs.1.5 lakh crores in the Indian Railways, over a period of five years. This initiative is note-worthy and appreciable.

                 However, the Corporation doesn’t think that it owes any responsibility towards its hard-working and sincere ex-employees; those who have resigned from its service. It has illegally refused to pay them the difference in wages and retirement benefits as arrears’ payments, arbitrarily.

                These payments, repudiated since 1997 by LIC, will be approximately equal to the amount that LIC has pledged to the Indian Railways.

               Thus we can safely state that charity begins at home, but not for LIC! Its largesse is for the outsiders, not for its insiders! Its step-motherly treatment towards its ex-employees is despicable. This step-mother feeds others' children and starves her own children. 

              

               Of course, what we are asking for is not charity, but our rightful dues.

All Public Authorities must display RTI appeals and replies on their websites

Ministries to put up RTI replies online from Oct 31

TNN | Oct 22, 2014, 04.29AM IST

NEW DELHI: Taking transparency to another level, the government on Tuesday directed all its ministries and departments to suo motu display RTI applications and responses thereof, on their respective websites from October 31.

However, the DoPT instructions in this regard do leave scope for withholding RTI replies that contain personal information relating to an individual. "It may be noted that RTI applications and appeals received and their responses relating to the personal information of an individual may not be disclosed if they do not serve any public interest," said the DoPT note circulated to all Union ministries and departments on Tuesday.

To facilitate uploading of RTI applications and appeals received and their responses on the website, a new feature has been added to the CPIO/FAA module on the 'RTI Online' portal on pilot basis for DoPT. Through this feature, an option is given to the central public information officers (CPIO) and first appellate authority (FAA) to upload the reply to RTI query and the first appeal respectively on to the department's website. This particular feature will now be extended to other ministries and departments as well. To display the RTI applications received in the ministry/department and the reply given using this feature, web services will be provided through a URL to each ministry or department by NIC or DoPT.

"The concerned ministry/department needs to consume this web service (by writing a program) to display the desired contest on its respective website," the DoPT note said while asking the ministries and departments to take the help of NIC or DoPT experts in this regard.

"An immediate action is requested so that the facility to upload the reply to RTI application and first appeal respectively on the website of the respective ministry/department may be started with effect from October 31, 2014," directed the DoPT. 

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Source: www.timesofindia.indiatimes.com