Spouses Of Psu Staff Can Hawk Lic Policies

The spouses of public sector employees can now hawk products of the Life Insurance Corporation of India (LIC). The Centre has relaxed a 40-year-old rule which barred the insurance monolith from offering agency to spouses of public sector undertaking (PSU) employees.

The directive was issued by the finance ministry given the fact that there is no such clause binding on competition.

Within five days of receiving the directive, dated January 16, LIC issued a circular to all its divisional offices, advising them to appoint spouses of PSU employees "subject to the production of no objection certificate from the organisation (read PSU) in which the spouse of the prospective agent is an employee".

LIC's letter stated that the corporation can now recruit "qualified agents from among the spouses of employees of central government, state government and PSUs subject to compliance with IRDA agents' regulations, LIC agents' regulations and relevant CCS (conduct) rules".

Technically, the spouse can be the agent but for all practical purposes PSU employees will be the front which will market insurance products.

Officials cited the example of people seeking bank loans being approached by bank clerks to buy an insurance cover.

With the industry having opened up doors for private players, LIC, which is on a recruitment spree, wants to increase its agency force by 20-30 per cent in the current fiscal.

The restriction on granting agency to relatives of LIC employees, however, continues as per the provisions of the LIC Staff Regulations 1980.

Insiders, however, said the organisation can amend the same. The agents have opposed this possible amendment on the grounds that LIC employees would cater to the interests of their relatives at the expense of other agents.