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 Persistency Norms Have Been Relaxed

The Regulator has diluted the persistency norms that they had earlier stipulated. Vide a Circular issued on 29 September, 2012 amendments were issued to the original circular on the persistency norms.

As per the new norms agents have to maintain a persistency of 50 % in terms of policies. The norms in terms of premium have been withdrawn. To arrive at the persistency rate the following policies will not be considered:

a. Policies with ‘Auto Cover’ facility for the period of the auto cover. That is those policies where the life cover continues even if the premium is not paid for a pre-determined period. This usually happens on ULIPs.

b. Policies on which there has been a death claim, maturity claim or surrender claim.

The request for transfer of an agency from one company to another will be considered only if a minimum of 50 % persistency is maintained by the agent on the date of seeking transfer.

The norms for persistency will become operative from 1st July 2014.


 Your chance to earn more money is soon coming your way….

On 9th March 2012 the IRDA issued an Exposure Draft giving proposed guidelines for servicing of orphan and lapsed policies. An orphan policy is defined as one where the original agent discontinues his agency or is terminated from his agency. A lapsed policy is one where the premium due has not paid for more than 6 months from the due date.

Such orphan and lapsed policies can now be allotted to an “Allottee agent” with the condition that the allottee agent services the policy holder and revives a lapsed policy. For this service the allottee agent can receive a commission equivalent to the commissions that the original policy holder would have received had he or she continued servicing the policy in point. The allottee agent however cannot receive an advance or any commission unless the premium due on the policy has been received by the company and in case of lapsed policies the policy status is converted to a policy in force.

Single premium policies and limited premium term policies cannot be allotted under the scheme as envisaged in this Draft. Lapsed policies that are allotted should be revived within 3 months from the date of allotment to the allottee agent. The allotted policies under this scheme shall not be counted to arrive at the minimum persistency norms as prescribed by IRDA.

By the time this draft becomes law it will take some time as many people will give their comments to IRDA and IRDA will release the final guidelines after considering all the points of view. It could take 3 – 4 months.

But why is IIST giving you this information so much in advance? Those who start first finish first. Prepare your strategy to reach out to orphan policy holders well in advance. Many of you have been reaching out to orphaned policy holders without a reward. No here is your chance to earn money for doing the same work. Prepare your self on how you are going to approach the policy holders, what you are going to tell them, how you are going to tell them, within what time frame you will bring the policy as an in-force policy, how you are going to get new business from the policy holder and how you are going to get references form them. You must also practice scripts that show you are different from the original agent. Make a target of how many orphaned policy holders you are going to service this year.