The Finance Ministry on Monday announced the increase of gratuity limit from Rs 3 lakh to Rs 5 lakh for agents and employees of the Life Insurance Corporation of India (LIC) as part of the welfare measures conceived under the amendments to the LIC (Agents) Regulations, 2017.
In a statement, the ministry said the measures are part of amendments to the LIC regulations related to the enhancement of gratuity limit and uniform family pension rate, among others.
According to the statement from the ministry, cited by the media, these measures are expected to “bring substantial improvements to the working conditions and benefits of LIC agents.”
It further pointed out, “Currently, LIC agents are not eligible for renewal commission on any business completed under the old agency." Hence, the government has enabled the reappointed agents to be eligible for renewal commissions. It will ensure their increased financial stability.
LIC currently has over 1.3 million agents and over 100,000 regular employees.
The LIC agents’ and employees’ term insurance cover has also been increased from Rs 3,000-10,000 to Rs 25,000-150,000. The government said that for the welfare of the families of LIC employees, it has also decided to keep a uniform rate of 30 per cent in family pensions.
The announcement comes after LIC Chairman Siddhartha Mohanty last week presented a dividend cheque of Rs 1,831.09 crore, which represents the Centre’s share for FY2022-23, to Union Finance Minister Nirmala Sitharaman.
The Central government has a majority stake in LIC at 96.5 per cent. The dividend of Rs 3 per share for FY 2022-23 was agreed upon by LIC’s shareholders at their annual general meeting on August 22. In May last year, LIC made headlines after it launched a massive initial public offering (IPO) amounting to Rs 21,000 crore. However, its current share price of around Rs 663 per unit is a significant drop from its initial issue price of Rs 949 per share during the IPO.
LIC’s net profit in the first quarter ended June 30, 2023, stood at a staggering Rs 9,544 crore, compared to about Rs 683 crore in the same period a year ago.